Financial Topics

Estate Planning

2008-03-11T12:53:00.001-07:00

You Can't Take It With You

You're gonna die. Someday. It's an inevitable truth, yet many of us spend a good portion of our lives denying it. Unless you stumbled onto this page in error, your willingness to read about estate planning suggests you're not as deluded about your mortality as the rest of the sorry bunch. Good for you. Because estate planning is important business when you have anyone important in your life and own any "thing" of value, sentimental and otherwise.

Estate planning is so much more than planning for death. There are actually three separate plans in an estate plan. The first is for accumulation of assets. If you don't have any assets, there's little need for further planning, after all. The second plan is to preserve assets once they are accumulated. Finally, the estate plan should include a plan for distribution of your assets to your heirs. And we're not talking fighting over the antique china at an estate sale.

If you're not sure this information applies to you, consider these reasons for estate planning:
It can help you avoid or reduce federal and state estate taxes, so more of your estate is passed on to your beneficiaries.

It allows you to say who gets what (to avoid family fights over your marble bust and other treasures, for instance).

It helps you to provide for your spouse and other remaining family members, and especially for any special concerns such as care of minors or handicapped family members.
It avoids delays in the distribution of your estate.

It reduces the cost of administering your estate (and you know how much it costs to shuffle paperwork nowadays).

Getting Married - Money Mismanagement? Not For This Mr. And Mrs.!

2008-03-11T12:52:00.001-07:00

For love? Or for money? Whatever your reasons for tying the knot (and being hopeless romantics, we hope it's for love), money and finances are a big part of the equation when two people say "I do."

Uttering those two words is more than a pact to love and cherish one another. Read between the lines and your partner may be saying "I do have a lot of debt I'm bringing to this marriage, honey bunny." Or, "I do think a prenuptial is a crummy idea, my little love nut." Or how about, "I do not give a rip about saving for our future, I want a big house now!")

Fortunately, we do have some solid info here that can help you go down the aisle and into a lifetime of wedded bliss with a clearer understanding of what you're getting into, as well as a financial plan of attack to get you started on the right foot (or left foot, for you southpaws) with your money and your financial decisions.

Here Comes the Bride (With a Big, Fat Stack of Bills to Pay)You might think you're planning a wedding, but you're really just part of a sophisticated highway robbery. The average wedding costs $19,000 and here's where the money goes.

The list doesn't include your honeymoon or costs associated with a rehearsal dinner, but it does assume you'll spend about 42 bucks a head to feed 200 guests. In other words, your numbers may not match this "typical wedding," which is good because your wedding will be anything but typical! Our wedding budget worksheet is an essential wedding planning tool. Or maybe our compatibility quiz will reveal that you don't need a wedding budget, after all.

Home Sweet Home - How To Make All The Right Moves With Your Home

2008-03-11T12:51:00.002-07:00

How To Make All The Right Moves With Your Home
Like the early settlers of this great nation, most of us yearn for a corner of earth to call our own. Yet we aren't satisfied with just owning a piece of sod -- we want a roof over our heads and indoor plumbing to boot. And why not? If a home is where your heart is, let's explore the ownership thing.

The quest for home ownership--as old as the hills as it may be--is a reasonable goal for most hardworking Joes and Joannas. There are many options (from ramshackle shack to California rambler) in the spectrum of homeownership, and a number of ways to finance the one that fits your dreams. So whether you're a first-time home buyer, looking to upgrade your digs or ready to bail, you've come to the right place to get a thumbnail sketch of the art of buying or selling a home.

If all you want to do is crunch some mortgage numbers, check out our Mortgage Payment Calculator and Home Affordability Calculator, which helps you factor in things like homeowner's insurance, association dues and real estate taxes.

7 Quick Tips To Guide Your Home-buying Journey:
Put the word out. Let people know what you're looking for in a home. From the dry cleaner to the gas station attendant, everyone knows someone who owns a home and might be ready to sell.
Get your finances in order. We've mentioned it before -- a good credit history (at least two years' worth) and prequalification can help you land a home faster (and before the other guy can steal it away from you).
Shop for a loan. The business of home mortgages is highly competitive. Examine the points, fees and rates of different lenders to get the best loan you can. One caveat: If your credit is shaky, you may not be able to be as choosy as you'd like.
Zero in on what you want. Don't hit the pavement until you know what you're looking for. You can waste a lot of your time (and your real estate agent's) by looking at two stories when you know you're looking for a walkout rambler. Make a list of features you won't negotiate on, and carry it with you.
Look for the diamond in the rough. A home in a good neighborhood that needs a little spit and polish is probably a better value than a charmer on the freeway and next to the airport. Look beyond weeds and broken windows to find a deal, or be willing to pay more for a home in "move-in" condition.
Pay for a home inspection. Here's an investment that's worth every cent. A home inspection done by a professional can help you avoid the harsh reality of a leaky roof or a faulty furnace. When an inspection turns up something like this, the seller can be asked (or even required) to make repairs before the sale can go through. Or you may decide to back out altogether.
Don't let your heart rule. Try to be objective in your home buying decisions. What we mean is, try to ignore the simmering potpourri that reminds you of growing up with ma's good cooking. Is the roof in good shape, the neighborhood sound and the price right? Cinnamon sticks are a dime a dozen (or thereabouts). Like a good book, you need to dig in to find the true value of a home (or uncover its flaws).

Identity Protection

2008-03-11T12:51:00.001-07:00

It's Not "If" But "When" You'll Be Robbed

Take this quick quiz to determine whether you are a candidate for identity theft.

Are you awake or sleeping?
A. Yes
B. No

If you answered the question with "A" or "B," you are in an ideal position to have your personal identity stolen. Identity thieves don't sneak into your home in the dark of night and scrape your identity from the drool on your pillow. They don't rely on high-tech tactics or only target your wealthy neighbors. Identity thieves--like most crooks--aren't nearly that ambitious. They do things like learn your dog's name because it's a common password choice and watch the keypad when you're using a calling card on a pay phone at the mall. They make your name their own after finding your bank statement in the garbage. They use your credit record to open accounts and spend until they have robbed you of your future buying power.

Most the time, identity thieves drag your name through the mud before you realize it was raining. By the time you report your losses, the crooks are long gone. They commit crimes simultaneously in multiple jurisdictions, making it difficult for authorities to make a case against them.

The good news? If you've been a victim of such theft, you're not alone. According to the Federal Trade Commission, it's the #1 (and fastest growing) financial crime. We've got information in this topic you may find helpful, either to take steps to minimize the risk that you could become part of that statistic or to help you put your finances back in order once they've been stolen.

Kids & Money

2008-03-11T12:50:00.001-07:00

Will It Motivate Them Or Corrupt Them?

Like it or not, we live in a capitalist society. (Most of us seem to like it just fine.) A lot of our values are reflected in the way we earn, save and spend money. So if you want to teach those values to your kids, you need to teach them about money how it motivates people, how it requires making choices, and how it can lead us astray.

We recommend focusing on the basics: live within your means, save part of what you earn, and consider sharing some of your money with others.

Like most of life's lessons, these are best taught through hands-on experience. Your kids can't just hear about making choices. They have to feel the frustration of wanting more things than they have the means to buy, and they have to go through the process of making those choices for themselves. That's why an allowance is an important instructional tool. (And you thought it was just a drain on your bank balance.) But it's not your only instructional tool. We'll cover a few more along the way.

It's not our intention to turn your kids into CPAs (although that's not necessarily a bad thing; of course, it's not a guaranteed good thing, either). We just want to point out how many ways money intersects with their lives. And when it does, we want to help you make sure it's not a serious collision.

Money & The Single Person

2008-03-11T12:49:00.000-07:00

Hey, You're Not Alone Out There

The single life comes in many varieties among people of all walks and ages. Single may be:

Never married
Separated
Divorced
Widowed
Non-married partner
Single with kids
Young & single
Senior & single

In America there are approximately 185 million people over the age of 18, if you believe the 2000 census figures from the Census Bureau. The odds are 2 in 5 they have no present marriage partner. Among all singles, 52% are women, 48% are men. Going solo can be fun, depressing, active, lonely, freeing, boring, or, more likely, all of the above, just like every other state of existence.

Being single may be a choice you've made, or someone's made for you, or simply a matter of destiny. No matter how you happen to be single, money is an issue. In fact, it's several issues, ranging from insurance needs to retirement decisions, and even the matter of a will. So whether you choose to be single or not, you should choose to make smart financial decisions. And you've chosen just the right place to begin.

Debt Is A Four-letter Word

2008-03-11T12:48:00.003-07:00

During the lucrative 1990s, credit card companies convinced unsuspecting consumers to spend, spend, spend. But buy now, pay later turns out to be a myth most of the time because "later" never seems to get here. And it's only getting worse. Double-digit interest rates on credit card debt and late fees conspire to put balances through the roof.

We won't burden you with statistics about the average debt carried by individual consumers (but we do have some pretty graphic info on average household debt later in this topic). If you're anything like us, you are reminded of that every time another bill arrives in the mail. Scary statistics tend to send self-respecting consumers to the shopping mall. We will give you a chance to glimpse your own situation using our Credit Card Payoff Calculator. Simply punch in a few numbers (actually punching them in may make you feel better) to sneak a private peek at how long you'll be paying what you owe. Assuming you don't charge anything else in the meantime.
Maybe you're bold enough to skip right to a Debt Quiz from Profina Debt Solutions, a non-profit organization that helps everyday people figure out what to do to solve their debt problems. The quiz is quick and easy, and your answers may even reveal that things aren't as bad as they seem.

We don't pretend to be debt counselors, and we can't pay your bills for you. What we do offer is some solid advice for people with moderate debt. We've got some tips for steering clear of near-miss debt trouble. If you keep reading this topic, you'll pick up some debt "Warning Signs" or use our "Action Plan" to get started in your personal debt reduction program.

College Funding

2008-03-11T12:48:00.001-07:00

A Little Knowledge Can Go A Long, Long Way

We always tell it like it is. So here's the bad news about paying for your kids' college expenses. No matter how old your kids are today, it's going to cost a whole lot of money to send them to college. According to the College Board, tuition and fees at your basic run-of-the-mill four-year public college or university is $4,694 for the 2003-04 school year. Private schools cost an average of $19,710. When you factor in inflation, the number of years it will be until your kid heads off to college, and the budgetary whims of state governments everywhere, and then you multiply that number by the 4 or 5 years it will take to earn a degree, let's just say we're hoping your calculator can handle the equation.

But there is good news! The Census Bureau reports that as of 2000, the average college graduate (B.A. degree) earned $49,674 a year, compared to just $26,059 a year for non-graduates. That's a 90% earnings advantage, up from 57% in 1975. So if you're wondering whether it was worth it, it has all the potential of being worth an extra $23,615 a year (at least this year). Those figures aren't for entry-level jobs, of course. But they paint quite a picture about the earnings potential of college grads in general. If only the picture were framed with dollar bills.

Of course, attending college isn't just about making lots of money. It's about attending lots of parties and football games and setting world records for Number Of People Crammed Into A New VW Beetle. Stuff like that. Clearly, there's a potential value to a college education that goes way beyond opportunities for bonding with fellow students in a compact car. It's an investment that may pay dividends for a lifetime. Wait a minute. Pardon the ridiculous financial cliché, but it sure holds true in this case.

Anyway, here's a little knowledge that can go a long way toward helping you overcome your disgust, fear, loathing, confusion, procrastination and Stage I panic on the subject of paying for college.

Certified Procrastinators - Wait! There's Still Time To Put This Off Til Tomorrow

2008-03-11T12:47:00.001-07:00

We'll keep this brief because we know your time to read through this is limited, and your excuses to leave are many. The subject is procrastination, and there are two basic kinds.
When it's a matter of the garbage needing to be taken out, or those videos having to be returned, or postponing that dentist appointment, it's no big deal. So your kitchen starts to stink a little, or you're a few bucks poorer after paying the video fines, or your teeth don't get cleaned this month. You'll live.

But when it's a matter of putting off that financial plan indefinitely, or postponing your retirement savings, or refusing to pay off that escalating debt, procrastination may be a very big deal -- a very big, expensive deal.

In the world of personal finance, time = money. And procrastination of the financial kind literally can either make you or break you.

New Grad - Was It Worth All Those Student Loans?

2008-03-11T12:46:00.001-07:00

Congratulations! You made it through college. Your future is looking bright. Studies continue to confirm that college graduates often make significantly more money than their non-college counterparts.

The Census Bureau reports that as of 2000, the average college graduate (B.A. degree) earned $49,674 a year, compared to just $26,059 a year for non-graduates. That's a 90% earnings advantage, up from 57% in 1975. So if you're wondering whether it was worth it, it has all the potential of being worth an extra $23,615 a year (at least this year).

So who cares if you've only got eight bucks in your pocket, three million in loans and a beater car outside? You're about to take full advantage of a personal economic boom -- no matter what's going on with our nation's economy -- because, bottom line, you're bound to make more moola that you did in college. And you've come to just the right place to get the information you need. Because, even though you hate financial planning, you gotta love the opportunities you now have for a very bright financial future indeed.

What Kind Of Job Should You Look For?If you're trying to figure out which direction to head career-wise, you might want to take a look at a recent study by the Bureau of Labor Statistics. "Tomorrow's Jobs" (at bls.gov) predicts the fastest-growing occupations through 2010. Not surprisingly, most of them involve technology (computer software engineering, analysis and systems management) and require a college degree. Other industries that may provide job growth include health care and education. The study also predicts plenty of work for librarians, accountants, auditors, meeting planners, graphic designers and financial professionals.

More information and help on student loans you'll find here: Student Loans Help Blog.

Money Issues for Gays & Lesbians - Better To Be Late Than Straight When Planning Your Financial Future

2008-03-11T12:45:00.000-07:00

Even though gay money is just as green as straight money, it is not always treated that way. Ever been denied the option of naming your partner as beneficiary of your life insurance policy? Have you considered the income tax implications of the domestic partner benefits offered at work? Wouldn't it be great if currency could be multi-colored to match our differences?

Many couples have difficulty talking about money. In fact, money talk is one thing gay and lesbian couples have in common with their straight counterparts. That is, no one looks forward to it. Communication is the key-don't ask, don't tell doesn't work! You and your partner must take an active role in understanding financial planning issues so you can make educated decisions together.

We have some advice that can help you and your partner wade through the topics you face in your everyday financial life together. You can make your way without sinking in the deep end.

Risk & Reward - Some Of One May Bring Some Of The Other

2008-03-11T12:44:00.000-07:00

Most everything you do involves some risk, from talking to the good-looking stranger at the bus stop to deciding between two equally challenging and high-paying job offers. OK, so we admit we have never actually secured a date with anyone who is remotely good looking, and the thought of two prospective employers fighting over our skills makes us hysterical with laughter. But you get the picture. Risk is just a part of life. And somehow, most of us are able to avoid disaster most of the time. Except for that one time when we ended up being stalked by a good-looking stranger we met at the bus stop.

Some people are afraid of risk and structure their lives so as to avoid it at all costs. Others insist on taking every bungee jump that life has to offer. Still others are somewhere in the middle, with white knuckles but a smile on their face. No matter which category you fall into, you probably know people in the other two and you shake your head wondering how they get through life.
Where your money is concerned, you don't want to take too many risks. Or do you? Does the chance of doubling your money in a short period of time outweigh the anxiety you feel when considering a future with empty pockets? And, is personal finance so absolute? Absolutely not!

Teens & Money - CAUTION: Contents Unsuitable for Parents

2008-03-11T12:43:00.000-07:00

Read this introduction and then turn the mouse over to a teen you know. If you take these two clichés--money doesn't grow on trees, and the fruit doesn't fall far from the tree--and shake them up, you have the reason we've got a topic called "Teens and Money." Your teen is probably asking you for money even as you try to read this paragraph. Maybe you don't have your own kids, but you've been known to give money to a niece or a nephew, or a friend's kid. Raise your hand if you have never told a kid that money doesn't grow on trees. Because you hate financial planning and everything associated with it, chances are that kid you're thinking about right now doesn't care for it much either. Kids learn by example, after all.

Most high school students would flunk a test on money management. That‘s right! According to a 2002 JumpStart Coalition study of 4,024 seniors in 183 high schools across the country, only 4 percent of the students passed a test about basic money management. The average score on the test was 50.2 percent, down from 57.3 percent in 1997. Yet today‘s teenagers are part of the wealthiest generation ever.

"Teens & Money" is written from a teenager's point of view with lots of quick tips on how to take action in several areas, from budgeting and first jobs to saving for college, using a bank and the importance of saving. Show it to your kid (or other teens you think could benefit from some basic money talk) and they'll see that the information is friendly and makes sense. What's more, it doesn't sound like some 50-year-old accountant wrote it.

Long-Term Care - Prepare Today For What You Might Need Tomorrow

2008-03-11T12:42:00.002-07:00

We could spout the statistics about the growing need for nursing home care and outliving your resources, but you probably get enough of that other places. Besides, long-term care isn‘t just about nursing homes. It's about getting the assistance you or someone you care for needs at home as well. Furthermore, you know as well as we do that people seem to be living longer than ever, and health care costs are climbing higher every year.

You could live to 100 and never need long-term care, you could end up needing assistance in daily living long before retirement, or you could fit somewhere in between. Maybe your knees go. Or your eyes. Or you become a little too forgetful. No one likes to think about it, but none of us is built to live forever, except the Million Dollar Man, and even he needed replacement parts (before his show was cancelled altogether). We don't want you to freak out over big numbers and worst-case scenarios. We merely want you to become informed about long-term care insurance--its benefits, costs and options--so you are better prepared to make a decision about it for yourself and those you love.

Why You Want to Be PreparedLong-term care insurance usually covers the costs for care that isn't picked up by regular health insurance or Medicare, the government health program for people over age 65. If you need assistance to properly feed, clothe or bathe yourself, long-term care insurance could pay the bill, depending on the type and amount of coverage you buy. If you plan on growing old, you could be a candidate for long-term care insurance, especially if you're living a middle-income or upper-income lifestyle. Because it's expensive, long-term care insurance isn't typically a product lower-income individuals are able to buy.

If you're middle-class, you're likely to be hit the hardest by the high cost of long-term care, because you're likely to spend most of your assets if you required extended long-term assistance. You may not qualify for Medicaid assistance, yet paying your own bills for long-term care could break you.

If you've got a lot of dough (assets of $1 million or more), you probably can pay for your own long-term care, although you might want insurance anyway to preserve your estate for your kids or grandkids (or that favorite charity if the kids don't deserve it). This is also the reason some people buy long-term care insurance for their parents--to preserve the inheritance they might receive one day.

Insurance Isn't Your Only Long-term OptionLong-term care insurance can be a pretty pricey proposition. You will likely pay dearly over several years for coverage you may or may not ever use. That's the gist of insurance, after all. If don't think there's any way that you‘ll be able to afford the premiums, all is not lost. Perhaps some of these options will work in your particular situation to help you fund your long term care needs:
Save enough money during working years to pay for your care (and probably forgo the next century of vacations).

Hope you remain healthy enough so as not to require outside care (if that's a risk you‘re willing to take).

Ask family and friends to help pay for care (not easy but feasible).
Pay to live in a continuing care community, which may include some personal assistance along with room and board.

Look for other sources of funding such as life insurance riders or reverse mortgages.

Bonds - Why You Might Want Them In Your Portfolio

2008-03-11T12:42:00.001-07:00

Most of us have been in the position where we have had to ask someone for money. It's not a fun feeling. Well, how about being on the other side of the coin? Bonds are a form of investing that can generate earnings through what basically amounts to you loaning money to a company or government agency. One of the oldest ways to invest, a bond certifies that the issuer has borrowed a specific sum of money and needs to repay the principal and interest to the bondholder by a certain date.

So What's The Attraction? Bonds tend to be more predictable than other securities because many of the financial variables associated with them are known at the time they are issued. Many investors include bonds in their portfolios, therefore, to provide diversification and balance. The main attraction of bonds is that they can provide a source of fixed income for a defined period of time (assuming a bond is not "called," or paid off by the issuer).

Certain types of bonds may offer less risk than many stocks. Of course, that generally means they offer lower rates of return. Then again, there are also types of bonds -- junk bonds, for example--that are more risky than many stocks. If you want to add balance to a portfolio full of stocks, diversify your investments, or you like the idea of being a moneylender, you may want to consider what bonds can do for you. Learn as much as you can, because bonds are not that simple at face value (no pun intended).

WARNING: Unless you're serious about bonds, you may want to skip this topic altogether. The information we present will just clog your mind if you don't plan to use it.

Asset Allocation - Different Investment Baskets Can Make You Less Of A Basketcase

2008-03-11T12:41:00.001-07:00

The roots of asset allocation may be traced to the 1950s when a University of Chicago graduate student in economics was in search of a dissertation topic. The student, Harry Markowitz (we're not making them up, folks), ran into a stockbroker (no injuries were reported) who suggested to Harry that he study the stock market.

Markowitz took that advice and developed the theory that became a foundation for financial economics. Harry later earned, along with William Sharpe and Merton Miller, the 1990 Nobel Prize in Economics, following work by the two of them that pioneered the Modern Portfolio Theory.

Today, Modern Portfolio Theory is called asset allocation. Read on to find out how this concept could help pad your portfolio, if not win you the Nobel Prize. Here are a few of the highlights of asset allocation:

Asset allocation is essentially the notion that you can minimize your overall investment risk and increase your potential for gain by spreading your investment dollars across various types of investments.
Carefully consider what you hope to achieve through investing before you choose the make-up of your portfolio.
Are you a thrill seeker, or a nervous Ned or Nancy? Gauge your emotional tolerances for risk before you invest.
As you shop for investments, consider how an investment is classified, its performance history and what the experts are predicting about its performance.
Things in life constantly change. Keep on top of your portfolio's contents -- and shake things up once in a while.

The Costs of Death - Preparing For The Inevitable

2008-03-11T12:40:00.000-07:00

If you haven't made a point of considering what will happen when you take your final curtain call, you're not alone. A 2001 survey by the Hospice Foundation of America revealed that half of those polled say they will rely on relatives and friends to carry out their wishes when they're gone, but 75 percent say they've never told those people what their wishes are. Hey, it's not fun to talk about, but if you expect your friends and family to take care of things following your death, you owe it to them to tell them what those things are. You owe it to yourself to think about it.

Maybe you know where all your important financial papers are, but you're carrying that information in your head. Guess what? Nobody will be able to tap into that knowledge after the fact. (The "fact" in this case being your untimely demise.) Consider the consequences of your inaction: Stocks, bonds, bank accounts, real estate, insurance policy benefits and a bunch more in your name could go unclaimed. Fortunately, losses like these can be avoided with just a little advance planning and organizing. We're not saying it will be an easy task, but if you do one thing at a time, you can accomplish the job.

Don't let this list overwhelm you, but do yourself--and your loves ones--a favor by thinking it through. Then, make an effort to make some progress.
Make a list. Grab a piece of paper and write down what you own. We've got helpful forms that can make it easier. We're talking stocks, bonds, bank accounts, real estate, insurance policies, employer pensions. Take a breath and continue reading. We're also talking anything you have in a safe, safe deposit box, shoebox or other hidden places. Do you own family heirlooms, valuables or irreplaceable items? Add them to the list.
Simplify. Now look at your list to see if you can consolidate or eliminate anything. Do you have more than one savings account? Is there a good reason for that? Do you own real estate you should have sold years ago? Is it time to simplify your finances for your sake and for the sake of your heirs?
Name names. We'll assume you have a will, even though you're in the minority if you've actually got one. Do the names in your will match your named beneficiaries on things like your house, retirement accounts and the like? If you own a house jointly with right of survivorship, the other owners will usually inherit the property, even if you leave the home to somebody else in your will. Here's what we have to say about wills and power of attorney.
Tell somebody. Tell your spouse and/or family members and/or trusted friends where your important papers are. You do know where your important papers are, don't you? You may also want to inform your heirs in a general way what you've got. Imagine Junior's surprise when he learns you're donating your art collection to the local gallery.
Keep it safe. If you've actually gotten this far, we hope you have things in writing that you want to keep in a safe place. Store papers or a computer disk or CD in a fireproof metal box, file cabinet or home safe. If you put it in a safe deposit box, be sure someone besides you has access to it or your documents won't be accessible once you‘re gone.

Taking Care Of Parents - Begin The Conversation And Keep It Going

2008-03-11T12:39:00.002-07:00

Most of us would just as soon have our teeth drilled (without novocain) than talk to our aging parents about the possibility that their health, memory or both may fade. Just as a trip to the dental hygienist is worth it to preserve your teeth, so a conversation with mom and/or pop about aging is worth it to help preserve a future you both can handle. And much like avoiding a trip to the dentist chair, the longer you wait to talk with your folks about the future, the fewer choices you may have down the line and the more costly it may be to ensure they get the care they need.

As long as your parents are still capable of making decisions, your role is merely to help them make those decisions. Just try telling them what to do if you don't believe us. How you approach the situation may have a huge effect on whether your parents are willing to accept your help. Consider these tips:

Listen to your parents and ask questions. Avoid telling them what to do, no matter how tempting it can be.

Be patient and give your parents time to think over their alternatives (that's why it's best to get the conversation going earlier rather than later). Major decisions won't get made during one casual phone call, so don't expect quick responses to your questions and don't mistake indecision for lack of interest.

It's alright if you don't know what you're doing. Procrastination is popular for a reason, you know! Seriously, your willingness to assist your parents is a big step. Perhaps you know friends or co-workers who are going through the same thing. Dare to ask for help.
Keep your sense of humor handy at all times.

If you haven't done so already, talk to your parents about these things, keeping in mind that a few bullet points from us won‘t make the awkwardness go away:
Your parents‘ wishes if their health fails.

How they are currently situated financially and what financial considerations much be addressed for the future.

Their health care and medical insurance needs.
Whether they want to assign you or someone else the ability to make decisions in the event that they cannot.

Be Prepared If They Resist Your AttemptsIf you think it‘s tough to talk about this stuff with your parents, just think how they feel. We‘ll spare you the dental images, but they may resist your attempts to talk about things like their money, their health and their potential need for assistance with either or both. Counter your parents‘ brush off with a heartfelt argument along these lines: Should anything happen to your parents, the reality of managing their finances and health care may likely fall to you and/or your siblings. Since you want to respect their needs and wishes, it would be helpful to you if they would be willing to talk about it now. If you‘re lucky, they will cooperate and you can all be convinced you‘re doing each other a favor, because that‘s what it is.

The information we‘ve got in this topic about taking care of your parents isn‘t comprehensive by any stretch. But it may help you shape some questions and seek more answers as you prepare for the possibilities that lay ahead.

Retirement Savings Accounts - All About All The Plans Designed To Gild Your Nest Egg

2008-03-11T12:39:00.001-07:00

Have you ever seen a glacier move? It's definitely not an activity we recommend for a first date--mostly because it takes so long and first dates--by definition--are painful enough on their own. The point here is that glaciers move about as fast as employees enroll in their company-sponsored retirement plans. If they aren't eligible the day they start their jobs, employees tend to forget to enroll when they do become eligible. Also, most people feel inadequate when faced with making investment decisions, so they put it off. Still others are unaware that the tax advantages and long-term growth potential of company-sponsored plans outweigh their "I can't afford it" rationale.

General consensus is that Social Security won't be all things to all people. The government has created a range of individual retirement savings plans over the years to encourage Americans to assume responsibility for their own futures. It started in the late 1950s with a defined contribution plan called the 403(b) plan. It is an investment plan for employees of non-profit organizations, hospitals, public schools and universities. 401(k) plans were introduced about 20 years later for employees of for-profit organizations.

We are huge proponents of 457, 403(b) and 401(k) retirement plans because we firmly believe in taking personal responsibility for funding your retirement. We're also quite fond of retirement plans for small-business owners and others without access to company-sponsored plans. In short, these plans get you into the habit of saving money, and they'll give you some tax breaks to boot. The sooner you start investing in one, the more relaxed your retirement could be.

Get started by checking out our ready for retirement calculator, which can help you get a handle on how much you may accumulate for retirement during the course of your working years. It doesn't factor in the amount you save by bringing your lunch to work every day, so be sure to add that figure to the equation.

Income Tax Planning - Strategies For The Strategically Impaired

2008-03-11T12:38:00.001-07:00

According to Oliver Wendell Holmes, taxes are what we pay for a civilized society. Thankfully, you don't have to finance 'civilized society' all by yourself. You're only obligated to pay your fair share, plain and simple. Sort of. Actually, the sum of your fair share will depend a great deal on what YOU do as you juggle the numbers.

The fact is, you may be able to preserve more of your taxable income with a little tax planning, performed in a timely manner (take heed, you procrastinators out there). With a few aptly applied tax strategies, you can get your taxes in good shape for Uncle Sam.

Form Over FunctionBut first, which tax form should you use? It's a question that may stump you, but not if you keep reading. Your income tax situation will determine the kind of tax return you must file with the IRS. That organization has provided this quick guide to save you time when sifting through all the tax forms at the post office the night before the filing deadline.
It's EZ to use the 1040EZ if you:

Earn taxable income below $50,000
Are single or married filing jointly
Are 65 or younger
Have no dependents
Earn interest income under $1,500
Go the 1040A route if you:
Earn taxable income below $50,000
Have capital gains distributions from mutual funds, but no other gains or losses
Have tax credits for child tax, education, earned income, child and dependent care expenses, adoption and retirement savings
Have deductions for IRA contributions, student loan interest, educator expenses and/or tuition and fees
Claim no itemized deductions
File the 1040 long form if you:
Earn taxable income of $50,000 or more
Itemize deductions
Earn self-employment income
Have income from the sale of property

Choosing the right tax form could mean money in your pocket. You may receive a 1040A or 1040EZ in the mail from the IRS based on the return you filed last year, but if your situation has changed it may be to your advantage to file a 1040 instead. Say you may pay less tax by filing a 1040 because you have enough deductions to itemize this year. Don't leave money on the table just because you don't want to fill out more forms, for goodness sake.

IRA Choices - An Individual Retirement Account Is For Do-It-Yourself Retirement

2008-03-11T12:37:00.000-07:00

Maybe you don't like what you see in the news about Social Security and its questionable future. Maybe you don't like being left out when everyone you know talks about their retirement portfolio is not producing the same numbers it did in the 1990s. Maybe you have a 401(k), but you don't think it will be enough. Maybe you just want to find out what the heck "IRA" stands for.

Individual Retirement Accounts were authorized by the federal government 20-some-odd years ago as an incentive for individuals to save for retirement. That's why they used "Individual" in the name. The IRA encourages regular, long-term savings, and it also offers income tax advantages as well. Because of the fairly low contribution limits, the IRA isn't designed to be the only route you take for retirement savings, but rather be combined with other retirement savings options.

IRAs have grown ever more popular the longer they exist, in part because the future of Social Security retirement benefits continually becomes more uncertain. Everyone has a theory about how long Social Security will continue to provide meaningful assistance to retirees. Many Americans don't believe it will be available when the bazillion Baby Boomers retire. And even those who have faith in Social Security may have some serious questions about it. One thing everyone agrees on is that Social Security will not be enough to fund your retirement. If you don't agree, we've got some Beanie Babies for you to invest in.

Tax Time Don'ts and Do's

2008-03-11T12:36:00.000-07:00

Maybe you have found this page because the tax deadline is looming and you want to believe you're doing something about it. With April 15 lurking out there, we have some stuff you should and shouldn't do at tax time.

Don't get a tax refund loan. It's a gimmick offered by tax chains such as H&R Block that may end up costing you huge fees.

Don't pay your tax bill using a credit card. It's especially tempting when filing online, but the "convenience fee" may make it an expensive venture. If you owe Uncle Sam, avoid fees by using the Electronic Federal Tax Payment System. You need to enroll and get a PIN number, so don't wait until the last minute to get started.

Do believe us when we say the IRS has an EZ site where you can find all sorts of free efile options or print enough forms to wallpaper a tree house. A nifty site called Taxsites.com has hundreds of tax-related links, including numerous software options, deduction finders and other procrastination tools.

Do play meaningless games at our Fun Tax Center.
Do yourself a favor and keep reading this topic.
· Life Insurance
· When someone tries talking to you about life insurance, you can usually shut them up by stealing the line from Sixth Sense star Haley Joel Osment: "I see dead people." Such shocking statements work well when you want to avoid an awkward topic or skip buying a product you don't understand. We're here to tell you that unlike those cold creatures haunting Haley Joel, life insurance is nothing to be feared and it's actually an effective financial planning tool. Allow us to shed some light on what seems like a ghostly topic.
· Sure, the most traditional use of life insurance is to provide a death benefit to financially assist a surviving partner and/or dependents when the insured is no longer starring in his or her own motion picture (i.e., dead). If drama is what you're looking for, however, you might want to ponder the possibilities for the aforementioned death benefit, such as providing for your family, making charitable gifts, or ensuring that your business continues without you. Certain kinds of life insurance policies may also provide cash values you can access through loans and withdrawals to help with college costs or retirement needs.
· As an individual earning an income, the value of your life is your most important asset (aside from your ability to quote lines from spooky movies). Therefore, it's important that your decisions about purchasing life insurance be financial decisions, not emotional ones. You need to consider the cost, evaluate the benefits and make your own decision about whether life insurance is appropriate for your particular situation.

Mutual Funds - The Fund-a-mental Truth About Mutual Funds

2008-03-11T12:35:00.000-07:00

Millions of Americans own trillions of dollars of shares in thousands of mutual funds. Impressed? If not, maybe the exact numbers will sway you. Nearly 95 million individuals have $7 trillion invested in roughly 10,000 U.S. mutual funds (Investment Company Institute, 2002). Either these people are all incredibly stupid about their money or they're really on to something. The way investments performed during the economic slump of the past few years, it wouldn't be such a stretch to stick with "incredibly stupid." But now as things start to turn around and positive returns have shown up on some quarterly investment statements, maybe "on to something" is closer to the truth. We'll leave it up to you to decide.

As the name implies, a mutual fund is simply a way for people to invest together, through an investment company that allows investors, large and small, to put their money into a large pool (not the chlorinated kind, though you may have the feeling on occasion of jumping off a diving board). This company then invests in a portfolio or "large bunch" of stocks, bonds or other assets more efficiently and cost effectively. Generally, the larger the fund, the greater its cost advantage in making purchases and sales for the mutual fund. The portfolio is professionally managed by people who do this sort of thing for a living.

Assuming you don't want to do this sort of thing for a living--but you want to join the gang of mutual fund investors--we've created this topic especially for you! It's full of details on everything from what a mutual fund really is to which parts of the prospectus are especially important to prospective investors. Next time someone talks about up-front fees at a party, you won't think they're referring to the cover charge.

Playing The Stock Market - Past Performance Is No Guarantee of Future Results

2008-03-11T12:34:00.000-07:00

So you're at a club faking a Latin dance. Your moves mysteriously work magic on a sweaty sweetie across the floor, and the two of you pair off. When the music stops, your dance partner whispers, "Past performance is no guarantee of future results." Evidently turned off by market losses, your partner can't help but utter mood-dampening phrases to virtual strangers.

With the stock market in a perpetual downward spiral, investors have resorted to all sorts of stress-relieving tactics, so it's not a stretch to believe the scenario above. Anyone who has owned investments during this prolonged downturn can probably recite specific double-digit earnings that same portfolio was producing in the late 1990s. The difference between those investors and you is that they actually own a portfolio. And now, you are ready to play the stock market. Well, at least you're willing to learn more.

Stocks, or equities, are investments that represent ownership with the potential to appreciate in value. Owning stock is like owning a piece of the corporate pie. Your ownership, and potential for loss or gain, is based on how many shares you purchase. Sure there are risks, but there is also the potential for a big payoff. Just keep in mind that investing is meant to be a long-term adventure filled with normal market fluctuations that cause earnings to rise and fall.

You won't get your arms around investing in one sitting--or one song on the dance floor. But the understanding will come if you keep at it. Based on the history of the stock market, your efforts have the potential to seriously pay off over the long run. Can you say that about a night at the dance club? In the name of balance, allow us to remind you that you could lose money too, which might affect your ability to pay the cover charge.

Retirement Planning - Age And Stage Affect Your Retirement Page

2008-03-11T12:33:00.000-07:00

As recently as the last century, Americans believed they could afford to retire early and lead the good life with employer pensions and Uncle Sam footing the bill. The toughest decision would be whether to keep working until 50, 55 or 60. Then the bubble burst and spattered bad news all around. The stock market collapsed under the weight of late 1990s boom, causing investment values to sink so low investors can barely remember what it was like to be rich on paper.

Corporate scandals have caused workers to second-guess whether their 401(k) accounts would actually be there when they retire. Throw the wishy-washy future of Social Security in the mix and the whole concept of retirement is anything but certain.

These factors and more have given procrastinators all the excuses they need to put retirement planning on hold indefinitely. What's the point, when outside forces are conspiring against you? The point is, you are responsible for making your future happen. Forget about everything else and focus on that. If it causes you to want to take steps immediately, jump right to "Here‘s a Non-plan," a page that coaches you to just do something--anything--toward achieving the retirement goal.

Perhaps you're more of a numbers cruncher and want to do some math. We've got two calculators that can help you figure out retirement, from a purely dollars-and-cents perspective. They won't take the place of learning more about planning for retirement, mind you, they merely put some dollar signs in the picture you're creating. The Ready for Retirement?
calculator has just a few variables and is intended to help you see how close you are to your savings goal. Needless to say, you need to have some savings goals to make it work (wink, wink). Our Retirement calculator makes you do some thinking in addition to plugging in numbers. It's our favorite little tool, if you must know.

Maybe you don't move that fast. Hey, we understand (having practically invented inertia). The stage you should be at in your retirement planning depends a lot on your age right now. So take a breath, find the paragraph below that applies to you, and continue at your own pace. That's the point anyway.

You're Never Too Young For Bad HabitsIn your 20s retirement is an especially foreign concept. But we'd be remiss if we didn't give you a push in the right direction. A quick spin on our procrastinator calculator may help you see what an advantage your age offers. Save just a little money on a regular basis, and it could add up to any goal you dare set for yourself. Be responsible when paying off your school loans and be cautious when using credit cards.

Thirtysomethings Should Do SomethingIn your 30s your biggest asset isn't a portfolio but your ability to earn a future income. Some essentials at this stage include disability income insurance and an employer-sponsored plan (or a traditional or Roth IRA). Start by saving at least what your employer will match and increase the amount every year you're thirtysomething. Have you tried QuickPlan?

Forties Aren't FatalDitto on what's listed above, plus you should be saving at least 10 percent of your earnings every year (emphasis on "at least"). Keep paying off the plastic. Hint: it's easier if you don't keep charging. If you have kids, college funding may be on your mind, but don't let it crowd out thoughts of retirement. Students can borrow money to go to school, but you can't take out a retirement loan.

Fifty Is Just Another "F" WordYour age group will most certainly have Social Security benefits, but they won't pay your entire way. As George W. Bush's advisors keep reminding him, this is not your father's Social Security. You should be saving about 20 percent of your salary every year. Get rid of your consumer debt and prepay your mortgage if possible. For a good time, read what we've got to say about early retirement.

No matter how old you are, now is the right time.

Surviving Divorce - How Not To Come Financially Unglued During The Great Divide

2008-03-11T12:31:00.000-07:00

When a marriage doesn't work, and one or both partners are ready to split, the solution may be divorce. Divorce can mean heartache and disappointment, and a serious case of financial upset. It's important to understand how your financial picture will be altered by divorce, since the terms you agree to during the dissolution of your marriage will have an impact on your finances for the rest of your life.

We know it's easier said than done, but try to look at your divorce as the end of a partnership rather than the end of a romance. If you can keep your emotions in check, you will be better equipped to handle all the messy details. You'll come out slightly more intact if you can treat the settlement like a business transaction.

We've got stuff here to help you get through the divorce from a financial standpoint. It might be stuff you haven't thought about. It is probably stuff you don't want to think about. You can take it or leave it, but then don't blame us when your divorce is final and you realize you should have found out what a QDRO is.

Finacial Glossar: A

2008-03-11T12:29:00.000-07:00

Accelerated death benefit: Allows the policyholder to receive all or part of the policy's proceeds prior to death under certain circumstances (life's too short to go into them all here, but one that's included is life expectancy of 12 months or less).

Accidental death benefit: A provision added to a life insurance policy for payment of an additional benefit if death is caused by an accident. This provision is often called "double indemnity." (Not to be confused with the movie starring Cary Grant or somebody like that.)

Accumulation phase: Has nothing to do with waistlines. The early-to-middle years of the investment cycle. Attempt to accumulate assets to satisfy both long-term and short-term needs.

Accumulation plan: A plan for the systematic accumulation of mutual fund shares through periodic investments and reinvestments of income dividends and capital gains distributions. Do this and you're really goin' for it.

Adjustable-rate mortgage: A mortgage with an interest rate that may change, usually in response to changes in the Treasury Bill rate or the prime rate; rarely if ever in response to the weather.

Adjusted gross income: Also known by its friendlier nickname, AGI. This is the income amount on which a working stiff computes deductions that are based on, or limited by, a percentage of his or her income in order to figure out federal taxable income. AGI is determined by subtracting from gross income any deductible business expenses and other allowable adjustments (some traditional Individual Retirement Account annual contributions, SEP and Keogh annual contributions, and alimony payments. Stuff like that).

Administrator: A person appointed by a probate court to handle the estate of a person who died intestate (without a will). They have the same duties as an executor.

Adult day services: A program of adult day health care that is state licensed, operates at least five days a week for a specific minimum length of time and does not provide any overnight care.
Advisor: See definitions for Financial Advisor and Investment Advisor.

After-tax retirement income: The amount of spending money needed, net after tax, to provide an investor with his or her desired lifestyle. Can be thought of as their annual budget in retirement or their total planned annual spending in retirement. (Tennis on the Riviera, anyone?)

Aggressive: An investment approach that takes higher risks in return for potentially higher rewards. (Also known as the "Go Big Or Go Home" mentality.)

Aggressive Growth Funds: Funds that invest in shares of companies with earnings and profits that are expected to grow rapidly to seek maximum capital gain (you gotta love 'em) and have more risk.

Alpha: That portion of an investment's historical return in excess of the risk-free interest rate that is estimated to be unrelated to market movements. (Hey, you asked!)

Alternate care: Alternate care is licensed personal care and custodial services provided to those who suffer cognitive impairment, not just require help with activities of daily living. (And we're talking serious cognitive impairment, not just the kind you get from financial planning.)

Alternative minimum tax: An IRS mechanism created to ensure that high-income individuals, corporations, trusts, and estates pay at least some minimum amount of tax, regardless of deductions, credits or exemptions. (It seems only fair, doesn't it?) It operates by adding certain tax-preference items back into AGI (our friend adjusted gross income).

American Stock Exchange (AMEX): The second largest stock exchange in the U.S. after the New York Stock Exchange (NYSE). AMEX has a larger number of stocks and bonds issued by smaller companies than the NYSE, or the "Big Board" as it is affectionately called on Wall Street.

Amortization: It's the kind of word that makes you smile and nod when you hear it because you want people to believe you understand. (Keep reading and you really will understand.) It's the gradual elimination of a liability, such as a mortgage, in regular payments over a specified period of time. Such payments must be sufficient to cover both principal and interest.

Annuity: A contract that provides for a series of payments to be made or received at regular intervals. An annuity (say those two words 10 times fast) may be immediate, starting as soon as the premium has been paid, or deferred, starting at a designated later date. Annuities are commonly used to fund retirement. See fixed annuity or variable annuity.

Appreciating asset: An asset that is growing in worth. As opposed to growing in mold. See asset.
Asked price: The price asked for a security offered for sale. Quoted, bid, and asked prices are wholesale prices for interdealer trading and do not represent prices for the public. So don't get too excited about them. Not that you would.

Asset: Property and tangible resources, such as cash and investments. Examples include stocks, bonds, real estate, bank accounts, and jewelry. Assets considered marginal are velvet Elvis art, your good looks and that novel-in-progress in your drawer.

Asset allocation: Investment strategy whose purpose is to enhance total return and/or reduce risk by diversifying assets among different types of stocks, bonds and money market investments; i.e., variety is the spice of investment life.

Asset classes: No, these are not dreary investment seminars for narcoleptics. They're types of investments, such as stocks, bonds, real estate, and cash.

Assisted living: As it relates to long-term care insurance, a form of personal care such as help with bathing or dressing, and usually recreation and social services. Licensed by state departments of social services.

Attorney-in-fact: A person who holds power of attorney, and therefore is legally designated to transact business on behalf of another person. Perry Mason is an example of attorney-as-act, which is completely different and probably made up.

Automatic premium loan: A provision in a life insurance policy that any premium not paid by the end of the grace period will be paid automatically by a policy loan if there is sufficient cash value. And what if there isn't sufficient cash value? You don't even want to know...

Average annual total return: Represents the average annual change in value of an investment over time, including changes in share price and income (dividends or interest) expressed as a percentage. In other words, it's roughly how much you made (or lost).

Average maturity: Someone who's not really, really mature, or really, really immature. Actually, it's the average of the stated maturity dates of debt securities in a portfolio for a bond fund.

Averages: Various ways of measuring the trend of stocks listed on exchanges. Formulas, some very specific and devised by people with apparently too much time on their hands, have been created to take insert into account such stuff as stock splits and stock dividends. That gives continuity to the average. In the case of the Dow Jones industrial average (the Grand Poo-bah of averages), the prices of the 30 stocks used in the Dow are totaled and then divided by a figure that is intended to compensate for past stock splits and stock dividends. That gets changed from time to time. Some have suggested that the people who do all this ought to get a life. We'll refrain from any opinion on that matter.

Growing Family - Just Had A Baby? (The Bills Will Be Coming Next Week)

2008-03-11T12:28:00.000-07:00

Nothing will change your life quite like a baby. It will literally become the center of your world. You'll probably find yourself smiling a lot more and sleeping a whole lot less. All your priorities are about to change. And so will a lot of your expenses.

A big share of your resources will now be redirected to the newest member of your family. And we'd like to help you prepare. There are tax write-offs you can take advantage of that will give you some significant breaks. There's some work you should do too. You need a will, if you don't already have one, and a budget would be nice too.

You'll Be Needing An Extra $9,500 A YearAccording to a study by the U.S. Department of Agriculture in 2002, the cost of raising a typical kid is about $9,500 per year. That's $170,500 to age 18 (only if your kid is typical, and we know your kid is way above average). Shelter accounts for 33 percent of that total and food 15 percent. Those figures represent the projected cost for a two-parent, middle-income family with one child. As you might expect, it costs less per child as you add children to your family--about 23 percent per child, in fact. The good news for parents in the Midwest is that it will only cost $160,700 to bring up baby, whereas parents in the western United States will end up paying about $186,700.

Dollars and Sense

2008-03-11T12:26:00.000-07:00

Imagine you're a contestant on a hot new game show that's replaced "Who Wants to Be a Millionaire" in the ratings. There's never a wrong answer, but you'll be judged--by others and yourself--on which answer you give. The winner is the one who can best balance the consequences of their choices and then weigh them against the decisions of the judges.
You'd have 30 seconds to answer three questions:

Is it more important to invest in companies that produce double-digit returns every year or to invest in ones that manufacture products you approve of?
Do you live to work or work to live?
If you had $5,000 to spend on one thing, would you choose to invest it in your family or an investment guaranteed to triple its value in 10 months?

Do you ever get the feeling that your financial life is a game show you just can't win? Either you pay down your debt or you save for your kid's college. Your investments can make beaucoup bucks but you'll be supporting the tobacco industry or child labor or defense spending or the list goes on.

Our topic on Dollars and Sense doesn't attempt to solve all the financial dilemmas you're facing, but it may help you answer some tough questions about what impact your values have on financial decisions. We've got some suggestions about where you can look to find investments that are more aligned with your values. Much like that game show, there are no wrong answers, so just keep playing. You may already be a winner!

Changing Jobs - The Only Constant Is Change

2008-03-11T12:25:00.000-07:00

Everyone is changing jobs these days, thanks to layoffs, mergers, a sagging economy and free agency. Web sites are wall-papered with resumes, but jobless rates are the only economic indicators that keep going up. Unfortunately, those are numbers we don't want to get any bigger. Maybe this topic would be more accurate if it were called "Hunting Jobs."

It is possible you are here because you chose to leave your job. If that's the case, congratulations. That option is always out there, this being the land of opportunity and all. But in 2004, we're betting our next paycheck that most of you who venture onto this page of our web site were invited to leave by your employer, its parent company or the business analysts who insist that companies turn a profit.

No matter what your circumstances, you are not alone. The average American changes jobs an average of nine times before the ripe old age of 34, according to the Bureau of Labor Statistics (April 2000). And you are anything but average. The good news with that stat is, you won't need to bother dusting off your résumé because there won't be time for the dust to settle.

If you're trying to figure out which direction to head on the "changing jobs" map, you might want to take a look at a recent study by the Bureau of Labor Statistics. "Tomorrow's Jobs" (at bls.gov) predicts the fastest-growing occupations through 2010. Not surprisingly, most of them involve technology (computer software engineering, analysis and systems management) and require a college degree. Other industries that may provide job growth include health care and education. The study also predicts plenty of work for librarians, accountants, auditors, meeting planners, graphic designers and financial professionals.

Whenever you change jobs--no matter what the reason--consider the benefits offered by prospective employers before you change. Nearly 28 percent of your total compensation is derived from employee benefits (Bureau of Labor Statistics, December 2002). Benefits include group health coverage, retirement savings plans, paid holidays, life insurance, long lunch breaks, computer games, free photocopies, and Internet access in some cases.

Budgeting - Not An Easy Task But A Worthy Cause

2008-03-11T12:24:00.000-07:00

Whether you chalk it up to human nature or some freakish financial force, it seems that inertia, phobia, disgust, denial, confusion or simple neglect keep us from the two things that are at the root of all good financial planning: 1) knowing what we're currently spending; and 2) having a spending plan we can live with.

Ignorance is truly bliss when it comes to spending. It's a pretty neat trick to never know what your bank balance is. When that is the case, you don't have to face the reality of not having enough moola to buy a candy bar, much less the fancy dinner you fooled yourself into popping for last night on your credit card. But ultimately, you reach a point where you say enough is enough. Your chronic avoidance of budgeting and sensible spending is wreaking havoc on your life in ways that go beyond just money. You're wasting time, increasing your anxiety and giving yourself little to no chance of reaching goals that are important to your happiness.

Well, you've come to the right place because we're going to help you overcome those hurdles. The key will be to keep your plan simple and your expectations realistic. And just like a financial plan, budgeting is not something you do once and then forget about it. As your life circumstances change, so must your spending plan change to keep you from falling back into bad habits or falling behind on your goals.

And if the thought of a budget has left you feeling a little queasy, go to "Budget Tips," which allows you to skip the whole budgetary process while still making some progress with your spending habits.

Car Leasing A new car is cool, whether you buy or lease

2008-03-11T12:23:00.000-07:00

We are what we drive. Americans use their cars to make a statement or make an impression or make it to work so they can afford a nicer car. We have been tricked into believing that we deserve to be behind the wheel of the hottest set of wheels. The same people who used to yell, "I want my MTV!" are now shouting, "I want my SUV!" Or not. If we are what we drive, then some of us aren't flashy, but dependable. Some others can live with a little rust around the edges as long as we own that rust free and clear. Some of us ride the bus at least once a month when our car is in the shop.

We aren't here to sell you a car. Or lease you one, for that matter. We're not even going to try to feed you a peach off the used lot. What we are going to do is help you sort out the financial aspects of buying and leasing cars so that you can confidently go about what could be the second largest purchase you make. You may discover that while you crave an SUV, filling its huge gas tank and insuring it would blow your budget right off the road. And we know how important a budget is to you. We also know you don't want to be taken advantage of or overpay for a car. We know this because we don't either, and we have a hunch you're more like us that you would ever admit.

Annuities - Another Tool For Your Retirement Tool Shed

2008-03-11T12:21:00.000-07:00

The word "annuity" doesn't exactly roll off the tongue, does it. Why do financial terms have to be so bizarre? That's an excellent question--one we can't answer without first teaching you a secret handshake. Despite the strange term, annuities are a popular retirement tools today. You may want to gain a better understanding of how you could use them in your overall retirement plan.

Think of an annuity as one of the tools in the retirement shed. It may not be the sharpest tool in the shed, and you can get by without it--if you've got other tools that serve a similar purpose. An annuity has many features, but it's generally not the first tool you show off when bragging about your tool shed. And you probably won't use the annuity tool for awhile, but when the time comes you‘ll be glad you have it.

OK, enough with this metaphor. Is there such a thing as a genuine tool shed anymore? Maybe everyone gets one when they retire. There we go again.Annuities may be just the tool for you because:

They can supplement monthly retirement income from IRAs and 401(k) plans or other employer-sponsored retirement plans. Annuities can be a good way to arrange for a monthly income during retirement (or you can collect a lump sum). Some annuities will even guarantee a monthly pay-out for as long as you live, no matter how long you live.
You don't pay income taxes on the accrued interest until you withdraw money from the annuity. However, the contributions themselves--your non-qualified annuity premiums--are not deductible at the time of contribution.
Pay-outs can begin immediately after you open the annuity or can be deferred until a later time when you need income.
With some annuities, you can pass on death benefits to your beneficiaries.

Self-Employed - How To Hang Your Shingle Without Hanging Yourself

2008-03-11T12:13:00.000-07:00

Every day, millions of Americans go to work--on their own terms. They're pursuing their dream by making a rewarding living through self-employment. Is this something you've always dreamed of?

If it is, you should know that a full 95 percent of new businesses fail in the first five years, according to the U.S. Small Business Administration (2003). We hope that number shocks and motivates you. Perhaps someone else's failure has no bearing on the success of your business. Your business will thrive or fail based on the need for your product or service, your ability to deliver (talent plus drive), and a good dose of luck. With a clear vision of your goals, some good advice and dedicated effort on your part, you could achieve your wildest dreams. Read on to determine what you need to know and do to succeed with your budding (and we're not just talking flower arranging) enterprise.