This will be continuous column about how to get more out of less. I hope to post real life stories and I hope that all readers will contribute their stories in the comment section as well.

Being on limited budget, buy in drift shops, having to limit spending is not something that anyone ever needs to be ashamed off. Living frugally can be viewed as Monopoly game in reverse – who can get the most from the least.

So stay tuned for real life stories to come…

in regards to bank overdraft fees. I am keeping my eye on the developments and this is good article to get the latest.

I am so glad to report that with credit card reform underway banks are modifying their overdraft free structure as well. As you remember, we have talked about overdraft fees before – how unfair and sneaky these can be. Now some big banks are taking a new look how these fees are applied and how they affect people. And they are taking action in the right direction.

Bank of America will be implementing new rule, where you can opt-out** from overdraft protection all together. This means that you will have to go to your branch of Bank of America and request opt-out from overdraft and after that when you use your ATM card and you do not have enough money, the purchase will be denied but you will not be charged $ 35.oo fee either. If you have not opted out, as long as your overage is less than $ 10.00, you will not be charged any fees, as long as you pay the bank back with in 5 days and get your balance back to positive.

JP Morgan Chase & Co is also going to reform their overdraft fees but no details are available at this time. If you are concerned about how your bank is currently handling overdraft fees, read the article linked to educate yourself more on the current trends, then call your bank and ask what is their current overdraft policy, what changes, if any,  are coming and request them to make overdraft fees more customer friendly. Make sure you understand whether your bank is opt-in* or opt-out in regards to overdraft fees and make necessary changes to your account based on your own preferences.

Next we will be talking about smart travel, how to decide what mode of transportation is best to your destination, how to find best deals on airfare and more. Post a question, if you want to know something specific

For more information on overdraft fee overhaul in some bigger banks click here.

*opt-in – when you specifically request to be included in the program

**opt-out – when you are automatically enrolled in the program and have to specifically request to be removed from the program.

If you want to have money left over for what you want, you need a budget.

For many people, budget seems like a boring school math assignment. In reality, it is your key to be able to enjoy your life to the fullest. If you have a budget, and you track your expenses, you will have more money left over for fun stuff than if you do not.  Lets look how to come up with a budget the easiest and simplest way:

• First, write two lists

• Next add up how much your needs list costs. Subtract the monthly cost from your monthly take home income.
• Now you have the amount that you can play with, but this does not mean that this is your play money. No, first you need to make sure that you have savings for  rainy days.
• If you are just starting out and you have no savings, consider that for  minimum you should have 6 months of costs in your savings account. If you have already some savings, figure out how much more you need to add to get to the target amount.
• Next figure out how much your wants will cost. See how well they fit into the amount you have left over from your costs.
• Next allocate how much money will go toward savings and how much will go toward wants. Ideally, you would initially allocate more to the savings, so that you get to your minimum savings rate as soon as possible. But always, leave some money for wants, as this makes it much easier to follow your budget.
• Once you have your savings account funded, do not stop putting this money aside and spending it on wants. Instead start putting this money aside for your retirement.

Why do I mention retirement savings to young people? Because the earlier you start, the less per month you need to put aside to get the same end result. Simple example; if you start putting $ 100 aside each month when you are 25 years old and this money earns 5% a year, by the time you are 65, you will have $ 152,000 dollars. To get the same result, you would need to save $ 200 a month if you started as a 35 year old, and $ 400 a month if you started age 45. If you put away $ 400 a month since 25 years old, you would have a cool $ 600,000 in your account by the time you are 65.  If you started as a 45 year old, you would need to put aside almost $ 1500 per month to get the same result. Think about it. I hope my long, convoluted example has made my point – start retirement savings when you are young.
If after the exercise of coming up with your budget, there is not enough money for all the fun stuff you want to do and get, you have two options:

• reduce your costs – get a cheaper place to live, or a room mate; find ways to spend less on food, etc. Check out our Simple Living blog for ideas.
• bring in more money – get a 2nd job; sell stuff that you are not using; start a part time business that could grow into full time and eventually solve all your money problems.

In the end, you will be successful only if you follow your budget and your actual spending month to month and make it a habit.

Until the Regulation E has been approved (see discussion here) and we know exactly how it is going to protect the consumer, high overdraft fees are the fact of life.  If you are hit with those fees frequently while using your ATM card, then you are a good prospect for prepaid credit card.

There are many of those out there, so be careful and read the fine print so that the one you pick does NOT charge an overdraft fee. The one that we are familiar with and can suggest is WalMart MoneyCard. It does come with some fees but Walmart lowered the fees significantly recently in light of financial troubles in our economy. To get you started takes $ 3.00. To add money can be free (if you get your payroll sent there) or cost you another $ 3.00 at WalMart. It might sound a lot, but you need to add money more than 10 times a month to reach even one overdraft fee.

MoneyCard Visa/MC works like a regular credit card, except you spend money that you have and have put in there, rather than the money you might not have and borrow from a bank.

MoneyCard Visa/MC will also help with staying within your budget  (We will talk more about budgets next week). By adding a set amount to your card weekly or semi-weekly, what ever works best for you, will help you to stay within your spending target. You can get your day end balance sent to your e-mail or cell phone for free and that helps to keep track of your spending and how much you have left until next infusion of money.

Here is a list of thing what not to do with your WalMart MoneyCard:

• never take money from ATM (you can, but it costs you extra, use the tips from previous article to get cash)
• never check your balance from your cell phone (again extra fee, you can do that online for free)

Stop paying banks your hard earned money as overdraft fees, start using prepared credit card instead. If you have experience with other prepaid cards, good or bad, please share, so others can learn from your experience.

Incidentally we heard back from Senator Nelson and in his letter he noted that good place to get additional help with issues with banks is your own state representatives. This suggestion fits very well with yesterday’s Supreme Court decision that states can apply some of their own laws to big national banks operating within their borders. This a decision  was called by proponents a huge win for consumers and for states seeking more power to regulate financial activities. Read more here.

It will be interesting to see if the now defunct states usury limit laws will start to be applied again. Read more about the usury law and where your state stands.

Stay tuned about this exciting new development.

there are many more things to take into account than how much car payment a month I can afford. First, lets look at the list of expenses you will have after you buy a car:

• car payment – probably your largest amount
• car insurance
• gasoline
• maintenance – oil change, new tires, belts
• repair
• misc. – once a year registration fee

Before you can figure out what your car payment can/should be, you need to figure out what the rest of the list will cost you and then you will know how much is left over for the car itself.

Insurance is easy. There are many sites on WWW that give you instant quotes. Just google “cheap car insurance” and you will get a list of them.

For gas, you need to estimate how many miles you drive a day, a week, a month. Then look up the gas mileage of the car you are planning to buy and what the current gas prices are. Multiply monthly mileage with gas price and you will have an estimate, how much the gas will cost you. Keep in mind that many European and Japanese cars require higher grade gas. It is more expensive, so make sure you know the type of gas as well.

The last two items on the list are little harder to estimate. Again, first look up on google “*your car model* + problems” and see other people’s experience with your car. If many people are complaining about reliability, you might be better of looking for a different model. Else, depending on the age of your car and location where you live, it would be good idea to have at least $ 500.00 – $ 1000.00 of emergency fund for larger scale repairs. Keep in mind that fixing a transmission can easily cost $ 2000.00 or even $ 3000.00, so my suggestion is actually on the low side.

Based on your monthly mileage traveled, you can estimate how often you need to change the oil, when the belts might need to be changed and when do you need new tires. The cost of all those are readily available too. Figure about $ 20.00 for oil change for a regular car (if you are looking for luxury or performance car, that can be many times more expensive) $ 75 per tire ( and you need at least two at the time).

Adding up all those figures will give you a good idea what car ownership will actually cost you and how much monthly car payment can you actually afford.

Good luck and have fun (responsibly) with your new car.

unless it is your ATM card issuing bank one and you are 100% sure that you will not be charged any fees for withdrawing money or for any other activity that you needed to do. Sometimes just checking your balance can cost you, so make sure you know all the fees that bank can charge you when using ATM machines ahead of time.

Here is a typical scenario – you need $ 20 or $ 40 cash in your pocket. You go to the closest ATM machine (not your own bank) and you pay $2.00 for the ATM machine owner and $ 2.00 for your own bank for the privilege of getting your own $ 20.00. That is $ 4.00 dollars to get $ 20.00. This is a 20% fee. This is like paying $ 20.00 to get $ 100.00. You get the picture?

So what should you do, if you need $ 20.00 or $ 40.00 cash. There are two prudent ways to do so:

• go get it from your bank

• next time you are in convenience store (any store) making a purchase, ask cash back.

There are smart and not so smart ways to get your money out of the bank. Choose the smart way and do not pay unnecessary fees, your hard earned money, to the bank.

We have heard back from Federal Reserve regarding the letter published in “What to do when bank is being unfair – part II”. The encouraging news is that feds are well aware of the problems pointed out in the letter and are working on righting the wrong. Here are the highlights of the reply:

• Federal Reserve is working on proposal “Regulation E” that would prohibit overdraft fees. The question that is still open is whether this is going to be achieved via the consumer opting in or out of overdraft protection program.

• The “Regulation E”, if adopted, would also address consumer rights in regards to ACH transactions.

Copy of the letter is attached. Current timeline, when the final proposal is going to be published and the new regulations become effective, is not know. We will keep you informed.

Quick update to folks who have been following this saga. No official word from Navy Federal but the last statement shows that $ 200.00 of reversed fees were applied to the account.

At least some justice is being done and squeaky wheel does get attention.