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Money Ramblings of a Financial Underdog

Overrated financial products

Personalized cheques ($60)

I can never figure out why anybody would pay extra money to have personalized checks. I understand that some people feel the need to express themselves, but I can't imagine form of payment being a good medium for it. We already have plenty of questionable ways to express ourselves - bumper stickers and stick figure families on your cars. But personalized cheques? Whom are you trying to impress with your dolphin-themed cheques? Your local ATM machines? Most cheques you send through the mail to pay bills (if you're one of the seventeen remaining people that do it) get deposited automatically without people even looking at them.

On top of everything else, personalized checks cost money. In my mind, you might as well burn $60 (the average cost to order customized cheques) and be done with it. Or send it to me, I'll find a better use for it.

 

Overdraft protection ($5/month or more)

Overdraft protection works like this: If you run out of money on any given day but another expense comes in, the bank still processes the payment and charges you a small fee per day until your bring up your balance (in addition to your monthly fee). In reality, you're paying your bank a fee to cover your ass.

Here's a simple solution - keep an eye on your bank accounts and make sure you have enough money to cover all expenses. Granted, we have all been there. I've bounced a few checks myself when I was broke and an unexpected utility bill would show up out of nowhere. But in every single case, it happened because I wasn't paying attention - and paying your bank more money to cover your butt is a terrible solution. A better solution is to start paying attention.

Ideally, you want to have enough money in your account to pay for all your monthly expenses at the beginning of the month. This way you never have to worry about dipping below the liquidity line. But if you're not quite there yet, figure out when your bills clear your account and be proactive.

 

Christmas dinner prepayment plans

Recently I saw an ad on TV for prepaid Christmas dinner. The plan is pretty simple - the company debits your account once a month twelve times straight, and once Christmas comes it delivers a beautiful dinner to your door - complete with turkey, wine, gravy, and all the other fixings. Sounds delicious, but is it a good financial product?

First of all, you'll be greatly overpaying for this dinner. Not only do you pay for all the products at inflated prices, but you also pay the company profit (they wouldn't do it just for nothing, am I right?) and marketing costs including the cheesy ad on TV. Second, you're basically hiring somebody to take money from your account and put it aside for later use. Isn't that something you can easily do yourself?

 

I hope you enjoy my column. Please leave a comment on this (even just to tell me how wrong I am), by visiting the full version of this story at http://moneyramblings.com/useless-financial-products/. Also, let’s chat on twitter: https://twitter.com/MoneyRamblings



Read more Money Ramblings of a Financial Underdog articles

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About the Author

As somebody who grew up in a poor family, I lacked common knowledge about money from day one. If you can think of one dumb thing to do with your money - I did it. No paid college education for me. No inheritance, no financial help from my parents.

I may be a financial underdog, but through building good personal finance habits and educating myself about how money works, I hope one day to achieve financial independence for myself and my family.

Yes, I do believe an average person can enjoy a wealthy lifestyle as a result of smart decisions. Given enough time and proper education, anybody can change their financial future for the better. This can happen even if you start very late into the game - but your financial habits have to change.

If you'd like to know more about my struggles and wins with money, feel free to visit my website http://www.MoneyRamblings.com where I ramble about everyday money issues.!

Contact me by email at:  [email protected]

 

 




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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.


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