This Week in Your Wallet: November 1, 2011
Has Halloween been playing tricks on me, or have some scary things been happening lately? First, the market yo-yos some 300 points in the wake of the European debt debate. Then, a whopper of a Nor’Easter brings snow to the east coast — so much snow that power lines are down and the kids have a snow day. It looks like February around here!
But there does seem to be some good news in the amount of power that consumers now possess. After much consumer complaining and – a huge number of them looking into the possibility of switching to a credit union (according to this Washington Post article, the National Association of Federal Credit Unions recorded a 350 percent increase in Web traffic to its online credit union locator, CUlookup.com, over the past month) Bank of America turned tail and announced it would not be implementing the $5 monthly debit card fee. Other banks (Citi, PNC, KeyCorp, US Bancorp) came out and announced the same.
Score one for consumers. If there are no outrageous fees headed your way, you may decide to stay put for now. But that doesn’t mean you’ll never want to switch banks in the future. I did a segment for Today about how to switch a few days ago. It’s a bit of an administrative hassle, but here are the steps.
- Find a good bank. You can use www.findabetterbank.com to help find you a new bank, and you must do this before you close the old account.
- Take a look at your last three or four bank statements. Many people have set up automatic transactions, and these can get lost in a switch. So, even though you are going to the gym every week, you might have completely forgotten that your bank makes the membership payment for you every month. Taking a look at the last three to four statements will help you find these transactions and transfer them to the new account.
- Keep the old account open for at least three months. Many people forget about the quarterly payments they may have, so keeping the account open for at least three months will allow you to catch any lingering payments you’ve forgotten.
For more on how to switch banks, take a look at the Today segment. Now here’s the other news of theweek.
A dropping savings rate
If you had to guess how much money Americans are putting away each month, which of the following figures would you pick?
A) 3.6% of their income
B) 5.5%
C) 7.2%
D) 10%
I recommend trying to put away 10 to 15 percent – and if you can’t get there, that you put away whatever you can and work your way up to that level. Unfortunately, right now the average is a long way off. According to figures released by the Commerce Department, the nation’s savings rate has dropped to 3.6% of personal disposable income. To put this into perspective, the savings rate was 3.1 percent during the pre-recession, credit-happy years. After the crisis began in 2008, Americans began putting away more than five percent of their income.
The silver lining is that a large majority realize that reducing savings is not good — according to Bankrate.com’s Financial Security Index, only 11 percent of Americans feel more comfortable about their savings than they did a year ago. How do you feel about your savings? Have you been saving more recently, or less? To read more about the savings rate — and what it means for the economy — check out this New York Times article.
The most trusted companies in the U.S
Yes, I know — Occupy Wall Street is in, trust in large corporations is (mostly) out. However, there are some companies out there you trust, and the Temkin Group ranked them. Here’s a look at the top ten:
1. USAA (insurance)
2. Amazon.com
3. Costco
4. Edward Jones (investments)
4. Hyatt
4. Sam’s Club
4. TriCare (health plans)
8. Kohl’s
9. Walgreens
10. Lowe’s
Did your favorite company make the top ten? Personally, I’m surprised to see that Apple was only ranked 48th — as you’ve probably figured out by now, it’s one of my favorite companies. To see howyour favorites made out, you can access the full list here.
Have a great week!
Jean
