Banking Made Easy-ish

March 30, 2016 1:44am
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So I thought I’d write a little about this because it ultimately took up a bit more of my day than I was really expecting, but in the end I’m still feeling pretty positive about the whole situation so I kind of wanted to share… 😉

I’ve written a few times in the past about my personal banking and my position on the matter continues to evolve, ironically to the point where now I’m actually more or less content with the same place that drew from me much ire only two years ago! And honestly, it’s really not so much the bank changing their ways as it is me changing my perspective on their ways, so let’s dive into it.

If I had to pinpoint one single idea that defined my personal banking relationship these days, I’d have to say that it’s in acknowledging that to a trillion dollar bank, I personally represent a very, very … very small fish in a very, very very big pond.

That’s all there is to it, and so despite issues with my finances being all-encompassing for me, I’ve found that it’s important to put things in perspective that if I want to argue with these guys over a few percentage points of interest or some late payment fees, there’s simply no real reason for them to care. As a financial institution, they exist much more for my benefit than I do for theirs … and that’s a tough one to swallow when “The customer is always right!” is your mantra, but remember, we’re trying to find compromise (and peace!) here…

I came to this realization over about the last month as I’ve been working to migrate a couple of stock accounts over to a brokerage account with Wells Fargo because they’re not a ton of money – maybe $5,000 total – but to a brokerage managing customers with portfolios containing literally millions of dollars, my little nest egg is pretty much a single fish egg sitting beside a dinosaur egg … and that’s ok because they’re still willing to work with me – they’ve got specific tiers within their reps to do so (e.g. call center vs. dedicated advisors, etc…).

This is good for me because it allows me the opportunity to invest, and to keep my investments easy to manage along with the rest of my banking at Wells Fargo, whereas I could technically spread out my accounts between an assortment of discount brokerages and credit unions that individually might handle each account a little better in their own way, but for me at this point, I’m willing to sacrifice a few dollars a trade or a tenth of a percentage point of interest in exchange for my time and my sanity.

I think it’s easy to get into that mindset when we’re customers that we’re the most important customer that XYZ Corporation has and so they should bend over backwards to make us happy, but let’s be honest – that usually isn’t the case. I recall a time many years ago when Sprint made headlines for “firing high-maintenance customers” so that they could focus on the rest, and even though it probably filled twenty-something me with all sorts of angst and rage, looking back – and having worked in a call center since myself – I can kind of see where they were coming from because really, you can only take so many complaints before you can’t help but say, “If we’re such an awful cell phone provider, then why are you still here???”

So that being said, I guess you could say that I’m trying to be more conscious of my place in the world, if you will … which isn’t to say that I devalue my position to these kinds of companies, but maybe just that I’m not the only customer they have and that they need to make money, too – even if their executives get paid ridiculous bonuses that just make me want to throw their late fees right out the window!

With that in mind, if I look at my personal finances – the places where big banks earn money from me are really pretty limited:

  1. Mortgage Interest – the BIG nut, thousands of dollars/year
  2. Credit Card / Loan Interest – not nearly as huge as my mortgage, hundreds of dollars/year
  3. Brokerage Account – even if I do a handful of trades, maybe tens of dollars/year
  4. Deposit Accounts – almost nothing, especially if I meet my minimums and don’t overdraft, less than a hundred dollars/year

When you consider that my needs to interact with the bank is completely inverse to how they actually profit from me, it kind of helps to put into perspective why people feel like their banks don’t really care about them … because they don’t need to. You don’t make millions of dollars for shareholders by spending 90% of your focus on 10% of your profit-generating customers – it’s just the sad reality of how business works. And again, the lens that I’m trying to look at this all through isn’t that I shouldn’t waste my time with them because they don’t need me, but more so that there are some great things they can do for me if I play my cards right, but that I also have to remember where I fit into their puzzle because if I’m not kind and don’t know what to expect from them in advance, there’s not much more incentive for them to really go above and beyond for me.

In all of my investment research fun that I’ve done over the last month, I came across this forum thread where the poster was complaining about a brokerage because in his eyes they were rude to him after he asked for some advice and then after deciding to transfer some of his money elsewhere, the bank transferred his account from a dedicated advisor back to simply using their call center as his primary point of contact.

Now from his perspective, $30,000 was a lot of money and he’d been with them for over a decade, so just handing his account off to a lesser rep felt like some sort of travesty … but in reality? That advisor probably spent more preparing that single, unused recommendation than his years of $100 annual fees in one swoop.

So not only with banking, but with many of the people who I find myself interacting with these days, I’m trying to put myself more in their shoes of how *I* fit into the relationship we share before I let myself get too bent out of shape over something that rubs me the wrong way. Should that cast member at Disney World have been more helpful when ApplePay wouldn’t work at their kiosk? How about the doctor’s office that screwed up my prescription refill and then blamed it on the pharmacy when I called them out on it?

In any of these scenarios, I’m not necessarily willing to walk away from Disney or my doctor or Wells Fargo, so as much as I’d like to rant and rave and get the attention of their CEOs for times when I feel like I’ve been slighted, sometimes … sometimes … it’s just easier to take a deep breath and let one slide for the greater good because if there’s one thing I’ve been learning a lot lately as I get older, it’s that time spent arguing with customer service is almost never worthwhile. 😕

How Much Do You Pay Yourself?

March 1, 2016 8:53pm
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So you might have guessed that I’ve been in kind of a personal finance mood the last couple of days. Yesterday I posted about investing and the value of time, which led to another random question that I started musing in the shower this morning … how much am I paying myself each month?

Overall I like to think that our budget looks pretty ok. True that it still has way more debt than I would like, but we also make a conscious effort to save and put money away for retirement, so what exactly does that picture look like???

Turns out it looks something like this…

20160301_budget1

To be honest, it only took me about 10 minutes to gather all of the data for this exercise – it probably took longer for me to format the graphs just the way I wanted, though I suppose your mileage may vary if you happen to have a lot of credit cards to sort out or something. For what it’s worth, I keep a spreadsheet handy with how much of each of our debts goes to principal vs. interest to help us decide which to pay down next…

It should also be noted that my figures above also include employer retirement contributions like matching and whatnot, so it’s not solely income – more like income plus benefits – if you’re looking for something like Debt-to-Income ratio or a housing ratio, though for what it’s worth our numbers seem to be well below the recommended limits for both (debt – 19% vs 36% limit; housing – 16% vs 28% limit).

Although I thought that this was a good start, distilling it down even further really got me to the meat of what I wanted to see…

20160301_budget2

 

This chart takes the previous and groups everything into one of three categories – day to day expenses, debts, and savings – and so it’s easy enough to see here that right now about 21% of my household money is currently being saved aside for another day. Granted that 21% makes up multiple goals – emergency savings, Christopher’s college fund, and retirement – but I think it’s interesting and arguably a little more motivating to look at the monthly progress every now and then instead of simply net worth – debts vs assets which can be a little daunting!

Now to make that green slice a whole lot bigger as the light blue slice fades away… 🙂

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