Ashe v. PNC Goes to SCOTUS

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Spendology Launches Instant Budget App

Spendology has launched the Instant Budget App for Android. Instant Budget calculates a smart, local, and personal monthly budget in just minutes. Smart: we used crunched the numbers so you don’t have to. Local: we used zip codes and our U.S. Cost Matrix to connect to sales and use taxes, cost of living, and gas prices. Personal: we utilize the personal habits to develop the budget estimate.

In addition, Instant Budget provides a spending breakdown, a comparison to national consumer spending averages, and identifies ways to save money. The app is available for download for $1.99 in the Google Play Store. Spendology will be developing a version of the app for the Apple AppStore.

Spendology. Smarter You. Smarter We.

About the Company

Spendology activates intelligence in individuals and organizations. Smarter You: Apps that activate financial intelligence. Smarter We: Software and services that activate intelligence in organizations. Bank of America is a Spendology customer. The company is based in the Washington, DC metro area. Spendology was founded by K. Alexander Ashe. Mr. Ashe is a graduate of Florida A&M University and Columbia University. He previously worked as a management consultant at Booz Allen Hamilton and the Corporate Executive Board.

http://www.spendology.net

Contact: K. Alexander Ashe (240) 479-4705 contact@spendology.net

See the PR Newswire press release

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Reverse the No Budget Trend

61 percent of consumers do not have a budget according to an annual survey from the National Foundation for Credit Counseling.

Source: NFCC
Source: NFCC

Budgeting is Difficult

Cognitive bias gets in the way. Humans go for the default choice on difficult decisions. Most Americans are not organ donors because they don’t want to think about their mortality. Creating a budget is difficult because it forces consumers to actively face serious financial constraints.

Instant Budget App

Budgeting doesn’t have to be difficult. Spendology has been using psychology and advanced analytics to make budgeting super easy. We will soon be launching the Instant Budget App which will help consumers create a smart, local, and personal monthly budget in just a few minutes. Instant Budget is smart because it uses anchoring, a form of cognitive bias, to the benefit of consumers so that no invoices, contracts, or receipts are needed to create a budget.

Smart: We have crunched the numbers. If you tell Instant Budget that it takes you 30 minutes to drive to work, then we can calculate your transportation costs including gas for the entire month.

Local: We’ve conducted thorough analyses resulting in the Spendology Cost Matrix. We use your zip code to identify sales and use taxes, cost of living factors, and gas prices.

Personal: The resulting budget estimate is based on the personal habits of the consumer.

Follow Spendology on Twitter and Like us on Facebook for more info.

Get ready to help Spendology #ReverseTheTrend. Follow us on Twitter and Like us on Facebook to be first to learn about the Instant Budget App launch.

Keep Your Head About You

If you can keep your head when all about you
Are losing theirs and blaming it on you

~ An excerpt from “If” by Rudyard Kipling

The start of a new year is a time to reflect on the past year while looking towards the future. 2014 was a year full of shocks, surprises, and drama. There were fallen icons, tragic deaths, political drama, protests, cyber attacks, war and rumors of war. Yet, the world keeps spinning. Time marches on. We must remember to stay calm in the midst of a storm while keeping our eyes on the prize. Many select New Year’s resolutions our goals.

The Spendology approach is to pick one goal to rule them all. After all, we have a limited mental reservoir to implement big changes. Therefore, less is more and too much choice can be demotivating. As you make decisions in 2015 and beyond, be mindful of the cognitive bias(es) affecting your decision-making process. The world can sometimes be a chaotic place. Do remember to keep your head about you and your goals in sight – even in the midst of chaos. Spendology will be focusing more on millennials, alternative currencies, innovative technologies, and strategies for attacking cognitive bias in 2015. Stay tuned! I want to wish everyone a safe, prosperous, and Happy New Year!

Do You Need A Financial Advisor?

You don’t have to be a millionaire to afford a financial planner, let alone benefit from their advice. People of vastly different incomes and overall wealth seek valuable help from financial advisors everyday.

Financial questions and decisions are a part of life. Financial advisors go to school and have experience finding the best methods for solving financial dilemmas, from paying off large amounts of debt to investing for retirement. So how do you know when a financial planner’s experience and knowledge can benefit you? Here are three instances where it might be a good idea to consult with a financial advisor.

Looking To Make Financially Smart Investments

Investments are an important part of your overall financial picture. Once you have enough money saved up to start investing it’s important to honestly ask yourself: Do I have the experience and knowledge necessary to make financially smart investments?

You can be a very smart, well-educated person yet still remain unqualified to properly invest money because it’s a niche industry that requires specified knowledge. Smart investments also take a good amount of time to research and follow up, and so it’s also important to consider if you have adequate time to keep track of your investments.

If you have the time and experience to make great investments on your own, there might be no reason to pay a financial advisor to do the work for you. Although, if you don’t have the knowledge or time, a financial planner could really help you upgrade dividends earned through investments.

You Own Your Own Business

There are so many different financial aspects regarding owning your own business. You have to figure out how much you can afford to pay yourself and employees while still keeping your business in the green. According to Forbes.com, hiring a financial planner can help your business prioritize goals and make financially savvy decisions that greatly pay off in the future.

You Have A Growing Family

Add a spouse and kids to the mix and finances become more complicated. Daily bills plus medical costs, childcare, saving for college, etc. all starts to add up and feel a bit overwhelming. There are a number of options you can take advantage of that you might not know about. Working with a financial planner can benefit you and your family in the short and long term.

Tips How To Find A Reputable Financial Planner

A reputable financial planner will be honest if they can or cannot help you out. Unfortunately, if you watch enough episodes of American Greed you know the world is full of dishonest scammers. The most important thing is to find a reliable professional you can actually trust. Here are a few tips you should keep in mind when seeking a financial planner:

-Financial planners specialize in different areas, such as retirement, savings, or investments. Find a financial planner specializing in what you need.

-Make sure your advisor has his/her CFP credentials, meaning they passed a rigorous test from the Certified Financial Planner Board of Standards.

-According to financial writer Trent Hamm, you should always ask about advisor fees upfront. Be leery of planners that only make money from commissions buying or selling stocks.

-Make sure that your advisor focuses on you and what works best for your financial picture. Your financial goals should his or hers, too.

-Listen carefully, ask plenty of questions, and take notes. Doing your own research to back up what your planner tells you can also help you more at ease.

A financial planner can help you identify rewarding ways to handle your money, but that doesn’t mean that you are completely free from your financial duties. You are the captain of your own assets. Protect your money by making sure no one else has full control of the steering wheel besides you, not even a financial planner.

How to Easily Split the Bill

Imagine an idyllic scene where you and a few good friends go out to dinner for fondue. There are laughs, good memories shared, the food is delicious, and the wine is flowing. Nothing could make this night any better. Then the bill arrives.

Suddenly, a scene of joy and friendship turns in to one of mathematical calculation. The check gets passed around and everyone carefully throws in their money. The leader of the pack discovers there isn’t enough money to cover the bill and tip. Suspicion arises, and every person is interrogated on how they assessed their portion of the bill. The generous one throws in an extra twenty, even though he probably overpaid already. The poor one nervously shifts in his chair, because he has nothing more in his pocket to give and his credit card is maxed out. The leader pulls out a calculator and begins meticulously dividing up the bill. A fight breaks out about how so and so drank too many vodka tonics, and the rest of the group shouldn’t have to make up for it. Another battle begins about how much tip the waitress really deserves. If splitting the bill drives you crazy, there are some good rules of thumb on how to avoid the above scene. There is no reason that it should be a tough procedure every single time.

First, be thoughtful of everyone going to eat. Pick a restaurant you think everyone can afford given their circumstances. Warn people that the bill is “dutch” tonight, and email them the menu in advance so they can plan what they can reasonably eat and drink. If someone complains that the price per plate is too high, be ready with a good backup. Remind people to bring small bills if possible. Before arriving at the restaurant, see if the restaurant is willing to cut separate checks for every person at the table. This can avoid a great a deal of confusion. If the restaurant can’t accommodate you, ask your table of friends how they want to handle the bill before the meal starts: are we splitting evenly or itemizing? This way, everyone is prepared for what will happen with the bill and it is less likely to ruin the night.

Alcoholic drinks are often the root of many disputes in regards to the bill. Try having everyone order and pay for their own drinks at the bar before sitting. Don’t have the bar check transferred over to the table or start a tab. Try to avoid ordering wine for the table, unless everyone at the table, whether they drank a glass or not, agrees to share the cost. Appetizers is another area for issue. Again, best to avoid unless everyone agrees to share the cost.

Prepare to be the bookkeeper and the bank for the meal. Two of the biggest problems with splitting the bill are when everyone gets a say, and nobody has change. Bring a wad of small bills. Ask the waitress to bring you the bill. Be the person to itemize the bill and let everyone know their total with tip. Make change where necessary right on the spot. Having centralized accounting can make the entire process much smoother.

Also, consider technology to help you split the bill. There are several apps out now that can help you do this. If you need help doing mathematics, Gratuity will assist you in calculating the tip plus total and dividing out by the number of people in the party. If you are forced to itemize, there are several apps such as Tab, Divvy and Billr that will let you either snap a photo of the bill or enter the items ordered and divide out the amounts everyone should pay. You can also agree to pay for everyone and have people pay you back on services such as Venmo or Paypal. Be careful with this option because not everyone is great at remembering to pay back. It’s acceptable to send a reminder email or text a few days after the meal. Know, however, that it is possible that someone might not pay you back.

So, go enjoy a meal with friends and family, but remember to keep these tips in mind.

Using Game Theory to Improve Your Finances

You are hanging out with two of your friends trying to decide where to spend the following weekend. Your options are a local spa or Las Vegas. While the more expensive option is a guaranteed good time, you are feeling tight on finances at the moment, and spending over $1,000 next weekend doesn’t feel very wise or comfortable. Then again, your friends seem really excited about the Vegas option and you don’t want to let anyone down.

In the above scenario, you are weighing out your options, trying to make the most favorable decision, not only to you but also in regards to your friends. This strategic thought process is studied by scientists from all different fields and is known as Game Theory. The name is rather appropriate, considering life is really like a game, everything we do is a calculated move, as we try to situate ourselves nicely on the board game of life.

Originally game theory looked at zero-sum games, which tried to prove people operate on a system of exact exchanges, equal parts lost to equal parts gained. For instance you buy your roommate dinner tonight, because she bought you dinner last night. Of course, humans are never that simple all of the time, and so since its origins, gaming theory has expanded into complicated scenarios. In simplicity, it aims to describe why we do what we do in social situations.

How Can You Use Game Theory To Improve Your Finances?

Understanding how people think and why they do what they do gives you a lot of power. You can better understand your loved ones and even yourself; in fact, you can actually use the ideology behind game theory to improve your own life. According to one NYU professor, you can score a better deal on a car using game theory. He says he’s successfully done it at over 11 car dealerships. Business Insider explains that this professor simply calls up a number of dealers, says he will buy a specific car at a specific time that day from the dealership that offers the best price. Since car dealerships work on ‘dominate strategy’ logic, this means they want to make a sale more than they want to make a large profit spread, the Professor gets a great deal from someone.

If you just walk into a dealership, the salesmen are going to be using game theory psychology on you, selling you a car at the price they want. Few businesses use ‘optimum outcome,’ which would be the opposite and mean that they only want to make a sale for full retail price. Always keep this in mind when negotiations are on the table.

Besides getting a better deal on your next car, you can use game theory to improve your finances in many other aspects of life, too. If you are going to buy a house, or anything that involves negotiations, you can get a better deal by thinking outside of the box, and applying game theory to understand the real thought process of the seller and anyone else involved. You can also take note of your own rationalizations to help you spend less and save more. The mind is a powerful thing, the better you understand how it operates, the more control you have over your own destiny and bank account!

What to Consider When Buying a House

Buying a house is certainly a big deal since it most likely is going to be one of the largest purchases of your life. A lot of emotions and thoughts can come up within this decision-making process, so it is good to take the necessary time to process and prepare yourself for things to consider when deciding to take this big step! Since buying a house is a significant investment and there are lot of variables that determine the value and expense of this investment, it’s prudent to consider what possible strategies can be effective in seeing if it’s the right time and right home to purchase. Here are some practical ideas of things to consider when buying a house:

Do the Math

You heard it before, but the classic variables regarding buying a house are still true: your credit, down payment, and budget. How is your credit rating?  Does it favor you to have an adjustable-rate mortgage (ARM) versus fixed-rate mortgage? Even if the initial ARM might look good to start with, it might not be completely certain or stable versus a fixed-rate interest rate, which might be more stable and secure yet more expensive. Consider the range of the ARM: does the point range fall under your affordable maximum budget per month? It is important to look at the proposed mortgage terms and see the fine print to make sure you know what you can afford. Then, do the math to see what works best for you in your situation. How much money do you have saved for a down payment? The typical percentages of down payments have risen–even with individuals who have good credit, which is preferably 20%–so it’s good to consider if you have the down payment. It’s important to also consider other expenses that you will have to fit in your budget beyond just the mortgage, interest, and taxes such as home insurance, utilities, maintenance, or upgrading.

What are your goals?

This question probably depends on who you are and what stage you are in your life, but it’s something to consider when buying a house. Perhaps you are dreaming of having a family in a home or you just want to use this home as a stepping stone to greater things in your life that you might want to fix up and resell later. Perhaps you want to rent it out. You might have to verify that renting out your property is legal and make sure you know the process. It is possible that the home owner’s association might not allow it, so understand home owner’s association contract if renting is something you might want to consider. Also, what is your target market? What is the local vicinity like? Do the school districts have a good reputation? Are there homeowners or is it mostly renters in the area? Is this a college town with mostly single and young adults? Learning about the neighborhood, the schools, and the demographics can give you an idea of the prospective stability and value of the neighborhood homes. Make sure you like the surroundings and the view: do you see yourself admiring this for the years to come?

Looking Beyond What You See

 At first glance you might feel love-struck with a house, but make sure you look past the infatuation to see if it is a true fit. Some real estate agents are real artists in crafting a good-looking open house and might be able to divert attention away from one thing to another. Also, a lot of real estate agencies partner with staging teams to master in making a home look better than its natural appeal. Make sure to see what the actual floor plans are to see what it looks like on paper versus the mastered staging meant to disguise its flawed layout or cramped space. The same goes for the opposite for an occupied home or a home that doesn’t seem as appealing. If there is some interior fashion or decorating that doesn’t agree with you, see if you can imagine the way you would like it. The fact is when buying a house, a lot of things must be considered, whether it’s your finances, the neighborhood surroundings, or going beyond what you see that makes the most difference of an informed decision.

 

 

Credit Union Vs. Big Bank: Who Should You Trust With Your Money?

Both banks and credit unions offer loans and checking accounts, but they are different on various fronts. Banks are for-profit, private institutions. Credit unions are privately operated not-for-profit organizations. Just like banks and the Federal Deposit Insurance Corporation, the National Credit Union Administration backs credit union accounts, insuring each account up to $250,000.

The Wall Street Debate on Big Banks

Perhaps the biggest difference is that banks must please shareholders in order to remain in the green, but credit unions are not publicly traded. Instead, if you put your money into a credit union account, you become a stakeholder. Instead of shareholders calling all of the shots, credit union members are the stakeholders in credit unions. As such, after a successful quarter, credit unions offer dividends back to their members, while big banks give dividends to shareholders instead of bank members.

If big banks don’t report growing profits every quarter, their company value can suffer, and banks feel a pressure to increase profits. On the contrary, credit unions need to please the people with money in their banks in order to remain afloat.

Are Credit Unions As Convenient As Big Banks?

According to data from the Federal Reserves Survey of Consumer Finances, 90 percent of Americans deposit their money into a checking account. Putting your money into a debit account is convenient; you can keep your money tucked away safely, and then take as you need it using an ATM, credit card, or walk-in service.

While there are over 7,000 credit unions in the U.S., one of the biggest concerns people have about switching over is accessibility to banking. Depending on the credit union you go with, and the area you live in, accessing your funds from ATMs may or may not be difficult. In fact, just like the big banks, credit unions are offering more and more options for self-banking.

You might have to drive an extra mile to reach the ATM, but according to MyCreditUnion.gov, credit unions tend to return higher interest rates to their bank members, and offer lower rates on loans. A 2013 study by Datatrac found that mortgage rates ran pretty close between banks and credit unions, but car loans were 2% lower at credit unions.

The national average savings rate offered by big banks is 0.13%, while Credit Unions offer 0.14%. Still, these rates are only ‘average’ and fluctuate far and wide. You have to look around where you live to see what options are available.

Drawbacks To Credit Unions

At this point you might be wondering, so what’s the catch? Are there any downsides to banking with a credit union?

Everything has its drawbacks, even credit unions. For starters, not everyone is eligible to become a member at a credit union. Banks allow anyone to enjoy their services, but credit unions operate under tighter regulations.

And don’t go thinking credit unions don’t have fees! Just like any business, they have to generate money just to keep their doors open. Credit unions have rent to pay, employees to support, and expenses to cover. They are susceptible to the same business demands and pitfalls that have tripped up banks in recent years.

Are Credit Unions The Next Big Bank?

As credit unions become more and more popular, will they turn out to be just like the big banks? According to a 2013 article in the Washington Post, over the last few years, big bank overdraft fees have stayed the same, costing an average of $30 per item. During the last 2 years the average price for credit union overdraft fees increased from $25 to $28. Could the transition already be happening?

There is a Bank of America and a Wells Fargo on every corner, right across the street from Chase. But if you look carefully you will notice a number of credit unions are also available for banking. Do online research and talk with bankers from both big banks and credit unions to uncover which metal vault offers you the most benefits.