Yodlee Blog: Mind On Your Money

I Got the Sweetest Hangover

noreply@blogger.com (Yodlee) — Tue, 20 Dec 2011 19:14:00 +0000

By Jacquette Timmons

“I got the sweetest hangover, I don’t wanna get over.” That’s the hook from Diana Ross’ sultry disco hit of the 1970s. And she is right: A love hangover can be “sweet, sweet, sweet.”

However, if you’ve ever had an alcohol related hangover, you know it is anything but sweet. You wake up the next day, with a headache, perhaps feeling slightly nauseous and a bit parched and groggy. For those of you who don’t consumer alcohol, you may be surprised to learn that one doesn’t have to be a heavy drinker to experience a hangover.

Alcohol related hangovers are much like financial hangovers – by the time you realize you have one, it is long after there’s anything you can do to prevent it.

Similarly, by the time you read this post, there’s a strong chance you’ve exceeded your holiday spending budget and/or racked up more credit card debt than you planned. Therefore, it’s probably too late to share last minute tips and techniques that will be useful for managing your holiday budget. So instead, I’ll share five (5) choices you can make after the fact --- choices that will help you recover from a hangover you do want to get over!

1. Move from guilt to action

It’s easy to get mired in what you “shoulda, woulda, coulda” done differently but it is much more productive to acknowledge you exceeded your financial limits and commit to getting back on track immediately in the New Year. This is not the time to ‘close your eyes’ by not opening your banking and credit card statements.

2. Go on a spending fast

Hopefully, the holidays brought you all you needed and desired. Because depending upon the degree of your financial hangover, you may need to forego new, non-essential purchases for one to three months. And this applies whether you are using cash, debit or credit!!

3. Increase your credit card payment – even if just $5 or $10

It may not seem like a lot but even just paying an extra $5 or $10 dollars above your minimum payment can help your effort to reduce your credit card debt. On this front, however, be realistic about how quickly you’ll be able to pay off your credit card in full.

4. Shift your focus

When (notice I didn’t say “if”) doing steps 1-3 above become challenging, shift your focus to your goals for 2012. Redirecting your attention to what you really want will help you endure the temporary discomfort the above steps are likely to bring forth.

5. Prepare for next year…now

Much like making sure to eat a hearty meal, drinking plenty of water or increasing the span of time between drinks can lessen the probability of a hangover, being better financially prepared can help you avoid a financial hangover at the end of next year’s holiday season. Therefore, review your statements to count the cost of this year’s holiday and related (travel, hosting) expenses; see by how much you went over budget; use this information as a benchmark for creating your 2012 holiday budget today!
Two aspirins and a little extra sleep won’t help you too much with a financial hangover. But the five recommended choices above are an excellent antidote!

Happy Love Hangover…Happy Holidays!

N.B. If you want help creating a fresh (financial) start to 2012, check this out!

Smart Shopping + Smart Spending = Happy Holidays!

noreply@blogger.com (Yodlee) — Mon, 05 Dec 2011 18:05:00 +0000

By Jacquette Timmons

Some of us start saving for the holiday shopping season a full-year in advance. While others of us are looking at the calendar with utter astonishment wondering, “OMG, how many more paychecks will I get before the holidays arrive?” Ironically, both approaches require the same thing.

Whether the economy is doing well or in a slump, budgets tend to get a bad rap. But the holidays seem to bring about an even deeper visceral response to the word and practice of budgeting – as if having and following one either means you don’t have enough money and/or that you are being cheap and frugal.

Quite the contrary!

Having a holiday shopping budget equals smart spending, smart shopping and happiness all around. Here’s why: A budget helps you manage the expectations of others, as well as your own!

Now, here’s how: Back into your budget by determining for how many people you want to buy gifts; how many gifts per person; what type of gift; and the price point per gift. Do an initial version that is unedited. If you have the resources to do your first draft stress-free (read: no new debt)…awesome! If not, revise your budget until you reach the dollar amount that you can realistically afford using cash and/or a credit card you can pay in full. Note: it is perfectly OK if you have to adjust your budget several times before reaching the sweet spot.

Remember, the goal is to give meaningful gifts to your loved ones, the cost of which won’t leave you feeling remorseful on January 2 -- after the holiday euphoria has worn off! Also, keep in mind that the joy of giving and stress cannot co-exist. So, plan your holiday shopping (where, when, what debit/credit card you plan to use) to minimize your stress with the shopping process – especially if your holiday plans also include traveling!

Holiday shopping shouldn’t break your bank, and it won’t if you are proactive. And it doesn’t matter if you started planning twelve months ago or are just getting started today. A budget consists of equal parts smart shopping and smart spending…the perfect mixture for a happy holiday!

Food. Diet. Money. Budget.

noreply@blogger.com (Yodlee) — Mon, 21 Nov 2011 01:36:00 +0000

By Jacquette Timmons

Food and money have a lot in common. For starters, a healthy relationship with either requires a common sense approach – something that is often easier said than done. And, your relationship with food and money forecast to the world a great deal about your behavior, choices and mindset, and dare I be bold enough to say, your degree of self-love and self-esteem.

So it shouldn’t come as a surprise that diet is to food what budget is to money: Hard to do!

Especially during this waist and wallet bulging season – aka the holidays – when temptations abound.

The challenge with diets and budgets is that, by their nature, they are restrictive. You are saying “no” to a choice you would really rather say “yes” to.

Holiday season or not, people often fail at diets and budgets because neither is sustainable over the long-haul if you don’t approach them with the right intent, focus, and goal.

Here are a few tips to help you turn “diet” and “budget” – the terms and the practice - into your friends:

Define “right.” People often approach diets and budgets as if one-size-fits-all. To truly achieve success, make sure you are tailoring the diets and budgets you are following to your particular set of circumstances.

Define your success, yourself. If the first tip - “right” - is about process, then this tip is about outcome. Diets and budgets require discipline and dedication. Others can challenge you to stretch yourself, but you do the actually work and only you know what boundaries you can extend in a sustainable way. And don’t forget about acknowledging your milestones with treats! Rewards are good for your soul.

You can substitute “diet” and “budget” with more friendly terms, e.g., food plan or spending plan, but the end result is still the end result: You are giving yourself a framework to help you decide to what you’ll say “yes” or “no.” The key is to determine if you are making a lifestyle choice or quick-fix one. When you approach a diet or budget as a quick-fix solution to reach a goal or to correct an unhealthy behavior, it is reactive; but when you approach the same as if you are making a lifestyle choice, you are thinking long-term and operating proactively. Proactive is always a healthier way to go!

Lead with a system. As with food, so with money. Common sense wisdom rules: eat less than the energy you expend; spend less than the money you earn. Nothing new, but oh, so hard to follow at times. Having a system for doing what you know is the right thing to do will help you rebound faster when you fall off the proverbial wagon.

Give yourself permission to (sometimes) cheat. There are moments when you actually do yourself a favor by just giving into the temptation. But only if you commit to doing it occasionally and for a limited time. As an example, the Thanksgiving holiday is later this week. Unless you are on a strict, physician-prescribed diet that says no sugar, allow yourself to have a slice of pie (or two)! Be sure to return to your diet after the holiday, though. Same for your budget. If you go a few dollars over your budget for gifts this season, avoid beating yourself up. Instead, identify ways to reduce your spending in the weeks ahead on other items.

Where’s the joy? Before you begin any diet or budget, one of the first questions you’d benefit from asking yourself is: Why am I doing this? Your “why” factor is powerful…it is your source of joy. Don’t forget to look for and remember your joy factor! Otherwise, you will concentrate more on what you are being deprived of and you’ll become frustrated and you’ll abandon your game-plan at the precise moment when you have the most to lose – literally and figuratively.

Food is never just about food in the same way as money is never just about money. Wrapped up in our choices about both are our conscious and unconscious thoughts, perceptions and expectations. Diets and budgets frequently get a bad rap and aren’t sustainable not because of what they are, but due to how we approach and utilize them. Contrary to conventional wisdom, they actually can be sustainable over the long-haul if we get our intent, focus and goal right.

So, work on getting it right and while you are at it…have a Happy (and healthy) Thanksgiving!

Tax Moves to Make Now to Lessen the Pain Come April 2012

noreply@blogger.com (Yodlee) — Wed, 16 Nov 2011 22:23:00 +0000

By Carla Fried

Between now and the end of the year you can make some tactical money moves that will save you some serious money next Spring. Consider these year-end moves that can trigger a smaller tax bill come next April 15th:

Sell a losing investment. Time for some classic lemonade making. If you have an investment-stock, fund, ETF etc-that has lost value amid the markets big swings this year, you might be able to reduce your tax bill by selling it for a loss. Sell an investment at a loss and it can it can be used to offset any gains. An investment held less than on year is considered a short-term loss; holdings of more than one year are considered long-term. Short-term losses can be used to offset short-term gains, long-term losses are applied to offset long-term gains. (Remember, short-term gains are taxed as ordinary income. Long-term gains are taxed at a maximum rate of 15%.) If you don’t have any gains to offset losses, you can use $3,000 a year in losses to offset ordinary income tax. If your loss is more than $3,000, don’t worry. You can keep claiming the loss as a way to reduce your taxable income in subsequent years until you’ve accounted for the entire loss. It’s just that you have to do it in $3,000 annual increments.

Note: If you want to sell an investment at a loss to claim the tax break and then repurchase it, be careful. You need to wait 30 calendar days to buy the exact same investment. This is what is known as the wash-sale rule. But you could buy a similar investment, just not the identical investment. So for example, if you sell Exxon Mobil you could buy Chevron immediately. It’s just that you need to wait 30 calendar days before repurchasing Exxon Mobil.

Accelerate Mortgage and Property Tax Payments. If you’re looking for ways to generate more tax deductions, consider paying some of your 2012 housing bills before Jan. 1. For example, if you make your January 2012 mortgage payment in December 2011 you can claim the interest portion as part of your 2011 mortgage interest deduction. Same goes with any property tax you prepay. (Of course, this only works if you choose to itemize your deductions, rather than claiming the standard deduction.)

Get Tactical with Medical Expenses. If you’ve shelled out more than usual for medical expenses this year, do a quick calculation to see if your total out of pocket costs might be near 7.5% of your adjusted gross income for the year. Any medical costs above the 7.5% threshold can be claimed as a deduction. So if you’re close you might consider pushing any elective procedures you anticipate having in 2012 into this calendar year.

Think Charitably. Charitable donations you make by year end can be claimed as itemized deductions. That’s a win-win; helping causes you believe in and getting a tax break as well. If the value of any donation is $250 or more, make sure you file away a copy of the receipt/recognition of your donation.

When Can Your Side Job Become THE Job?

noreply@blogger.com (Yodlee) — Tue, 08 Nov 2011 18:33:00 +0000

By Jacquette Timmons

If you have a side-business, it is probably your intention that someday it will no longer be a “side” gig. I suspect your dream is that one day you’ll be able to dedicate 100% of your time and resources to it and let go of your “day job.”

But how do you know when you are really ready to make that transition? What do you use to gauge if now is the right time to say good-bye to your “9-5” and let go of the (relatively) guaranteed bi-weekly check you have currently?

When I started my business in 1995, I didn’t start it as a side gig; although, there were times when I wish I had! The reasons for my occasional woe is me in the form of, “If I could do this over, I would…” represent the three factors you need to consider when deciding the best time to leave your primary job.

These factors are relevant regardless of your business (product, service, combo) and in almost equal measure determine your business’ success or failure: financial resources, support system and time.

Financial Resources

It’s common wisdom to save 6-12 months of living expenses for an unexpected, rainy day. To this number, I would add 6-12 months of business expenses. This approach assumes you aren’t commingling personal/business resources by depositing business receipts into your personal account. If you are, now is an ideal time to create a separate identity – legally and financially – for your business.

I’d also presume that some of your account receivables will be outstanding for sixty- to ninety days, regardless of your payment terms. This strategy will help you manage cash-flow if you have to “float” your business expenses using personal resources (cash or credit card). (I once waited six months for a check from a client!)

Remember, when you are working THE job, cash-flow takes on an importance it may not have had when you were also working the day-gig. Cash-flow can truly become more important than making a profit sometimes!

Support System

You’ll need a support system in two ways: emotional and infrastructure. Because you’ve been “doing” your side-job for awhile, you probably have most if not all the things you need, i.e., smartphone, laptop, printer/scanner, files/filing system. But as you imagine working from home full time or renting office space, how might your infrastructure needs change? Once you identify any gaps between what is and what will be, what is the cost of closing the gaps? (Be sure to add this number to your financial needs/resources above.)

I cannot emphasize enough the importance of a really good emotional support system…of a certain kind. If you currently spend most of your time with family and friends who work a traditional 9-5 job, make a commitment to surround thee (and quickly) with other entrepreneurs. Seriously. No matter how well intentioned your 9-5 crowd is, there are elements of running your own business that they will never understand (unless they at one time were also an entrepreneur). You’ll save yourself a lot of frustration by being in the company of, supported by, encouraged by, and challenged by fellow entrepreneurs who “get it.

Time

When you leave your day-gig to focus full-time on THE job, you get more time and lose it, simultaneously. Here’s why: i) When you are juggling both jobs, you are probably much more disciplined and protective about your calendar. As a result, you are probably extremely focused and productive. ii) However, when you are able to dedicate 100% of your time to THE job you at first feel like you have a ton of “free” time. For some, this time freedom renders them paralyzed with indecision about what to do and when and often comes with guilt about how you are using said time.

So before you leave your 9-5, get clear about how your choices with regards to time will change and begin to adjust your habits and patterns accordingly. In this way, the transition from “I only have two hours to get this done,” to “I have all day to finish this,” won’t feel so drastic.

Now, let me tell you a sobering reality about all that I’ve just shared: When it comes to financial resources, support system and time, you’ll actually probably under-estimate what and how much you really need because it always takes more than you forecasted!!! I’ve yet to meet an entrepreneur to say otherwise and I can attest to this personally.

However, don’t let this dissuade you. Instead, allow it to help you temper your expectations and to prepare as best you can. And, good luck!

How to Make Your Bonus (and Raise) Pay off Big Time

noreply@blogger.com (Yodlee) — Wed, 02 Nov 2011 16:37:00 +0000

By Carla Fried

Let’s face it, snagging a bonus or solid raise isn’t exactly easy these days. That makes it all the more important to make the most of any extra pay that comes your way. Don’t worry, I’m not about to suggest you save every penny. We’ll get to that sort of unimpeachable advice in a sec. But I’d put in a pitch for making sure you spend a portion on something that makes you smile. Maybe that’s paying off your credit card. But maybe it’s a long weekend getaway. Both have value. In our overworked and overstressed world where it’s hard not to worry, spending a little on checking out can be the secret to avoiding burn out. And that’s what enables you to excel at work…and earn the next bonus or raise. You decide how much feels right. Maybe you siphon off 75% or so of any windfall for solid financial planning, and give yourself the room to splurge with the other 25%.

Okay, now onto the best financial moves for any extra income:

Pay off high rate credit card debt. ‘Nuff said. You know the drill here.

Contribute more to your 401(k). The minute you hear the word “raise” contact HR or your plan administrator pronto and increase your contribution rate. If you do this before the first raise ever hits your paycheck you’re not going to “miss” having that money to spend. This is especially profitable if you have yet to max out on your company’s maximum matching contribution. By increasing your deferral rate you’ll be eligible for a higher match. You just got a bonus on your bonus!

Fund a Roth IRA. Individuals with income below $107,000 and couples filing a joint tax return with modified adjusted gross income below $169,000 can contribute $5,000 per person this year into a Roth IRA. If you’re at least 50, the max is $6,000. If your MAGI is between $107,000-$110,000 ($169,000-$179,000 for couples) you can make a reduced direct contribution into a Roth IRA for 2011. If your income is above that upper limit, you can still finagle your way into a Roth by first contributing to a Traditional IRA and then converting that into a Roth. The big advantage of a Roth IRA is the prospect of having 100% tax free income in retirement. Remember, all withdrawals from a Traditional IRA will be taxed as ordinary income. In effect, with a Roth you pay your tax today, rather than in retirement. Unless you anticipate being in a low tax bracket come retirement, the Roth can be a better deal. Moreover, if you already have money in Traditional IRAs, adding a Roth IRA to your retirement mix gives you some tax diversification: you have both types of accounts that in retirement you can tap strategically based on your needs.

Pay Down Your Mortgage. This is for the 50+ crowd. If you intend to live in your current home through retirement, using some extra cash flow today to get the mortgage paid off before you stop working can be both financially smart and psychologically calming. Or if you’re been hankering to refinance at today’s seriously low rates, but worry you won’t qualify for a loan given today’s higher equity requirements (typically 20%) consider a cash-in refinance. That’s when you bring some cash to the refinance so you can buy your way into having at least 20% equity. With bank savings rates at 1% or less, using extra cash to reduce your mortgage costs can be a smart move. Just make sure that when you refinance you don’t extend your original loan term. So for example, if you’re 10 years into a 30-year loan, take out a new 20-year mortgage. That way you don’t end up paying more interest over the total length of your payback of the two loans.

Going cash-free: what does the future of payments look like?

noreply@blogger.com (Yodlee) — Mon, 31 Oct 2011 23:59:00 +0000

By Josh Smith

“Cash is king!” may still ring true on Wall Street, but pretty soon technology will be telling us all that, “the buck stops here.”

Like it or not, the future of payments isn’t on printed bills and noisy coins, but rather on the other device you already carry in your pocket or purse -- your cell phone.

Other countries have been using their mobile phones to make small payments for years, but the U.S. is just now entering the game in a meaningful way.

So, what does a cash free future look like?

At the center of our future payments is our smartphone. This device will allow us to make payments in new ways and in new locations.

Making Payments

Google Wallet now lets owners of a specific phone make payments at the same tap to pay stations that have been accepting credit cards.

This technology is powered by NFC, a small chip that allows your phone to securely communicate to a terminal when it is nearby. You will still need to enter a PIN on your device to make this possible, but no more grabbing for your real wallet.

As you can see in this Google Wallet video, there are a number of other ways that you will benefit from a wallet that is part of your phone, such as coupons and loyalty programs that don’t require you to remember any cards or clippings.

Soon, your smartphone will come with this same technology. These payments tie into your credit and debit cards, as well as prepaid cards that you can load up for controlled spending or to give your kid an allowance on his phone.

We may also see stickers that attach to the back of your current phone to enable NFC transactions.

Another way you may be making payments is on someone else’s smartphone or tablet. The Square card reader is a small credit card reader that plugs into the headphone jack of Android phones, the iPad and the iPhone.

As you can see in this video, the square card reader will let you make a payment with the same credit card you have been using, but because it attaches to smartphones, you will be able to use your card in new locations. Think, at a festival or small business that didn’t typically accept credit cards. I know I can’t wait for my dry cleaner to get one of these.

Anyone can get a Square card reader, and start accepting payments, which means even you can start charging your friend’s when they ask you to pick up the tab because they don’t have any cash. Just keep in mind the 2.75% transaction fee.

There are a number of new payment ideas out there, but these are the closest to coming to your pocket and becoming a reality. As we move forward, I anticipate even more integration with our phones for payments, discounts and loyalty.

The Unusual Bottom Line Factor: Personal & Professional Development

noreply@blogger.com (Yodlee) — Wed, 19 Oct 2011 18:33:00 +0000

By Jacquette Timmons

When it comes to talking about money, the discourse is typically centered on growing one’s earnings, savings, and investments, while reducing debt and careless spending. Rarely do we make a correlation between these aspirations and our own growth in terms of personal and professional development.

Yet, I believe a strong case can be made for this oft overlooked connection – especially for those of us who are not professional athletes and therefore not “trained” to see the connection between improved performance and one’s level of wealth.

Consider the small business owner who hires a coach because her business is faltering; or, the physician who attends the annual medical conference to obtain CMEs (Continuing Medical Education); or the middle manager taking firm-provided training to improve his chances for a promotion; or the artist who works for an arts-based non-profit and participates in an artist fellowship program; or the person who annually attends a yoga retreat. These are just some examples of how people invest in their personal or professional well-being.

But personal and professional development (P/PD) is about more than acquiring skills or knowledge in an absolute sense. It’s about the transformation you experience as a result of your newfound skill-set and expanded awareness and how you apply that to your career and life. And sometimes the line between what constitutes “personal” vs. “professional” development is so blurred it warrants an important question: “Who should pay for my development?”

The short answer: it depends. Sometimes your employer will pay for your training, whether that training is offered by the firm or by an external vendor, because it directly ties into your job function. At other times, you’ll need to pay for it. But whether you or your employer pays for your P/PD, you cannot underestimate the ripple effect of said investment beyond your expanded awareness, increased potential, and sharpened skills to your wallet! So from now on think of personal and professional development not only as a tool to manage your career and life, but to manage your wealth as well. It’s an unusual bottom line factor, but one to which everyone should pay more attention.

The Buy v. Rent Conundrum

noreply@blogger.com (Yodlee) — Mon, 17 Oct 2011 02:11:00 +0000

By Carla Fried

It turns out that plenty of Americans are still sold on the American Dream. In Fannie Mae’s latest survey, 62% of folks said that if they were planning to move right now they would buy, rather than rent. Moreover, 69% of the same survey respondents believe that right now is a good time to buy a home. Indeed it is. With mortgage rates at historic lows and prices having seriously deflated since the bursting of a bubble, prospective buyers face an enticing market. The economic forecasting firm FiServ notes that the national median home price is now back to within 5% of its 2003 level.

From a straight-up cost perspective, buying can in fact be the better deal these days. While home prices have fallen, rents haven’t. Real estate forecasting firm Reis, Inc. predicts 2011 apartment rental rates will rise 6% or more in major markets including San Jose, Washington D.C. and New York City, and foresees average apartment rental rates bumping up another 3% in 2012. According to real estate research firm Trulia, buying beats renting in more than 70% of the metro markets it tracks. (That link to Trulia takes you to a way-cool interactive map that; it’s well worth taking a spin.)

But let’s face it, pulling the trigger is anything but easy these days. For starters, there’s the not-so-small worry that prices could head even lower. And then there’s the high-jump challenge of getting approved for a loan.

To help you wade through your options, think through these factors:

Am I going to stay put for at least five to seven years? Even if prices are stabilizing in your area, you’re not likely to see big price gains in the next few years. In a recent survey of more than 100 housing economists, the general consensus was for prices to inch along at a 1.1% annualized rate gain through 2015. That’s actually good news, compared to the losses since 2006, but it also means you can’t expect to have strong appreciation to cover the costs of eventually selling. Remember, there’s going to be the agent’s fee to sell, which typically is 5% to 6%, combined with moving costs etc. So you only want to be buying today if you intend to stay in that home for a good chunk of time. There’s a terrific free rent v. buy calculator at the New York Times that allows you to play with all sorts of variables to get a sense of what might make the most sense given your financial situation and what you expect to happen with locak housing (and rental) prices.
Will I pass muster with a lender? Let’s just say lenders have swung to the other end of the pendulum the past few years. After spending the bubble years handing out mortgages to just about anybody who wanted one, now you must actually prove you qualify. And those qualifying standards have gotten much tougher. To have a shot at a great interest rate you’ll need a FICO credit score of at least 720-740 and be able to make a down payment of at least 10%, though 20% is what is going to give you the best shot at getting a conventional mortgage. If that down payment hurdle seems impossible high, you should definitely look into an FHA-insured loan; most lenders offer ‘em. Because of the government backing, the lending standards for these loans are way more lenient. Many lenders will consider an FHA-insured loan if your FICO credit score is at least 660 or so, and the down payment can be as low as 3.5%. Just keep in mind that with the FHA option you pay an upfront 1% fee for the insurance and an ongoing annual charge of 1.1% (1.15% if your down payment is less than 5%) until you have at least 22 percent equity in the home.
What’s my all-in ownership cost? Just because you can afford the $1,500 rent does not mean you can afford a home with a $1,500 base mortgage. Make sure you factor in the cost of property tax; yes it’s deductible if you file an itemized return, but it’s still a hefty annual charge that can be 1.5% or more of your home’s value. And then there’s home insurance; a solid policy—you want to ask for extended replacement cost coverage; do not settle for actual cash value-is going to be more expensive than any renter’s policy. And let’s not forget all the maintenance costs once you settle into your own place. Get estimate for all those costs-ask friends what they pay. This exercise isn’t to talk you out of buying, but rather to help you buy smart: you might find you want to lower your shopping price point a little bit to make sure your total all-in monthly costs won’t be a stress on your finances.

How to (Realistically) Save For Your Wedding

noreply@blogger.com (Yodlee) — Tue, 04 Oct 2011 23:08:00 +0000

By Jacquette Timmons

Marriage rates may have fallen from its peak in the mid 1980s. But people are still getting hitched to the tune of approximately two million marriages a year according to the U.S. Department of Health and Human Services.

Since 1970, the cost of getting married has almost doubled to $24,000 – the average cost of a wedding in today’s dollars. Depending upon where you live and the financial resources available to you, you may consider this figure to be a lot of money to say, “I Do,” or a drop in the bucket. Either way paying for a wedding is a costly endeavor and saving for it can seem daunting. Here are a few suggestions to help you realistically save for your wedding:

Create a vision of the kind of wedding you want to have by including a) the location, b) number of guests split between family and friends, c) type of venue for the ceremony and reception, d) time of year (off-season or in-season), and e) your living arrangement post wedding (will you move into a place where one of you lives currently; will you rent; will you buy?) Starting with this as your base is the best way to prepare for what comes next…
Back into your budget. Don’t make the mistake of many people which is to come up with a number without knowing how realistic said number is. Better to map out all the points noted in #1, see what the cost is (per line item and comprehensively), and adjust your expectations and your vision accordingly.
Give yourself enough time to save the money needed to create the wedding experience you desire. Even if you use a credit card for all or most of your wedding expenses, you want to be in a position to pay the card balances in full when due – or at least within six to twelve months of your wedding.
Create a separate “wedding” account to avoid commingling funds allocated for your wedding with your other savings.
Determine the appropriate portion of expenses to be attributed to you and your intended, as well as your respective families if appropriate.

Remember, your wedding day is a wonderful celebration of your love and union, but your marriage – a life-long journey – is more important than a single day! Keep this in mind as you make tradeoffs between what you may really want and what you may discover you can really afford.

Preparing for the holidays: Best time to buy flight tickets

noreply@blogger.com (Yodlee) — Mon, 03 Oct 2011 00:10:00 +0000

By Josh Smith

With temperatures dropping across the nation, it’s time to put summer vacations behind you and focus on getting the best deal on tickets for your holiday flights.

If you’re reading this, and you haven’t already started your search for a holiday flight deal, you should get started.

When to Buy

Unlike the rest of the year, where demand is less predictable, Airlines know that the holidays will be booked up.

Despite this confidence, if you buy early, you can still score some deals, as airlines are still cautious. As planes fill up, prices will go up. Additionally, the closer you get to takeoff, the higher prices will be. There are no last minute deals on airfare, so you should make plans now, stick to them, and purchase tickets as soon as you can.

If you need to stay in a hotel during your holiday travel, you can often get a better overall price on the trip if you book them both at the same time. In some extreme cases, you can purchase cheaper tickets by adding a hotel and not using it.

When to Fly

Unfortunately airlines are adding fare increases earlier and earlier each year. If you are able to fly before December 17th and return after the New Year is over you can score cheaper airfare, but this isn’t realistic for most flyers.

Look for early morning flights and those with connections to cut back on the cost of flying, but beware of potential delays if you have a layover in a bad weather location.

If you are able to fly in or out on Christmas Day, you can normally score some deals.

How to Find the Best Deals on Holiday Flights

Bing Travel lets you search a number of airlines and airfare price comparison search engines, and delivers an easy to follow price predictor. Bing analyzes flight trends to figure out if prices are going up or down.

You’ll get a tip to buy now or wait, and Bing’s confidence of the prediction. Ultimately, this is one of the easiest ways to find out if you should buy now or wait.

Google has also launched a new tool for flights that helps you find the best deals on holiday airfare. Google Flight search lets you search many airlines and use visual tools to find flights that meet your needs.

One of the nice features of Google Flights is the ability to see which weeks offer the best pricing on trips like yours. For example, if you plan on taking a five day trip this December, Google can help you see the cheapest weeks for that trip. If you need a shorter or longer flight, you’ll see the best weeks for that trip. Just click on the calendar icon next to the return date at Google Flights.

It’s also worth checking directly with your favorite airline to see if they are offering a good deal, and don’t forget to factor in the cost of checked baggage to your price comparisons.

Flex Your Way to Big Savings

noreply@blogger.com (Yodlee) — Sun, 02 Oct 2011 23:54:00 +0000

By Carla Fried

In these times where raises are hard to come by, or barely keep pace with inflation, looking for creative ways to increase your net compensation becomes even more important. Exhibit A: Signing up for a Flexible Spending Account (FSA) can reduce your taxable income by at least a few hundred dollars a year, and often much more. That seems like an especially timely way to keep more money in your pocket these days.

As you’re perusing your benefits options during this Fall’s open enrollment season, maybe it’s time to take a serious look at how an FSA for 2012 could work for you. There are two types of FSAs: one for health care expenses and one that can be used to cover qualified dependent care expenses.

An FSA allows you to set aside money on a pre-tax basis into a special account that you can then use to pay for qualified expenses. The typical maximum amount you can set aside for a health-care FSA in 2012 is $5,000, per person. (Note: A provision of the federal health reform bill mandates a $2,500 maximum beginning in 2013.) So let’s say you decide to set aside $3,000 in 2012 into an FSA to cover all sorts of out-of-pocket medical expenses, and let’s assume your tax rate is 30%. That means you’ve effectively saved $900 for the year. And the good news is that everyone is eligible; there’s no income cut off.

With a health care FSA you can use money in an FSA to cover dozens of medical related expenses, including co-pays, deductibles, and the myriad expenses in which coverage is often limited, such as orthodontia or eye care (yep, contact lenses are covered.) Up until 2011 you could also use your FSA account to reimburse you for over-the-counter meds, but now you must have a prescription from your doctor to be able to claim those expenses. Yes, we have health care reform to thank for the fact that you now need to ask your doctor for a prescription if you want to be able to use your FSA to pay for the Tylenol and Advil.

If you have young children under the age of 13, or a spouse or parent you provide care for, a dependent care FSA can help you defray some of your costs of care. You can use this flavor of an FSA to pay for childcare, including, nursery school or for before/after school programs. If you plan on sending a child to day camp next summer, you can use a dependent care FSA to cover the costs (but not for sleepover camp.) The dependent care FSA can also be used to reimburse you for qualified expenses used to care for spouse or parent who needs assistance. The maximum household contribution to a dependent care FSA is $5,000.

The Use it or Lose It Catch

Okay, there’s one big honking problem with both types of FSAs: any money you set aside in an FSA but don’t spend is forfeited. There’s no carry-over provision. Some semi-good news is that you typically have 15 months, not just a year, to spend the money. For example, money you set aside in a 2012 FSA can be used to pay for eligible expenses through mid-March 2013. Your best move is to spend an hour or so tallying up your medical expenses for the past year that you paid out of pocket. Assuming your expenses were “normal” you could plan on setting aside 90% of that for next year’s 2012, to give yourself a little cushion if next year’s costs end up being a little lower than this year.

Home shopping: Should you use a buyer's agent?

noreply@blogger.com (Yodlee) — Mon, 26 Sep 2011 23:18:00 +0000

By Josh Smith

After you decide to buy a home, or at least decide to start the long process of looking at homes, your next decision is whether or not to use a buyer’s agent.

A buyer’s agent is a Realtor that works for you, the buyer, instead of the seller. These Realtors are just like the selling Realtor’s and many times also sell homes themselves.

Rather than trying to help you get the highest price, a buyer’s agent will help you get the best deal on a new home. The good news is that you don’t have to pay for a buyer’s agent, in most cases the agent is paid out of the commission paid by the sellers.

Why a Buyer’s Agent is a Good Idea

Finding Homes Fast – If you want to know about homes as soon as they come on the market, perhaps even before they arrive on the nationwide listing platform (MLS), a local Realtor can help. This could be a new listing they had heard about, or one being listed with their agency.
Knowing What to Look For – A buyer’s agent is an experienced homebuyer, which means she can help you identify potential issues with a property that you might never have considered.
Provide Guidance – A buyer’s agent can help you know when to contact, and who to contact, when you need a home inspection, title and help you find a lender if need be. Expect to receive several recommendations from which to make a choice.
Scheduling Showings – Rather than spend you time trying to set up showings and track down real estate agents, your buyer’s agent can do all of this for you, which is a major time saver.
Pricing Information – If you need help, the buyer’s agent can help fill you in on pricing trends in the area and help you figure out if a home is overpriced. He can also help you come up with an appropriate offer.

Things to Watch For

You’ll want to make sure that you have a good agent, because they are paid based on a percentage of the final sale price. This could influence an unscrupulous agent to suggest a higher opening bid to pad his or her pockets.

How to Find a Buyer’s Agent

The best way is to ask your friends, family and coworkers for recommendations. If this fails, you can search online or by visiting a local real estate agency. Find an agent you click with before signing an agreement.

Buyer’s Agent Agreements

When you pick a buyer’s agent, you may be asked to sign an agreement that you will use a select Realtor as your source for finding a home.

This contract will often allow you to quit your Realtor if he or she is not performing, but it prevents you from cutting out your agent for a backdoor deal on a new house. These are in place because Realtors spend a lot of upfront time on helping you find a home before getting paid.

Should you use a buyer's agent?

If you are a first time homebuyer, a buyer’s agent will definitely provide you with additional information and help that will make the home buying process smooth.

For home buyers who are buying for the second or third time, a buyer’s agent may not be needed to navigate the waters, but can still help you with finding properties fast, scheduling showings and more.

Is Real Estate (Still) a Worthy Investment…for Me?

noreply@blogger.com (Yodlee) — Thu, 22 Sep 2011 21:43:00 +0000

By Jacquette Timmons

According to the U.S. Census Bureau, the rate of U.S. homeownership is down to 66.4%, the lowest since 1998. Yet, a recent Pew Research Center study revealed that 81% of adults agree that buying a home is the best long-term investment a person can make.

But are these statistics enough to answer the question: Is Real Estate (Still) a Worthy Investment…for Me?

As a result of the financial/mortgage crisis of 2008, today’s real estate market is significantly depressed as compared to its market value highs of the mid-2000’s. And quite a few current homeowners are underwater, i.e., their mortgage is greater than the current market value of their home. This combination has left a number of people skittish about real estate. So, if you are asking yourself the above question, the key to ascertaining if now is the right time for you to invest in real estate is know thyself, know thyself, know thyself!

Here are some key lessons from the crisis that will help you:

Know Thyself
Depressed real estate values coupled with low interest rates make this a buyers market. Not only do you as a buyer have more housing options from which to choose, you also probably have more negotiating room in terms of the purchase price. But “buyer beware.” It is important to have clarity as to whether the purchase you are making is a short-term real-estate “play” or for the long-term (e.g., you are buying a home you plan to live in for 15-20 years). Understanding your time horizon – which is not to be confused with attempting to time the real estate market – is paramount for real estate success and satisfaction.

Know Thyself
Understanding the “why” behind your purchase will help you manage your expectations with regards to appreciation. According to a Case-Shiller study the value of a home in the 100 years from 1900 to 2000 increased by 3.35% per year, just a little better than the rate of inflation. Another Case-Shiller study covering the period of 2000-2006 reports appreciation of 70%! It’ll probably be years upon years before we see appreciation values reach double-digits. So, temper your expectations of how much you’ll be able to sell your house for when it is time to sell.

Know Thyself
Your home is usually your biggest asset…or albatross. Take an honest look at your life-style; is it ideal for the responsibilities that come with homeownership? Or, would you be better off renting for the flexibility it provides – especially at it pertains to being able to easily and quickly relocate?

The truth: For someone, now is always a good to invest - whether in stocks or real estate. The critical question is whether the time is right for you.

Are mileage/rewards credit cards worth it?

noreply@blogger.com (Yodlee) — Mon, 19 Sep 2011 20:48:00 +0000

By Josh Smith

Walk through an airport or open your mailbox and the odds are good that you’ll be confronted by at least one offer for airline miles or other credit card rewards.

Rewards credit cards give you miles or other incentives to use them for your purchases, but typically carry an annual fee. For the first year the annual fee is waived, and typically you can get bonus miles when you sign up, allowing you to earn a flight fairly quickly.

The presence of an annual fee is one reason why you might question the overall value of a mileage rewards card, but if you know how to play the game and are willing to invest the time, you can make out like a bandit.

Are Rewards Credit Cards Worth it?

If you don’t intend to pay off your balance every month, then stop right now – you will lose out in the long run. Rewards cards typically have higher interest rates, which will quickly eat into your saving and are compounded by annual fees.

If you can pay off your card every month, ask yourself if you will be able to use the miles. Look at reviews for the cards that interest you online to see if promises of no blackout dates are true.

There are plenty of people with extra miles on their credit card that go unused because they underestimated their ability to travel.

REWARD CREDIT CARD STRATEGIES

Casual Users and Travelers

If you are a casual user, your best bet for using a rewards card without getting taken for a ride is to stick to a single card.

The Capital One Venture card is a top pick from Money Magazine, and has a lower $59 annual fee, or look into an airline specific card if you can commit to flying with one airline.

By keeping things simple, you can reap the sign on bonuses, and keep track of your renewal dates and fees easier. It also allows you to commit to one card for racking up the miles.

All in Users and Travel Hackers

If you are here to maximize the miles, you can sign up for as many credit cards as will accept you and become a travel hacker. If you are committed to keeping track of bonus points and using the rewards enough that it covers the annual fees you can pull off amazing travel for next to nothing.

For example, Steve Kamb spent $418 to fly 35,000 miles and live it up like James Bond! This is extreme, but just like extreme couponing is a hobby, so is travel hacking.

Extras to consider

Mileage rewards cards aren’t only for miles; there are a number of other benefits given to users, especially for airline specific mile cards. If you travel a few times a year, you may be able to cover the cost of the annual fee with some of the following benefits.

1 Free checked bag
Complimentary passes to Airline Clubs and Lounges
Companion tickets
Priority boarding

In the case of free checked bags and day passes, you might be able to cover your annual fee if you fly twice a year.

How to Handle a Suddenly Full Nest (Again)

noreply@blogger.com (Yodlee) — Thu, 15 Sep 2011 23:25:00 +0000

By Carla Fried

An increasingly popular coping mechanism for recent college graduates who are finding it excruciatingly difficult to launch their careers when jobs are so scarce-and college loans are so large- is to move back home. That’s what family is for. But at the same time, parents are wise to set ground rules on how the once again full-nest will run. Your child will always be a child, but they are also an adult now. Setting some financial ground rules isn’t punishment. It’s instilling a sense of adult responsibility. And let’s be honest, that’s going to make the time together run a lot more smoothly for you as well.

Some tips to help your family live happily ever after (again) under one roof:

Insist on Rent. Doesn’t matter if you need the help or not. This is about conveying to your child that you do not see them as a 10 year old, but as an adult 22-year-old. While they are looking for a full-time career job they can also find some part-time work to contribute to the family.
Save The Rent for Their First Deposit. If you’re still squirming at the idea of charging rent, how about tucking away that money into a separate savings account. Then when your child lands a job you can spring it on him or her that you saved every penny they paid you. That should be a huge help with the deposit when they are ready to move into their own rental.
Make Sure They are on Top of their Student Loans. There is a six-month grace period between graduation and when the first payment is due on student loans. That means November or December is when most grads must begin repaying their loans. Simply ignoring this fact will only make matters worse. Much worse. As in penalties and fees, and a huge ding on their credit report. And a credit report ding is the last thing they want to self-inflict. Many employers now request permission to check a job applicant’s credit report. Your child can’t afford to have any red flags show up. And make sure your child understands that even if they do not have a job they still must contact their lender and make a formal request for deferment. The federal loan program is set up to allow deferment for the unemployed, but only if borrowers apply for deferment. Otherwise you are considered to be in default. Private loan lenders have no obligation to offer deferment, but that doesn’t mean they won’t agree to a delay. Again, the important step is to be proactive and ask for the deferment before the loan is in default.
Insist on Health Insurance. If you have a health plan through work, you can re-enroll your child on your plan. A provision of the 2010 health care reform legislation allows adult children to piggyback on a parent’s insurance until the age of 26. (And again, don’t be shy about having your child pay at least part of the premium cost.) Or insist that your child obtain a short-term insurance plan on their own. Yes, the odds are thankfully low that a healthy young adult will need costly medical care. But low does not mean zero. Your family cannot afford that risk. Send your kid over to ehealthinsurance to shop for short-term insurance. If you need to suspend or scale back rent payments so your child can cover this expense that’s a solid parental assist.

Has Your Bank Made You Credit Union Curious?

noreply@blogger.com (Yodlee) — Tue, 06 Sep 2011 00:43:00 +0000

By Jacquette Timmons

Since the 2008 financial crisis, has the interest rate on your credit card increased; has the interest rate on your savings account and interest-bearing checking account decreased; are you now paying fees for transactions and services that were once available to you at no additional cost?

I suspect you can probably answer “yes” to one if not all of the above questions. This trend is an unexpected (?) consequence of the financial reform brought about in response to and as a result of the financial crisis. The fees banks used to be able to charge you but can no longer have sliced their profits significantly and the “loss” revenue has to be made up somewhere. But the approach many banks are taking (i.e., charging you to use your debit card) is altering the relationship dynamic with its retail customers, leaving some consumers pissed about the nick-picking and wondering: “What else can I do?”

Joining a credit union is a viable option.

Unlike a bank, which is a shareholder-owned, for-profit financial institution and open to anyone, credit unions are member-owned, not-for-profit financial institutions, and you must be eligible to join. Even though credit unions have been around since the 1800s (in Germany) and the early 1900s (in America), a lot of people are taking a closer look at credit unions today. Just as banks are looking for ways to increase their revenue, customers are looking for ways to get more for their money while simultaneously reducing their expenses.

And relative to traditional, national banks credit unions offer:

Lower fees and balance requirements
Higher interest rates on checking and savings (CDs, money markets) accounts
Better loan rates (credit card, mortgage, car loans)

So, should you join a credit union? Yes! (Go here to find a credit union near you.) And you don’t have to abandon the convenience (more ATMs, branches, broader products and services and longer customer-service hours) of your traditional bank to enjoy the benefits (noted above) of a credit union.

Look at financial institutions as part of your financial team; when viewed in this light, it’s not about “either-or.” Instead, it is about “both-and” and the ways in which the blend can help you achieve your financial goals and objectives. Personally, I have a savings account at a credit union and my personal and business checking accounts are with a major national bank. This combination gives me the best of both worlds!

How to Bring Down the Cost of Your Health Insurance

noreply@blogger.com (Yodlee) — Tue, 06 Sep 2011 00:35:00 +0000

By Carla Fried

Fall is the official season for benefits enrollment at work. And once again you could be facing the not-so-fun news that your health insurance premium will be heading higher next year. A national survey says average health plan costs will rise by more than 7 percent in 2012, and more than half of the surveyed firms say they expect to hit up workers to shoulder some of that increase.

If that’s making your blood pressure rise, perhaps it’s time to take a look at a High Deductible Health Plan. Many employers now offer these plans; it’s anticipated that by 2013 more than 75 percent of businesses will have it in their lineup. If you and your family are in good health, an HDHP can be a smart way to lower your health insurance premium costs. Moreover, once you’re enrolled in a high-deductible plan you’re eligible to contribute to a health savings account (HSA) with pre-tax dollars deducted from your salary.

Money you set aside in your HSA can be used to pay for most out-of-pocket health care costs, including your deductible, co-payments and any other standard medical costs. Using pre-tax dollars to pay your out of pocket costs is another smart money saving move.

In a healthy year when you don’t need to tap the account, you just leave the money in your HSA. In fact, you can leave the money growing for decades if you want. In retirement, any withdrawals for approved health care costs will be 100% tax free. And in a neat twist, your HSA can also moonlight as an ancillary IRA as well. You can withdraw money from your HSA in retirement and use it for anything-a vacation, a car repair, you name it-and there is no penalty, though just like a traditional IRA you will owe income tax on withdrawal amounts that are not used for health-care expenses.

Here’s how to think through whether a high-deductible plan might be a good move for you in 2012:

Can you handle the high deductible? In 2011, for a plan to be considered “high deductible” it must impose a minimum deductible of at least $1,200 for individuals and $2,400 for families. (The rules for 2012 will be out in October; ask HR if the limits have been raised.) These plans work best for healthy employees who have a good chance of not coming close to hitting their deductible. But you still want to make sure that in the event you did have high medical expenses you could handle the high deductible.

Can you handle the annual out-of-pocket maximum? In 2011 the most you would have to pay is $11,900 for a family and $5,950 for an individual. Those aren’t exactly small sums. So think through how you could handle the “worst case” scenario.

So with those two big hurdles, you might be wondering what’s the advantage. Well, for starters, your annual share of the premium will be a lot lower than with a traditional plan. You’re trading off that cost for assuming more cost if you in fact do need care. And a powerful kicker is the aforementioned HSA account offered by many plans. (Some employers opt instead for what is called a Health Reimbursement Account-HRA-in which your company sets aside money in an account for you to use to pay medical bills.) In 2011 you could set aside as much as $6,050 in an HSA account for a family plan, or $3,050 for individual coverage. (Again, just in with HR for the 2012 limits.)

As mentioned above, money you contribute to your HSA can be rolled over into subsequent years. There’s no use-it-or-lose-it provision as with your flexible spending account. (Note: HRAs work differently; it’s up to your employer to set the ground rules for what happens with unspent funds from year to year.) That’s a nice way to set aside some money for future health care expenses. Or best case scenario, you don’t need the money now, and can tap it – tax free – to cover medical costs in retirement.

How much do you store on your phone and how safe is it?

noreply@blogger.com (Yodlee) — Sun, 28 Aug 2011 18:21:00 +0000

By Josh Smith

These days, your smartphone has more in common with your wallet than it does the first flip phone you purchased.

As more of our lives become digital, our phones have become a constant companion with access to incredible amounts of personal and financial information. Unfortunately, this means that much of our private data is always on the go, and easy to lose.

What all do you store on your phone?

Bank Information
Personal Photos
Login and Passwords
Membership Information
And much more.

If you don’t take a few precautions, this personal information could easily fall into the hands of anyone who has access to your phone. You might say, “No one would want to steal my information, I don’t have enough money to take.” But I assure you, thieves don’t care, they’ll take your information and sell it to other thieves.

In addition to unscrupulous people who have access to your phone, Android users need to be sure that they don’t get infected with malware. Just like your computer can leak your information to a thief if it is infected, malicious apps can steal your information or cause you to be charged for calling and texting premium phone numbers.

How to Secure Your Phone

Aside from storing passwords on your phone, the rest of the information listed above is fairly safe to keep on your device if you take a few smart steps when setting up your phone and the apps with access to it.

Lock Your Phone – All modern smartphones allow you to lock the device with a password. This PIN number can be a set of numbers or an easy to remember connect the dots code.

However you plan to do it, you should secure your phone with a lock code. In an emergency, your spouse or child could still make an emergency call, so you don’t have to worry about shutting out help when it is needed.

Lock Your Apps – Any banking app worth using offers the ability to add another layer of protection by locking it with another PIN. Just like you shouldn’t reuse passwords, don’t use the same PIN you use elsewhere for this.

Your banking apps, PayPal and other apps that store private information likely has a built in locking tool. Check the settings or the app manufacturer’s web page to figure out how to set it up for your specific device.

Security Solution – If you are on Android, you may want to get a security solution to protect your smartphone from malware. You can find several offerings on the Android Market, including Lookout Mobile, Norton and McAfee apps.

These apps can help keep bad apps off your phone and some can even remotely wipe your smartphone if you lose it so that no one can get access to your information. Check out Lookout and Norton first, as they offer better free services.

Common Sense – When you are downloading apps to your phone, use common sense. If an app has a long list of permissions that seem out of place, Google the app first to find out if it is legit. You should also be sure to stick to well known app stores like the Android Market and Amazon’s App Store.

Your smartphone carries a lot of personal and financial information, but with some common sense and a few passwords, you can keep your information safe.

Don’t Let Your Good Name Get Filched!

noreply@blogger.com (Yodlee) — Tue, 23 Aug 2011 17:18:00 +0000

By Jacquette Timmons

Approximately 9 million Americans have their identity stolen each year according to the Federal Trade Commission. The crime of stealing someone’s identity isn’t new. But given the technological advances of the 21st century, it seems much more prevalent and much more probable. As a result, you and I need to be vigilant in protecting the aspects of our identity that can be filched for ill-gain.

Here’s a list of the common methods used by thieves to gain access to your personally identifiable information, along with corresponding ways to safeguard your name, social security number, credit card and other financial information:

Dumpster Diving – This is the term used to describe the thieves who go through trash looking for anything containing your personal information.

Safeguarding Tactic #1– Shred all mail containing your name, social security number, banking and credit card numbers, or other account related details that can be linked to you (such as utility bill account numbers). Be sure to also shred the order forms from the catalogs you receive, where your name and address are typically pre-printed. You should also be sure to ask others (like your doctor) with whom you share information what they do to protect your data.

Point-of-Transaction Skimming – This occurs when you use your credit or debit card and the insertion or swipe point has a device to skim your number and pin code.

Safeguarding Tactic #2 – Always select the “credit” option when using your debit card for purchases. Instead of entering your pin-code, opt for providing a wet or electronic signature. Also, avoid using the stand-alone, non-bank affiliated ATM machines. It’s not that professional criminals can’t clone your card at a legitimate ATM, but it’s less likely to occur.

Phishing – As the name implies, “phishing” is a way of digging for information under false pretenses. Thieves will contact you pretending to be associated with a firm you trust to gain your trust…and access to your information.

Safeguarding Tactic #3 - Only open email messages – such as statement and payment alerts - that you are expecting from the financial institution/s with which you do business. Never provide your social security number or account number in response to an email inquiry or phone conversation you didn’t initiate.

As a matter of best-practice, even when dealing with a trusted source, you should never share these numbers electronically unless you have the ability to encrypt the email and/or the attachment containing said.

Stolen credentials – Thieves can also pilfer your information if they steal your purse or wallet, or “re-direct” your credit/banking statements or utility bills.

Safeguarding Tactic #4 – Pay attention to your mail delivery and don’t easily disregard a missing statement. You might want to consider signing up to receive electronic statements. Elect to do this only if you are diligent with reviewing them for accuracy! It is beneficial to make a copy of the contents of your wallet to include your driver’s or non-driver’s license and credit cards you have (front and back). In the unlikely event your purse or wallet get stolen (or you lose it), you will be able to efficiently file a police report and contact the requisite financial institutions.

While you are proactively protecting your identity, make certain the elders in your life are protecting their identities. And sad as it may seem, do all you can to protect the identity of recently deceased loved ones. Unfortunately, this is a growing target for identity thieves.

In addition to the safeguarding tactics outlined above, I’d recommend subscribing to a credit monitoring and alerting service. Your bank may offer this service, or you can utilize a third-party provider, such as EZShield, Intersections, or Privacy Guard, to name a few. (Personally, and I don't get compensated for making this suggestion, I use Privacy Guard.)

Of the tactics listed, which do you do already? Which will begin to do post haste?

HOW TO TACKLE THE FINANCIAL AID PROCESS

noreply@blogger.com (Yodlee) — Sat, 13 Aug 2011 17:55:00 +0000

By Carla Fried

If you have a high school senior in the house, now’s the time for both student and parent to get serious about applying to college. Your kid is in charge of the school application, but parents need to take the lead in making sure your family is on top of the financial aid application process.

Here are four tips for helping your family navigate the financial aid process:

1. Treat the FAFSA application as the Holy Grail.

The Free Application for Federal Student Aid (FAFSA) is the ticket to all potential grants and loans. If you don’t complete this form, you are basically rendering your family ineligible for most financial aid. While the form says “federal”, it is also typically used to determine any state or private aid your family may qualify for. One of the biggest mistakes families make is to assume they shouldn’t bother with the FAFSA because they won’t qualify for any aid. In fact, all families regardless of financial need are eligible for an unsubsidized Federal Stafford loan. These loans start at $5,500 (this year) for freshman and rise to $7,500 for juniors and seniors. The interest rate is a fixed 6.8 percent. Yet if you don’t complete the FAFSA, your child can’t snag an unsubsidized Stafford.

There’s no sugarcoating the fact that the FAFSA is a bit of a pain to complete. It requires a fair amount of detail—including info from your federal tax return. Just remind yourself that the hours it may take to get it completed is the only way to give you and your child the ability to qualify for financial aid that can save you thousands, if not tens of thousands of dollars.

Important tip: The official deadline for completing the FAFSA application is June 30th of the year your child will be in school. (You apply for financial aid every year of school, not once.) Ignore that deadline and aim to get the application filed as soon after January 1st as possible. A lot of aid is parceled out on a first come, first serve basis. Wait until close to the deadline to get your application complete, and much if not all of the money may already be doled out. Learn more about FAFSA.

2. Don’t assume you won’t qualify.

If you already have one child in school and didn’t qualify for aid, don’t make the costly mistake that you won’t qualify this year. If there has been any change to your financial situation, that’s going to obviously change how the financial aid folks size up your situation. Moreover, if you will be juggling two children in school this year, that’s going to increase your odds that your older child may now qualify for aid (or more aid). Schools are indeed sensitive to the burden of having more than one child in school.

3. Focus on scholarships no later than the fall of senior year.

Now’s the time for your child to get serious about applying for scholarships. If you wait until the spring you’re shutting yourself out of plenty of potential scholarships with earlier deadlines. You and your kid can learn more about how to maximize their scholarship potential, and search potential scholarships at fastweb.com.

4. Keep money out of your kid’s name.

Your family’s eligibility is a function of the parents’ finances as well as any money in the student’s name as well. It’s crucial to understand that your assets and your child’s assets are treated differently. Retirement assets for a parent are not part of the calculation at all, and all other parental assets are factored in at a low 5.64 percent rate. But any money that is held in your child’s name—an UGMA or UTMA account for example-will be factored in at a rate of 20 percent. If you want to maximize your family’s eligibility for aid it’s best to spend down any assets in a child’s name before senior year of high school.

Debt ceiling crisis: what does it really mean for consumers?

noreply@blogger.com (Yodlee) — Fri, 12 Aug 2011 16:33:00 +0000

By Josh Smith

If you’ve been paying attention to the news recently, or looked at your retirement account you’ve probably noticed that the government has been fighting to get the debt ceiling raised in order to keep borrowing. You’ve also probably witnessed a major dive in the stock market as the U.S. lost its AAA credit rating.

These two connected events can be difficult to put into perspective with our daily lives, but they can actually play a big role in several major areas. The good news is that you don’t need to panic, and it might even be a good time to buy stocks, if you can afford them.

What the Debt Ceiling Crisis Means for Consumers

Home loans – Initially, we assumed that mortgage rates were going to jump on the news of the lower U.S. credit rating, but the Fed has gone on record saying it wants to keep interest rates low through 2013. This means that if you’ve been exploring a home purchase or a refinance, it’s still a good time to do so.

Banks are still wary, so you may need to shop around, even with stellar credit. If you are thinking of a refinance or taking out a home loan, we suggest you lock in your rate as soon as you know you want it, as rates are more likely to rise than fall.

Bailouts – Because the government has a reduced credit rating, and still has a limited debt ceiling, don’t expect another round of bailout money for the average consumer. Now is as good a time as any to make sure you have some type of emergency savings at hand in case you hit a rough patch.

Employment – The bad news is that unemployed may have a tougher time finding a job thanks to cuts in spending at various stages of the government. We are already seeing states cut back on unemployment benefits, but the threats aren’t just confined to the already unemployed.

The slow economy isn’t going to grow any faster according to Mohamed El-Erian, chief executive of Pimco, which could translate into higher unemployment in the next 6 months, and unemployment times will last longer.

Social Security and Retirement – Social Security is going to get even tighter, so make sure you take advantage of any employer matching available for your retirement account. This would be a good time to sit down with a financial planner to make sure you are investing enough. Your employer may offer free counseling throughout the year, check with HR.

Medicare – If you count on Medicare or Medicaid, be wary of future cuts. If you can afford it, now would be a good time to investigate health insurance options

What should you do based on the current economic environment? Based on what we know, here are 5 action steps to take.

Refinance or Lock In Low Rates
Evaluate Your Retirement Options With a Professional, Even if Already Retired
Beef Up Your Emergency Fund
Look for Affordable Health Insurance That Meets Your Needs
Remain Calm and Rational. Be Wary of Scams That Play on Fear of Uncertainty to Take Your Money.

With a cool head, and some help, you should weather the credit downgrade and debt ceiling fallout.

Ready to Invest…But Not Really?

noreply@blogger.com (Yodlee) — Fri, 12 Aug 2011 16:19:00 +0000

By Jacquette Timmons

There is no question that investing in the stock market is one of the best ways to create wealth. But when the stock market goes down 600 points one day; rebounds 400 points the next day; and then retreats again by more than 500 points the very next day, it is no wonder beginner investors are squeamish as they try to figure out what do, when, and how. Heck, even the pros have a hard time stomaching the drastic swings – aka volatility – even though the market’s ups and downs are part of its nature.

However, there is a way to "practice" investing before you actually invest. It is called "virtual" investing, and there are many benefits to having a virtual stock portfolio. For starters, you get to see if how you think you’ll react is how you actually react when you gain or lose money. This is a wonderful way to help manage your expectations. Second, it can satisfy your curiosity about the stocks you have your eye on - on both an individual basis as well as in combination with your other portfolio holdings. Finally, managing a “practice” portfolio is a great way to get objective confirmation as to whether or not you behave like an investor…or a trader.

Here are two ways to use a practice portfolio to prepare for actual investing:

• Open a virtual account with companies like WeSeed or the Wall Street Journal’s Virtual Stock Exchange – both are free to join, use fake cash, and operate in a virtual trading environment with real-time stock exchange conditions.

- or -

• Create a virtual portfolio using Yahoo.com and an excel spreadsheet to track losses and gains. Ironically, "practice" investing is not only good for beginners; it is an excellent way for more experienced do-it-yourselfers to "test" the waters before committing to particular stock or portfolio of stocks. But there's one word of caution: Don’t do anything in your virtual portfolio that you wouldn't do if you were using real cash. If you do, you mitigate the benefits that come from getting ready for the real thing.

Oh, and as an added bonus, if you and your spouse/partner create separate "virtual" portfolios you can see who is really more skillful…how's that for some healthy competition?

HOW TO TACKLE THE FINANCIAL AID PROCESS

noreply@blogger.com (Yodlee) — Fri, 05 Aug 2011 20:38:00 +0000

By Carla Fried

If you have a high school senior in the house, now is the time for both student and parent to get serious about applying to college. Your kid is in charge of the school application, but parents need to take the lead in making sure your family is on top of the financial aid application process.

Here are four tips for helping your family navigate the financial aid process:

1.) Treat the FAFSA application as the Holy Grail.

The Free Application for Federal Student Aid (FAFSA) is the ticket to all potential grants and loans. If you don’t complete this form, you are basically rendering your family ineligible for most financial aid. While the form says “federal”, it is also typically used to determine any state or private aid your family may qualify for. One of the biggest mistakes families make is to assume they shouldn’t bother with the FAFSA because they won’t qualify for any aid. In fact, all families regardless of financial need are eligible for an unsubsidized Federal Stafford loan. These loans start at $5,500 (this year) for freshman and rise to $7,500 for juniors and seniors. The interest rate is a fixed 6.8 percent. Yet if you don’t complete the FAFSA, your child can’t snag an unsubsidized Stafford.

There’s no sugarcoating the fact that the FAFSA is a bit of a pain to complete. It requires a fair amount of detail—including info from your federal tax return. Just remind yourself that the hours it may take to get it completed is the only way to give you and your child the ability to qualify for financial aid that can save you thousands, if not tens of thousands of dollars.

Important tip: The official deadline for completing the FAFSA application is June 30th of the year your child will be in school. (You apply for financial aid every year of school, not once.) Ignore that deadline and aim to get the application filed as soon after January 1st as possible. A lot of aid is parceled out on a first come, first serve basis. Wait until close to the deadline to get your application complete, and much if not all of the money may already be doled out. Learn more about FAFSA.

2.) Don’t assume you won’t qualify.

If you already have one child in school and didn’t qualify for aid, don’t make the costly mistake that you won’t qualify this year. If there has been any change to your financial situation, that’s going to obviously change how the financial aid folks size up your situation. Moreover, if you will be juggling two children in school this year, that’s going to increase your odds that your older child may now qualify for aid (or more aid). Schools are indeed sensitive to the burden of having more than one child in school.

3. Focus on scholarships no later than the fall of senior year.

Now’s the time for your child to get serious about applying for scholarships. If you wait until the spring you’re shutting yourself out of plenty of potential scholarships with earlier deadlines. You and your kid can learn more about how to maximize their scholarship potential, and search potential scholarships at fastweb.com.

4. Keep money out of your kid’s name.

Your family’s eligibility is a function of the parents’ finances as well as any money in the student’s name as well. It’s crucial to understand that your assets and your child’s assets are treated differently. Retirement assets for a parent are not part of the calculation at all, and all other parental assets are factored in at a low 5.64 percent rate. But any money that is held in your child’s name—an UGMA or UTMA account for example-will be factored in at a rate of 20 percent. If you want to maximize your family’s eligibility for aid it’s best to spend down any assets in a child’s name before senior year of high school.

How to Save Hundreds By Asking

noreply@blogger.com (Yodlee) — Mon, 25 Jul 2011 20:39:00 +0000

By Josh Smith

Don't you wish you could get discounts every time you shop? I can't help you save at Walmart, but I can tell you how to save big on almost any major purchase. Saving is actually really simple. You just have to ask for a better price. This is hard to do the fist few times, because we are so used to having other people tell is how much we should charge and how much we should pay, but after a few times it will be as natural as reaching for your debit card. I used this method to save $100 on a recent furniture purchase, just by asking for a cheaper price -- and that was on top of the already reduced clearance price.

How to Get a Better Deal by Asking:

Be Nice - When you go into the store, make friends with the sales person. This is as simple as repeating their name back to them when you say hello and ask how they are doing. Little things like this can go a long way, especially at the end of a busy day.

Bundle - If you need more that one thing find everything you want before you ask for a discount. This will help show you are willing to spend, you just want a better deal and allows the store to cut a price on a high margin item and still make a profit.

Be a Regular - For electronics, furniture and other items you will buy repeatedly, look for one local store to frequent. This may not be possible all the time due to low online prices, but it can help build a bond for bigger purchases.

Ask about Warranties - Stores make big bucks on extended warranties. If the sales staff thinks you are going to buy a high profit item like a warranty you may get a better deal. While purchasing furniture my discount was the same price as the warranty. Coincidence? I think not.

Ask Nicely - After you follow all the steps above, don't forget to ask nicely. A simple, "I know these items are already discounted, but can you bundle them or cut me a deal for buying more than one?" does wonders.

As you get more comfortable you can ask for discounts in a more straightforward manner. Remember, it never hurts to ask for a discount. It will feel weird the first time, but it is worth it in the long run. You will have the best luck at small businesses, but if you ask the right person at a chain store you can occasionally score a better deal if you bundle and play up your interest in the warranty.