One saved is one earned. Image: stevendepolo/Flickr/CC BY

The economic crisis affects most of us every day as we tighten our belts and keep our wallets in check. But like a dieter craving sweets, temptation is always there to consume beyond our means. Thankfully, there are simple things you can do when the cravings get to be too much.

Think ahead

Thinking long term can help. Instead of seeing savings and frugality as a chore, think big picture. You and your family will be happier if you aren’t overextending to pay off last month’s splurge.

Realistic frugality begins with a realistic plan. If a budget is too restrictive, it adds stress to your life. That constant pressure may lead to abandoning the budget altogether. Make your plan realistic, but not a “starvation diet.”

Include some fun

While a budget must begin with month-to-month obligations and essentials — mortgage, groceries, car insurance, utilities –  it should also include some “fun money.” If you enjoy sports, make sure to include some greens fees or club dues. If concerts or theater are your thing, figure in a ticket every couple of months.

Another way to achieve this is to keep a “fun fund,” which is reserved only for a specific goal. Instead of giving in to every impulse, focus on the really satisfying ones and put a little away toward it out of every paycheck. Maybe there is a trip you want to take, or one luxury item that you truly want. With a little patience and persistence, it can be yours.

Ways to cut corners

For the day-to-day items, there are many things you can do to cut corners. Here are just a few suggestions to get the ball rolling.

Most beauty schools and community colleges offer cut-rate haircuts and beauty services, as students need opportunities to practice their craft. While that may sound risky, rest assured most places only let advanced students touch the paying customers.

Second-hand and thrift stores are a wonderful resource for items we use every day. Flea markets, garage sales and Craigslist are good, too. Somebody once said one man’s trash is another man’s treasure. Go explore. You never know what you might find for a song.

Fuel expenses are one of the worst drains on our resources these days. Try public transportation, carpooling and consolidating trips. Remember, the less you are behind the wheel, the less you are spending.

Tell yourself ‘Wait’

The best thing you can do to stay frugal and on budget is tell yourself to wait. We see something on television, online or in a store and think we just have to have it. Tell yourself, “Wait.” How many times have we given in to that urge, only to see the item gather dust or wind up in the next garage sale? Chances are it is a whim brought on by budget fatigue, and the burning desire will go away. If the feeling persists, then maybe it is something worth saving for in your “fun fund.”

Sources

Walletpop
The Frisky
Retire by 40

Everybody loves a good yard sale. / Image: kirinqueen/Flickr/CC BY-SA

Spring is here, and summer’s right around the corner. It’s time to declutter and spend some time in the fresh air. What better way to do that than by having a yard sale and making a few dollars in the process? With a little planning, the experience can be more profitable and more enjoyable.

Check the weather

Nothing spoils a yard sale faster than a rain shower! Keep your eye on the 10-day forecast before you schedule or do any advertising.

Advertising

The more people who know about your sale, the more traffic you will get. Craigslist is a great place to post an ad. It is free and will likely be seen by more people than a newspaper ad. While you are at it, post your ad on websites like yardsalesearch.com. And don’t underestimate the value of neighborhood signs. Colorful signs on cardboard or posterboard get attention and add homemade flavor that appeals to local buyers. Remember, people in cars have only a few seconds to get the message, so keep it simple and don’t forget the arrows pointing toward your sale!

Group similar items

Displaying similar items together keeps down the clutter and provides a more pleasant shopping experience. When you pick the items from your home that you want to include in the sale, you may want to start by grouping similar items in the same boxes. This will make it easier when it comes time to set up your sale.

Keep it uncluttered

Have plenty of tables so that items can be be displayed in a clean, uncluttered fashion. An exception might be boxes of loose, similar items like baby clothes. But even in that case, several smaller bins make it easier to see what is for sale than one large one.

Have plenty of change

Nothing will cost you sales faster than not having proper change. Quarters and $1 bills will be the most helpful, but depending on your prices and number of items for sale, you may also need dimes, nickels and $5 and $10 bills. A cash box with dividers for different denominations will keep you organized and make sales go more quickly.

Price things right

Some items may have sentimental value to you, but that means nothing to your shopper. She or he is there for a bargain and for a fun time outdoors. Often, more money can be made and more items cleared out if you keep the prices low. If you are going after top dollar, you may want to consider foregoing a yard sale and opt for Craigslist or eBay instead.

Sources

MSNBC
Frugal Dad
Get Rich Slowly
KTUL

“So, you've started my 529 college savings plan, right?” (Photo Credit: CC BY-ND/Janielle Viggiano/Dr. Boyce Family Finance)

The earlier you begin to save for a child’s college education, the better. A 529 college savings plan enables you to watch money grow tax-free until it’s time for college. Particularly if a child doesn’t qualify for scholarships, a 529 plan can be quite useful.

Recession creates 529 bidding war

Many 529 plan administrators noticed that the recession had kept cash-strapped parents from contributing to their compound savings accounts. Hence, fees began to drop, which resulted in a 529 savings plan price war in which the consumer is the real winner. Money goes into conservative-mix, age-based portfolios – which function much like mutual funds – and the payoff comes when the child reaches college age. These 529 plans must have state sponsorship, and each state typically has more than one sponsored plan – some have as many as five.

However, cream tends to rise to the top. Here are some of the best 529 college savings plans available, according to consumer advocate Clark Howard:

Utah: Utah Educational Savings Plan Trust

Iowa: College Savings Iowa

New York: New York’s College Savings Program – Direct Sold

The best of the rest

Alaska: University of Alaska College Savings Plan

Arizona: Fidelity Arizona College Savings Plan

Arkansas: Gift College Investing Plan

California: The Scholarshare College Savings Plan

Colorado: Direct Portfolio College Savings Plan

Connecticut: Connecticut Higher Education Trust

Delaware: Delaware College Investment Plan

Georgia: Path2College 529 Plan

Idaho: Idaho College Savings Program (iDeal)

Illinois: Bright Start College Savings Program Direct Sold Plan

Indiana: College Choice 529 Direct Savings Plan

Kentucky: Kentucky Education Savings Plan Trust

Louisiana: Start Saving Program

Maine: Next Gen College Investing Plan – Client Direct Series

Maryland: College Savings Plans of Maryland – College Investment Plan

Massachusetts: U.Fund College Investing Plan

Michigan: Michigan Education Savings Program

Minnesota: Minnesota College Savings Plan

Mississippi: Mississippi Affordable College Savings Program

Missouri: MOST (Vanguard)

Nevada: The Vanguard 529 Savings Plan

New Hampshire: Unique College Investing Plan

New Mexico: The Education Plan’s College Savings Program – Direct Sold

North Carolina: North Carolina National College Savings Program (Vanguard)

North Dakota: College SAVE 529 Plan

Ohio: Ohio College Advantage 529 Savings Plan (Vanguard)

Oklahoma: Oklahoma College Savings Plan

Oregon: Oregon College Savings Plan (Vanguard)

Pennsylvania: Pennsylvania 529 Investment Plan

South Carolina: Future Scholar 529 College Savings Plan – Direct Sold

South Dakota: College Access 529 – Direct Sold

Texas: Texas College Savings Plan

Vermont: Vermont Higher Education Investment Plan

Virginia: Virginia Education Savings Trust

Choosing the best 529 plan for your child

Consider age-based portfolios, which start strong but gradually become more conservative as the goal comes into view (the child’s age approaches 18). Another option is a Coverdell Education Savings Account, where money can be saved at a tax advantage either for college or private school grades 1 through 12. The annual limit is $2,000 and you have to manage the investment package yourself. Coverdells do not require state sponsorship. You can sign up for a Coverdell at most any bank or broker. Independent 529 plans are also available, where tuition at participating colleges are paid at current prices, to guard against the inevitable future price hikes.

Sources

Clark Howard

Private College 529 Plan

Comparing 529 college savings plans

Couples fighting over money is tragic. Life is hard enough. (Photo Credit: CC BY-ND/Media Anarchist/Guerilla Blog)

Loving relationships are built on a foundation of trust. For couples to live happily ever after, they must be able to trust one another with sensitive information, including knowledge of personal finances. If a couple isn’t on the same page – if they’re fighting about money – dark times lie ahead. Jill Gianola, a registered financial advisor with the National Association of Personal Financial Advisors, has some advice for how couples can best avoid money arguments.

Know your money personality

Using money wisely means different things to different people. Some see money as a path to short-term happiness, while others view it as a sign of future security. Once you understand how you and your partner view money, you can begin to form a meeting of the minds when it comes to planning your finances. Hopefully, your money personalities are reasonably compatible.

Share feelings and experiences

Rather than using a credit card statement like a cudgel to subdue your overspending mate, come down from the pulpit and share your feelings. Even talk about how you learned about money, and encourage your significant other to do the same.

Set aside a quiet time and place to talk with your partner about money attitudes. This is not the time to drag out the credit card statements or lecture your partner. Instead, talk about how money was handled when you were growing up. Share your fears and talk about what you hope your money will accomplish.

Talk about your savings goals

There are always larger financial goals on the horizon, such as funding a home, buying a car, or preparing for education or retirement. If you stay focused on the long-term goals as a couple, you can more easily commit to saving enough each month to reach those goals within a reasonable time frame. Thinking long term and knowing you can achieve your goals brings a confidence melts away a great deal of stress.

Your own private slush fund

This is nothing nefarious. Each partner should have some of their own money socked away, for them and only them. Use it for eating out with friends, or whatever impulse expenses that don’t fit into the larger budget.

Go for the switcheroo

If your money personality is significantly different than your partner’s, all may not be lost. An exercise in empathy could do the trick. Take a week to switch roles. If beloved is a binger and you’re a hoarder, try some role reversal and see what happens. Once the binger gets a close look at the books, perhaps they’ll see how much damage regularly unchecked impulse can do. Just make sure they pay the bills during the process.

If all else fails, call in the cavalry

If arguing over money simply can’t be helped, a neutral third party may be the answer. A financial planner can help arguing couples to define their goals with greater clarity and lay out an effective strategy. The next step beyond that would be couples therapy, as money probably isn’t the only issue on which you and your mate clash.

Sources

National Association of Personal Financial Advisors

SmartMoney.com

Couples, stop fighting about money

A growing number of people are willing to raid their retirement accounts. Photo Credit: MJ/TR/Flickr.com/CC-BY

An increasing number of people are having to turn to their retirement accounts to scare up cash. Withdrawing from an IRA, whether its a Roth or 401(k) plan, incurs stiff penalties, but people will do it when they are desperate enough. Being able to retire securely is becoming far more difficult.

Nearly one-fifth of workers make early withdrawal

Some people, when in dire straights, turn to their retirement accounts as a source of emergency cash. Though withdrawing money from one’s IRA can be a lifesaver — or seem like one — at the time, it may not be. It carries a stiff penalty, but more people are resorting to withdrawing from retirement accounts, according to Bankrate. The Financial Security Index, an annual survey by Bankrate.com, found that about 19 percent of respondents dipped into their IRA accounts at some point in the last year. About 17 percent of the people in the survey who are employed full time reported dipping into their retirement account at some point in 2010. Early withdrawals indicate that the people who withdrew the money did not have much money put away in case of emergency.

Fewer people believe they will retire

Retirement is becoming a dream that not many people believe they will be able to realize, according to CNN. A survey by the American Institute of Certified Public Accountants revealed that nearly 40 percent of working people surveyed believed they would not be able to afford to retire. Almost 56 percent said that they couldn’t afford retirement savings because food and gas costs were too high, and 55 percent had no idea how much would be necessary to save to retire. As a result of less confidence in the ability to retire, the younger set in the workforce are more apt to stay with an employer who offers a top shelf pension plan, according to Daily Finance. A Towers Watson survey revealed that 43 percent of respondents believed it was a great reason to stay at a job, up from 28 percent in 2009.

Retirement security at all time low

A secure retirement is something many people place a premium on, now more than than ever. People are less confident that they will be able to retire, and the state of the Social Security Administration is part of that. Roth IRA and 401(k) plans depend on stock values, so every economic downturn ruins many people’s nest eggs. More people are becoming interested in defined benefit plans, which have become rarer in the past few decades. Defined benefits, what many people refer to as a “pension,” is a flat rate payment given to a retiree each month. A traditional retirement account, like a 401(k) account, is called “defined contributions,” meaning an employer makes contributions while an employee works for them.

Sources

Bankrate

CNN

Daily Finance

This July, families considering military loans will be able to seek advice from the Office of Servicemember Affairs. (Photo Credit: CC BY-ND/Robert Niehaus/RDN)

Young military families face numerous financial challenges, as deployments and household relocation wreak havoc. That’s why Elizabeth Warren and the soon-to-be-active Consumer Financial Protection Bureau appointed Holly Petraeus, wife of U.S. Army Gen. David Petraeus, to chair the Office of Servicemember Affairs. NPR reports that with Holly Petraeus looking out for military families as a consumer advocate, the world will be safe for military loans.

Holly Petraeus is ‘Mom, apple pie and a pit bull’

According to Rod Davis, a colleague of Holly Petraeus’ at the Better Business Bureau, the Office of Servicemember Affairs new chairwoman is all-American and a fighter.

“She’s Mom, apple pie and also a pit bull,” he said. “You get her in your corner and watch her go.”

Fight is exactly what Petraeus, 58, did as the head of the Better Business Bureau’s Military Line program, which provides free financial literacy and consumer protection information to U.S. military communities. In the top position at the Office for Servicemember Affairs, Holly Petraeus plans to help educate military families on when such things as payday loans and installment loans – referred to military loans for active military and their immediate families – are a good idea. Also, Petraeus will work with the CFPB to help combat overly expensive variations on military loans that attempt to skirt federal lending laws.

Petraeus has been there before

As a military wife of 35 years, Holly Petraeus and her husband, Gen. David Petraeus, know what it’s like to make impulsive financial decisions. Everyone is young once, but that doesn’t mean one has to make harmful financial decisions in order to learn valuable life lessons. Unlike the civilian population, where problem debt can roll on for some time through collections and the legal system, military members who don’t pay their creditors can be forced to pay by their superiors. That’s why it’s a better not to learn the hard way with military loans, says Petraeus.

The Office of Servicemember Affairs is slated to open for business in July 2011, when the Consumer Financial Protection Bureau opens its doors.

Sources

Better Business Bureau

NPR

Holly Petraeus on military loans

Summer jobs for teens are out there, but get ready to hustle. (Photo Credit: CC BY-ND/Longwood Events)

The recession has made getting a job more difficult for everyone, but if you’re a teenager looking for summer jobs, the competition can be overwhelming. Nothing ventured, nothing gained still applies, however – even at minimum wage. Here are some hot summer jobs that typically employ younger, less experienced workers.

The kids are alright, thanks to the babysitter

Baby sitting and nanny positions will always need to be filled, and responsible, energetic young people who remain cool under fire are a good fit. Laura Davis, owner of College Nannies & Tutors franchises in three states told Bankrate that her company places hundreds of teens in such summer jobs. Another company named Care.com has connections with thousands of local colleges that help connect prospective caregivers with families.

Make it a Meatballs summer

There are typically jobs available at summer camps for kids, including day camps, weeklong or for the entire summer season. If a teen is active and outgoing, teaching children about camping or canoeing can be a breeze. According to Sandy Blondin of Fox Valley Special Recreation Association of Aurora, Ill., there are numerous benefits for teens beyond a paycheck.

“Being on a summer day camp staff offers important skills in team building, leadership, problem-solving and child development,” she said.

Check out websites like American Camp Association, Summer Camp Jobs and Camp Channel for links to summer camp jobs for teens.

Test the waters of being a lifeguard

Warm summer temperatures mean that beaches, water parks and public pools around the country will be open for business. Career websites like Simply Hired have more than 1,000 summer jobs listed for lifeguards, and that’s just one site. For teens who are strong swimmers and have certifications in CPR and first aid, spending golden summer days by the ocean or pool is a slam dunk. The key is to apply now.

“These numbers are promising for those looking for employment this summer,” says Daniel Greenberg, chief marketing officer of Simply Hired.

Summer amusement at the park

Summer is the busy season for most amusement parks in the U.S., and seasonal jobs must be filled. According to Bankrate, Six Flags Great America near Chicago hires 3,200 season employees for groundskeeping, ticket sales and entertainment. Disney and other chains look to fill similar positions. Free park admission is typically a benefit of these summer jobs.

Work retail, get a mall discount

Summer hiring for retail work has begun early this year, so jump on the opportunity now. Teens hang out at the mall, so why not get paid for it? Traditionally, larger malls hire a few thousand teens for summer jobs, although the recession may force some older workers into such jobs. Learning sales and improving social skills are two benefits of mall work for teens. The customary mall discount may be more immediately appreciated, however.

Sources

Bankrate.com

CoolWorks.com

Summer Camp Jobs

Need a summer job? Try a job fair

Despite bank customer satisfaction being higher, banks are being sued more frequently for ATM fee policies. Image from Wikimedia Commons.

Bank fees, specifically ATM fees charged to out-of-network debit card holders, infuriate many consumers. An increasing number of lawsuits have been initiated nationwide based on an obscure law regarding ATM fee disclosure.

Banks facing 30 lawsuits over bank fees in Michigan

There are more than 30 lawsuits over fees at automated teller machines facing various banks in the state of Michigan. All of the suits concern fee disclosure laws, according to USA Today. There are similar suits pending in numerous states, but there are the most in Michigan because of a couple of pesky retirees. Nancy Kinder and Ray Harrison of Fowlerville, Mich., have sued numerous banks because they found that they do not disclose bank fees in the manner specified in the Electronic Funds Transfer Act. Kinder and Harrison filed five of the suits in one day. They have, according to the Chicago Tribune, sued 36 banks in the last two years, accusing them of violations of federal law.

Nuisance lawsuits

Kinder and Harrison actively search for banks that aren’t in compliance with federal law regarding how ATM fees are advertised. When they find a violator, they make an ATM withdrawal and take pictures of the screen during the transaction along with the disclosing signage. Once the evidence is gathered, they file a lawsuit against the offending bank. Banks must have a sign disclosing the fees; a notice on the screen isn’t enough.

Customers more satisfied with their banks

A consumer survey by J.D. Power and Associates found that consumers are happier with their banking experience compared to three years ago, according to CNN. On J.D. Power’s 1,000 point scale, customer satisfaction rated a 752 for banking, four points higher than last year and the first time the approval rating has moved up since 2007. Bank fees and credit card fees have been getting a lot of attention recently for being raised at nearly every opportunity. However, only 18 percent of those in the survey had their fee structure changed in the last year, and only 43 percent recalled being charged a fee by their banks. That changed from last year, when the same survey revealed 53 percent of bank customers surveyed had been charged a fee by their bank.

Sources

USA Today

Chicago Tribune

CNN

Make your own biodiesel fuel and save a bundle. (Photo Credit: CC BY-ND/Chemistryland)

Gasoline prices are out of control, prompting more consumers to consider alternative fuels. For diesel vehicle owners, biodiesel is an environmentally conscious option that costs less than $1 per gallon. Biodiesel fuel can even be made at home. While there are pros and cons to the process, it’s hard to deny that running a diesel vehicle on biofuel is cheaper in the long run than gasoline.

Biodiesel requires a diesel car and production kit

Your vehicle must have a diesel engine in order to take advantage of biodiesel fuel, and you’ll need some equipment to make biodiesel. Bankrate writes that several companies offer do-it-yourself biodiesel kits, ranging in price from $400 to $5,000, depending upon the quantity of biodiesel you want to produce, pump and store at one time. Thankfully, the Alternative Fuel Vehicle Refueling Property Credit can make up for up to 30 percent of the cost of making biodiesel fuel at your primary residence. Remember that for your 2011 taxes.

Putting the bio in biodiesel

The time required to make the fuel can be as little as a few hours, depending upon the production kit used. The big question is what suitable organic substance you’ll use to make biodiesel fuel. Soybean oil is most commonly used in the U.S., although any old yellow grease taken from cooking oil will work. Get friendly with your local greasy spoon restaurants and they may let you haul away their grease for free.

The only caveat to this path is that restaurant grease may be too dirty to produce the highest-functioning biodiesel fuel. Impure biodiesel can also expose your gas tank to bacteria, mold and fungus and can end up costing thousands of dollars to repair. The more expensive production kits filter out impurities, but of course you have to pay more for the most efficient kits. The purest biodiesel is B100 or B99. That means the fuel is 100 or 99 percent biodiesel, with the rest being petroleum diesel, says Bankrate. However, an 80/20 mix may be less likely to clog your fuel injectors if you live in a colder climate. Consult with your automaker if you’re unsure of which mix to use.

Cost on percentage

How much you save using biodiesel fuel instead of standard petroleum diesel depends in part upon the mix. If you’re able to obtain free soybean or cooking grease, production costs should ideally average out to about 70 cents per gallon for the other required ingredients specified by your production kit. As stated above, equipment will cost extra. But it beats living with high gasoline prices.

Sources

Bankrate.com

How Stuff Works

Journey to Forever

More on making biodiesel fuel

Thanks to a slumping housing market, home renovation isn't as sure a thing to increase value as it once was. (Photo Credit: Public Domain/U.S. Army Africa/Flickr)

Remodeling to increase the value of a home has traditionally been a good idea. However, the housing market collapse has made big home renovation projects a calculated risk. In parts of the U.S. where the real estate market is more favorable, remodeling projects can still provide good value for the cost. SmartMoney has a few ideas about where to start if you’re looking to remodel your home.

Cooking up a tasteful kitchen remodel

Today, kitchen remodeling is a $12.6 billion industry. Since the lowest point of the housing bubble collapse in 2009, homeowners have spent an average of $27,300 on kitchen remodels, reports SmartMoney. That’s only 8 percent below the average cost at the height of the U.S. housing boom, says Harvard University’s Joint Center for Housing Studies, but there are ways to economize.

As demand has decreased during the recession, some cabinet manufacturers have cut out surcharges for custom work, decorative finishes and highest-quality wood. Don’t be afraid to ask, as it could save you 20 to 30 percent. Unfortunately, the same cannot be said for hand-painted tile, as there aren’t the kind of backlogs that would necessitate driving down prices. A major tip SmartMoney offers kitchen remodelers is not to source materials directly from manufacturers simply to save money. The potential for sizing error increases, which could force you to pay more for return shipping and repairs.

Clean up with a bathroom remodel

Even in a sluggish real estate market, studies indicate that bathroom remodelers recoup 53 percent of costs on average. Prices for high-quality granite have come down by as much as 50 percent since the housing boom years, in part because of increased competition from Asian and Brazilian rock quarries. Similarly, porcelain sinks are down in price by 50 percent because of increased Chinese import activity. Thus, high-end restroom remodeling projects aren’t out of the question.

A bathroom project that makes a lot of sense is a spa shower, suggests SmartMoney. With a shower tower kit, only one water hookup is required to deliver multiple streams of water. Just keep in mind that such kits aren’t adjustable, which can be a problem if people of different heights use the shower.

Backyard projects that sizzle

To target buyers who like backyard cookouts, there are remodeling projects that can increase your potential cash return at resell. Deluxe grills, pizza ovens, refrigerators, warming drawers, wine chillers and cabana roofs have sold well during the recession, says SmartMoney. Rising demand hasn’t affected the price much, experts say. Installation costs are down by as much as 20 percent because of the labor glut, and homeowners have found the recession has made it easier to haggle over landscaping costs.

A “hot tip” SmartMoney offers readers is to consider a gas fire pit instead of a masonry fireplace. Pits are often portable, which offers greater flexibility with décor. Not only that, but gas pits can cost thousands of dollars less.

Sources

Oprah

SmartMoney

Knowing when renovating your home is worth it

“Hang on, pops! You'll be returning to work – if you know what's good for you.” (Photo Credit: CC BY-SA/Sean Fornelli/Flickr)

Some people look forward to retirement at 65 as the time when they’ll finally be able to focus entirely upon the things they want to do. However, retiring at age 65 may be a thing of the past, suggests the Los Angeles Times. According to geriatrician Dr. Katherine Schlaerth of the USC School of Medicine, the U.S. retirement age may even be unhealthy.

Working longer for your health

Intellectually and physically, Schlaerth has found that her retirement-age patients who worked later into life were more healthy. Retirees who had suffered from high blood pressure, memory lapses and other ailments improved dramatically upon returning to work. They lost weight, experienced much less hypertension and avoided the kinds of depression that prey on idle minds. And considering the current U.S. economic landscape, returning to work was also a welcome financial boost for many of her patients.

Research suggests that the decline in physical and mental activity that often comes after retirement place great burdens upon a retiree’s health. A 2007 study of British civil servants corroborates this, as the risk for cognitive decline increased after for subjects after retirement. A more recent study by the Rand Corp. and the University of Michigan found that “men and women in countries where people worked longer did better on a test of cognitive skill involving memory than those in countries where early retirement was the norm,” writes Schlaerth.

Similarly, an Israeli study of septuagenarian workers found that the activity involved in the completion of daily work duties kept people healthy and increased individual feelings of independence and satisfaction.

The troubles with Social Security have paved the way

As Social Security slides toward complete collapse – and more people are taking it early – younger workers are looking toward a future where the retirement age will be significantly higher. Those who receive Social Security today grew up in a time when families averaged four children, while post-1960s families have averaged two. This means that there will be fewer worker contributions to the pool over time, which in turn will contribute to Social Security’s decline.

Where the septuagenarians are

According to RetirementJobs.com, employees 50 and older tend to cluster in the following industries:

1. Airlines (American Airlines is the top employer)
2. Utilities
3. Insurance
4. Retail
5. Chemicals
6. Aerospace
7. Packaging and containers
8. Forest and paper products
9. Food production
10. Beverages

Sources

Los Angeles Times

RetirementJobs.com

Retirees: Back to work, back to school

When divorce hits your eye like a big pizza pie, that's when you wish you had a prenup. (Photo Credit: CC BY-ND/Ohio Prenuptial Agreement)

The April 29 royal wedding of Prince William and Kate Middleton is fast approaching, and amid the usual fanfare surrounding the fairy-tale ceremony, consumer advocate Clark Howard noticed something curious. There’s a great deal of urging in the U.K. media for Prince William to sign a prenuptial agreement before the wedding. Contracts specifying the division of assets are encouraged by many financial planners, particularly when property and wealth are involved.

What is a prenuptial agreement?

Regardless of the nomenclature – prenuptial agreement, prenup, prenupt or premarital agreement – a prenup is a legal contract signed before a marriage or civil union. While the terms of the agreement can vary, specifications for how community property and spousal support are to be divided in the event of divorce are most common. Provisions for child guardianship and forfeiture of assets in the event of indiscretions like adultery may also be present.

Postnuptial agreements are similar to prenups, but are formed after a couple is married.

Divorce is a fact of life

One in three first marriages and at least half of second and third marriages end in divorce, reports Bankrate, so financial experts say prenuptial agreements are a good idea.

“Marriage is not just an emotional and physical union — it’s also a financial union. A prenup and the discussions that go with it can help ensure the financial well-being of the marriage,” said New York City financial adviser Nancy Dunnan.

Contrary to popular belief, a couple doesn’t have to be Prince William and Kate Middleton for a prenup to be practical. If a person has managed to sock away a nest egg, protecting it is worthwhile.

“Those are sometimes the most jealously guarded assets because it has taken a lot of hard work to accumulate a small amount,” said Iowa lawyer Joseph Zwack, author of “Premarital Agreements: When, Why and How to Write Them.”

Signs you should have a prenup (or postnup)

According to Bankrate, if any of these things apply and you are about to marry or are already married, consult with an attorney:

• You own a home, business, stock or retirement funds
• Your business venture may lead to a large increase in income
• You may be receiving an inheritance
• You have children or grandchildren from a previous marriage
• There is a significant imbalance of wealth between you and your spouse
• One spouse will be putting the other through college
• You have elderly parents who require care
• You have or are pursing a medical degree or similarly lucrative license

How to proceed if you want a prenuptial agreement

Dunnan recommends you approach the topic with your mate as early as possible, and Palm Beach County, Fla., lawyer Michael McDonough says honest discussion is important. So long as both parties have an attorney – ideally matrimonial lawyers familiar with prenups and the laws of the state in which you’ll live together – a fair agreement is possible.

Sources

Bankrate.com

Clark Howard

Wikipedia

‘He fell in love during the flight’

Ensure her education today with free term life insurance. (Photo Credit: CC BY/Vicci/Moon, Stars and Paper)

Life insurance can provide loved ones with financial security in the event of the policyholder’s death. For most people, term life insurance (aka term assurance) is among the most affordable packages, as low as a few hundred dollars per year for $250,000 worth of coverage. For customers of MassMutual Financial Group of Massachusetts, however, the price is even better. According to Bankrate.com, MassMutual is currently offering free term life insurance.

Get free term life insurance while you’re healthy

Life insurance experts advise potential customers that if they’re interested in a policy, the time to buy is when you’re young and healthy, as rates are significantly lower. If a person has dependents, life insurance is almost always a good idea.

In general, term life insurance provides coverage at a fixed rate for a limited period of time – the term period. At the end of the term, coverage expires unless additional coverage is obtained. If the insured dies mid-term, death benefits are paid to the beneficiary.

Take the MassMutual LifeBridge to free term life insurance

MassMutual Financial Group is willing to set aside $50,000 in free term life insurance that can be applied toward the education of the policyholder’s children in the event of the policyholder’s untimely death. This may seem too good to be true, but Bankrate.com says MassMutual is the real deal. Provided a person meets the qualifications for the free term life insurance policy through MassMutual’s LifeBridge program, the money can be there for the future.

The $50,000 is placed in a 10-year trust. If the policyholder dies during the life insurance term, benefits are paid directly toward children’s tuition, fees, books and on-campus room and board, whether the children are in pre-school, private school, trade school or college. After the policyholder’s death, the children have either 10 years or until age 35 to use the trust money, whichever is later.

Free term life insurance requirements

Those interested in MassMutual’s LifeBridge life insurance program must meet the following qualifications:

• Be at least 19 but not older than 42
• Be the parent or legal guardian of one or more dependent children younger than 18
• Be a permanent legal resident of the U.S.
• Be employed full or part time and have a family income between $10,000 and $40,000
• Be the only parent or guardian in your household to apply
• Be in good health in the view of MassMutual underwriters
• Have not been diagnosed with heart disease, cancer, HIV or Type 1 diabetes
• Have not abused drugs or alcohol at any time within the past 10 years
• Are not currently on probation

Blood and urine tests are required before free term life insurance approval. Suicide within two years of the policy’s effective date voids the policy. Additional information is available at MassMutual Financial Group’s website.

Source

Bankrate.com

MassMutual Financial Group

MassMutual LifeBridge brochure

MassMutual LifeBridge FAQ

Wikipedia

MassMutual LifeBridge program testimonial

Will that umbrella still be there if he has a heart attack? (Photo Credit: CC BY-ND/Affordable Life Insurance Policy)

Which health conditions are most likely to send your life insurance premiums skyrocketing? Bankrate.com asked New York Life’s chief underwriter Stephen Bloom and chief medical officer Dr. Jacki Goldstein for some of the top health hazards as they would apply to life insurance for a 40-year-old man. Here is their tale of the unhealthy red tape.

High blood pressure

High blood pressure can lead to a host of organ diseases, said Goldstein. Coronary artery disease, stroke and kidney damage are just a few. While life insurance industry underwriters show the most favor to those who control their blood pressure, people with high blood pressure may still qualify for a preferred policy, as long as they’re taking steps to manage it.

“Different carriers have different categories of preferred, but yes, high blood pressure that is well-managed, most carriers would have that qualified for preferred,” said Goldstein.

Type 2 diabetes

Adult onset diabetes (Type 2) takes a toll on the body’s vascular system, with coronary artery disease, renal failure and blindness being some of the potential risks. If a Type 2 diabetes sufferer is younger, the potential for higher life insurance premiums increases because the condition generally does not improve with time.

“If I get diabetes at age 70, I might already have coronary artery disease or a stroke anyway, so the impact of the diabetes might not affect my life expectancy in the way it might a 40-year-old. A 40-year-old is unlikely to qualify for preferred in my experience,” Goldstein told Bankrate.

Heart disease

A massive heart attack relates to a host of heart conditions that can be difficult to document, which makes a life insurance underwriter’s job more difficult. If the situation is indeed severe, the person may not be insurable, says Bloom.

“We do consider family history in our underwriting assessments,” Bloom said. “Generally, this is associated with immediate family members — father, mother, sister, brother — who may have developed heart disease or had a stroke.

Asthma

The chronic respiratory condition asthma can, while rare, lead to death if not carefully controlled. If it is carefully controlled, a preferred life insurance rate class is not out of the question.

“For the most part, asthma will be extremely favorably underwritten,” said Goldstein.

Cancer

Depending upon the type and severity of the cancer involved, life insurance premiums can be affected to a negligible degree or quite severely. According to Bloom, if New York Life were to underwrite a policy for a cancer patient, the company would want to monitor the patient for six months to a year before making a policy decision.

“Cancer conditions may require a longer period of time depending on the location of the cancer, the staging and type of treatment involved,” he said.

More of the top health risks for life insurance are cataloged at Bankrate.com.

Source

Bankrate.com

Billy Mays on health insurance

Find a good financial planner to help you generate investing ideas. (Photo Credit: CC BY-ND/Brook Rushing/Creative Loafing)

People invest because they want to create wealth. Day traders may savor the adrenaline rush, but profit is the purpose. In order to invest effectively, however, it pays to know some basics. It also pays to know how not to invest.

Invest in a 401(k)

Experts advise getting started with a 401(k) plan from your place of employment, preferably with matching funds from the company. The money deposited is not taxable as long as it remains in the account, earning dividends, interest and capital gains. Let it sit for a while and gain interest for your retirement.

About.com reminds investors that a 401(k) is not an investment per se but an account that holds investments in stocks, bonds, mutual funds and more, depending upon your 401(k) variant.

Save for a rainy day

In addition to a retirement account, it is essential to establish savings. Online resources like Motley Fool or any worthwhile financial adviser can help you decide how much you should realistically be saving.

Max out your Roth or Traditional IRA

A Roth IRA retirement account gives you the flexibility to make contributions after taxes, so taxes are paid only upon withdrawal. Maxing out your contribution limits will enable you to build a fine nest egg. Even if you don’t qualify for a Roth, a Traditional IRA still grants you sizable tax benefits.

Expanding beyond the retirement account

Producing additional wealth can mean opening a brokerage account and buying stocks. Before investing, however, you should have a clear vision of your goal. Know what you want and how long it will take you to get there based upon the amount of the investment and rate of return.

Pay off your credit cards first

The interest rate on credit cards make them the worst debt consumers can hold. Take care of all credit card debt before beginning to invest in stocks.

How NOT to invest: Don’t sit on your hands

Motley Fool points out that stock market is unpredictable, but t if you venture nothing, you will gain nothing. The miracle of compound interest smiles upon those who buy in. If you invest in stocks and stop paying attention, you’re asking the market to swallow your cash. Follow your stocks and move on if and when the time is right. Remember your financial goals and don’t go too far outside your comfort zone unless you’re prepared for possible loss.

In and out is expensive

If you’re investing through a brokerage firm, frequent trading in and out of the market will produce major fees. Day traders make up for this in volume, but for the basic investor, long-term investments (ideally five years or longer) are the safer course. If short-term investment is necessary, consider money market funds or CDs, advises Motley Fool.

Sources

About.com

Motley Fool

From socks to stocks

Teach him to save, and he'll be on his way to being a smart consumer. (Photo Credit: CC BY-ND/Consider the Ant)

Many parents have wrestled with whether they should pay their kids for good grades. Some look at a little cash as an extra incentive to excel, while others believe that it sends the wrong message to children about the value of both money and education. However, studies suggest that there is a golden middle path that is motivating and teaches children lifelong financial lessons.

‘School is your job’

Many parents who support the idea that paying for grades is productive argue that school is a child’s vo0cation. It’s a kid’s job to learn as much as possible to prepare for the endless education that is life. As such, paying for performance is like an employer compensating an employee.

The opposing side to this argument, however, is that not all jobs in life net monetary rewards and that children should strive for good grades simply for personal growth. Does withholding cash for grades prepare children for the joy of unpaid internships, where experience is its own reward? Or are such jobs nothing more than volunteered slavery to a corporation, where the game of “paying your dues” obscures the truth that labor is being exploited?

Pay for good grades programs have been instituted in a number of public school systems to good effect, reports the New York Times. Yet controversy has remained. While Urban League President Darwin Davis praised such efforts for mirroring the reward systems of U.S. capitalist society, Manhattan Institute fellow Sol Stern called it “an insult to every hard-working parent.”

Never work for free

Teaching children they should be properly compensated for hard work and achievement is one of the ways parents can help instill an entrepreneurial spirit. In short, the lesson is that if you’re good at something, never do it for free. Yet for such a principle to sink into a child’s mind, it must be accompanied by knowledge regarding the value of money. Here’s a crash course in teaching kids the value of money, courtesy of Money Crashers:

1. Cash is king. If you’re dealing with teenagers, do not give them gift cards or prepaid debit card as a reward for grades. The tangible feeling of handling dollars and cents as they purchase the things they want will help them understand the finite nature of money and help them visualize what it’s like to develop a savings.
2. Get a job. In addition to earning money for good grades, if kids need more money, they should find part-time employment. For younger kids who aren’t already receiving an allowance, this could be doing yardwork for neighbors. For teenagers who are old enough, it could mean a paper route or other part-time job. The sense of accomplishment gained from earning money goes a long way toward teaching kids to value it.
3. Teach kids about giving. Doing good in society can take many forms, donating time and/or money. Developing a healthy sense of selflessness early in life can help a child build an appreciation for money, education and the value of life in general.

Sources

Money Crashers

New York Times

Exxon is paying high school students for grades

Earn good interest on your money with a money market account. (Photo Credit: CC BY-ND/Catherine Hoyle/Wrights Business Research)

If the rate of return on a small savings account were a particle in the natural world, you’d need an electron microscope to see it. For a better rate of return, consider a money market account. While not as liquid as a savings account – you can’t cash it out as quickly – a money market account is a safe investment that you can easily sign up for online.

Money market accounts and money market funds

There are two basic variations when it comes to a money market: the money market account (aka the money market savings account) and the money market fund (aka the money market mutual fund). Money market accounts are products of a bank, and hence such an investment carries the benefit of being FDIC insured. “High-yield savings,” “Internet savings” and “electronic savings” are all terms various banks will use to refer to such accounts. And like a savings account, a money market savings account provides liquidity, although with some limitations not present in a regular savings account.

Money market mutual funds are quality, short-term investments with some liquidity and interest rates that fluctuate daily. While investors have historically had great success with money market funds in terms of safety, there is no FDIC insurance that guarantees investors will get their money back if the issuing bank becomes insolvent.

Research the best money market account or fund for you

Decide what features work best for your financial situation and shop around. Yields will vary greatly from one financial institution to the next. Check Bankrate.com to compare rates. It is important that consumers pay attention to bait-and-switch-style situations in which a bank advertises a high opening rate, only to drop it down later.

Some banks give customers free checks and access to electronic funds transfer (EFT) between a money market fund and checking account. However, the number of monthly transfers allowed will likely be limited.

If you sign up for a money market account through a brokerage, unlimited check writing, an attached debit card and EFT transfers are common features. Any cash surplus between trades and investments performed within a broker money market account are “swept” into a separate money market account that is used to pay for future trades.

Go to your chosen institution’s website

Once you’re on the website for the financial institution of your choice, the procedure to open an account will be spelled out in detail. Print, sign and mail in the required account agreement, as well as the signature card if the option for checks is available. If you have questions, a toll-free number is made available by most issuing banks. Keep in mind that if signing up for a money market account is difficult with a particular bank, it is likely that future transactions involving the account will also be more trouble than they’re worth.

Don’t forget the EFT

If you want the flexibility to be able to instantly transfer money from your money market account or money market mutual fund into your checking account – and the option is available at your bank of choice – make sure to set up the EFT link at sign-up.

Sources

eHow Money

Investopedia

Cathy Pareto, MBA, CFP, on the benefits of money market accounts

“Another hard day at work from home” is anything but facetious. (Photo Credit: CC BY-ND/Ashley/Flickr)

The U.S. job market has been sluggish to recover from the recession, which means many Americans are still out of work. Work from home opportunities abound, however – and most of them don’t even involve eBay. Here are some work from home ideas to get you started.

Why work from home?

Most people pursue gainful employment because they need money to meet their expenses. However, by working at home or even telecommuting 50 percent of the time, U.S. workers and employers could save more than $750 billion per year, according to the Telework Research Network.

A hefty percentage of that total comes from reduced dependency on oil. Productivity would increase by a projected 6.2 million man-years, which equates to $200 billion worth of labor annually. Businesses would reduce spending on real estate and utilities by at least the same amount each year, while highway maintenance costs and traffic accidents would drop significantly.

What work from home idea is best for you?

Selling on eBay is always an option, although amassing significant returns can be difficult unless you have access to a product everyone wants that can be delivered in great volume at minimal cost. Luckily, there are lots of work from home options you can research online without having to wade through the many work at home scams that tend to congregate on Craigslist (there are some gems, but they’re hard to find). As Clark Howard says, if a company says it will find you a work from home job for a large fee upfront, it’s probably a scam. Avoid the red tape with these work from home ideas. Keep in mind that some may charge a background check fee.

Work from home opportunities to fit your lifestyle

• AlpineAccess.com: After paying $45 for the required background check, AlpineAccess.com can match you with a virtual call center job. Positions typically involve customer service work.
• ConvergysWorkatHome.com: In addition to customer service telephone positions, Convergys can help you find work from home human resources and billing service opportunities.
• Elance.com: A great source for freelance talents who like flexibility. Small businesses look to Elance for web design, programming, SEO, graphic design and copywriting professionals. Bid for jobs, but watch out: Elance is so popular that unless you’re a highly experienced, award-winning professional, you may have to bid lower than you’re comfortable in order to secure work.
• LiveOps.com: Want to work from home as a virtual call center agent for a Fortune 200 company? LiveOps.com can get you there, provided you pay $175 for a more extensive background check than the standard $50 check gets you. A dedicated land phone line for LiveOps.com work only is required.

Worried about work from home scams?

Check with the Federal Trade Commission and Better Business Bureau websites for advice on how to spot work from home scams. It can save you time, money and big headaches.

Sources

Better Business Bureau

Clark Howard

Dr. Phil

Federal Trade Commission

John Tesh has everything you need to work from home

Banks and credit unions offer various types of certificates of deposit. Ask around. (Photo Credit: CC BY-ND/What is a Certificate of Deposit?)

A certificate of deposit (CD) resembles a savings account, in that a consumer makes a federally insured, interest-accruing bank or credit union deposit. Unlike a savings account, however, a CD does not allow early withdrawal without penalty. For those who want to explore opening a CD, here’s a guide to the best CD options available.

The traditional certificate of deposit

A traditional certificate of deposit is simple. The customer deposits a fixed amount of money for a specified term (from three months to five years) at a predetermined rate of interest. Once the CD comes to maturity, the customer can either cash out the money with interest or roll it into another CD term. Most banks and credit unions allow customers to add funds to a CD at any time. The downside is that the early withdrawal penalty can eliminate interest and cut into principal. Federal regulations delineate the minimum penalty level but not a maximum. Thus, financial institutions can — and d0 — charge more.

Flex for higher rates with a bump-up CD

For added flexibility, a bump-up certificate of deposit enables you to opt for a higher rate on return, even mid-term. It pays to know the going market rate of interest for a CD, so you can tell your bank to give you the bump-up. The trade-off when compared with a traditional CD is that a bump-up CD may begin at a lower interest rate than a traditional CD. Typically, only one bump-up is allowed per term.

Go with the flow and avoid withdrawal penalty

A liquid certificate of deposit enables you to withdraw money from your account, so long as the money invested at account inception remains untouched for at least seven days (the federal minimum; banks’ rules vary) and a minimum balance is maintained. While the liquid CD does offer penalty-free withdrawal, each financial institution will specify a maximum number of withdrawals per term. The interest rate on a liquid CD is generally lower than a traditional CD. Brokerage CDs are a form of liquid CD that has the benefit of professional management and a higher interest rate than a standard bank CD.

Zero-coupon for long-term upside

A long-term CD option is the zero-coupon CD. Typically at least 10 years in term, a zero-coupon CD does not receive direct interest payments during the term. That money is re-invested, then back-loaded at maturity. Bankrate.com gives the example of a 12-year, $100,000 CD at 6 percent interest. As a zero-coupon CD, this might cost $50,000 to open, but the balance will reach $100,000 at the end of the term.

Keep in mind that a zero-coupon CD may cause you to be credited with phantom income at tax time, even though you won’t have access to the funds. For the most up-to-date information on the top yields for CDs, check out Bankrate.com.

Sources

Bankrate

Bankrate: Top CD interest rates

What is a Certificate of Deposit?

Wikipedia entry for certificate of deposit

How to calculate a CD

Consumers fed up with bailouts, bonuses and bogus fees are switching to local banks and credit unions by the millions. Image: CC bk1bennett/Flickr

Wall Street banks watched their customers jump ship by the millions in 2010. Community banks and credit unions have watched their clientele grow as consumers disgusted with bailouts, big bonuses and deceptive fees move their money. A driving force behind the movement is the “Move Your Money” project, a campaign that assists consumers who want to divest from Wall Street and invest in local financial institutions.

Big bank defections a growing trend

Wall Street banks, in a game of cat and mouse with regulators, are devising creative new ways to gouge consumers as traditionally abusive practices are outlawed by financial reform. Big banks bet that their customers are too lazy, busy or negligent to notice they are getting nickeled and dimed into giving up dollars. For example, many banks that can no longer charge usurious overdraft fees have discontinued free checking. Carly Fried at MoneyWatch reports that in a recent presentation to shareholders, a Chase executive boasted of making about $1 billion simply by converting 8 million free checking accounts into a revenue stream generating $10 to $12 in monthly fees. But that windfall could be short-lived. The largest banks lost more than 4 million accounts last year. According to the research firm Moebs Services, 7 million to 9 million more accounts could move to community banks and credit unions in 2011.

The Move Your Money campaign

Consumers who question the new checking account fees are often told by their banks that the government forced it to take such action. What they should know is that 65 percent of banks in the U.S. still offer free checking despite the Dodd-Frank bill. The easiest way to find those financial institutions is at moveyourmoneyproject.org. Move Your Money is a campaign organized by Arianna Huffington. The Move Your Money website search tool locates the closest local community banks and credit unions simply by typing in a zip code. After Huffington appeared on CNN to promote the website in January last year, 80,000 people used it to find a local financial institution. In the past year moveyourmoneyproject.org has been getting up to 45,000 page views a day.

Closing a bank account

For consumers thinking about moving their money, closing a bank account should be done carefully. Open an account at your new financial institution first, then make sure all your checks have cleared. Physically go to your bank to close your accounts, but call before you leave to learn about its policies about closing accounts. Some banks will try to ding you one last time with a hefty fee. Be sure to go before 3 p.m. on a weekday so the staff has plenty of time to complete your request. Bring two forms of identification, including a photo I.D. Don’t leave without the balance of your accounts. If the bank can transfer the funds electronically, have it do so. If not, take the money with a cashier’s check or cash.

Sources

Huffington Post

Christian Science Monitor

CBS MoneyWatch

ehow.com