What I’ve Been Up To

This Week In Your Wallet: 80 Cents On The Dollar

Last week, Wells Fargo, one of the country’s biggest banks — as well as my own — was fined $185 million. This was after an investigation by the Consumer Financial Protection Bureau revealed that employees had opened more than two million checking and credit card (often fake) accounts for consumers — without those consumers’ knowledge or permission — between 2011 and last year. It fired 5,300 employees as a result. And CEO John Stumpf sent out a letter to customers (including me) that said, in part, “Every day we strive to get things right. In this instance we did not — and that is simply not acceptable.” If you want to read more about how the company is planning to turn the situation around, you can do so here.

My eyebrows went up when recalling that when my husband and I refinanced a mortgage with the bank a couple of years ago, the bank insisted he have a checking account with them (which he did not at the time). Were we among the customers who, as Stumpf wrote, “received products and services that they did not want or need?”

What was happening at Wells was clearly out of bounds, but as The Wall Street Journal noted, this company specifically and banks in general are not only the places that engage in what’s called cross-selling, a sales technique where a company pitches someone who has one product on additional features for an added fee. Think about it: When was the last time you were on the phone with a company — an airline, a cable provider, a bank — and the representative asked if you’d like to sign up for extras or additional products before you hung up? Ummm, yesterday?

When it’s on the up-and-up, it’s generally annoying at worst. But at times, the Journal notes in its list of pros and cons that you might benefit. Brand loyalty can net you discounts on added products. It also might make your financial life easier to have more relationships with a single institution. On the flip side, no one likes feeling pressure to buy things they don’t need (hello, extended warranties) or at a price that’s higher than you could find when shopping around. Bottom line: It’s a red flag if you feel pressure to pay for something because it’s billed as time-sensitive or exclusive — and especially if they want you to make an on-the-spot decision. Take time to think and research competitors to be sure you’re getting the best deal.

Calculate Your Own Personal Wage Gap

Women earn less than men — typically 80 cents for every dollar a man earns, according to the American Association of University Women. That’s a one-cent improvement from 2014. But your personal wage gap varies by your age and your field, among other factors. If you want to know by how much, check out this new tool: #shiftTheBalance. You input your age, gender and industry, and boom. It tells you that a 30-year-old woman in architecture makes $41 to a man’s $50 — which translates to $13,218 less per year and $462,635 between now and retirement. In law, the gap is even more significant. A 40-year-old woman makes nearly $40,000 less a year, which adds up to almost $1 million less at retirement. That hurts.

The Pursuit Of Happiness — And A Higher Credit Score

According to a new report from Credit Karma, people who enjoy saving report being more satisfied with their lives on average than those who find saving painful. It also found that 95 percent of people with excellent credit scores reported having more than $1,000 in savings, compared to one in four people with very poor credit — and that those with lower credit scores were more likely to say that spending money is pleasurable and saving is painful. So which came first here, the chicken or the egg?

Do you save first, then improve your credit score and find life satisfaction? Or does having better credit lead to being flusher and happier? It’s hard to say based on this study, but here’s what I know for sure. Saving money in and of itself is not fun. Why? Because it’s asking you to put off things you want today for things you may not even be able to envision tomorrow. But having money saved? That’s both fun and satisfying. It makes you feel safe, secure, powerful, independent. So if you’re not saving automatically — for life in general as well as for retirement — on a monthly basis, step it up. Then visit your savings on a regular basis. And smile.

Have a great week,

Jean