Money Blue Book

After months of waiting and checking my mail box regularly like a little kid waiting for his video game to arrive, I was finally relieved to discover a little envelope from the United States Treasury yesterday – my long awaited 2008 Economic Stimulus Payment check had finally arrived! Cha-ching (punctuated with a few obligatory fist pumping motions).

Actually, about a week ago I had already been given written notice that the check was on its way. I received one of those pointless waste of paper junk mail letters from the Internal Revenue Service (IRS) letting me know that I was entitled to an economic stimulus payment check as provided by the Economic Stimulus Act of 2008, and to expect its arrival in a week or so. The letter also provided a simple breakdown of how the federal government calculated my small time stimulus payment.

But what was the point of sending this predecessor letter out to let me know this? Why is the IRS and federal government so oblivious and wasteful when it comes to wasting millions of dollars on paper and delivery costs to send out these pointless letters? Why not just combine the calculation breakdown letter with the actual stimulus rebate check that I received yesterday rather than sending them separately on different weeks? The financial savings for the federal government could easily have been several million dollars. Especially since we are now in an economic recession and the government keeps griping and raising issues about needing to balance the budget, and even some of the presidential candidates like Barack Obama keeps talking about raising taxes against those with higher incomes to pay for more federal government programs, why not practice some fiscal sense now by adopting real cost cutting techniques? The government’s habitual wasteful spending activities truly baffles me sometimes.

How My Economic Stimulus Tax Rebate Was Calculated

While I had hoped to receive my economic stimulus rebate via direct deposit, because I filed my 2007 tax return through TurboTax and actually owed a sizable amount of taxes, I was not able to provide my bank account routing numbers on my tax return for direct deposit purposes. Thus I was one of many who had to wait for my economic stimulus check to be mailed via the postal service.

Taking a look at my rebate, here is how my actual stimulus payment was broken down, in case you’re wondering. Because my adjusted gross income on my reported 2007 federal income tax return was above $75,000, the IRS reduced my stimulus payment by 5% of the amount of my adjusted gross income exceeding $75,000. As such, with my single filing status starting qualification amount of $600 increased by $0 for my lack of qualifying children, but reduced by $230.25 for the adjusted gross income limitation, my final calculated stimulus payment turned out to be only $369.75. It’s not a whole lot, especially since the cost of living in my D.C./Maryland suburban neighborhood is pretty high, but I suppose every little bit helps me pay the bills in the grand scheme of things.

How I Plan To Spend My Economic Stimulus Check, and Its Impact On My Future 2008 Tax Return

I’m obviously elated to receive my tax rebate check finally after all these months, but after looking at the relatively small amount, it sort of leaves me wondering, how is this small amount of money really supposed to stimulate the economy to any significant degree? While the check is certainly free windfall money in the sense that I wasn’t really expecting it or planning for it until recently, the amount isn’t really large enough for it to be good for much.

I considered several financially smart as well as a few fun but reckless ways to spend my tax rebate, now that I have it in my hand. Here are the choices and possible options I came up with:

1. Use the economic stimulus payment to help pay my rent – The downside is that with a pricey monthly rental obligation of $1,425.00, this small economic stimulus payment isn’t likely to make much of a dent in my case.
2. Deposit the small stimulus rebate into my high APY savings account to earn interest and help build up my backup emergency fund – I usually try to keep at least enough liquid cash in my savings account to last 6 months. I advocate more emergency fund savings than most, but I think this offers greater peace of mind. In this recession, you never know what unfortunate events may strike when you least expect it – everything from out of the blue vehicle repair charges to sudden unemployment necessitating the need to file for unemployment insurance benefits.
3. Save the stimulus rebate for retirement and contribute the amount towards my Roth IRA retirement fund. This is a good way to plan for the future. Great for you, but not so good for the economy (at least for the present time).
4. Pay off debt – While this sounds like a logical choice, other than my usual monthly revolving credit cards bills that I always pay off in full, my 0% APR balance transfer credit card arbitrage funds, and my very low interest student loans, I don’t have significant debt that demands my immediate attention to speak of. I think I’ve done a pretty good job of managing debt.
5. Spend the money and actually help directly stimulate the economy by injecting it back into the stream of commerce – Possibilities include using it for discretionary entertainment reasons like spending it on expensive movie tickets or even just using the amount to pay for necessary driving expenses brought about by spiraling high gas prices.

After much thought, I decided to deposit the amount into my high yield savings account like a good grasshopper (or was it the ant) and save for a rainy day. Why change my frugal savings minded personality just because I came upon some windfall money? I’m the type of person who would probably still drive around in a rain storm for a free car wash to save some money as a force of habit even after winning a lottery for millions.

As for the taxation aspects of the economic stimulus payment, due to the terms and nature of the Economic Stimulus Package, recipients of the tax rebate such as myself will not have to report the amount of our stimulus payments as taxable income on our 2008 federal income tax returns. The amount is indeed free money and not something we will have to pay back or pay taxes on. Furthermore, if any recipient also received any other federal benefits or federally financed benefits, those benefits generally will not be affected by any stimulus payment received as well.

Where’s My Economic Stimulus Payment? Ask The Almighty IRS

For those of you who are still waiting for your stimulus tax rebates with bated breath, you should utilize this handy IRS stimulus rebate tool to locate the status of your economic stimulus payment. It should be able to answer your most pressing tax rebate question. To use the online tool and verify your identity, you’ll need to provide your social security number, your filing status, and the total number of your exemptions.

If you still are not able to obtain a satisfactory answer, you may want to visit your local Taxpayer Assistance Center for help or call the IRS via the Rebate Hotline at 1-866-234-2942 for updates.

If you’re like most people out there, there’s inevitably going to come some point in your life when you’ll need to apply for credit and seek out deeper pockets to help you fulfill your personal financial goals and objectives. While the traditional American dream of home ownership seemed to be fading out of reach during the last few years, the housing meltdown is now thankfully forcing out of control real estate prices back down into sync with reality. But with the resultant repercussions and reverberations of the financial credit crisis, mortgage lenders have grown extra vigilant in weeding out unproven and unreliable mortgage debtors. While a mortgage applicant with a FICO score of 700 in the past could have easily obtained a lofty prime interest rate on their loan, lenders are now increasingly demanding higher FICO’s in excess of 760 for the same prime interest package. The subprime credit mess has made one’s credit report and credit score even more important gateway factors to determining who qualifies and who doesn’t for the loan conditions of their choice. It’s not just for expensive, higher denominational credit prospects like mortgage loans either – even routine applications for things like credit cards, checking accounts, auto loans, and even new jobs are undergoing greater credit worthiness scrutiny.

Both Your Credit Report History and Credit Score Help Determine Your Credit Worthiness, But Credit Scores Are More Uniform Measures Of Comparison From Individual To Individual

While credit reports, like your high school transcript does a better overall job in revealing the compete performance history of the individual, oftentimes, it’s the credit score, like the mathematically calculated grade point average (GPA) that is given the greatest initial attention. Like the analogous school GPA’s, credit scores are frequently used by major lenders to serve as cut off points to determine who will enjoy speedy approval and those who will require further scrutiny. As such, a high credit score serves up the best first impression when it comes to getting quickly approved for credit cards, car loans, and mortgages. Your complete credit report transcript conveys the rest of your credit history, but it’s your credit score that provides that first impression to determine whether you instantly qualify or not. If you’ve ever wondered why some people can get online and get instantly approved for a credit card in seconds, that’s because their credit scores are likely so remarkably high, credit card issuers feel they have more than enough information right off the bat to grant application approval. The same can be said for pre-qualification terms for mortgage or auto loans for favorable rates.

For those of you who buy into the financial wisdom of some personal finance pundits who advocate a cash only lifestyle and preach against all forms of debt, I personally think that is an all too safe but foolish perspective to cling to. It’s not credit or debt that is so evil, it’s the lack of financial education and mismanagement that dooms one to failure. Unless you are a millionaire, come from a very wealthy family, or your last name is Gates, Buffett, or Walton (of Walmart fame), you will inevitably need to take on student loans, car loans, or a housing mortgage loan in some form or another sometime during your life span. A cash only lifestyle is appropriate for engaging in small time transactions, but for the pricier car and home buying process, you will inevitably need to call upon your built up credit history and credit score eventually.

So What Is The Purpose Of Having A Good Credit Score And How Is It Calculated?

Your credit score is basically a three digit number that is mathematically generated by credit reporting agencies based on information found on your individual credit report. The credit score is a numeral representation used to assess your past debt payment history and predict your ability to fulfill future debt obligations. Everytime you perform actions or transactions that relate to the extension of credit in the real world, that request for credit is submitted to the three major U.S. credit bureaus (Equifax, Experian, TransUnion) for recordation. By taking that continuously updated information and plugging it into a special mathematical formula, credit bureaus can generate an up to date credit score on demand to accurately predict your present and future ability to pay off incurred liabilities. Positive actions like on-time payment and low credit usage will boost your credit score, while negative events like bankruptcies, foreclosures, and failures to pay on time will hurt your score. Experience and trends have shown that those with higher credit scores are more responsible with credit and are less likely to default on loans. However, because credit transactions are not always equally sent to all big three consumer credit reporting agencies and not all information is processed by all three in the same mistake or error-free way, there are bound to be slight differences and discrepancies among different credit bureau scoring results, even if they all utilized the same credit scoring methodology. Keep in mind, Equifax, Experian, and TransUnion all individually generate their own credit score results on request.

But in general, one’s credit score is a fairly uniform mathematical measure of credit worthiness. Banks, credit card companies, and mortgage creditors are in the business of taking on risk, and thus utilize this invaluable scoring system to gauge prospects. In exchange for taking on risk, these institutions are willing to extend you money on loan, but in return they expect to be compensated for the financial risk they take on in the form of additional interest rate payments. Different degrees of risk and possibilities of default demand different levels of interest. If you’re a risky debtor with a shaky credit history, you will be required to pay higher interest payments to the creditor to offset the risk. If you are a more reliable debtor, chances are your interest obligations will be a lot less. That is why it is important to keep your credit score high – it’s one of the most important things that lenders look at when they evaluate your financial profile. You might be a nice guy or a nice gal, really deserving of credit approval, but if your credit score is lackluster, your chances may be shot.

What Is The FICO Credit Score Made Up Of, and How Are The Scoring Categories Weighted?

When most people speak about credit scores, more likely than not they are referring to the FICO credit score, the popular credit scoring system created by the Fair Isaac Corporation. There are currently several alternative credit scoring systems out there, most notably, the new VantageScore jointly developed by the big three credit reporting agencies, Equifax, Experian, and TransUnion, but the FICO is still the most widely used scoring method. I recommend avoiding the VantageScore for now and staying clear of credit vendors that attempt to hawk it. Because the VantageScore also uses a three digit scoring system but on a different numerical range from 501-990, obtaining it at this time will only serve to confuse you. Because most lenders have not broadly adopted the use of the VantageScore yet, you are better off focusing on the FICO exclusively for now. There really is no particular purpose for consumers or lenders to adopt the VantageScore at this point in time as its development was primarily business motivated rather than designed to benefit the consumer. The credit reporting agencies simply got tired of having to pay royalties to Fair Isaac for utilizing their proprietary scoring formula and wanted to create their own cheaper version. For now, stick with the genuine FICO – it’s the most widely used credit score and currently still the most relevant by far.

The FICO credit score is formulated on a scale from 300 to 850, however most people will have scores between 600 and 800. It’s unlikely to find many people with scores below or above this general scoring range. As a rule of thumb, any FICO score that is above 700 should be deemed good, although in this current market, a FICO of 750 will probably be needed to guarantee you the most favorable loan rates. Here is how the FICO credit score is generated and broken down into its composition categories according to pie chart percentages:

1) Your Credit and Debt Payment History – ( 35% of Your FICO)

This is the absolute most important factor in determining your FICO credit score. To have a high score, you’ll need to develop a history of timely and punctual bill payments. When lenders evaluate you as a prospective credit candidate, they want to see that you have a solid history of not only fulfilling debt obligations, but that you also have a track record of paying on time. Past late payments and unpaid debts sent to collections will significantly damage your FICO score. Negative factors like bankruptcy and defaulted payments will hurt your score as well. How badly a failure to pay or a late payment will affect your credit score is determined by the total number of past due items, how long they were past due, and the length of time since your last late payment. Because the payment history category is weighted to favor more recent transactions over older actions on your credit history, it’s never too late to start paying on time. Better late than never.

2) Amounts and Balances Owed – ( 30% Of Your FICO)

The second most important factor other than timely payment is the total amount of credit money that you owe and the proportional amount of your total available credit utilized. If you are already carrying a substantial amount of active debt in the form of existing home mortgages, home equity lines, car loans, student loans, or credit cards, you are less favorable as a candidate to take on additional debt. Because of your existing debt obligations, you are seen as a greater potential credit risk. However, your total amount of outstanding debt can be hugely tempered and your risk factor greatly minimized by having a lower debt usage ratio.

Under the FICO formula, someone with an outstanding credit card balance of $900, with a total available limit of $1000 (utilization ratio of 90%) is deemed to be riskier than someone who has an outstanding credit card balance of $2000, but with a total credit limit of $10,000 (utilization ratio of 20%). Being saddled with a lot of debt isn’t necessarily bad in terms of your credit score if you are well under your total available credit limit. Obviously the more zero balance revolving credit accounts you have on your credit report the better, but the amount of your credit usage in proportion to your total credit available goes a long way to boosting your score.

Example: As someone who regularly engages in credit card arbitrage, I frequently carrying large 0% APR balances on my 0% balance transfer credit cards. But despite my high credit balances, I maintain a stellar FICO score (FICO of 758), attributable to my low overall credit usage ratio. I might carry credit card balances in excess of $20,000 on multiple cards, but because I have over $80,000 of unused revolving credit available to me, my low proportional usage keeps my FICO high.

3) Length of Your Credit History – ( 15% Of Your FICO)

When it comes to the FICO credit score, the older the credit account, the better. That is why consumers are sometimes encouraged to initiate credit usage at an earlier age, if only for the sole purpose of building up credit. College students are sometimes advised to open at a least one student credit card for the purpose of building up a credit history file. Those who stick with cash only and wait till later in life to start opening credit accounts are ultimately short changed when it comes to their FICO scores. The same rationale is also why it is almost never advisable to cancel old credit cards. Unless you are obsessive and compulsive when it comes to credit card spending, you should keep those older cards around and let the accounts age like fine wine. You don’t necessarily have to use those cards – just put them away in a drawer if you have to. Because the length of your credit history is based on the average ages of your total active credit accounts, it’s in your best interest to keep old accounts open indefinitely. If you absolutely must cancel a credit card, cancel a newer card instead. Closing out an old account will have the unintended backfire effect of hurting your FICO credit score.

4) Types Of Existing Credit Owned – ( 10% Of Your FICO)

The FICO scoring system favors credit users who are diverse with their usage. The system likes to see users mix it up a little and not just focus on one type of installment usage – like credit cards alone. In general, older individuals with longer credit histories usually tend to have a greater mix of credit account types, thus higher scores. While revolving credit accounts like mortgages and car loans help to inject some diversity into your usage, one shouldn’t go out of one’s way to mix it up purposely. Focus more on paying all bills on time and limiting your credit usage instead (they comprise 65% of your FICO credit score). In my opinion, this category has the least relevance and the least impact on your overall credit score.

5) New Credit or Recent Credit Sought – ( 10% Of Your FICO )

This is where hard credit checks and soft credit checks come in. Everytime you affirmatively submit an application for a loan or additional credit, a hard credit pull is made against your credit report. The resulting credit pull will have a short term negative hit against your formulated FICO score (in time the score will recover). In general, new and recent requests for credit are seen as risky factors in the eyes of lenders. However, new requests for additional revolving credit that follows a recent late payment will likely cause a more significant drain against your score, as they are seen as ominous signs of financial desperation.

However, the way the FICO system is set up, frequent requests for credit within a relatively short 30 day period is discounted in terms of aggregate negative effects on your credit score. This is to compensate and alleviate the effects of those who are merely interest rate shopping for mortgages or car loans who are likely to submit numerous applications within a short period of time. This is the reason why balance transfer arbitrage seekers are often advised to submit their numerous credit card applications simultaneously within a short period of time to minimize the overall hit against their credit score. As always though, only hard credit checks negatively affect your FICO. Self credit checks initiated by you to examine your own credit report or credit score will never hurt your rating.

What Is Not Considered In Your Credit Score, And How To Boost Your FICO

While the FICO score is a very important factor to those seeking instant approval for credit or a quicker path to the best loan terms and conditions, it’s not the end all. Lenders also carefully scrutinize your credit report and other financial factors like income, job stability, education, and amount of money you have in your checking and savings accounts to determine your credit worthiness. That’s because many relevant personal risk factors are not appropriately reflected in the credit report or the credit score model compiled by the big three credit reporting bureaus. Such information include age, race, sex, income, savings, marital status, education, and your current type of housing.

The FICO score also struggles with formulating an accurate score representation for new entrants into the credit world. Those with short credit histories like recent immigrants or college students are unlikely to have much of a credit report transcript to work off of. As evidenced by the Fair Isaac Corporation’s efforts at formulating and developing its new FICO Expansion Score to gauge the credit worthiness prospects of those with incomplete or thin files, the existing FICO system as is probably still needs some improvement, and is far from perfect. However, until a better thing comes along, consumers need to find ways to improve and keep their credit ratings high. Unless you don’t have plans to seek new employment, apply for a new credit card, obtain a home mortgage loan, find a new apartment, or apply for insurance in the next few years, it’s in your self interest to improve your FICO credit score and keep it high in case you ever need to use it.

As it is relevant to your ultimate credit score, I’d recommend taking several minutes to download a free credit report at annualcreditreport.com. With this free federal government service, you get to request a single credit report from each of the three major credit bureaus every four months. Instead of requesting all three credit reports at once, you might want to stagger them out to three times a year for continuous monitoring. If you spot an error, notify the bureau (online, by phone or by mail) and the creditor (call and also send a letter) immediately. While your credit score isn’t free, there are ways to get get your free credit score from the big three credit reporting agencies. Remember, if you want consistency, stick with the FICO score exclusively for now.

While I have my own convenient and jack-rabbity-fast high speed broadband connection at home, sometimes I just want to get out of the house for a change of scenery. Ever since I began the gradual transition from traditional office life to the work from home routine, I’ve noticed that it can sometimes be pretty boring working from the confines of one’s own house or apartment all the time. While working from home on the computer is great because it’s nice to be your own boss, loneliness and lack of human contact can become troubling issues, especially if you are working by yourself all the time. While it’s certainly very convenient to do business related work from one’s home office (necessary supplies, kitchen amenities, and even bathroom conveniences are only a few steps away), the work at home experience can be plagued by boredom and frequent feelings of isolation. Once in a while, I just want to pick up my laptop and head out to some cafe, restaurant, or public location, and momentarily work at an Internet accessible place where there’s random people milling about. That way I don’t feel so cut off from the real world.

One’s Home Office Can Be Any Cafe, Restaurant, Or Public Park With Free WiFi and Electrical Outlet Access

Since I’m trying to transition into running my own home based businesses full time and no longer work frequent contract attorney projects as a result, I no longer have an Internet equipped office computer outside of my home that I can go to everyday to get me in the right day job mindset. Sometimes it’s difficult to work from home because it just doesn’t feel like a real work zone and it’s so easy to get distracted and sidetracked. After all, my bedroom, home office desk computer, and television entertainment gadgets are only a few feet apart from each other. So at least once or twice a week, I enjoy driving out to local public places to swap my home office for a more productive working environment.

As a savvy saver and frugal fellow, I prefer to seek out suitable local neighborhood businesses and public work spaces that offer free but necessary business amenities like convenient restroom access, proximity to drinks and food, and most important of all – free or very affordable wireless internet access. While not all places provide truly free wireless Internet for customers (instead requiring them to purchase usage time or limiting free surfing to only an hour or two), there are places that do provide this particular perk. Free Wi-Fi hotspots are everywhere – at the mall, the park, in public places where people gather – you just need to know where to look. Many major fast food chain restaurants and many sit down coffee cafe shops provide free wireless hotspot services for customers to enjoy. Often times they don’t even require you to purchase anything – although I’d recommend that you at least buy a coffee or a light snack. You don’t need to purchase a three course meal, but on principle, you don’t want to be a freeloader do you? Speaking of eating and working at the same time, I do however at times question the wisdom of placing an expensive laptop in very close proximity to food and drink. Just be careful – your laptop and your caramel macchiato drink don’t mix!

The last few days, I purposely visited various popular WiFi hotspot locations to confirm and inspect the business’ free wireless Internet service offerings. Below, I’ve listed the places I’ve found to be the most widely available and easily found free wireless Internet locales. So long as you have a portable notebook computer that is WiFi enabled that you can suitably lug around, you are good to go for free web surfing. All you’ll need to do is run the wireless signal manager, search for the target business’ public wireless network name (also called the SSID), and you should be able to connect instantly to the WiFi service. For habitual free WiFi hotspot seekers who browse the Internet for hours at a time, I recommend investing in extra long lasting laptop batteries. Some of the places below either don’t offer electrical outlets for customers to use, or simply don’t have sufficient numbers to go around.

Some Of The Top WiFi Hotspot Places To Enjoy Free Wireless Internet

1) Panera Bread – This place is one of my favorite free wireless hotspot destinations for unlimited use. Panera has become a very popular choice for young professionals and home business types who want a relaxing place to access the web for free, while enjoying a tasty sandwich, hot soup, or one of their delicious salads at the same time (please bring back the Fuji apple chicken salad). There are lots of tables and electrical outlets available, but single Internet users should focus on the small tables, and leave the bigger ones for groups. The cafe is a common meeting location for small businesses and sometimes you’ll see such meetings take place in corners – as the place has sort of a trendy, Internet cafe vibe to it (at least that’s the case for the one near where I live). Panera Bread is a popular choice for free WiFi seekers but its popularity also causes greater strain on the shared Internet connection. I found the WiFi access speed to be very slow during peak usage times. Avoid using the WiFi from 12 pm to 2 pm if you can since that is when most people try to get on. Panera also heavily filters out many (ahem) questionable websites – I’m sure some of you hanky panky web surfers are disappointed.

2) Corner Bakery – Right around the corner (pun very much intended) is the Corner Bakery, which offers free WiFi for unlimited use and is also a great place to relax, eat, and surf the web for free. There is no obligation to buy anything either, although Corner Bakery offers quite a selection of pretty decent pastas, sandwiches, and soups. Corner Bakery franchises seem to be located mostly in the major states. As for the WiFi, I think few people are aware that Corner Bakery offers free wireless Internet for patrons, which probably explains why there’s less connection crowding. The WiFi speeds were much faster and less congested than that offered by other restaurants, including Panera. Electrical outlets are not plentiful, but they are available at certain tables.

3) McDonald’s – While McDonald’s used to charge for extended wireless Internet usage at participating restaurants, they’ve recently started to offer free unlimited WiFi use. Free WiFi access is now being offered at most McDonald locations. There is no obligation to buy – just power up your laptop computer and surf to your heart’s content. However, you might want to get used to nosy people peeking at your screen over your shoulder – McDonald restaurants are usually filled with all sorts of interesting characters. Also, aside from the unhealthy aspects of McDonald’s fast food choices, one other big problem with McDonald’s is that their restaurants lack electrical outlets. I wasn’t able to find a single outlet for my laptop.

4) Starbucks - While Starbucks coffee shops have started to offer free wireless internet access for coffee and tea drinking customers, this top free WiFi hotspot needs a little asterisk next to it. While WiFi use at Starbucks is indeed free, it’s only currently free for a single use of two consecutive hours at a time. Since Starbucks switched from T-Mobile to AT&T, customers must now register their Starbucks Card and use it at least once a month (buy a drink with it), to receive two consecutive hours a day of free internet use. While it’s not unlimited use, I needed to mention Starbucks, if only because of the fact that they have locations almost everywhere.

5) Caribou Coffee – I like Caribou coffee drinks much more than the unremarkable ones brewed at Starbucks, so I prefer to hang out at Caribou more often than I do at Starbucks. However, Caribou locations are not as widely available as Starbucks. But at Caribou, WiFi internet use is completely free and usage is unlimited. There is no demand that you actually purchase a drink, but it’s probably advisable to do so as a courtesy. If you want to use your laptop in a trendy environment decked out in wood to look like some type of ski lodge, Caribou’s the place to be. Plus, their daily trivia questions are not only whimsically interesting, but getting them right can also help you save a few cents off your drink!

6) Schlotzsky’s – Schlotzsky’s, like the slogan says, has a funny name, but provides serious sandwiches. If you enjoy relatively healthy deli sandwiches, subs, and wraps, this is a nice place to hang out. This New York style deli sandwich chain provides free wireless Internet access for its customers through its Cool Cloud wireless network. Most locations also provide free computer workstations for laptop-less customers to jump online and browse.

7) Public Library – While there seems to be plenty of odd and quirky folks who hang out at public libraries, not to mention the hordes of kids everywhere, I like public libraries, mostly because of the comfortable presence of people that it affords work at home entrepreneurs like myself. Most local libraries provide a wealth of free county sponsored services, including free wireless Internet access. Your tax dollars pay for them so you might as well take full advantage when you can. Most public county libraries also have free computers for patrons to use although sometimes you’ll need to sign up for a library card to access them. Because there are usually a large number of simultaneously connected users, public library connections are notoriously slower than average. I recommend bringing along electrical extension cords in case available electrical outlets are not conveniently located next to your desired table. Based on my observations, public libraries seem less strict about patrons stringing cables and cords around anyway.

8) Local University Library or Study Lounge – I recently returned to my alma mater’s university library to see if I could still access the library’s internet connections for free. Unfortunately my old school doesn’t provide free WiFi access for non active students, even for an alumnus such as myself. Students are required to log onto the network with secured passwords, and unauthorized laptops are denied Internet access. However, at another local college, I was able to access the school’s free wireless signal from a study lounge area, despite not being a student there. While not exactly publicly available, the signal wasn’t restricted. If you’re lucky to find a free university library WiFi signal, you’re quite fortunate. University wireless signals tend to be extremely fast and rarely congested – perfect for home business workers who want a change of scenery.

9) Unsecured Wireless Router – This one is controversial, but another interesting way to work somewhere besides from your home computer is to find a public work space where you can obtain a freely available WiFi signal from some random person’s wireless router. While most home network owners are getting better at securing and protecting their wireless broadcast signals, there are still some people who either purposely choose not to or neglect to do so (like my neighbor). If you don’t have ethical qualms about doing so, it’s an option. Be careful though, open wireless networks make it easy for hackers and evil-doers to access your computer and intercept data that you submit through the connection. I don’t think it’s very likely as it requires some fancy knowhow, but it’s a possibility. Keep in mind, while I’ve done this before in the past, this grey area practice is fraught with debatable legal issues.

10) Public Parks or Certain Downtown Areas – In the downtown city area close to where I live, my local city government has decided to shell out money to provide free public WiFi access for all city residents that frequent the heavily trafficked area. The wireless signal area is populated by restaurants, shops, and lots of open sitting spaces – perfect for those who desire to work on the Internet and enjoy the great outdoors at the same time. In major metropolitan areas like New York City, there are lots of public places where the city government has provided complimentary wireless Internet signals for free public use. The only drawback with these places is that electrical outlets are usually nonexistent.

I consider myself one of many rate chasers out there – savvy savers who hunt for the best annual percentage yield (APY) interest rates at banks and credit unions, and who are keen on quickly moving large sums of money from one account to another in pursuit of that financial ideal. High yield interest rate chasers seek out the highest available interest rate offerings possible, whether available at popular brick and mortar branches or whether available only through obscure online banks. We keep tabs on them all regularly and shift our bank balances around in pursuit of that elusive, but perfect high yield savings account. Rather than be content with letting our savings accounts sit idle, earning stable, yet passive interest growth, rate chasers such as myself prefer to actively manage our bank accounts to maximize interest earnings. Interest rates periodically change, thus so should we. Currently, I use my compiled list of the Best High Yield Savings Accounts to actively keep tabs on bank rate updates and changes.

High Yield Savings Accounts Offer Not Only Liquidity, But Rock Solid Financial Security and Reliable Growth As Well

While I have a diversified investment portfolio made up of high performing stocks, bonds, exchange traded funds, and mutual funds, I still try to put a sizable amount of what I own in cash form, invested in stable interest bearing savings accounts. The type of money I put in a savings account is money I can’t afford to risk or jeopardize, and the type of funds that I may need to call upon to weather difficult financial times or unexpected financial emergencies. While I personally use credit cards for emergency fund purposes at least in the short term, stable savings account funds make up the bulk of my long term emergency money strategy. I try to keep at least 6 months worth of liquid assets on hand at all times – money that can be quickly converted into usable cash to pay current bills and liabilities on a moment’s notice. You never know what type of sudden unemployment, cash flow, car trouble, or health problems might befall you that might necessitate the need to call upon such an emergency influx of readily available funds. I choose to invest my emergency fund money into savings and money market accounts because they not only provide a modest degree of interest growth that usually outpaces or at least keeps up with inflation, the invested funds are liquid and extremely well protected from loss. I plan to work certificate of deposits (CD’s) into my emergency fund planning approach in the future, but wish to save up more in my savings before dabbling with higher yielding, but less liquid assets like CD’s.

Some people call rate chasers – day traders of the banking world, but I think that’s a terrible analogy. Unlike day traders who trade on short term, violent swings in the stock market, we do not take actions that could even remotely be construed as gambling or high risk stakes. Interest rate chasers tend to be risk adverse, and are almost always play-it-safe type investors and emergency fund builders who seek safety and pursue predictable rates of return, rather than high flying, speculative investments.

Besides, bank accounts, whether checking, savings, or money market accounts are one of the most stable, reliable, and dependent sources of asset preservation. While most traditional banking institutions do not provide investment assets that will make one rich as their rates of return are generally lower than that offered by other investment options such as stocks, bonds, options, or foreign currency exchange, they do provide a very stable and predictable rate of return. Insured by the Federal Deposit Insurance Corporation (FDIC), the potential risk of loss of assets stored in a banking account is virtually nil. The FDIC, an independent agency of the United States government utilizes the full faith and credit of the federal government to protect the assets of all insured banks. Most major savings and banking associations are FDIC insured, and as such most traditional accounts offered by the insured bank, including checking, savings, money market accounts, CD’s, and even IRA retirement accounts are protected from loss. Even if the bank fails, goes bankrupt, goes out of business, gets robbed, burns down, or succumbs to some market catastrophe like the mortgage meltdown or credit crisis, the money stored in a FDIC insured high yield savings account remains 100% safe, up to the coverage amount. For savings accounts, the legal coverage limit is $100,000. If you own substantial assets that exceed this basic coverage limit and want to be 100% safe, you may want to consider spreading your assets among difference asset categories or banks.

Register With The Top High Yield Savings Accounts And Manage Your Fund Transfers As Interest Rates Periodically Fluctuate

There are certain basic steps savvy rate chasers and high yield online bank arbitrage seekers (as I like to them sometimes) take to properly manage their pursuit of high interest savings rates:

1) Open High Yield Accounts With Online Banks That Consistently Offer the Highest APY Interest Rates For Savings Accounts

I currently own several savings and money market accounts with the top online banks that have consistently offered the best APY interest rates. Personally, I avoid savings accounts from major brick and mortar retail banks like Wachovia, Wells Fargo, Bank of America, or even Citibank, since most rarely offer attractive interest rates as they don’t need to offer them to attract customers. Most of these big retail banks rely on convenience and physical location presence to attract clientele. On the other hand, online banking sites, blessed with lower operational and maintenance costs, are highly motivated and more willing to offer competitive interest rates for account holders.

Most of my recently opened high yield savings accounts are with generally well known online banking institution favorites like HSBC Direct, Countrywide’s Savings, WT Direct, E-trade Savings Bank, and Capital One Direct Savings. Oldies but goodies like ING Direct Savings (get an ING Direct Sign Up Bonus), and Emigrant Direct still remain alive and well as members of my complete savings account tracking roster. While the actual order in the interest rate sliding scale changes periodically, the mentioned banks tend to offer consistently high rates. After opening accounts, it’s simply a matter of tracking APY changes and shifting funds around accordingly.

It’s important as a rate chaser to have target bank accounts ready for quick transfers as interest rates change. Back in the old caveman days before the advent of the Internet, opening new savings accounts was cumbersome and limited to local brick and mortar branches, and phone banking was a pain. With the emergence of the Internet and the development of fully functional online banking websites, online funds can now be shifted around instantly with a few strategic key strokes. To manage your online accounts and prep them for transfers, all you have to do is register for online account access and set up linked ACH electronic access. To set up ACH transfer permissions, you’ll be required to submit information about the bank account that you want to link up – including the bank account number and the banking institution’s ABA routing number (you can ask your bank for this information). Frequently the online system will initiate two small denominational test deposits into your linked bank account, the amounts which you’ll have to verify to confirm that you are the actual owner.

2) Be Watchful Of New Bank Account Credit Report Check Penalties, and Electronic Bank Transfer Limits

If you’re like me, you try to maximize your money whenever possible. In my case, so long as the resulting effects don’t put myself in a potentially worse off financial position and the necessary actions to get me there aren’t too prohibitive, I try to go for the gold whenever possible. For those looking to open multiple bank accounts, one thing to keep in mind is the health of your credit score and credit report history. When a new savings or money market account is opened, some banks initiate a hard credit check. The resulting hard credit pull, as it is sometimes called, may result in a small credit score hit in the nature of a request by one seeking credit. Not all banks initiate a hard credit pull that will ding your precious FICO score for new savings account applications, but some do. Examples of online bank account applications that result in harmless soft credit pulls include – Capital One Direct Savings, Countrywide, Emigrant Direct, E-Trade Savings, FNBO, HSBC Savings, ING Direct savings, and Washington Mutual.

Another thing rate chasers have to watch out for as well is the federal savings account limit of 6 ACH transfers a month. However, unless you are shifting your savings around every few days, the 6 ACH transfer limit per account should not be too much of a limitation or restrictive hassle. Be mindful that the transfer limitation also applies to money market deposit accounts as well. For most comparative factors, savings and money market accounts have little differences except money markets usually provide slightly higher interest rates and sometimes offer check writing privileges. However, money markets usually have higher tiered minimum balance requirements, although that is not always the case.

3) Manage Your Portfolio Of Multiple Savings Accounts By Using An Account Aggregation Service

To keep an eagle eye on your bank balances and army of savings accounts, I recommend using an account aggregation service like Yodlee, or Mint.com. Yodlee in particular offers its banking account consolidation service through other financial providers as well, such as Bank of America. In my case, I utilize Yodlee through Fidelity’s Full View access, which allows me to link up all of my high yield savings accounts and money markets to Fidelity Investments, storing my account passwords securely so that I can easily view my regularly updated account balances from one location. To make actual transfers however, you’ll have to log into the desired bank account directly.

4) Periodically and Regularly Shift Your Bank Balances Around As Major Interest Rate Changes Are Issued By the Federal Reserve

One thing to note is that I’m not a rabid or fanatic rate chaser. While some hardcore rate chasers shift their money around as soon as interest rate offerings change the slightest, I prefer to my make shift once or twice a month at the very most – call me a mild rate chaser if you wish. Usually I only shift my balances around in pursuit of higher APY rates every two or three months on average. Thus I don’t go hog wild over every slightest budge in APY, although there are lots of super online rate chasers who do though. Just look at those crazies who post on Fatwallet forums – they go nuts over a single .01% change.

Frequently, I fashion my fund transfers from one savings account to another around major interest rate moves by the Federal Reserve when I know major changes are coming my way. Upcoming federal reserve meeting dates on the calendar greatly interest me because decisions by the Federal Reserve frequently have a correlative effect across the board on the interest rate offerings by major banks. Rate cuts by the Fed usually signal subsequent APY interest rate drops by banks in a matter of days. Similarly, raises in the Fed Funds rate usually signal potential banking interest rate increases. Thus I usually try to make my electronic fund transfers as major rate changes are made across the board in response to Fed interest rate moves. Usually there is a lag time of about 1-2 weeks before banks at large fully and collectively respond to Fed announcements. Keep that in mind as well, lest you shift or chase that higher APY interest offering prematurely.