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Citigroup Inc. Delisted From Dow

The financial downturn has definitely taken its toll on a lot of banking companies. Undeniably one of the worst hit was Citigroup. Now, it seems that the company’s disgrace is not yet over. The Dow Jones Industrial announced that Citigroup Inc will be delisted from the index. It will be replaced by Travelers Cos (TRV) in the flagship 30-stock index, starting June 8.

Since mid-January, the shares of Citigroup were already trading at below $5. In fact, it even dropped as low as 97 cents on March 5 after huge losses were announced and the government had to bail them out. Currently, it is estimated that taxpayers actually owns up to 34 percent of Citigroup. Who would have thought that this would happen to the world’s largest bank?

Established in 1998 with the merger of the Travelers Group and Citicorp, it was nicknamed as a “financial supermarket” because it carried virtually all financial products in the market. Later on, the company spun off its Travelers’ arm. The removal of Citigroup signals the end of company’s 12-year status on the Dow Jones Index.

Explaining why it took some time before Citigroup was removed from the Dow despite months of weak performance; the Dow Jones Editor-in-Chief Robert Thomson explains “We were reluctant to remove Citigroup at the height of the financial frenzy”. The editor further added that they hoped the company can rejoin the Dow in the future once it has refashioned itself.

In an effort to assume investors and the public, Citigroup said that this development will not affect the bank’s strategy to get back to sustained profitability. Another interesting bit of news is that Citigroup has started a brokerage venture together with Morgan Stanley (MS). The bank will transfer its Smith Barney subsidiary to get $2.75 billion and a 49 percent share in the new venture.

With the delisting of Citigroup, only two banks are left standing: JPMorgan Chase & Co (JPM) and Bank of America (BAC). There are still other financial services companies in the Dow though. For example, General Electric Co (GE) and American Express Co (AXP) both have financial arms. Previously, Kraft Foods Inc (KFT) has replaced the American International Group (AIG) in the Dow.

5 More Everyday Tips to Save Money

To build on the Friday Financial Fitness from two weeks ago, we have included 5 more every day tips to save money.  Taking simple steps to save money has a chain reaction that improves the quality of your life in more ways than one.  First, additional money in your pocket will help you pay off those bills faster, thus decreasing stress and anxiety that often accompanies debt.   By decreasing your debt at a faster rate, you will also be well on your way to improving your credit score; improving your credit score impacts your borrowing opportunities.  Below, we outline 5 more ways to save money on a daily basis.

5 More Everyday Tips to Save Money

1. Cook at home; then bring your leftovers to work for lunch

Every day, millions of Americans spend a minimum of $5.00 a day when going out to lunch during the work day.  If you live in a more expensive city, the price of a single lunch can skyrocket to $10 or more per day.  When you’re working 5 days per week, that adds up to $50 per week, $200 per month, and $2400 per year.  That $2400 could be used to pay off outstanding debt, or put away for a rainy day!  Though the work week is often busy, try to set aside some time (maybe even on a Sunday) to cook for the week.  Buying groceries is much cheaper than buying your lunch every day; cooking in bulk for the week will help you pocket that much more money over time.

2. Make personal calls on your cell phone during evenings and weekends

Many of us find that every month, our cell phone bills seem to skyrocket.  One call here, another call there-and suddenly you have exceeded the total number of minutes included in your plan.  If you have a plan that offers free phone calls in the evenings and on the weekends, try and schedule your personal calls during these times. Month to month, this will reduce your bills, helping you pocket a substantial amount of cash over the course of a year.

3. Avoid ATM Fees

When you’re in a hurry and you need cash, it’s convenient to withdraw money at the closest ATM you can find.  If you are withdrawing money from another bank’s ATM, the average fee each time you do is around $1.97.  Fees can even go up to $4.00, depending on where you are.  Banks make a fortune charging non-customer surcharges and consumers spend a fortune filling banks pockets.  Next time you’re in a hurry to get cash, take a few extra minutes to figure out if your bank has an ATM nearby that you may not know about.  If you really want to stop spending on non-customer surcharges, plan to get cash before you go-those few extra minutes of planning will save you money over time!

4. Track every dollar you spend for 2 weeks

This simple, 14 day exercise will bring more awareness to your personal spending habits.  Get a small notebook that you can carry around with you; for 2 weeks, simply record every dollar you spend and what you buy.  After the 2 weeks are up, it will be interesting to see where all your money has gone.  Take a close look at every purchase and then figure out ways to cut corners.  You may be surprised to find that you may not need that $5.00 magazine after all.

5. Leave your credit card at home

During this financial crisis, it is crucial to not only limit the amount of cash you are spending, but also to limit the number of times you swipe your credit card.  Though there has been a recent push to regulate credit card companies and the fees and interest rates they charge, racking up credit is a dangerous habit that all too many Americans have developed.  Simply stated, if you cannot afford, don’t buy it!  Help yourself resist the temptation to swipe that credit card by leaving it at home.  If you don’t have it with you, you can’t use it

Spending Habits – The Changes We Need to Make

In order to fix the financial mess we are in, we must look at how we as a nation got here.  The changes we must all make are deep.  We must examine the habits that we have exercised every day; maxing out credit cards, buying the expensive cars, spending more then we make, and living outside our means.  This behavior cannot continue, as we have recently learned that the markets and our economy cannot support or sustain this way of life.

This sad reality check has proven that we as a country are a true debtor nation.  From the government down to the individual, we have issues with borrowing way more then we ever should.  Since the government borrows excessively on a regular basis, why can’t we place the blame on them?  Well, that is one way to look at it; however, the financial responsibility of every individual is on the individual.  Accountability is key here.

So what do we need to do?  Well, borrowing money to buy something you truly cannot afford is no longer an option.  Never again will Americans who cannot afford a true mortgage get a loan.  This was ridiculous in the first place.  But like our President said, in those days, reform was not a priority.  Well, not reform is a priority.  Every time you are about to make a purchase and pull out your credit card and NOT your debit card, you need to truly ask yourself, “is this something I need?  Is the reason I am using the credit card because I cannot pay cash for the item?”  If this is the case, then you should reconsider.  Many Americans took into no fax payday loans and failed to pay them back.

As Americans, we have always enjoyed the spoils of the best and the nicest things.  We have to realize the days of enjoying these things without consequence are over. It is inevitable that living outside an individual’s or a country’s means will come back to bite you.  No one will continue to supply you with loans if you only take news loans to pay off the old ones.

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