Tuesday, April 28, 2009
Posted by Stephen Mills; Group1A
"The ideal situation is that you prepare when you still have time," said Karin Maloney Stifler, a certified financial planner with True Wealth Advisors in Hudson, Ohio.
The rule of thumb is that you should maintain an emergency fund of three to six months of living expenses. But emergency funds are often an ideal rather than a reality. And with the ranks of unemployed in March being out of work for an average of 5 months, chances are you'd have to dig deeper.
To gauge your ability to pull through a financial calamity, work through the four steps below. For each, rate your strength on the topic from 1 to 5. Give yourself a 1 if that aspect of your finances couldn't provide any help in an emergency; give yourself a 3 if you feel the area could use some work; and rate yourself a 5 if you feel entirely comfortable with that part of your financial plan.
If you score less than 3 on more than one area, it might be time to start fortifying your financial plan.Read On
“The days of any time, any reason rate hikes and late fee traps have to end,” Obama said.
At issue is how to protect consumers, particularly in a deep recession, while not imposing the kind of rules that could make it harder for banks to offer credit or put credit out of reach for many borrowers.
Industry executives left the White House without talking to reporters.
Later, one of the participants, American Bankers Association president Edward Yingling, said the executives listened to Obama’s concerns and “agreed to work with the administration to address them.” In a statement on behalf of the executives, he said consumer protection must be balanced with “ensuring that credit remains available to consumers and small businesses at a reasonable cost.”
The credit-card executives made the case in the meeting that the sweeping rules already ordered by the Federal Reserve, due to take effect next year, address many of the concerns held by the president and Congress.Read On
Posted By Stephen Mills; Group1A
Written By Eve Tahmincioglu
“There wasn’t much recruiting going on. They wouldn’t even accept resumes,” says Ahmed
Job fairs and job-networking events — such as “pink slip” parties geared toward mid-career types — are becoming a familiar scene across the country, with events sponsored by chambers of commerce and local charities to large corporations such as Monster and Careerbuilder.
Long lines of the unemployed waiting to attend these functions is becoming a familiar sight on the nightly news, but the big question is: Do job fairs really help you find a job?
Interested? Read On
Posted by Stephen Mills; Group 1a
- Tax Rates Will Rise - A tax break today doesn’t seem like such a good deal anymore if you end up having to pay a much higher rate upon withdrawal. With a $10 trillion national debt, continuing budget deficits, and staggeringly large entitlement obligations for Social Security and Medicare, many if not most observers predict the U.S. government will have no choice but to raise taxes significantly in the future. After all, we can only live off borrowed money for so long. If taxes are raised significantly in the future, the scales tip more in favor of paying taxes now rather than later. A Roth IRA would be the most obvious alternative.
- You Owe Income Tax On All Gains - In a 401k, there is no such thing as a capital gain: it is all considered regular income by the IRS and thus taxed at the highest possible rates. For some asset classes that throw off a lot of taxable income such as corporate bonds or REITs, this is fine since relatively little of their long-term return comes from capital gains. For low-cost index funds, growth stock mutual funds, and other low-turnover, equity-based investment strategies, however, this is a significant disadvantage. Since practically all of an index fund’s return comes in the form of long-term capital gains, the value of the tax deferral is minimized: these funds would be very tax-efficient anyway. “But you still start with more money in the beginning because you save on taxes,” you might say. This is true, but that isn’t necessarily enough to overcome the twin disadvantages of high-cost, low-quality investment choices prevalent in most 401k plans. Lazy Man And Money does the math here.
- 401ks Have Expensive, Sub-par Investment Options - On average, I have found this to be true. Sure, some larger companies administer their 401k plans through Vanguard or one of the other top mutual fund companies and offer low-cost, high-quality investment options to their employees but in my experience, this is rare. I have never in my life had a decent 401k plan, in fact. Many contend it’s better to forgo the tax deferral in favor of superior investment options, and this is certainly sometimes the case.
Monday, April 27, 2009
By Pin-Yu Liao
With the increasing amount in medical cost, Americans should look for plans best fit for themselves and prevent from looking for ones with lowest premiums. Choose the plan that’s most important to you.
You can begin with the group plans from your employers. Group plans are usually a lot cheaper than individual plans.
There are 3 main types of insurance plans you can select. The first one is health maintenance organization (HMO). The second one is preferred provider organization (PPO). The last option is high deductible health plan. Fee-for-service still exists, but the use of it has been decreasing.
Choices are limited if you choose HMO, because you can go to doctors that are associated with HMO’s network. The advantages are that you don’t have to pay deductible and co-payment, and it is a low-cost option.
For PPO you can go to the doctors without its network and only pay a small portion of co-payments. High deducible health plan allows deductible to be higher. The plan is connected with a health savings account. You can save pretax amount in the savings account and withdraw it when you need to pay for deductibles.
So how are credit-card issuers reacting to consumers' attempts to live a more financially responsible lifestyle? They're threatening to cut their credit cards off if they don't spend enough.
Posted By: Allison Franklin
PERSONAL FINANCE DAILY
Monday's Personal Finance stories
If you want safety for your money, don't expect to get much in return for your deposits other than a secure vault. The average 30-day yield on retail money-market funds that invest in Treasurys -- the safest of the safe -- are hovering around 0.05%. You can call that next to nothing.
You may be satisfied with that given that you won't be losing any money as has been the case in the stock market and even in some supposedly secure "cash-like" instruments over the past 18 months or so.
There is no getting around the fact, though, that if you want higher yields you have to accept more risk or be willing to lock up you money for long periods of time. That may be OK for younger investors who won't need their cash anytime soon, but neither option is particularly enticing for retirees who need income today or those close to retirement who are looking to pad the nest egg before quitting work.
No matter what path you want to put your portfolio on, it pays to heed a few simple yield rules. Even if you're following a trail of crumbs, you want to know it leads somewhere.
Thursday, April 23, 2009
- By Kevin Yu
However, because of the recession you want to keep the final price tag low. To help out, here are some recommendations from among the cars that I have tested in the last year. I hope that this story will aid in your search. The cars are in no particular order.
1. Honda Fit
Even with the recent redesign has not lost its sporty feel even though it will not be the most powerful car you have ever driven. New models even offer a navigation system to keep you from becoming economically lost. It is my top pick among small economy cars.
2. VW Jetta TDI
In this case, TDI means the Jetta in question comes with a very refined diesel engine that will net you excellent miles per gallon and still be fun to drive. Interior fit and finish are first class and, according to the diesel fans I have heard from, there is the promise of long life.
3. Nissan Versa (base)
Nissan recently announced a much-stripped-down version of the Versa that starts at under $10,000. It is roomy, actually fun to drive and got excellent gas mileage. You don't get a radio, there are roll up windows and manual door locks, but it is still a neat car. (Watch for an upcoming full road test.)
4. Scion xD
It is based on the Toyota Yaris and is a hoot to run errands in due to its small size. What we have in the xD is a very well made, inexpensive gas sipper with the expectation of long life and economical operation.
Click Here to Read More
Wednesday, April 22, 2009
By: Allison Franklin
With the United States economy going through a recession, the topic of debt is on many peoples’ minds. Since debt is such a hot topic, it is important that everyone is well informed about it. The first thing that people need to know is that they are not alone when it comes to debt. In fact, an average American has credit card debt of $10,700. When it comes to paying this off people need to take it slow and pay it off as they go. If they try to do too much at once it is unlikely that they will get out from under the debt. The second thing that people need to know is that being in debt for some money can actually be good. When people are in debt because of school loans this does not hurt their credit as this is an investment in their future. As long as people continue to pay these loans and do not default, this debt is beneficial. The third thing that people need to know is what kinds of things should be charged. People should not charge items that they do not really need and things that will be used up fast. Experts say that people should never charge meals or vacations. If people cannot afford to pay cash for these then they should not go. These are just a few things that people need to understand when it comes to debt. There is a lot more information out there that people need to become aware of.
Monday, April 20, 2009
Jodi, a development director for a nonprofit, was the youngest person ever elected to the Piedmont, Okla. city council.
David is a regional manager for a staffing company, has written a book on leadership and was recently named one of the area's "Achievers under 40" to watch.
And though he lost a 2004 run for state representative, David says he'd like another try at politics someday.
By Gail MarksJarvis
Many investors are being enticed by tremendous yields to take a chance on junk bonds.
If you are one of them, be aware of the risks.
"I think we might see the highest default rate ever," said Edward Altman, a professor at the New York University Stern School of Business and expert on bankruptcy and distressed bonds. He says he thinks it could top the 12.8 percent rate in 2002.
Even the savviest investors could have difficulty maneuvering in such an environment. Already, hedge funds that specialize in distressed debt lost an average of 27 percent last year, and high-yield - or so-called junk - bonds are likely to exert greater challenges in the months ahead.
Currently, junk bonds are yielding an average of 17 percent.
"You hear yields are attractive," Altman told professionals who manage investments for wealthy people at a recent CFA Institute conference in Chicago. "Well, good luck to you. You'll do well if there are not too many defaults. But we are predicting double digits. Then, you could have a problem."
He said that he thought a 12.3 percent default rate among high-yield bonds was likely this year and that he would not be surprised by 15.4 percent or even 18.3 percent. With yields far above Treasuries, the market is telling investors that an 18.3 percent default rate is likely, Altman said.
Sunday, April 19, 2009
Saturday, April 18, 2009
Under the threat of increasing regulation, credit card companies provide more online assistance. Gerri asks how helpful is it really?
Wednesday, April 15, 2009
Candle maker William Procter and soap maker James Gamble joined forces to start a small household-goods business in Cincinnati. It was a risky move for the brothers-in-law: The shaky economy had a full six years of financial crisis ahead. Massive migration to the West caused land prices to rise, and inflation soon followed. Under President Martin Van Buren, bank failures and concerns about the paper economy spurred the greatest economic decline since the birth of the country. But P&G survived and went on to score lucrative contracts to supply necessities to the Union Army during the Civil War.
Teaching Young People About Personal Finance
Financial literacy organizations aim to teach young people about finance and credit before they get into debt. Transcript of radio broadcast: 09 April 2009
This is the VOA Special English Economics Report.
April is National Financial Literacy Month in the United States. As the country faces a deep recession, Americans are paying closer attention to personal finance. Some critics partly blame the crisis on Americans’ low savings rate and high personal debt.
But efforts to increase financial knowledge have grown in the last ten years. Government, community and business leaders have pushed for teaching young people about the importance of saving, budgets and the true cost of credit.
The Jump$tart Coalition for Personal Financial Literacy is based in Washington, D.C. It is an organization of about one hundred eighty groups, government agencies and businesses. Its goal is to provide financial knowledge to children and young adults before they get into debt.
Jump$tart’s Executive Director Laura Levine says many young people misuse credit cards without meaning to. She says they often start by making the lowest payment required. Over time, their credit limit is increased, but they do not pay off their debt. Laura Levine says young people can take on more debt than they can deal with.
The government says forty-five percent of college students have credit card debt. The average amount owed is more than three thousand dollars.
Here are six reasons why buying real estate with an IRA is a potentially lucrative and wise move today:
1. A solid alternative to stocks
2. An investment well-suited for long-term investors
3. Purchasing a significantly undervalued asset
4. A steady income generator
5. A safer means to play the stock market
6. The ability to flip real estate with no tax bite
Sunday, April 12, 2009
- By Kevin Yu
Optimism. For months, it's been in rather short supply.
Like a lingering cold you can't shake off, the economy's blues just hang on. It's not just our bottom line that's been battered, but our psyches, too. And even if you haven't lost your job or aren't facing foreclosure, it's often hard to feel good.
So today on Easter, when thoughts turn to hope and new beginnings (if not marshmallow bunnies and chocolate eggs), it seems a good time to pause, take a collective deep breath and think some positive thoughts.
Because truthfully, in a personal-finance sense, we can't change the market's ricocheting ride nor can we instantly Botox our bank accounts.
But we can change how we take it all in. Here's how:
Click Here to Read More
Wednesday, April 8, 2009
Finding these hidden jobs requires lots of research. Research about 10 to 20 companies that you are interested in working for before contacting them for a job position, so you can map your skills to meet the needs of the employer.
Be creative and imaginative when it comes to getting the employers attention. For example, send the employer a coffee cup with a little $5 swipe card with a little note that says “, I'd like to get together and talk with you over coffee. I'll be calling soon.”
Make up your mind before you go into an interview. Don’t decide whether you want the job or not during an interview. When you go into an interview, “sell like your life depends on it” and the employer can tell your intentions. Don’t treat interviews like a business meeting. You should use it as an opportunity to prove that you are a great leader and communicator.
Tuesday, April 7, 2009
- By Kevin Yu
A few weeks ago, I watched a special feature of CNBC titled House of Cards. The feature explained how the current financial crisis came to fruition. To put it briefly, it all started after 9/11, when the Federal Reserve chief in the US decreased the interest rates to try to cushion the economic impact of 9/11.
The lower interest rates encouraged people to borrow money. Many people started buying houses and, therefore, house prices started rising. To get more money to lend, financial institutions in Wall Street devised a way to package the loans and sell them to third parties. The increased money encouraged further lending, so the economy flourished and the cycle continued. However, many of the loans were given to people who actually could not afford them, hence the term subprime. Naturally, the people who couldn’t afford the loans started defaulting on their payment, which eventually led to the downfall of the financial giants, in turn affecting the global economy.
1. Don’t be greedy.
2. Have a financial education.
3. Don’t spend money that you don’t have, and don’t equate money, things or status with being best.
5. Diversify your portfolio.
Posted by Stephen Mills; Group1A
All 50 states may use similar methods to fund their budgets -- taxes on income, sales, property, fuel, alcohol, tobacco -- but each does so with its own formula.
The differences can be extreme. If you lived in Alabama, one of the least-taxed states, you'd pay about $8.50 out of every $100 to the state. In Maine, on the other end of the scale, you'd fork out $14. On average, state and local governments combine to loosen about 10% of your income from your grasp.
A smoker wanting to save some dough might prefer to live in South Carolina, which charges just 7 cents a pack -- as opposed to the state tax average of $1.19. A heavy drinker might want to move from Oregon, where hard liquor is taxed at the rate of nearly $21 a gallon, to Maryland or Washington, D.C., which have the country's lowest liquor taxes, $1.50 a gallon.
Written by Stephen Mills; Group1A
Looking forward to graduating? Starting your new career? And then what? Probably getting your own place and buying your own car. Here lies the issue, buying a car can be a difficult task and much of the simple steps are commonly overlooked.
First you need to evaluate your current financial situation to find out how much you can afford in terms of whether you are going to finance the car or buy it outright. If you are buying a relatively new car, chances are you will have to finance the car and pay monthly payments.
New vs used is a common question people ask themselves when buying a car. You may be able to afford more car by going used but you know what to expect from the car when buying new. If you take the used route you are going to want to learn about the cars history. Carfax.com is a great site that provides the “medical history” of the car. It will let you know what the cars history has been like in terms of it being in the shop.
Either way you will need to budget yourself properly to ensure that you can afford the monthly payments if you chose to finance the car. You must also take into consideration the cost of insurance as well as put money aside for unexpected costs the car may incur.
Source: 1, 2, 3.
By: Allison Franklin
When people do not have a lot of money, they feel that it is not possible to save any money. However, this is not the case. With a few steps people can save money even if they do not have a large income. The first thing that people have to do is prioritize their expenditures. People have a tendency to buy whatever they want whenever they want and not think about it. However, if people only buy the items that are really important to them they will be able to save the money they are no longer spending. Another thing people need to do when saving is to set aside an emergency fund. This money needs to be easily accessible, but should only be touched if it is a true emergency. If people have this set aside then they will not dip into their savings when a crisis arises. One of the most important things people have to do when saving is to force themselves to save. One way to do this is to designate a portion of your paycheck to automatically go into a savings account. If people do this they will not “miss” this money as they will never have access to it. If people follow these simple steps they will be on their way to building a bigger savings account.
Monday, April 6, 2009
Posted by Yi-Xin Jin (Lily)
Finding a safe place for your money sounds easy enough. But you can do better by picking the right cash accounts for your goals.
(Money Magazine) -- Suddenly, cash is king again. With more and more Americans worried about their job security, the personal savings rate has climbed to 3.6%, up from next to nothing two years ago. Investors, meanwhile, have parked billions of dollars on the sidelines while they wait for better days. But with interest rates on savings near record lows, it pays to be savvy about where you stockpile your rainy-day funds. Here's what you should keep in mind.
1. Don't keep all your cash in the same place. There are four ways to use cash, and an ideal account for each. Grocery money goes in checking. Your emergency fund - cash you'll need if you lose a job - must be in a bank account that's 100% safe but needn't be so convenient; if you get a good yield, don't worry if it takes a day or two to transfer the money. Money for a specific purpose, like a wedding, can get a higher yield if locked in a certificate of deposit set to mature when you need it. Your investment portfolio's cash might belong in a money-market fund, but not always (see No. 3).
Click to read more.
Talk about a downward spiral. Hundreds of thousands of Americans who have been pink-slipped recently are joining the millions already unemployed in figuring out how to make ends meet.
The Bank of America survey indicated that 18% of Americans had withdrawn retirement assets prematurely because of the recent economic turmoil. Many had raided those accounts to pay for near-term financial obligations, including credit card debt and mortgage payments. But more than one in five of those had withdrawn money early from their retirement funds because of recent job losses.
Posted By: Allison Franklin
The problem may worsen as millions more find themselves out of job.
NEW YORK - More U.S. consumers have fallen behind on loan payments than ever before, and the problem may worsen as millions more find themselves out of a job, a study released Thursday shows.
According to the American Bankers Association, which represents most large U.S. banks and credit card companies, the percentage of consumer loans at least 30 days late rose to a seasonally-adjusted 3.22 percent in the October-to-December period from 2.9 percent in the prior quarter.
The ABA said the fourth-quarter rate was the highest since it began tracking the data in 1974, with delinquencies rising in nearly every category. It said these credit trends are unlikely to improve before 2010. Many consider the deep recession the worst since the Great Depression of the 1930s.
Sunday, April 5, 2009
- By Kevin Yu
In the wake of the Bernard L. Madoff scandal, it's a question on everyone's mind, especially older folks with the most to lose: How can one check out the people helping to manage one's life savings?
A lot of smart money with access to expensive private investigators got taken in by the confessed, now-imprisoned Madoff. But he was the rare case of an out-and-out fraudster with no previous adverse public regulatory baggage. As it turns out, there are cheap and easy ways to vet financial professionals and the outfits they work for, for a history of blunders--or worse.
The absolute easiest way: Google (GOOG - news - people) the name of your broker and then the firm. Also check some of the specialized Google services, such as Google News and Google Blog Search, which can pick up more recent events.
The New York attorney general, Andrew M. Cuomo, said that the bank offered promotional rate for balance transfers and other loans put onto the Chase credit card account. It would charge one-time transaction fee. However, in November 2008 Chase informed more than 300,000 cardholders that it would charge a flat fee of $10 per month. Mr. Cuomo, who observed the cardholders’ complaints, asked Chase bank to refund them and the Bank agreed. The Bank said that it canceled the service charge because of its cardholders’ feedback. This new policy aims at those people who have large balance for more than 2 years and are unlikely to pay it all off.
Thursday, April 2, 2009
The sooner you start saving for your child's education, the better your chances are of keeping up with rising tuition costs. But how do you set a realistic savings goal?
In developing a plan, you should consider more than just the age of your child and the cost of tuition at your local college.
Use this helpful online calculator to aid in planning for your kids college tuition.
Wednesday, April 1, 2009
1. If you invest in stocks, bonds or mutual funds and sold them at a overall loss, deductions are allowed to $3000 in ordinary income on your return. Your adjusted gross income will be decreased, and there will be less debt realized.
2. New tax breaks were executed by Congress.
3. There are some deductions enforced by law as part of last year’s economic stimulus. The State Sales Tax Deduction: you can take this deduction or write off your state income tax on your federal return. College Tuition Deduction: As a parent, you can deduct up to $4000 for your kid’s tuition expense.
4. If you don’t have a retirement plan offered by the company you work for, your 2008 IRA is deductible. $5000 will be deducted if you send the check for a 2008 IRA before and on April 15.
5. You are able to write off the cost of looking for a job if you were jobless in 2008. If you were laid off from a job where you can earn $100,000, your tax will be covered by the 15% bracket instead of 25% as normal. There’s also deduction for medical expenses. You are also eligible for a rebate check if you lost your job in 2008.
6. If you sold your portfolio at a loss last year, you can carry the loss forward to future years. You can still claim the loss even if you buy back the original stocks within 30 days.
7. Minimum distributions for retirement account have been waived for 2008 only.
8. Tax credits were renewed by Congress such as that constructing a green home will have a tax credit of $500.
9. Make sure to be aware that the changes of the tax credits may take place.
By: Allison Franklin
Saving for retirement can be a difficult task that many people put off because of how hard it is. However, this is a time that everyone has to plan for because if they do not, they will not be able to live out their lives in financial comfort. There are a few steps that can be taken to help people save and plan for retirement. The first is to start saving young. The earlier you start saving the better off you will be. This may sound simple, but the truth is it is not. Most young people believe that they do not need to worry about saving for retirement as they have so much time. The truth is it comes faster than you think and preparing early is a big help. The second thing to do is to try and calculate how much money you will need. This estimate can be made by taking an estimate of your expenses and multiplying by how long you expect to live. Obviously this is not totally accurate, but it will give you a ballpark when it comes to an amount you need in your savings. The third thing to do is start saving. You need to look at your current income and expenses and see how much you can comfortably save. You need to make sure you put this money into your savings every month as if you skip months it can throw off your entire financial plan. With these steps it can make retirement planning much easier. Retirement planning is a difficult process, but if people put effort into it, it can be made easier.
It can be hard to save money and manage fixed expenses with a tight budget. Here are seven ways to help you cut back expenses.
1. Homeowners Insurance
You should consider raisign yoru deductibles to $500 or $1000. If you combine your homeowner and automobile policies you can receive a discounts from your insurance company. You can also reduce your insurance premium by installing smoke alarms, deadbolts locks and home security systems.
2. Auto Insurance
If you can afford to, try to increase yoru deductibles from $200 to $500 and this could possibly reduce your collision and comprehensive coverage by 15 percent to 30 percent.
Cutting coupons can make a dramatic different on your grocery bill. You should also keep track of the prices of frequently purchased items and make a meal plan before you go shopping.
The cost of basic programming cable is around $42.76, however if you add premium channels to your plan, it can easily go up to $100 per month. You can save approximately $100 or more per month, by sticking to your “needs” when it comes to cable and cell phone plans.
You can save hundreds of dollars by shopping at the clearance racks more often when it comes to buying clothes for kids.
6. Utility Bills
You can save up to 10 percent on your heating an cooling costs if you set your thermostat back when you are not at home and when you are sleeping. You can also curb your utility bill by lowering the temperature of your water heater to 120 degrees Fahrenheit.
A great way to cut back entertainment expenses is by investing in region-specific entertainment coupon books.