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Good morning Dinks.  Do you have an online bank yet?  I’m not asking if you log into your bank’s online portal to pay bills and transfer funds.  I want to know if your primary bank is completely virtual.

When online banks were first introduced it was a nightmare for me as a financial planner, but as a client I was intrigued.  Online banks were offering rates that traditional banks couldn’t compete with and therefore we were losing a major chunk of savings to our new online competitors.  I knew I couldn’t compete with the low service fees and high interest rates that online banks were offing to my clients so I tried to sell something that online banks couldn’t offer – the personal one on one benefit of having a financial advisor.   It worked on some clients, but to others all they cared about was the bottom line – WOW that hurt!

I knew I should avoid online banks as a client because they went against everything I stood for as a financial planner.  However I was admittedly tempted by the allure of everything online banks had to offer and quickly jumped on the band wagon.  I opened a savings account for the substantially superior interest rates.  However the love affair didn’t last long.  I found it incredibly inconvenient when linking my virtual account to my primary bank accounts and trying to  transfer money between them.  When it comes to dollars and cents I like everything to balance out on a daily basis and waiting 2-3 days for my money to transfer made me stir crazy.

Open an account with an online bank if…

Online banks are both a gift and a curse.  They offer attractive interest rates but in most cases they’re not a full service bank.  I don’t know many people who use an online bank as their one and only bank, but I do know a lot of people who use online banks to compliment their overall financial strategy.  This is a great way to use an online bank.

If you don’t need to do foreign exchange transactions, purchase non-cash investments (i.e. mutual funds, stocks and ETFs) and enjoy the comfort of a dedicated financial advisor then online banks are for you.  If you’re shopping around for attractive rates on your savings deposits, mortgages and Guaranteed Investment Certificates then online banks are also the way to go – as long as you’re internet savvy and can live without actual paper confirmations.

Skip the online bank if you want customer service

I know this is a major reason why my Dad isn’t a client of an online bank – because he can’t physically go to a bank branch and talk to a teller or financial advisor.  Truth be told my Dad doesn’t even use online banking, he doesn’t even use telephone banking.  My 61 year old father likes to go into the bank once a week to get cash and pay his bills.  While waiting in line he munches on cookies and enjoys a hot cup of tea.  That’s banking to my Dad.

The flip side of that scenario is that you never have to wait in line with an online bank and you never have awful customer service because with an online bank you’re the client, the teller, the financial advisor and the branch manager.  I’m not sure if that’s better or worse, that’s just the way it is.

Photo from Flickr

 

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Good morning Dinks.  Two months ago my company announced they are being sold to a competitor and although it’s supposed to be “business as usual” my current employer can’t help but talk about how beneficial it will be once the takeover begins.

What is a flexible work schedule?

Our new employer is offering a variety of flexible work arrangements including a 10/4 schedule where employees can do their 40 hours in 4 days with 10 hour work days.  They are also allowing employees to work from home up to three days a week as well as offering a variety of 8 hour shifts with start times varying from 7 am to 12 pm; that’s a great option for people who prefer to work later than the normal 9 to 5.

The stress free environment of working from home and working the hours you want to helps relieve the burden of your managers watchful eye always looking over your shoulder.  It will make employees more productive because they will be more relaxed working on their own terms. Right?

Do you have a flexible work schedule?

Over 40% of the workforce at my new potential new employer (I say potential because our jobs aren’t guaranteed as of January) work unconventional hours outside of 9 to 5 or work from remote locations.

This will be a fantastic perk.  I work as a community manager and therefore I can work from absolutely anywhere; however my current employer prefers all employees to be in the office.  My manager is very understanding about giving us time off for doctor’s appointments and family matters but it’s frowned upon to work from home without a valid reason.  However come January this may change.

A flexible work schedule will also require employees to use less vacation days which means in the long run we get more days off.  We no longer need to take a day off every time we want to leave the office early on a Friday because when you can work remotely you can work from anywhere.  How great is that?!

Flexible work arrangements are a win-win for everyone

If you’re an employer I think a flexible work schedule is a valuable way to attract and retain employees.  As an employee a flexible work arrangement is the absolute best work life balance there could be.  It saves employees time commuting and gives them more time to spend with their families.  As an employer it makes employees happy and happy employees work harder.

Sometimes travelling to and from the office during the day can be a colossal waste of time.  If we work from home or have the option to work flexible hours it can definitely help balance personal appointments and family obligations.  In some offices special arrangements are only permitted for matters related to children, but what if you don’t have kids?  In my new job (if I have one) flexible hours will be the norm for everyone, not just for those families with children.

Photo from Flickr

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Why Cash is Still King

by Team Dinks on October 28, 2014 · 1 comment

money-chessThe ubiquity of credit and debit cards in today’s world has led some to believe that cash is a dying medium of payment. But according to Learnvest, the Federal Reserve Bank of San Francisco recently released a study showing that 40 percent of all transactions still involve cash while debit cards are used in 25 percent, credit cards in 17 percent, and checks and electronic payments both sit at 7 percent.

This data paints a very different picture than what some believe is happening. So the question remains, with so many more convenient and advanced forms of payment, why is cash still king?

Small Transactions

Have you ever purchased a pack of gum or other small item that’s under $2? How often do you pay for those with a credit or debit card? And doesn’t it feel kind of silly to be going through the hassle of swiping and signing for such a small purchase? Small transactions are one of the places where cash still reigns supreme. Paying for tiny purchases with plastic just feels weird and annoying. The normal convenience of a card actually seems stood on its head for small transactions. According to Yahoo Finance, the report from the Federal Reserve Bank of San Francisco found that two-thirds of all transactions under $10 and half of those under $25 are completed using cash.

Extra Expense of Cards

If you have ever spent any serious time traveling by car, you may have noticed some truck stops that offer a cheaper price-per-gallon on diesel for those who pay with cash. Gas stations that do this are trying to avoid the extra fees that come with using credit cards. Any business that accepts credit card payments must have some form of credit card processing service. These services aren’t free. According to Card Fellow, there can be a multitude of small fees when processing credit card payments like authorization fees, return fees, and gateway fees along with a few others. So each credit card transaction accepted by a business costs them a percentage of the price. Cash doesn’t need any form of processing and so doesn’t cost anything beyond the purchase price. You can find some businesses that won’t accept anything besides cash for purchases under a certain threshold.

Anonymity

Credit and debit cards along with checks and electronic payments all leave a history of your purchases. If there was ever a reason, police and government departments can use this purchasing history to potentially track your movements and collect other data. And according to Mashable, a history of your spending can be used by marketers to tailor advertisements to your specific hobbies and preferences. Card numbers and electronic information can also be stolen by hackers as has happened with Target and Sony in the past. Cash is anonymous; cash can’t be tracked, and using cash can’t come back and bite you.

People who Don’t use Cards

This is one of the more important points for a business owner. There are still plenty of citizens out there that don’t use anything but cash. Whether they are old fashioned senior citizens, young people without access to cards, or anyone else, there is a significant portion of society that still solely relies on cash. According to The Wall Street Journal, another reason for people to rely on cash alone is that a good section of society has limited or no access to banks, which are necessary for most other forms of payment. As a business owner, this means that a good portion of potential customers will be ostracized by not accepting cash.

The Psychology of Spending

Bringing psychology into this might seem odd, but there’s a point. According to Seeking Alpha, studies conducted by Dun & Bradstreet show that people who use credit cards are likely to spend 12-18 percent more on purchases. And a study conducted by Carnegie Mellon University in conjunction with Stanford and MIT found that the brain’s pain receptors are actually tweaked when paying with cash, meaning it’s literally painful for people to spend cash. What this means is that relying solely on cash for your purchases is a great way to help stay on budget and keep unnecessary spending down.

In The End

Plastic and other alternative forms of payment are continuing to grow in popularity. But the time when the world ditches cash for good is still a long ways away. Until then, cash will remain an integral part of economics and society. For that reason, all business owners need to provide the means to accept and process cash transactions. Cash drawers aren’t expensive and they’re easy to use. Getting your hands on some is very simple as well. Pretty much all ecommerce and business vendors, be they online like Shopify or not, will continue to sell them for a long time yet.

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Do you gamble with your money?

October 27, 2014

I’m not asking if you go to a casino and drop $500 down on the table for one hand of Black Jack or one roll of the dice.  I mean do you like your income, expenses and debt to be consistent every month or are you OK if they fluctuate? Even though I’m young and […]

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Extreme Early Retirement

October 26, 2014

Folks, I don’t know how many of you are big followers of personal finance blogs – however if you haven’t heard about the extreme early retirement movement, it worth reading up on. The main idea is to maintain your lifestyle while minimizing your input of efforts and money. People who are really into the lifestyle […]

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Weekly roundup: Gyms, retirement and cars

October 24, 2014

Happy Friday Dinks.  How was your week?  Mine was great.  I’m feeling more and more at home in our new apartment and I joined a gym in my new neighborhood.  Yep that’s right I, lover of the outdoors, joined a gym.  For the next 12 months I will have $43 deducted from my bank account […]

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I’m in debt again – and it’s OK

October 23, 2014

Good morning Dinks.  Nick and I have been in our new apartment for almost a month and although we still have some furniture to buy and some boxes to unpack we are slowly but surely getting settled into our new space. I have advocated many times here on Dinks Finance that I am not a […]

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5 reasons I’ll always take the bus

October 22, 2014

Good morning Dinks.  As you know buying a car was my biggest financial mistake and although some days I do really miss the convenience of hopping in my ride I will probably never buy a car again.   Actually that’s not necessarily true I will never buy a new car again unless I really need it.  […]

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A Retirement Tool: The Power of the Reverse Mortgage

October 21, 2014

Reverse mortgages aren’t exactly new, but they’re sometimes marketed as though they’re the greatest thing since sliced bread. At the same time, critics of reverse mortgages deride them as being questionable financial products that prey on the ignorance of senior citizens. The truth is that these financial products have the potential to help millions of […]

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