However, they are giving advice for the greater masses of people who, in the end, always fall back on credit and dig themselves in a hole.  I’m sure there’s a ton of statistics out there that prove that the companies always win.  However, statistically, I choose to believe that my TftM readers are not your typical credit card statistic.

Technique Overview

Basically credit card companies make it real enticing for the average Joe to use their product.  They do this in the form of rewards, miles, or cash-back.  Personally, I am a fan of the cash-back model.  The problem is that the average Joe never does the math and keeps a balance on the card every month.  You aren’t an average Joe though are you?  No, I didn’t think so.  Therefore, you find a suitable rewards card (see further in article for recommended comparison sites) and use it for every single daily expense you could possibly use it for.

Carry some emergency cash in your wallet if you want, but just use the credit card “as if it were cash”.  I know I’ll get blasted – so hold on.  Now very important you must pay this balance off in full, every single month, in order to not be charged finance fees and interest.  Basically, you’ll be using the convenience of a card and getting paid money for being smart about it!

1. Find a suitable Rewards Card and Apply
2. Have emergency cash in your wallet
3. Use the Rewards Card for everyday purchases and fixed costs.
4. Pay off your Bill each and every month in FULL
5. Reap the Rewards and Cash back benefits at THEIR cost!

Discipline

This technique can work but you must be militant in your discipline to pay down the card every month.   By the way, I only suggest having one credit card while doing this.  The problem is that most people obviously are not disciplined or fool themselves into believing they’ll pay it off over a period of time. As soon as you think this way YOU LOSE!    ::stamps Statistic on your forehead::

WARNING: If you do not have rock solid discipline, these tips will not work for you.  In fact, it could put you in more debt if you aren’t inclined to pay down your entire bill every month!

Get a Financial Cushion

I’ve become a big fan of always having an emergency fund.  For this, you will need to have some money laying around just incase things go south one month.  In fact, even if you don’t read anymore of this article you should really be thinking about having at least $1,000 in a no-touch savings account.  The point of this is, if later in the steps you cant make a payment on your credit card – you use the emergency fund.

Personal Favorite

Right now, I am using Chase Freedom credit card.  They seem to be the overall best, but of course its a personal preference.  They have a few websites like BankRate and CreditCards that show all the types of cards you can get.  Of course, you should choose something that gives you the rewards you want without any gimmicks.  I’m also a fan of Chase because I setup Blueprint that allows you to track all your expenses into categories and choose what categories you’ll always pay off.

Paying All and On time

I’ll stress this one more final time – pay off your credit card in due time, every month.  This whole method will not work unless you do that.  Every month you should have your credit card at a zero balance.  If you can not do this, then I suggest using Cash or Debit cards!

1. Pay On Time! Check your banks payment schedule.
2. Pay In Full!

Conclusion

I’m sure some of you PF experts out there will be ready to flay me for my suggestions, and that is fine.  Many people argue that credit card companies design everything for them to win.  That is true, but they play the statistics game also – that the majority will eventually, fail and rack up interest bearing credit.  My suggestion?  Don’t be a statistic – stay smart, pay off early, and keep a zero balance. Have your own suggestions?  What works for you all out there?  Let us know!

Today on Tech for the Masses we start the “Innovative Finance Series”, and we’ll jump into how to automate your personal finances.  If you’re like most people you probably live paycheck to paycheck with little concern on where it all goes.  When the money is gone, you have to stay in.  Using this method means there is often little thought for the future (savings goals, emergencies, down payments, gifts, vacations) and also means you’ll probably be using that high-interest credit card of yours.  That’s a huge problem.  Don’t worry – we have a solution and we’ll use technology to get it all done.

My Introduction to Personal Finance

Let’s face it, who wants to keep track of their money on a daily basis or god-forbid – Make a Budget!  Yuck, sound’s completely dull.  For the past year or so I’ve been inspired by the writings of several blogs, as well as personal finance guru’s such as Suze Orman and Dave Ramsay.  The daily finance blog I read is J.D. @ Get Rich Slowly.  I have to give JD a lot of credit because he’s pointed me in the right direction on many issues.  Lastly, The Simple Dollar is very informative and for the lazy, he put the basics of personal finance on the back of 5 business cards then expands it onto a 49 Page Free e-Book.  I’m sure everyone has time to read that one!  So if you haven’t gotten your finances in order and automated, wake up and smell the high-interest rates!

Online Banking Made Simple: ING Direct

For those who do not know, ING Direct is an online-bank.  Online banks usually higher savings account interest rates then brick-and-mortar banks which is why they are great.  ING is also FDIC insured so you don’t have to worry about the bank going under and losing everything.  I use ING for most things and it’s extremely simple to setup an account and I am impressed by their online security.  Pound for pound, I like it because they make it painless to login and even a chimp can use the interface.

Account Structure

As you can see from below, I’ve set up multiple savings accounts.  This is painless in ING and you can open as many as you want. The bank don’t care!  Plus there is no minimum fees or annual fees.  Basically, you open a savings account then give it a nickname, just as I have.  Now, my account balances aren’t anywhere near where I’d like them to be but it’s a start.  I highlighted the major money hits in my financial year, and created an account for each of them.

Christmas time has always been stressful for me, because like most people we never planned or saved for gifts.  It ends up going on a credit card and you make an empty promise to yourself that you’ll pay it.  Now as you can see I’ve created a savings account dedicated to these areas and will automatically fund it each month (See Below – ASP)

Why separate all your savings accounts when you can have just one?   The answer is simple. It’s difficult to keep track of your savings goals when they are jumbled all in one account.  You’ll easily lose track and spend the money unknowingly.

Automatic Saving Program

Now for the meat and potatoes part of the article.  Automatic Saving or Automating your Finances using ING DIRECT.  You saw earlier how I setup my accounts.  Below you’ll see ASP (Automatic Savings Plans) setup within ING DIRECT.  The ASP settings basically allow you to set monthly, weekly, yearly, etc rules for your accounts.  In my case, I have so much transferred each month to my Emergency Fund automatically, as well as the other areas.  All I have to do is make one bank transfer to my main checking account and the system does the rest for me.

Guess what?  When all that automated savings plans executive each month for me then I know I’ve met my goals – automatically.  Secondly, I know whatever is left in my bank account is all mine to spend as I like – guilt-free!  Furthermore, fast forward to Christmas and voila, a no-fuss no-muss Christmas gift fund is sitting there for me to spend on family and friends guilt-free.  Not only that, but I’ve made contributions to emergency, education, and vacation funds.  So when the time comes for a trip or even an emergency room visit (god forbid), there is money there.

I highly suggest you all try this approach.  This methodology I also use for funding investment and retirement accounts as well as bills.  The beauty of it is that everything is done hands-free and guilt-free.  The money you have left over each month (or week) is used for whatever your heart desires.

Joining ING – Free Money!

Now if the thought of automating your finances and having a guilt-free experience isn’t enough, then this should be it.  If you sign-up with ING Direct, they’ll give you $25 to start your account.  Crazy right?  The catch is you have to fund it with $250 and use an invite from an account holder.  If for some reason you aren’t comfortable doing it or getting $25, then still go to open an account directly at ING DIRECT – I am that passionate about ING Direct.

How it works

Basically, ING offers account holders a few limited $10 referral bonus for every person that we have create an account.  The new account holder is given $25 dollars after taking the referral.  That is a total of $35 ING is giving away just to have new customers! Amazing – It’s a WIN-WIN in my book and it’s how I got started with my account.

I have a few referral tickets left open, so if you are interested in depositing $250 to a new account and having ING give you $25 bonus for doing so then let me know. You can either leave your name and email address in a comment below or email: tech4themasses@gmail.com. I will send you the ING Referral and help you get started on your way.  It’s fast and easy – trust me.

Remember:  Sign up for Paperless Statements when you join-up! Save a tree!

Further Book Reading

Here are some books that I’ve read and highly recommend to everyone else.  I am not a guru in this area so I’ll tell you right off the back that you don’t need to be a rocket scientist to read any of these books.  In fact, I’ve found most of them I can read through pretty easily and they even offer some humor to go along with it.  Here is my list of books and authors below.

Author	Book	Review
Dave Ramsay	The Total Money Makeover: A Proven Plan for Financial Fitness	This is a great foundation book. His claim to fame is the debt snowball, a method used for getting rid of credit card debt.
Ramit Sethi	I Will Teach You To Be Rich	Ramit offers a youthful, intelligent, yet humorous approach to personal finance for most beginners.  He’s also a lover of automation like myself.
Suze Orman	The Money Book for the Young, Fabulous & Broke & Suze Orman’s 2009 Action Plan	Unfortunately, I end up watching Oprah with my wife.  And anyone who watches it long enough already knows who Suze Orman is.  Yes she direct and in your face, but that’s actually what most people need.  I read both books and they are priceless – especially the one for young people.

Further Online Reading:

These are my top 4 favorite personal Finance blogs to read – Get Rich Slowly, ManvsDebt, MyLifeROI, and The Simple Dollar.

Conclusion

Like always, I look forward to other peoples thoughts and ideas on the topic – especially automating finances.  Let me know how your experiences have personally went.  Look forward to hearing from you through comments or email.