Money Day: Your Personal Finance Holiday

I opened my first checking account on the day I entered college. During registration, local banks set up tables at one end of the room. They all seemed the same to me. I chose the bank that gave me a free Frisbee. I did business with that bank for seventeen miserable years. I loathed that bank. They were constantly finding new and interesting ways to charge me money. If I hated it so much, why didn't I change? Because I never felt like I had the time. Besides, I had no idea where else to go.

Eventually the bank went too far. Because of some obscure procedural policy, I was charged three $30 overdraft fees in a single day. This kicked my ass into gear. I took an afternoon off from work, closed my account, and started fresh at a local credit union. It was one of the best financial decisions I've ever made.

If I could solve one financial problem in a few hours, just imagine what I could do with an entire day. If you, too, have grand financial plans that you never seem to have time to fulfill, consider taking a personal Money Day. Choose a normal weekday (when banks and business are open), take time off work, and get things done. Don't worry that you're using a vacation day for “nothing” — this vacation day will repay you many times over, not just now but for years to come.

Before you begin, remove any barriers — mental and physical — that might prevent you from accomplishing your goals. Gather all the account information you can find. Eliminate distractions. Commit to spending the entire day taking control of your personal finances. It's time to do all the things you've been putting off!

Here are some tasks you might consider for your Money Day. These may sound dull, but the money you'll save by taking the time to do these can be very exciting:

Begin tracking every penny you spend.
This one change can work wonders on your finances. You can't change your habits if you don't know where the money goes. You can track your spending with a simple notebook, but most people find a computer makes things easier. You can create your own spreadsheets, or you can try a piece of personal finance software like Quicken or Microsoft Money. There are some exciting new web applications, too. Give Wesabe a try.

Set up a budget.
A budget can be a valuable tool. Yeah, the whole concept is boring, but if you can plan where your spending will go, you can make better decisions with your money. You can set up a budget on a piece of paper, or in a spreadsheet, or with a piece of software (PearBudget, for example).

Optimize your bank accounts.
If you, too, picked a bank because they were handing out free Frisbies, it's probably time to find a bank that works for you as an adult. If you're happy with your bank, then call them and ask them to eliminate service fees or to give you better interest rates. If you're unhappy with your bank, find a new one. A local credit union is an excellent choice. You might also consider internet banks, which often feature better interest rates. Here are few:

  • FNBO Direct
  • HSBC Direct
  • WT Direct
  • E*TRADE Bank
  • ING Direct (Ed. note: ING Direct became Capital One 360 in 2013.)
  • Everbank

You can also easily compare rates side by side using this form.

Open an investment account.
This may sound scary, but it isn't. It's easy. And because of the magic of compound returns, making regular small investments now will pay off huge in twenty or thirty years. Consider scheduling automatic investments: have $100 (or $50 or $25) withdrawn from your checking account each month and put directly into a Roth IRA. What's a Roth IRA? Check out these articles for more information:

For more information on automatic investing, borrow David Bach's The Automatic Millionaire from the public library.

Call around for better deals.
What are you paying for your credit card? Your cable? Your cell phone? You can probably find better deals elsewhere. Do some research. Did DirecTV just mail you a great offer? Did you get a zero-precent credit card mailer? Use this information as ammunition. Call your current service providers and ask if they can meet or beat the deals from their competitors. They may not, but it never hurts to ask. If you want to play hardball, threaten to close your account. This is often very effective, but you have to be prepared to actually follow through with your threat. An hour or two spent calling utilities and credit card companies can free up cash now.

Visit your public library.
Borrow one (and only one) personal finance book. (If you borrow more, you're less likely to read any of them.) Take this book home and begin reading it. Which book should you choose? Any of the following are excellent starting points:

Once you've finished your first personal finance book, you'll have a better idea of the topics that interest you. Return it and check out one (and only one) new personal finance book. The public library is a fantastic resource for saving money.

Set financial goals.
Most young people putter through life with no idea what they're supposed to be doing. You don't need to be one of them. Are you carrying credit card debt? Do you have an emergency fund? Would you like to buy a house? A car? Would you like to start a business? Take some time to decide where you want to be ten years from now. Create some money goals to act as a roadmap to your future. Here's an excellent set of basic goals you can build upon:

Goals keep you on course. They give you something to work toward.

Create a money file.
This can be an actual file, or it can be a shoebox. It can even be an encrypted file on your hard drive. It simply needs to be an easy-to-access location in which you keep all of your important financial information, including account numbers, service providers, phone numbers, etc. This final step ties together all the work you've done on Money Day.

These are just a few tasks you can get done on Money Day. Only you can say which tasks are most important, which tasks you've been putting off. Make a list. Gather information. Don't just talk about improving your financial situation — do it! Make a commitment to your financial future: throw away that free Frisbee and schedule a personal Money Day.

This is not a guest post. This article first appeared in Ramit's 2007 Guide to Kicking Ass in slightly different form.

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Lynnae
Lynnae
12 years ago

Great advice! One of the best moves I ever made was moving my savings account from our local credit union to an online bank. Our credit union started charging outrageous fees for doing business with them, so I took my business elsewhere and got a better interest rate, too.

Steven
Steven
12 years ago

One additional book I would add to the list is Get A financial Life: Personal Finance in Your Twenties and Thirties by Beth Kobliner.

After I read Beth’s book, I went out and bought a dozen copies to give to high school and college friends. I also made sure the public library has a couple copies. In my opinion, it is by far the most informative personal finance book for a person in their twenties and thirties. I just wish she had written it thirty years ago.

Jason
Jason
12 years ago

Did you publish this article before? I know I’ve read it…was it maybe from a contributing writer?

In any case, it’s a great article and I read it again in full.

Fabulously Broke
Fabulously Broke
12 years ago

Steven: Thanks for the book suggestion.. I want to at least try and be on the right track before I hit my 30s. As for leaving a bank – I did that when I turned 18. When you turn 18, your bank account at TD becomes “adult”, and therefore subject to a surcharge of $10 a month for balances under $1000. As an 18 year old kid, about to move out when she turned 19, $1000 was a lot of money to keep lying around when I had to pay rent, bills, buy food… I did a bit of research… Read more »

Modern Worker
Modern Worker
12 years ago

Luckily, I am very happy with my banking situation – but I’ve seen friends struggle with the b.s. policies some other banks have. Having the gusto to take business elsewhere is crucial.

Amber Yount
Amber Yount
12 years ago

I want to read that Larry guy’s book, the Shut Up and Stop Whining book…couldn’t find it at our local Hasting’s though..unless they keep it somewhere other than the finance section….I might try the library or Borders next…but it seems all pf books i’ve read are all basically the same concepts…

Julie
Julie
12 years ago

I’d like to also suggest the You Need a Budget software program. http://www.youneedabudget.com/

I HATED creating budgets using Quicken and always went over. You Need a Budget has totally transformed the way I spend money. I’ve discovered that I have a whole lot more to work with than I ever thought I did.

Julie

Sam
Sam
12 years ago

Great ideas! Furthermore, while a full weekday would be helpful much of this can be done on the weekends. We’ve been tracking our spending (I work on it at night when I’m in front of the tv), worked on organizing our bank accounts (found a full serice brance for Wachovia that was open on Saturdays, I understand that banks often provide a location where customers can meet with reps on Saturdays), and we have met with a variety of financial planners during the evening hours often over dinner (and they often buy the dinner).

Aleks
Aleks
12 years ago

I did most of this without taking time off work. You can open an online savings account whenever you want. I think I set mine up at 1am one night when I couldn’t sleep. When I set up my investment account I just downloaded the forms off their website and mailed them in. When you’re looking for a bank, hours of operation are something to consider. If you have to take time off work to open the account, will you also have to go during work hours whenever you need to talk to a teller? One of the things that… Read more »

Alex Ion
Alex Ion
12 years ago

I am with ING for almost all my necessities but I do use others from time to time if I need to cash in a check or anything like that.

I think you gave some great advice. Keep it up!

Louise
Louise
12 years ago

I’ve done this a couple times in the past. The most recent was the most successful. I had noticed my credit union had posted extra principal payments on our home equity loan in a way I thought was incorrect, so after 2+ years of ignoring it, I dropped in to check with them about it. While the principal payments turned out to be correct, I found out they had a 4.7% rate on a 4 year term (I had 7% on a 15 year term, but was paying extra on it) – so I got a free rate adjustment done… Read more »

plonkee
plonkee
12 years ago

When I first read this title, I thought you meant taking a holiday (vacation) from your personal finance.

The actual concept is a good one although it would need a lot of planning for me, or I’d end up lolling about rather than doing the things I was supposed to.

Iva
Iva
12 years ago

Great, consistent money advice, well done. Definitely some points to take notice of there, it really is amazing the differences small changes make, like getting a high interest earning online bank account.

Kuz
Kuz
12 years ago

Very good piece and I am looking to Wesabe now. One thing I would say about ING Direct (which I have and absolutely love for both their savings and checking acccounts) is that you cannot totally cut ties from a brick-and-mortar bank with them. They are not able to handle a lot of different kinds of deposits (I cashed out some options and had to send the check over to Bank of America first), so they actually advise you not to completely ditch your other bank. My next option is to go with the credit union at work linked to… Read more »

Tim
Tim
12 years ago

I agree with Kuz, you should have some kind of local bank whether big or small to do those local transactions that you cannot quickly and easily do with online banks.

since i’m not longer an ING fan, i have to say that omitting igobanking with its 5.3%APY in the list of high yield savings accounts is poor form. of course you can’t list every bank.

Mrs. Micah
Mrs. Micah
12 years ago

Most excellent! I’m working on something similar, right now. I’ve taken the last 2 days (I’m unemployed, but interviewing on Friday!) to collect and catalog financially-related things, research IRAs and the like. Your site is what got me researching IRAs, so thanks for that.

-MM

Thoughtful Wheaten
Thoughtful Wheaten
12 years ago

Overall a great post with some solid advice on budgetting and finanical planning. As a follow-up here is a book review for “The Millionaire Next Door” at my blog. Some great points on personal finance but an easy way to save yourself 250 pages of slow dragging text is to check out this review and see if its worth a read
http://thoughtful-wheaten.blogspot.com/2007/09/millionaire-next-door-book-review.html.

Pete
Pete
12 years ago

Thanks for this article, i originally found out about it on MSNMoney.com. It had some great points, and through my own personal finance day i netted almost $1800. I tell my story at my blog:

Link Here

Emmy Yang
Emmy Yang
6 years ago

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