Your Money Matters

Your Money Matters
A Consumer Financial Column

Resolve to improve your finances
December 27, 2010

By Jason Alderman

If you dread making New Year’s resolutions because you’re afraid you’ll fall short, take heart: One minor setback doesn’t mean having to write off the rest of the year. You’ll probably have more success if you start out with small steps and gain momentum as you go, whether it’s losing weight, lowering debt or boosting retirement savings.

If your goal is to improve your personal finances, here are a few ideas to get you started:

Most dieters know that the key to success using Weight Watchers is to monitor every morsel you eat. You become more aware of and thus, more likely to change, behavioral patterns that caused you to overeat in the first place. You can use the same strategy when designing a livable budget.

For a month or two, write down every cent you spend: rent, food, gas, clothes, cable, insurance (health, auto, home), 401(k) contributions, entertainment – everything. The list will probably be eye-opening. Along with the usual suggestions like brown-bagging lunch more often and fewer to-go coffees, try these relatively painless ways to trim expenses:

Pay bills on time and send at least the minimum amount due. You’ll avoid late fees and related interest rate increases, and it will improve your credit score.
Balance your checking account regularly and use in-network ATMs to avoid fees.
If your employer offers flexible spending accounts, use them to pay health and dependent care expenses with pretax dollars. If you’re in the 25 percent tax bracket that means expenses you’d have paid for anyway will cost 25 percent less.
Reduce energy bills by turning down the thermostat, weatherproofing your home, turning off “energy vampire” appliances when not in use and buying energy-efficient appliances.
Raise insurance deductibles and shop around for better rates.

With the money you save, start paying down debts more quickly. One strategy that often works is to list all outstanding balances and their corresponding interest rates. Then each month pay the minimum amount due on each account – except pay as much as possible on the highest-rate account or loan. Once it’s paid off, move to the next-highest-rate account, and so on.

At the same time, start building an emergency fund. Although the ideal of having six to nine months’ worth of expenses saved may sound insurmountable, don’t be discouraged. Start slowly with a few dollars each month. It won’t be missed and might just save you from needing an expensive short-term loan to cover emergency car repairs or another unexpected bill.

And finally, look to the future. Buying a home, paying for college and retirement are all big-ticket items that require sound budgeting and credit management skills. Here are several helpful resources:

Find free budgeting tools, including interactive budget calculators, at the government’s www.mymoney.gov, the National Foundation for Credit Counseling (www.nfcc.org), Mint.com (www.mint.com) and Visa Inc.’s Practical Money Skills for Life (www.practicalmoneyskills.com/budgeting).
Wealth Watchers applies techniques gleaned from Weight Watchers to personal financial management (www.ewealthwatchers.com).
MyFICO.com (www.myfico.com/CreditEducation) explains the ins and outs of credit reports and credit scores.
What’s My Score (also run by Visa) offers tips on ways to improve your credit score and a free credit score estimator (www.WhatsMyScore.org).

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Healthcare Reforms Kick Into Gear
December 20, 2010

By Jason Alderman

The Patient Protection and Affordable Care Act President Obama signed on March 23, 2010, set in motion a wide range of healthcare reforms. Although many of its more sweeping changes won’t be fully activated until 2014, several key elements already went live, effective September 23, 2010.

If you have employer-provided health insurance that runs on a calendar year, this means those new features will finally kick in on January 1, 2011. If you have individual coverage, you may have already seen the changes; but if your plan’s fiscal year starts later, you may have to wait awhile longer.

Here are a few noteworthy changes:

Extended child coverage. If your medical plan offers dependent coverage, your children may now remain on – or return to – your plan until their 26th birthdays, regardless of where they live, or their dependent, income or marriage status. You will be responsible for paying the additional premium at the plan’s already established family or per-child rate.

One notable exception: If your plan is “grandfathered” (i.e., already existed on March 23, 2010), the carrier has the right, until 2014, to deny such coverage if your child has other employer-sponsored coverage. However, plans lose their grandfathered status if they significantly cut benefits or increase out-of-pocket expenses.

Pre-existing conditions for children. Medical plans can no longer deny coverage to children under age 19 because of preexisting health conditions, unless you have an individually purchased, grandfathered plan. The same provision will go into effect for adults in 2014.

Some insurers have threatened to stop offering individual child policies altogether as a way to avoid having to cover seriously ill children, so double check with your carrier.

Rescinding coverage prohibited. Plans can no longer cancel coverage if you become sick or you made minor or inadvertent mistakes on your application that only later came to light. However, deliberate fraud, such as falsely claiming a dependent, can still result in cancellation.

No more lifetime limits. Non-grandfathered plans can no longer cut off benefits when you reach a lifetime maximum. In addition, annual coverage limits for non-grandfathered plans have begun phasing out and will be completely banned starting January 1, 2014. Important note: Several companies that offer limited-benefit coverage to low-wage workers who otherwise couldn’t afford coverage recently won a one-year exemption from the annual coverage limit. Ask your employer department if you’re unsure about your plan.

New coverage for the uninsured. If you’ve been refused insurance because of preexisting medical conditions, you now may be eligible to buy coverage through a new “high-risk pool” program. Although it’s a federal program, many states have chosen to run their own plans, with widely varying costs and benefits. A few details:

You must be a U.S. citizen or legal resident.
You must have been without health insurance for at least six months before you can apply.
You must have a qualifying preexisting condition and show proof that an insurance company has denied or excluded coverage because of it.
Go to https://www.pcip.gov/ for information and to apply online; or call the state department of insurance. AARP also has a thorough discussion about how the program works.

These are only a few of the many healthcare changes unfolding over the next few years. To learn more, visit the Government’s HealthCare.gov website.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Make Sure You Are Cyber Secure
December 13, 2010

By Jason Alderman

When Ben Franklin famously wrote, “An ounce of prevention is worth a pound of cure,” I’m pretty sure he wasn’t warning his readers about the perils of cyber crime. But in today’s world of phishing, shoulder-surfing and computer spyware, his advice hits home.

It’s a sad reality that some people will rip you off if you give them an opportunity. Just as you take safety precautions when handling cash, so should you be vigilant when using credit or debit payment cards for purchases, whether the transaction is in person on online.

Here are tips for protecting your account information and avoiding payment card scams:

Prevent online intrusions. Use updated anti-virus and anti-spyware software, only download information from trusted sites and don't click pop-up windows or suspicious links in emails. These can all be tricks to install spyware, which can record your keystrokes to obtain account or other confidential information.

Use secure websites. When purchasing items online, look for safety symbols such as the padlock icon in the browser's status bar, an "s" after "http" in the URL, or the words "Secure Sockets Layer” (SSL). These are signs that the merchant is using a secure page for transmitting personal information.

Protect personal information. Never provide sensitive information, such as credit card or bank account numbers, passwords, Social Security number, driver’s license, or address/phone by mail, phone or email unless you initiated the communication. Report requests for personal information to your card issuer by calling the number on the back of your card.

Be wary of "free trial" offers. Take time to read and understand all terms and conditions. Pay particular attention to any pre-checked boxes in online offers before submitting an order. Failing to un-check the boxes may bind you to terms and conditions you don’t want.

Track account activity. Regularly review credit card and bank statements and report any suspicious or unauthorized charges to the financial institution or card issuer. Ask whether your credit or debit card offers "zero liability," which means you won’t be responsible for unauthorized or fraudulent purchases.

Transaction alerts. Sign up for email or text message transaction alerts from your bank to keep track of purchases. These alerts are triggered when the transaction meets certain criteria you select; for example, purchases over a certain dollar amount. In addition, banks generally will contact you if they spot unusual activity, such as multiple large purchases made within a short time frame or from different geographic areas.

A few other quick tips:

Create strong, random passwords and change them regularly.
Shield keypads from the eyes of “shoulder surfers” at stores and ATMs.
Review receipts for accuracy before signing and retain them for your records.

There are many great resources where you can learn how to protect your personal and account information and prevent fraud, including:

The National Cyber Security Alliance’s www.StaySafeOnline.org is filled with tips for safe Internet use.
The Federal Trade Commission’s ID, Theft, Privacy and Security page offers extensive information about identity theft, privacy and information security at www.ftc.gov/bcp/menus/consumer/data.shtm.
Visa Inc. offers VisaSecuritySense (www.visasecuritysense.com), which contains tips on preventing fraud online, in stores and at ATMs, spotting deceptive marketing practices, and more.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

Are your kids ready for a cell phone?
December 6, 2010

By Jason Alderman

If your preteen child hasn’t hit you up yet for a cell phone, you’re among a rare breed indeed. Studies have found that roughly 70 percent of 11- to 14-year-olds now use cell phones. Closer to home, our 10-year-old has been hounding my wife and me for months to get his own phone.

My initial reaction was, “no way.” But upon investigation, I see why many parents eventually give in. Here are a few pros and cons for giving your preteen a phone, and some safeguards you can take:

Safety. Anyone who’s ever had a flat tire or gotten lost can attest to cell phones’ safety advantages. On the flip side, unless you install parental controls, your child could access inappropriate content or be more vulnerable to bullying and predatory behavior.

Expense. Cell phone use, including calls, text messaging, web browsing and application downloads, can be wildly expensive. You have two payment options:

Prepaid plan – buy minutes “pay-as-you-go.” Plans vary widely in terms of fees and per-minute calling and text rates. Advantages: No locked-in service contract; know exactly how many minutes they’re using. Disadvantages: Parental controls usually don’t apply; phones more expensive than under a service contract plan.
Family plan – sometimes it’s cheaper to add a phone to your existing plan. Some plans allow unlimited calls/texts between friends and family or those using the same carrier. Advantages: Generally cheaper if your kids make lots of calls/texts; most allow parental controls. Disadvantages: Parental controls may cost extra; some plans don’t allow usage caps, so undisciplined kids may rack up large bills; tied to service contract.

Parental controls. One of the best ways to protect your kids is to subscribe to your carrier’s parental controls plan. Plan features vary widely, but look for these when comparison shopping:

Cost (free to $4.99 a month).
Ability to cap phone minutes and text messages.
Allow emergency calls, even if over monthly usage allowance.
Cap and/or block entertainment downloads (costly/inappropriate ringtones, music, video, etc.)
Block mature content websites from Internet-enabled phones.
Restrict time-of-day usage (e.g., block during school hours or after bedtime).
Block calls/texts from specific or unknown numbers (helps prevent stalking, bullying and inappropriate contact).
Track your child’s physical location (requires GPS-enabled phone and typically costs $5 to $10 a month)

Parental control programs generally are not available with prepaid plans. And, since no filtering tool is completely foolproof, it’s important to regularly discuss safety issues with your kids. Make sure they’re comfortable coming to you with any questions or details of inappropriate contact they’ve received.

Not every child is ready for cell phone responsibilities. Set ground rules and be prepared to withhold privileges if they cross boundaries, such as not abiding school regulations, exceeding curfews or usage limits, using to bully others, repeatedly losing or damaging the phone, etc. And make sure they kick in part of their allowance to help pay.

With my son, it’s not a question of “if” but instead of “when.” And when the time is right, he’ll bear the costs of the handset and adding a line to our family plan. This of course will allow him to hound me remotely for the latest must-have item.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

To Smartphone, or Not to Smartphone?
November 29, 2010

By Jason Alderman

My wife decided to upgrade her dinosaur cell phone to a “smartphone” and enlisted my help. Initially, we ran into the brick wall of decisions smartphone shoppers frequently face: How to choose among hundreds of available phones, pick the right service provider and predict which calling and data plan and other options would best fit her needs without breaking the bank?

Here are a few things we learned:

What’s a smartphone? These all-in-one devices generally let you: send and receive phone calls and text, email and instant messages; surf the Internet; shoot photos and video; manage and synch-up your calendar; run applications such as weather and traffic conditions, games, social networking and maps; play music and video, and much more.

Reception. Reception in your home, commute and work is a critical component when choosing a service provider. Unfortunately, signal strength, data download speed and other factors can vary significantly from block to block.

Ask friends and neighbors how pleased they are with their service. Also, remember carriers offer a grace period (generally 30 days) before an early plan termination fee kicks in, so try out all features extensively wherever you plan to use the phone.

No apples to apples. Many variables complicate the selection process, including:

Some models are only available with particular service providers.
Most smartphones use some variation of the standard “QWERTY” keyboard, as a touch screen and/or raised keys located below the display or on a slide-out keyboard. Key size, spacing and sensitivity vary widely, so try several types for comfort and ease of operation, especially if you have large hands.
Screen size, handset shape, weight and battery life vary considerably, so visit carrier showrooms or an electronics store to compare phones, even if you end up purchasing online. Ask to make a few test calls and evaluate sound quality at both ends.
If you want to receive work emails and open documents, make sure the OS is compatible with your employer’s system and that you’ll be allowed to access your work network.

Cost considerations. Although the smartphone itself is pricey, to determine the true cost of ownership factor in how much you’ll pay for a standard two-year carrier contract. Depending on whether you opt for limited or unlimited plans for voice minutes, text messaging and Internet data transfer, you could rack up $80 to $150-plus in monthly operating costs.

Other expenses to consider: accessories (vehicle charger, Bluetooth earpiece, home charging dock and external memory card); various monthly plan taxes and fees; software applications such as ring tones, games, on-demand TV or radio, GPS navigation; additional fees for international calls; and replacement insurance.

These additional more online resources may help you decide:

CNET (www.cnet.com) has a helpful Cell Phone Buying Guide, a Cell Phone Coverage Map tool for comparing cell reception in certain cities, product reviews and other tools.
BillShrink has a cell phone service Price Comparison Tool (www.billshrink.com).
TeleBright has an online tool that compares cellular plans and phones available in the top 70 U.S. markets (https://wireless.telebright.com).

As for my wife, a friend let her borrow an LG Ally and now she’s hooked. The Ally is sleek, powerful and runs Google’s Android. Now I’ve got phone envy.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

Tis the Season to Be Cautious

It’s the holidays, which means the “Grinches” in the world are looking for ways to steal the joy out of your season. Before grabbing your checkbook, credit and/or debit cards for a shopping trip or before you log on to your favorite online store, take the steps to prevent financial fraud. Here are some tips to consider:

Don’t keep a stash of holiday cash – keep your money in a bank account until you need it.
Never leave your holiday purchases in plain sight in your car or in a window in your home.
Never give out your checking account number, debit or card number over the phone unless you called them.
When making a purchase, keep an eye on your credit card during the entire transaction. Don’t let the cashier take it someplace where you can’t monitor the transaction. When the card is returned, place it immediately back in your wallet.
Never leave your wallet unattended.
Only carry with you the credit cards you plan to use on your shopping trip.
Sign the back of credit and debit cards.
Save your receipts.
Shop online with companies you know. Find out their return policies. Use a secure browser.
Keep a record of your account numbers and their expiration dates. Keep the contact information of each card in a safe place. Review your statement each month and report any unauthorized transactions to the credit card company immediately.
If your credit or debit card is lost or stolen, report it immediately to the card or bank company.
When writing checks, use dark ink that cannot be erased and do not leave blank spaces in the payee or amount lines.
Notify your bank if you don’t receive your reorder of checks in the mail in a reasonable amount of time.
Shred or tear up cancelled checks, deposit slips and bank statements before discarding them.

Financial fraud costs consumers and financial institutions billions of dollars each year. Please take these precautions and don’t let yourself be robbed of your holiday enjoyment.

Avoid holiday spending hangover
November 22, 2010

By Jason Alderman

At this time of year, many people overindulge, whether it’s overeating or drinking too much at holiday parties or spending too much on gifts and decorations. You’ll regret the former the next morning; but with overspending you may not feel the hangover effect until the bills come due in January.

Here are a few tips for managing holiday expenses to avoid a holiday spending hangover:

Budgeting. Before spending a dime on holiday expenses, calculate how much you can afford relative to your overall budget. Many financial planners recommend spending no more than 1.5 percent of annual income on holiday expenses. Consider:

Will your savings cover a few months’ expenses in case of a layoff, unexpected medical bills or another financial emergency?
Can you pay off all holiday-related bills within a couple of months?
Do you already struggle to pay your monthly bills?
Would you need to suspend retirement savings to buy gifts?

Scale back. Examine how much you’ve spent in past years and look for areas to trim. Consider: gifts for family, friends and coworkers; decorations; new clothes/accessories; gift wrap and cards; special meals; year-end gratuities; and travel-related expenses. A few tips:

Review old credit card and bank statements to jog your memory.

Arrange gift lotteries with family, friends and coworkers so you each buy fewer, nicer gifts.
Suggest pooling resources to make a sizeable group charitable contribution rather than individual gifts to each other.

Get organized. Once you’ve determined your overall holiday budget, make a list or spreadsheet with columns for:

Everyone you need to shop for – relatives, friends, coworkers, service providers, etc.
Spending limits and gift alternatives for each person.
How much you actually spend on each gift. (Overspending on one present means trimming somewhere else.)
What you gave each person – to avoid giving them the same thing next year.
What each person gave you. That way, you won’t accidentally “re-gift” something to the same person.
Other expenses (decorations, etc.)

Gift cards: If you give gift cards, several changes were made to laws governing these cards. For gift cards sold on or after August 22, 2010, the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 requires that:

Money loaded on gift cards must not expire for at least five years from date of purchase or after funds were last added.
If the card expires but the funds haven’t, you can request a free replacement card.
Inactivity and service fees may not be charged until after 12 months of inactivity; after that, only one such fee may be deducted from the balance each month.
All fees must be clearly disclosed on the card or its packaging.

A few additional tips:

Note return policies for stores and online shopping sites. Watch for deadlines, exclusions for sale or clearance items and restocking charges.
Retain receipts. Many retailers will refund the price difference if an item goes on sale within a few weeks after purchase.
Check whether your credit card agreement provides free product warranty extensions and/or price protection (i.e., will reimburse the difference if you find an identical item for less).

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

Choose your charities carefully
November 15, 2010

By Jason Alderman

Today's tough economy has been doubly hard on non-profit organizations that rely on charitable contributions. Many people feeling the pinch have had to cut back on their donations; and because so many are out of work, charities that assist low-income families are being swamped just when their funding has been reduced.

If you're able to make charitable donations, whether cash, material goods or volunteering your time, make sure the organizations deserve your support.

Here are a few ideas that might help:

Make sure the non-profit organization is well-run. Ideally it applies at least 75 percent of contributions to programs that serve beneficiaries, as opposed to salaries, advertising, fund-raising and other administrative expenses.

Study the organization's website, annual report and mission statement, and ask for a copy of its IRS Form 990, which details how contributions are spent. Speak to staff members or volunteers, or volunteer there yourself. Or, if you know someone who has used its services, ask for their impressions of the organization's efficiency and client service.

Several online research tools can help:

GuideStar (www.guidestar.org), provides financial summaries and other data on over 1.8 million IRS-qualified, tax-exempt organizations. Its basic search engine is free; or you can order more customized research for a fee. The site also features helpful questions to ask and tips for choosing a charity.
Charity Navigator (www.charitynavigator.org) rates more than 5,500 large charities by financial strength, revenue spent on programs and services and other criteria. Their "Top 10" lists and "Tips and Resources" sections provide helpful evaluation tools.
The American Institute of Philanthropy (www.charitywatch.org) is a nonprofit charity watchdog and information service whose Charity Rating Guide (available for $3) rates more than 500 major American charities on how they spend donor money.
The Better Business Bureau (www.give.org) rates whether organizations have met its standards of accountability, including ethical conduct and honest solicitation practices.

Take advantage of tax deductions. If you itemize deductions on your federal taxes, you can deduct money and property contributions to qualified tax-exempt organizations, within IRS guidelines. And, although your time spent volunteering isn't tax-deductible, associated mileage and other expenses may be. The IRS' Tax Information for Contributors website (www.irs.gov/charities/contributors) features a search engine for eligible organizations, information on reporting and substantiating charitable deductions and other helpful tips.

Guard against fraud. Unfortunately, some unscrupulous people and organizations will take advantage of your desire to help others – if you let them. A few tips:

Be suspicious of telemarketing and email solicitations. When in doubt, hang up or delete the email and contact the organization yourself.
Be aware that scammers often choose names that are similar to those of legitimate organizations.
Never give out personal or credit card information unless you initiate the contact.

A few additional tips:

Ask if your employer will match a portion of your contributions, and if it allows automatic payroll deductions to charities of your choice.
As long as you charge a donation to your credit or debit card by December 31, 2010, it will be eligible for a 2010 tax deduction, even if the charge doesn't clear until next year.
Also, a check that you mail to a charity is considered delivered on the date you mail it.

This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.

Cut Your Taxes
November 8, 2010

By Jason Alderman

For many, mid-November through New Year’s Day is a blur of activity when important tasks get ignored. Who has time to review their benefits and tax paperwork when holiday planning looms overhead?

But what if spending a few minutes on such mundane tasks could shave hundreds of dollars off your taxes? Here are a few suggestions:

Review your 401(k). If you haven’t already maxed out, ask your employer if you can make a catch-up contribution to your 401(k), 403(b) or 457 plan before year’s end. Most people can contribute up to $16,500 in 2010, plus an additional $5,500 if they’re over 50.

If you make pretax contributions, your taxable income is reduced, which in turn lowers your taxes. Plus, if your employer offers matching contributions (essentially, free money), be sure to contribute at least enough to take full advantage of the match. The “Retirement Contribution Effects on Your Paycheck” calculator at www.dinkytown.com can help estimate the impact on your taxes.

Note: The maximum 2010 contribution to a regular or Roth IRA is $5,000 ($6,000 for those 50 and older), but you have until April 15, 2011.

Exhaust your FSA balances. If you participate in employer-sponsored health care or dependent care flexible spending accounts (FSAs), which let you use pretax dollars to pay for eligible expenses, be sure to spend the full balance before the plan-year deadline (sometimes up to 75 days into the following year); otherwise, you’ll forfeit the remaining balance.

You can use your health care FSA for copayments, deductibles and medical devices (e.g., glasses, contact lenses, braces); however, effective January 1, 2011, over-the-counter medicines will only be eligible with a doctor’s prescription (an exception is made for insulin), so you may want to stock up now. Read IRS Publication 502 for a complete list of allowable and non-allowable expenses at www.irs.gov.

Charitable contributions. If you itemize deductions this year, charitable contributions made to IRS-approved organizations by December 31, 2010, are generally tax-deductible. (See IRS Publication 78 for a complete list of organizations.) If you’ve got extra cash now and want to lower your 2010 taxes even further, consider moving up donations you would have made in 2011.

Energy tax credits. Allowable tax credits for certain energy-efficient improvements to principal residences will be reduced after December 31, 2010, unless Congress votes to extend 2010 levels. Until then, you can claim a tax credit for 30 percent of the total cost of eligible products purchased in 2009 and 2010, up to a maximum combined credit of $1,500 per household.

Eligible products include: biomass stoves; heating, ventilating and air conditioning (HVAC) systems; insulation; roofs (metal and asphalt); windows and doors; and non-solar water heaters. Carefully review the Energy Star website (www.energystar.gov/taxcredits) to make sure your purchases qualify.

Gifts. You’re allowed to bestow a total of $1 million in gifts during your lifetime before the federal gift tax kicks in. One way to exceed that limit – and avoid having to file a Gift Tax Return – is by giving separate, annual gifts of up to $13,000 per year, per person. (Married couples filing jointly can give $26,000 per recipient.) Rules for gift and estate taxes are complex, so read IRS Publication 950 and consult your financial advisor.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Super Bowl MVP tackles financial illiteracy
November 1, 2010

By Jason Alderman

Drew Brees’ list of accomplishments is long and impressive: New Orleans Saints quarterback. Super Bowl XLIV MVP. Devoted family man. And now, financial literacy champion.

Brees cites a personal experience for opening his eyes to the importance of money management.

“In my NFL rookie season, I applied for my first mortgage and during the process learned that an unpaid cell phone bill from my junior year in college had negatively affected my credit score,” Brees told me. “Fortunately I was still able to secure the loan, but at a much higher interest rate than if I’d had a good credit score. It frustrates me to this day that I didn’t understand the importance of my credit score at the time I made those poor financial decisions.”

Brees began channeling that frustration by taking a more active role in combating youth financial illiteracy. The statistics he cites are troubling:

The average high school senior can answer only about half of basic financial knowledge questions correctly.
Although 93 percent of Americans believe all high school students should be required to take a financial education class, only four states require at least a semester-long course in personal finances.
Only four in 10 adults understand how to properly calculate how much they’ll need to reach their retirement savings goals. Yet for most average earners, Social Security will replace only about 40 percent of pre-retirement earnings.
More than one in 10 Americans don’t use banks at all, despite the financial advantages they provide.

As you might expect, Brees is taking action. He visits high schools around the country, sharing personal stories, answering student questions and quarterbacking group competitions in Financial Football, an interactive video game jointly developed by the National Football League and Visa Inc.

Financial Football combines the NFL’s structure and rules with hundreds of questions of varying difficulty designed to test students’ financial knowledge. To move the ball down the field and score points, players must answer a series of money management questions correctly. Wrong answers cost yardage or loss of the ball.

Brees himself contributed numerous questions for the latest version just released. See whether you can answer the following correctly:

1. Negative financial information (excluding bankruptcy) can stay on your credit report for:

a. 2 years

b. 5 years

c. 7 years

d. 10 years

2. Which of the following will NOT damage your credit score?

a. Defaulting on a student loan

b. Checking your own credit score

c. Home foreclosure

d. Carrying a credit card balance equal to your spending limit

3. Which are the two most important factors when determining someone's creditworthiness?

a. Payment history and amounts owed

b. Length of credit history and amounts owed

c. Types of credit they currently use and payment history

d. Number of credit inquiries made and amounts owed

Teachers can download free lesson modules for three age levels to incorporate the game into their classroom curriculum. You can download Financial Football as a free iTunes application playable on your iPhone or iPad, or play it online at www.practicalmoneyskills.com/football – all in English or Spanish versions.

By the way, the correct answers to the questions above are: 1 (c), 2 (b) and 3 (a). How many yards did you gain?

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Feds strengthen debt settlement rules
October 25, 2010

By Jason Alderman

When faced with overwhelming debt, many people don’t know where to turn: Should they file for bankruptcy, consolidate their debts into one loan or try to settle with creditors for less than they owe? Each approach can be fraught with difficulties and expense if you don’t know what you’re doing, but inaction is probably the worst course.

If you’re considering debt settlement, be aware that the Federal Trade Commission (FTC) recently changed several key rules governing how for-profit debt settlement (a.k.a. “debt relief”) companies may bill for their services and what information they are required to disclose.

Briefly, debt settlement is where you negotiate with creditors to accept less than the full amount you owe. You can conduct these negotiations yourself, but some people hire a debt settlement company to act on their behalf. There’s usually a hefty fee – 15 percent or more of the negotiated settlement is common.

In a typical contract, you might be asked to stop making payments on unsecured debts, such as credit cards or medical bills, and instead put the money into a dedicated savings account. Once you’ve accrued sufficient funds, the settlement company attempts to negotiate with your creditors to accept lump-sum payments for less than the amounts owed.

Although many legitimate debt settlement companies exist, the FTC found that a number of businesses were targeting consumers in financial distress by making unrealistic claims, such as promising to reduce debt by as much as 60 percent with no damage to their credit score – in exchange for a large up-front fee.

Unfortunately, the FTC estimates that approximately two-thirds of these consumers are unable to accumulate enough savings for a sufficient settlement offer and therefore not only forfeit the fee, but still owe their debt, plus accumulated interest and additional penalties.

Effective October 27, 2010, certain for-profit debt settlement, debt negotiation and credit counseling companies can no longer collect fees for their services until they have renegotiated, reduced or settled at least one outstanding debt and the client has made at least one payment under the new agreement.

Other conditions of the new regulations include:

They apply only to companies that market their services by telephone or take phone calls from customers responding to print, broadcast or other ads.
They do not cover nonprofit firms, but do apply to companies that falsely claim nonprofit status.
They don’t apply to in-person only or Internet-only sales.
Although settlement companies can still require you to set aside savings in a dedicated account to pay creditors (and their own fees), you retain control over the account, earn interest on its balance and may withdraw the funds at any time without penalty.
Companies must disclose how long it will take to see results, how much their services will cost, negative consequences of using debt relief services and key information about dedicated savings accounts, if they require one.
The rules do not limit the amount of fees, only when they may be charged.

Before settling on how to manage your debt, you may want to speak to a certified credit counselor. The National Foundation for Credit Counseling provides referrals to free and low-cost non-profit credit counseling (www.nfcc.org).

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Watch out for taxes in retirement
October 18, 2010

By Jason Alderman

Wouldn’t it be nice if, after decades of hard work and saving, you could retire without worrying about paying taxes? Alas, that’ll probably never happen.

Even if your income drops significantly post-retirement, chances are you’ll still be taxed on a portion of it. And, depending on where you retire and your income sources, you’ll probably also face additional taxes on purchases, real estate, capital gains, inheritances – the list goes on.

Consider these tax-related issues when budgeting for retirement living expenses:

Social Security. Most people can collect Social Security benefits as early as age 62, although you drawing benefits before your full retirement age will significantly lower your benefit amount. (“Full retirement age” is 65 for those born before 1938 and gradually increases to 67 for those born in 1960 or later.)

Although many states don’t tax Social Security benefits, they are counted as taxable income by the federal government. So, depending on your overall income, you may owe federal tax on a portion of your benefit. The formula is complicated, but basically:

Single people whose combined income from all sources is less than $25,000 are not taxed on their Social Security benefit.
For combined income between $25,000 and $34,000, up to 50 percent of your benefit may be taxed.
For income over $34,000, up to 85 percent may be taxable.
For married people filing jointly: benefits aren’t taxable for combined income below $32,000; benefits between $34,000 and $44,000 are up to 50 percent taxable; benefits over $44,000 are up to 85 percent taxable.
For more details, read the IRS Tax Topic 423 and Publication 915 at www.irs.gov.

After beginning to collect Social Security, some people can’t make ends meet and must return to work, which can backfire: If you earn more than $14,160 a year, you’ll lose one dollar of Social Security benefits for every two dollars earned over that amount. (Note: Investment income doesn’t count.)

Thus, if you need to continue working, it may be wiser to postpone Social Security until reaching full retirement age. Such benefit reductions aren’t completely lost, however: Your benefit amount will be increased upon reaching full retirement age to account for benefits withheld due to earlier earnings. To learn more, read “How Work Affects Your Benefits” at www.ssa.gov.

IRA and 401(k) withdrawals. After age 59 ½, you can start withdrawing from your IRA or 401(k) without paying the 10 percent early withdrawal penalty. However, you will pay federal (and state, if applicable) income tax on the withdrawals – unless it’s a Roth plan, whose contributions have already been taxed.

Other taxes. Some people move to another state after retirement to their tax burden. For example, seven states don’t tax personal income (although two others do tax dividend and interest income). And five states charge no sales tax. But because other taxes and cost-of-living expenses vary significantly by community, you should only consider such moves after doing thorough research.

The Retirement Living Information Center (www.retirementliving.com) features a state-by-state breakdown of the various taxes seniors are likely to pay, including those on income, sales, fuel, property, inheritances, etc.

Bottom line: Be sure to include taxes among the many expenses you need to plan for at retirement.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Financial responsibilities for the self-employed
October 11, 2010
By Jason Alderman

Some people go into business for themselves so they can call their own shots; others turn to self-employment after falling victim to today's chronic unemployment rates. But before hanging out your shingle, recognize that you'll be responsible for many things your employer once managed, such as providing insurance, payroll deductions to pay taxes and maintaining your retirement account. You'll either have to spend time on these tasks or pay someone else to do them.

Don't ignore these financial responsibilities:

Health insurance is expensive, but going without is extremely risky: More than half of personal bankruptcies result from high medical bills. Fortunately, monthly premiums are fully deductible, which considerably lowers your taxable income.

Consider these options:

Coverage through your spouse's plan or a trade or professional organization.
COBRA continuation coverage through your former employer. Double-check eligibility requirements and enrollment deadlines.
An insurance broker can help you find appropriate private coverage. (Be aware that preexisting conditions may render you ineligible.)
High-deductible plans provide comprehensive coverage for catastrophic illnesses at much lower cost than comparable low-deductible plans.
Many states provide high-risk insurance if you don't qualify for private insurance. Visit www.naschip.org for information. Or, investigate Health Insurance Portability and Accountability Act (HIPAA) insurance after your COBRA expires. Eligibility rules are very complicated so consult a knowledgeable insurance broker.

Calculating and filing taxes is often more complicated for self-employed people. Unless you're an accounting whiz, consider hiring a tax professional who specializes in self-employment issues. The penalties and fees they help clients avoid – and deductions they can uncover – usually more than cover their fees.

A few tax considerations:

You can generally deduct many business-related expenses, including: legal and accounting fees; home office (including a portion of utilities and rent); professional dues and subscriptions; business insurance and licenses; training and education; and business-related travel and entertainment. See IRS Publication 535 at www.irs.gov for details.
You must pay 15.3 percent of net earnings in self-employment tax (for Social Security and Medicare). However, you can reduce your taxable income by 7.65 percent before calculating your self-employment tax; and then claim one-half of the tax as a deduction.
Visit the IRS's Self-Employed Individuals Tax Center for details.

Saving for retirement. Because you won't be earning employer-provided pension or 401(k) benefits, you must manage your own retirement savings strategy. Fortunately, you have many options, including regular and Roth IRAs (you may contribute up to $5,000 a year, or $6,000 if over 50), and Simplified Employee Pension (SEP) IRAs, which let you save even more.

A few other self-employment pointers:

The Small Business Administration (www.sba.gov) offers numerous online training courses and publications, plus local classes on many topics including applying for SBA loans, accounting, writing a business plan, marketing yourself and more.
Make sure you have adequate liability insurance. Many homeowners and renters insurance policies don't cover home business losses so you may need a separate policy.
If your business is computer-based, make sure your software is compatible with what your clients use. And find a good computer technician ahead of time, in case your system crashes.

Working for yourself can be extremely satisfying – just be sure to anticipate potential pitfalls before taking the plunge.

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Be careful when choosing 2011 benefits
October 4, 2010

By Jason Alderman

In the coming weeks, millions of Americans will receive 2011 employee benefit open enrollment materials. Yes, it’s a pain to wade through all that information, but simply opting for your current coverage could prove to be a costly mistake. Here’s why:

Plan changes. Many benefit plans – especially medical – change coverage details from year to year. If you have more than one option to choose from, compare plan features side by side to ensure you’re choosing the best plan for your current situation. Common changes include:

Increased monthly premiums for employee and/or dependent coverage.
Increased deductible and/or copayment amounts for doctor visits, prescriptions, preventive care, hospitalization, dental or vision benefits, etc.
Revised drug formularies (the list of covered medications, including copayment levels for different drug classifications).
Preferred doctors or hospitals may withdraw from the plan’s preferred provider network, boosting the cost to use them or even eliminating them as an option.
Raising maximum yearly out-of-pocket expense limits.

In addition, the Affordable Care Act states that group medical plans offering dependent coverage now must extend that coverage to adult children under 26 in most cases, even if they no longer live with you or are claimed as your dependent. Ask your Benefits Department if this provision applies and how much you would pay in additional premiums. (To learn more about provisions under the Act, visit www.healthcare.gov.)

Compare with spouse’s coverage. Compare your employer’s plans with those offered by your spouse’s employer, particularly when deciding where to insure your children. Just make sure it’s apples-to-apples. For example, one plan may charge lower premiums but have higher deductibles and copayments; or it may limit needed coverage – say your kid takes an asthma medication that one plan doesn’t cover.

Review flexible spending account (FSA) contributions. If offered by your employer, health care and dependent care FSAs are a great way to offset the financial impact of medical and dependent care expenses. With FSAs, you pay eligible out-of-pocket medical and dependent care expenses on a pre-tax basis; that is, before federal, state and Social Security taxes are deducted from your paycheck. This reduces your taxable income and therefore, your taxes.

You must re-enroll in FSAs each year – amounts don’t carry over year to year. If your health insurance deductibles and copayments are increasing, consider increasing your FSA contributions accordingly. To learn more about how FSAs work, visit Practical Money Skills for Life (www.practicalmoneyskills.com/benefits), Visa Inc.’s free personal financial management site.

Consider family status changes. If you marry, divorce, or gain or lose dependents, it could impact the type – and cost – of your coverage options. For example:

Compare maternity and pediatric benefits offered by the various medical plan options. Slightly lower monthly premiums might not be worth more restrictive coverage.
If you use a dependent care FSA, carefully estimate how much childcare (or day care for eligible adult dependents) you’ll need next year to maximize your tax advantage.
Similarly, consider family status changes when estimating eligible expenses for your health care FSA.
Recalibrate life insurance and disability coverage.

It’s worth spending a few minutes reviewing your benefit coverage options for next year, especially when you consider the potential financial consequences of not doing so.

Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Navigating marriage’s financial minefields
September 27, 2010

By Jason Alderman

As with all challenges in a marriage, often what starts as a small issue can fester and grow into a large problem, given enough time. It’s not surprising that after being together a few years, some couples realize that the financial quirks they initially found amusing or simply ignored in their spouse now dominate their marital disagreements. In fact, money issues tend to top the reasons for divorce.

If you’re having financial difficulties, long before they escalate step back and examine how and when you and your spouse discuss – or don’t discuss – your financial situation, and explore ways to ease the tension.

Put it on the calendar. You’re both busy and have probably divvied up the chores, including who pays the bills. But even if you completely agree on money matters, the family “accountant” should keep his or her spouse in the loop – if for no other reason than so they can easily take over managing the finances in an emergency.

Set up monthly or even weekly meetings to discuss things like bill payments, progress or setbacks regarding savings goals, budgeting for upcoming expenses (property taxes, insurance premiums, back-to-school supplies, etc.), and strategies for coping with unforeseen expenses (car repairs, emergency dental work, bailing out a family member, etc.)

Don’t postpone painful discussions. Say you accidentally bounce a check or miss a payment. Don’t wait until your next conversation to address it or try to hide the problem – you’ll only make matters worse and create an atmosphere of mistrust. Sometimes it’s best to rip off the bandage with one quick tug.

Be on the same page. When the news isn’t good – say your 401(k) balances tanked last quarter or one of you got laid off – communication is all the more important. Whether you need to temporarily tighten the budget or make a major life-altering decision like postponing retirement, talk it through and prepare to compromise so neither party becomes the bad guy.

Realign your goals. Couples often start out with one game plan but then life deals an unexpected hand and goals change. Periodically touch base on how you both feel about such major events as family size, home ownership, career changes, financing college for your kids (or yourselves), appetite for financial risk, and when and where you’ll retire.

Follow your budget. Some of the worst financial battles occur when one or both parties sabotage the family budget. If you don’t already have one, numerous free budgeting tools are available online. Check out the U.S. Financial Literacy and Education Commission’s www.mymoney.gov, the National Foundation for Credit Counseling (www.nfcc.org under “Consumer Tools), and www.mint.com, among other sites.

Seek help. If you’re no longer on the same page regarding how to handle your finances and can’t reach compromises, you may want to consider outside help.

The National Foundation for Credit Counseling (www.nfcc.org) can help you find a local non-profit credit-counseling agency.
Find a financial planner or advisor at the Certified Financial Planner Board of Standards (www.cfp.net), the National Association of Personal Financial Advisors (www.napfa.org) or the Financial Planning Association (www.fpanet.org).

Like any other joint venture, marriages can derail when partners don’t communicate. Make sure that doesn’t happen to you.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Not a millionaire? Better study gift tax rules
September 20, 2010

By Jason Alderman

Millionaires can probably skip this column. Most likely they’ve already got a team of financial professionals advising them about the best ways to pass along their wealth. For the rest of us, however, a quick refresher course on how the IRS treats gifts might prove helpful.

Separate from inheritances you might leave in your estate, you’re also allowed to make gifts of up to $13,000 per year per person to an unlimited number of people before potentially triggering the federal gift tax. (Married couples who file jointly can together give $26,000 per recipient.) These limits are periodically adjusted for inflation. You must file a Gift Tax Return (IRS Form 709) for any gifts that exceed these amounts.

This doesn’t mean you’ll necessarily ever have to pay a gift tax, however. You are allowed to bestow a total of $1 million in gifts during your lifetime above and beyond the annual $13,000 excluded amounts before the gift tax kicks in, which for most of us means never.

Also not counted toward the $1 million lifetime exclusion are:

Gifts to your spouse
Direct payments you make for someone else’s tuition or medical expenses
Charitable contributions
Gifts to qualified political organizations, such as political parties, election campaign committees and political action committees (PACs)

Note that to qualify for the $13,000 annual exclusion, your gifts must be of “present interest” – that is, there are no restrictions on the recipient being able to use the cash or property immediately; otherwise, they count toward the $1 million lifetime exclusion.

Rules for gift and estate taxes are complex, so read IRS Publication 950 at www.irs.gov for more details. Adding further complexity, the gift tax rate for 2010 was reduced to 35 percent from 45 percent in 2009. But Congress could well raise it in 2011. You’d be wise to consult a financial planning professional. If you don’t have one, the Financial Planning Association (www.fpaforfinancialplanning.org) is a good place to start your search.

Another way parents, grandparents and others can share their resources is by contributing to a 529 Qualified State Tuition Plan to fund children’s education. Contributions up to the $13,000 annual limit ($26,000/couple) will not trigger the gift tax. Alternatively, you can jump-start the account by making a one-time contribution of up to $65,000 ($130,000/couple), as long as you don’t make any other gifts to that beneficiary for five years.

There are two types of 529 Plans:

Prepaid tuition plans, where you prepay and lock-in future tuition at rates currently charged by in-state colleges.
College savings plans, where you contribute to an account whose interest earnings grow tax-free until withdrawn to pay for eligible expenses at any college or university.

To learn more about 529 Plans including tax implications, brokerage fees, investment risk and the potential impact on needs-based financial aid, read the guides at FinAid (www.finaid.org/savings/529plans.phtml), the Securities and Exchange Commission (www.sec.gov/investor/pubs/intro529.htm) and Chapter 9 of IRS Publication 970.

It goes without saying that before making such gifts, make sure you’re on track to fund your own retirement, have adequate health insurance, can pay off your mortgage and are otherwise debt-free. You wouldn’t want to deplete your resources and then become a financial burden on others.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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When elderly parents need financial guidance
September 13, 2010

By Jason Alderman

A friend of mine recently realized his mother needed help managing her finances when he found her closets filled with oddball purchases like jalapeno jelly beans and Betty Boop bobblehead dolls. “It was pretty clear that telemarketers were taking advantage of her friendly nature to sell her junk she didn’t want or need,” he said.

Fortunately, his mom welcomed assistance; but not all families are so lucky. Some parents are fiercely independent and fear relinquishing control over any aspect of their lives; others may be in over their heads and too embarrassed to ask for help.

Postponing uncomfortable financial conversations with your parents may do them – and you – a serious disservice. Chances are, if you’re helping your parents financially your own retirement savings probably are suffering.

It’s never too soon to become familiar with your parents’ financial, medical and legal records so you can step in if needed. If possible, start those conversations while they’re still in good health so you’ll be able to spot any warning signals that something may be amiss.

Signs to watch for might include:

Unpaid bills, late payment notices or utility shut-off warnings.
Calls from creditors or collection agencies.
Indications they’ve had to choose between filling prescriptions and buying food, heating or other necessities.
Overabundant junk mail, magazine subscriptions or cheap prizes – signs they may be targets of telemarketing or get-rich-quick schemes.
Seemingly unnecessary home improvements; or conversely, signs that they can’t afford needed repairs.
Uncharacteristically lavish spending on vacations, new cars, etc.

Long before your folks require assistance, offer to help organize their finances. Set up and periodically update files containing:

Details of all major possessions and relevant paperwork (such as property deeds, car registration, jewelry, etc.)
Outstanding and recurring debts (mortgage, car loan, medical bills, utilities, etc.)
All income sources, including Social Security, retirement and investment accounts and savings.
Bank accounts, credit cards, safe deposit box contents and insurance policies, including password, agent and beneficiary information.
Will, trust, power of attorney, health care proxy and other documents showing how they want their affairs handled.
Contact information for lawyer, accountant, broker, financial planner, insurance agent and other advisors.

A few other tips:

Help your folks set up and follow a detailed budget so they always know how much money is coming in and going out. Numerous free budgeting tools are available at such sites as www.mymoney.gov, the National Foundation for Credit Counseling (www.nfcc.org), www.mint.com, and Practical Money Skills for Life, Visa Inc.’s free personal financial management site (www.practicalmoneyskills.com/budgeting).

Set up automatic bill payment for monthly bills to avoid late payment fees. Just make sure the account is always sufficiently funded.
Schedule a session with a financial planner to help everyone understand retirement’s impact on taxes, income and expenses. If you don’t have one, the Financial Planning Association (www.fpaforfinancialplanning.org) is a good resource.

Take care of these financial planning details now, so that when your parents need your help, you’ll be able to give them your full attention. And while you’re at it, make sure your own files are in good order so your kids won’t face the same hurdles when you get older.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Slash your phone bills
September 6, 2010

By Jason Alderman

Sometimes I miss the days before cell phones, email and voicemail. Sure, they’ve simplified our lives in many ways – remember how frustrating it was trying to reach people before answering machines? On the downside, though, not only do we often feel compelled to be accessible 24-7, but it’s expensive. After factoring in Internet service and cable or satellite TV, you might be paying thousands of dollars a year to keep your family wired and wireless.

Here are a few cost-saving tips that might help:

Examine your home phone bill for services you may have signed up for but aren’t using, such as call waiting, call forwarding or caller ID. Dropping them could save $100 a year or more, depending on your plan.

If you have good cell phone reception at home, try using your cell for long-distance calls. But be sure to stay within your monthly minute allowance or your bill will skyrocket. When in doubt, check your remaining minutes at your carrier’s website or by calling or texting their “remaining balance” code.

More and more folks are dropping their land lines altogether, relying solely on cell phones. Just be sure it’s always fully charged – beware of extended power failures. And note that in an emergency, 911 operators may not be able to track your location if you’re unable to speak, as they can with a land line.

Another possible route is using a service that let you make free or low-cost calls (often, including international calls) using your Internet broadband connection. Some popular versions include Skype, Vonage and Google Voice. You’ll need to buy certain equipment upfront to enable the connection and monthly and/or per-minute charges may apply.

In addition, many cable TV carriers offer competitively priced digital phone service via their broadband connection. Be aware that with either of these types of broadband phone service you risk losing coverage during power failures, so it’s wise to have a cell phone as backup.

You may be able to lower your overall communications bill by bundling home phone, cell phone, TV and Internet services together through one carrier. Plus, it’s convenient to pay only one monthly bill. Just make sure you’re not being restricted on services you want or overpaying for those you don’t; and do the math on rates after the introductory period, if one applies.

A few more tips:

Watch for offers made to new customers and ask to be given the same deal – or threaten to take your business elsewhere.
Using a prepaid phone card for long-distance calls from home may be cheaper per minute than coverage through your phone company.
Ask if your employer has a cell phone plan discount for employees.
Explore family calling/texting plans in which you can share minutes among family members.
Add up your family’s monthly calling and texting charges and see if the carrier’s unlimited minutes plan is more affordable.

Comparing all these options may seem like a lot of work, but you could save hundreds of dollars a year by choosing the right plans. Plus, you may just realize that you’re wasting too much valuable time on the phone, watching television and surfing the Internet.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

The financial challenges of divorce

August 30, 2010

By Jason Alderman

Even in a strong economy, divorce is often difficult and costly; but in a prolonged recession, it can be financially devastating. For example, suppose that:

Neither spouse can afford to buy out the other and you’re forced to sell the house at a loss – or even go into foreclosure.
One of you has been unemployed for a prolonged period and you’ve run up major debt.
One or both of you have difficulty finding independent, affordable health insurance.
The retirement and investment accounts you’ve accumulated together and now must divide have lost significant value.

Even in an uncontested divorce, recovering from any of these scenarios would be difficult. But if your divorce is acrimonious, additional legal fees could leave you further in the hole.

Here are some important financial issues to consider when you separate:

Do-it-yourself divorce kits are widely available, but even couples with few assets who part amicably still need capable representation. That may mean hiring an attorney who specializes in divorce to at least review your paperwork and make sure you haven’t overlooked anything you might later regret.

To avoid a conflict of interest, you should each have your own attorney. Ask friends for recommendations, including those who have recently divorced. Ask attorneys you know who specialize in other areas if they can recommend a good divorce attorney. Another resource is the American Bar Association (www.abanet.org under “Public Resources), which has a state-by-state search engine for finding legal help.

You may also want to consult a financial planner for advice on how to fairly divide property whose value has escalated (or plummeted), calculate child support and ensure you’re sufficiently insured, as well as explain Social Security and retirement plan implications.

A good financial planner could save you money in the long run by helping to avoid prolonged court battles and mapping out a plan for future financial security. If you don’t know one, good resources are the Financial Planning Association (www.fpaforfinancialplanning.org) and the Institute for Divorce Financial Analysts (https://www.institutedfa.com.)

To protect your credit status, close joint bank or credit card accounts and open new ones in your own name; otherwise, an economically struggling or vindictive ex-spouse could amass debt in your name and ruin your credit. Be sure all closed accounts are paid off, even if you must transfer balances to your new account and pay them yourself. That’s because late or unmade payments by either party on a joint account – open or closed – will damage both of your credit scores.

Check your credit reports before, during and after the divorce to make sure you’re aware of all outstanding debts and to ensure that all joint accounts were properly closed. The three major credit bureaus, Equifax, Experian and TransUnion, don’t always list the same accounts, so to be safe, order reports from each. You can order one free credit report annually from each through www.annualcreditreport.com or more frequently for a small fee from each bureau.

For additional financial considerations related to divorce, visit Practical Money Skills for Life, Visa Inc’s free personal financial management site at www.practicalmoneyskills.com/divorce.

Don’t get caught up in the emotional turmoil of divorce and forget to protect your future financial interests.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

This article is intended to provide general information and should not be considered tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how tax laws apply to you and about your individual financial situation.

Improving your credit score
August 26, 2010

WMTV NBC 15, Madison
Your credit score has become an integral part of “who you are” when it comes to borrowing money. We all generally know that the higher the score, the better; but do we really know what makes up our credit score? And, what are some ways that we can improve our score? WBA(Wisconsin Bankers Association) Senior Vice President and Counsel Rose Oswald Poels spoke with NBC 15 Wednesday, August 26, 2010 about credit scores and provided tips on improving your number. Watch the interview at NBC15.com.

Final credit card law provisions go live

August 23, 2010

By Jason Alderman

If you’ve ever paid a penalty for sending in your credit card payment late, the following news might spark your interest: On August 22, 2010, the Federal Reserve Board implemented the third and final stage of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, which fundamentally changes how credit card agreements now operate.

Probably the most significant of these latest changes is that the Fed has placed caps on amounts that can be charged for late credit card bill payments:

Generally, the first late payment fee cannot exceed $25.
However, if someone makes more than one late payment in a six-month period, the fee can rise to $35 for every subsequent offense.
Late fees can no longer exceed the minimum amount owed. So, for example if your minimum payment due is $15 and you miss the deadline, your late fee for the month cannot exceed $15.

Other changes include:

Consumers cannot be charged multiple penalty fees for any single transaction. So, for example, if your payment check bounces, you cannot be charged both a returned check fee and a late fee.

Cardholders can no longer be charged an “inactivity fee” for not using the account for new purchases.

If your credit card issuer increases your card’s annual percentage rate (APR), it must spell out why. Plus, if your APR has been increased since January 1, 2009, the issuer must review that decision after six months and, if appropriate, reduce the rate within 45 days – or provide written notice why the increase should still apply.

Other CARD Act changes that already went into effect earlier in the year include:

The APR on new credit card accounts cannot be increased during the first year unless: A clearly disclosed introductory period (teaser rate) ends; it’s a variable-rate card tied to an index that has increased; you enter a debt repayment workout plan and don’t comply with its terms; or you’re over 60 days late making at least the minimum monthly payment.
Card issuers must provide 45 days’ advance notice before raising the APR on new transactions or making other significant account changes. Also, you’re allowed to cancel the card before these changes take effect and pay off the balance at the old rate.
Credit card statements must be mailed at least 21 days before the balance is due. Also, payments must be credited as on-time if received by 5 p.m. on the due date.
When one card carries balances at different interest rates – such as one rate for purchases and another for balance transfers – payments must be applied to the highest-rate balance first.
Over-the-limit fees cannot be charged unless you have previously agreed (opted in) to allow charges over your credit limit.
Card issuers may no longer factor in average daily balances from a previous billing cycle that wasn’t fully paid off when calculating current interest charges (known as “double-cycle billing”).

For further details about CARD Act provisions, visit www.federalreserve.gov. They also have a great guide that explains how credit cards work (www.federalreserve.gov/creditcard). A final suggestion: Always read all mailings from your card issuers to ensure you’re up-to-date on any account changes.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

The high cost of dying
August 16, 2010

By Jason Alderman

In the past few recessionary years, most of us have gotten used to closely watching our expenses for everything from child rearing to college to retirement funding. Another important area where comparison shopping makes sense is funerals. Yes, funerals.

While it may not make for typical water cooler chatter, dying in America is expensive and the costs are often borne by grieving family members who are in no mood to haggle.

Expenses vary widely, but a traditional funeral and burial can easily cost $10,000 or more, once you factor in a burial plot, funeral services, casket, viewings, flowers, obituary notices, limousines, etc. But for those whose religious or personal beliefs don’t require that specific funeral protocols or traditions be followed, there are many ways to reduce costs while still honoring your deceased loved ones and their survivors.

Here are a few ideas you may not have considered:

Veterans, their immediate family members, public health workers and certain civilians who’ve provided military-related service are entitled to burial at a national cemetery with a grave marker. Burial for veterans is free, but families are responsible for funeral home expenses and transportation to the cemetery. Go to www.cem.va.gov for details.

A $255 lump-sum death benefit that can be used for funeral expenses is available to surviving spouses or minor children of eligible workers who paid into Social Security. Search “death benefit” at www.ssa.gov for details.

For many, cremation is a viable, less expensive option to burial, even with the same funeral services. If you plan to hold a viewing first before the cremation, ask the funeral home if you can rent an attractive casket for the ceremony.

Some families prefer not to hold a public viewing of the deceased. For them, “direct cremation” or “direct burial” may make sense. Because the body is promptly cremated or interred, embalming and cosmetology services are not necessary, saving hundreds of dollars. Also, with direct cremation you can opt for an unfinished wood coffin or heavy cardboard enclosure for the journey to the crematorium.

You can purchase a casket and cremation urn from a source other than your funeral home, such as another funeral home, a local casket store or an online retailer (even Costco and Walmart sell caskets online) – often for far less money. By law, funeral homes cannot assess handling fees or require you to be there to take delivery.

Many people choose to donate their body to science. Organizations are forbidden by law from paying for donated bodies; however, many programs will pay for transporting the body and final cremation. For a list of body donation programs in the U.S., go to www.med.ufl.edu/anatbd/usprograms.html. Also, visit www.anatomicgift.com for additional information on whole-body or organ donation.

And finally, it pays to know your rights when it comes to funeral expenses. The FTC enforces a federal law commonly known as the “Funeral Rule,” which regulates how funeral providers must deal with consumers. Visit www.ftc.gov/funerals for full details.

Death is the ultimate fact of life; it pays to be prepared for what expenses will be so you – or your loved ones – won’t be forced to make difficult decisions during your time of grieving.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Turn the Tooth Fairy into a Teachable Moment
August 9, 2010

By Jason Alderman

Thanks to cherished family traditions like birthday celebrations and presents from Santa and the Tooth Fairy, today’s children are often bombarded with gifts from an early age. In fact, many kids begin cashing in on their baby teeth before they’ve even grasped the concept of what money is and where it comes from.

According to a recent survey conducted by Visa Inc., 94 percent of children under age 10 are visited by the Tooth Fairy, reaping an average of $3 per tooth. By that standard and compared to what some of our neighbors give, my wife and I are relative cheapskates with a $2 for the first lost tooth and a $1 golden Sacagawea coin for each thereafter.

Like most parents, we wrestle with knowing how much is appropriate to give, as well as how we can best teach our kids to appreciate what they are receiving, whether it’s a gift, a necessity (like clothing or braces) or the allowance they earn. Our goal is to share the joy surrounding the exchange of gifts while at the same time using those occasions as teachable moments that will help our kids learn how to manage their money in the future.

For example, our kids learned early on that whenever the Tooth Fairy visits or they get a birthday check from their grandparents, a small percentage goes to charity right off the top to help those less fortunate.

Another portion goes into their savings accounts to help them save for big-ticket items they want; and the rest is theirs to spend or save as they please. We try to allow our kids to make financial decisions and mistakes on their own in a safe environment before the stakes become too high.

If your kids are too young to open a bank account, you can introduce them to the idea of dividing up their money for different purposes by using the Money Savvy Pig, a clear plastic piggy bank with four compartments (save, spend, donate and invest) that was created by Money Savvy Generation (www.msgen.com).

As your kids get older, start having discussions about:

What earning money means, using your own job and their allowance as examples.
How to budget for planned and unplanned expenses.
Needs versus wants – and the concept of delayed gratification.

If you need resources to help guide money conversations with your kids, here are a few helpful financial education sites:

The Federal Trade Commission’s You Are Here (www.ftc.gov/youarehere).
The Federal Deposit Insurance Corporation’s Money Smart (www.fdic.gov/moneysmart).
The U.S. government’s MyMoney.gov (www.mymoney.gov.com).
Wells Fargo’s Hands on Banking (www.wellsfargo.com/handsonbanking).
The Jump$tart Coalition (www.jumpstart.org).
Visa Inc.’s free, fast-paced Financial Soccer video game (www.financialsoccer.com).

If you or the grandparents have the urge to splurge and can afford it, siphon some gift money into a 529 Qualified State Tuition Plan. To learn how they work, read the guides at FinAid (www.finaid.org/savings/529plans.phtml) and the Securities and Exchange Commission (www.sec.gov/investor/pubs/intro529.htm).

And finally, remember that kids often mimic their parents’ behavior, good and bad, so if they see you spending beyond your means to buy gifts, they may follow suit later in their own lives.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Can you afford a new car?

August 2, 2010

By Jason Alderman

When I was growing up, car manufacturers made a big deal each fall about unveiling next year’s models, literally shrouding them in secrecy under tarps in print and TV ads until the launch date. Car-crazy dads would then rush down to the dealer for a test drive.

New models now roll out year round – and financing methods have gotten more flexible as well. Back then, many people saved for years in order to pay cash for a new car; today, most people I know take out car loans. In fact, many saddle themselves with debt that might take five or more years to pay off – money they could be saving to buy a home or pay for retirement.

Although a longer-term loan may lower monthly payment amounts or enable you to buy a more expensive car than you could otherwise afford, it can also have unexpected, costly consequences:

The longer your loan term, the more interest you ultimately pay. For example, on a six-year, $25,000 loan at 6 percent interest, you would pay $1,659 more in total interest than for a comparable four-year loan.
When calculating how much car they can afford, many people forget to factor in such expenses as a down payment, insurance, sales tax, registration and emission fees, maintenance and repairs, which can add thousands of dollars to the overall cost.
New cars typically lose 20 percent or more in value the minute you drive them off the lot. Thus, if you put 10 percent down on a $25,000 car and borrowed the rest, you’d automatically owe $22,500 on a car that might only be worth $20,000. If you suddenly had to sell it, would you have $2,500 to pay off the loan? (Not to mention having to come up with the cash to buy another car.)
Worse yet, if the car were stolen or totaled in an accident, depending on your insurance coverage you could owe much more.

Before you sign on for a new car payment you can’t afford, consider these points:

Today’s cars are much better constructed and more reliable than in the past. With proper maintenance, you might be able to get 150,000 or more miles out of your current car before repair costs become prohibitive. Check your car’s service manual for maintenance guidelines. If you can’t find it, go to your car manufacturer’s website.
A good used car could save you thousands of dollars, both in price and insurance costs. To find a reliable used car, look for a certified pre-owned (CPO) vehicle backed by a manufacturer’s warranty. Kelley Blue Book (www.kbb.com) and Cars.com (www.cars.com) both have good discussions on CPOs. Also, ask friends or reputable mechanics for reliable referrals.
Before purchasing a used car, look into obtaining a Vehicle History Report, available from www.carfax.com and other sites for a small fee. These reports will trace the car’s history by vehicle identification number on a nationwide database to make sure it’s not a lemon or has title problems.

For more tips on budgeting for and buying a car, visit Practical Money Skills for Life, Visa Inc.’s free personal financial management program (www.practicalmoneyskills.com/car).

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Credit 101 for your college freshman

July 26, 2010

By Jason Alderman

If you’ve got teenagers heading off to college soon, I hope you’ve done a good job educating them about the importance of personal financial responsibility and how to build a strong credit history. If not, better do it now.

College freshmen and young adults entering the workforce encounter many unfamiliar expenses – and temptations – so it’s important to help them avoid early financial missteps that could damage their credit for years to come.

Probably the most fundamental tool for helping students manage their finances is a checking account with a debit card. A few tips:

Look for a bank or credit union that charges no monthly usage fee, requires no minimum balance and has conveniently located ATMs so they don’t rack up foreign ATM charges.
Enter all transactions in the check register or use a digital tool like www.mint.com and review the account online weekly to know when transactions have cleared.

Avoid writing checks or making debit card transactions unless the current balance will cover them.

One way to build credit history is through responsible use of credit cards. The 2009 Credit CARD Act requires that people under age 21 now must have a parent or other responsible adult cosign on any credit card account unless they can prove sufficient income to repay the debt.

Although this new policy probably will prevent many young adults from amassing more credit card debt than they can afford, it may also make it more difficult for them to begin building a credit history. A couple of alternatives are available to parents:

Make them an authorized user on one of your accounts. They’ll get their own card and you can usually restrict the amount they can charge. Authorized users are not legally responsible to pay balances owed – that’s your responsibility, so tread carefully.
You can add them as a joint account holder to a new or existing account – preferably, one with a small credit limit. Joint account holders are equally liable to pay off the account.
Just remember, any account activity, good or bad, goes on both your credit reports, so careful account monitoring is critical.

Those who haven’t yet demonstrated financial maturity may not be ready for an unsecured credit card or loan. Two alternatives include:

A secured credit card linked to an account with the card issuer to which they deposit money. Typically, users can charge up to the deposit amount, which can be replenished. Then, after a period of on-time payments, they can ask the lender to convert it to an unsecured card, or at least add an unsecured amount to the account.
A prepaid debit card, where you load the card with money in advance and they use the card for purchases or ATM withdrawals. You monitor account activity online or by phone.
With each, fees and restrictions may apply so shop around for the best terms.

If you need help educating your kids about personal financial management, a good resource is What’s My Score (www.whatsmyscore.org), a financial literacy program for young adults run by Visa Inc. It features a comprehensive workbook called Money 101: A Crash Course in Better Money Management, which can be downloaded for free.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Stretch your back-to-school budget
July 19, 2010

By Jason Alderman

State and local government budget cuts have taken their toll on practically every public service, including school districts. As parents, you’re probably already being asked to contribute more and more to fund your children’s classroom and extracurricular activities. That means when it comes to personal budgeting, we’ve got to do more with less.

Take back-to-school shopping. Some of the money you earmarked for new clothes may now have to go toward classroom supplies or to pay for childcare you need because after-school programs have been shuttered.

Here are a few tips on how to better manage back-to-school expenses while helping your school get through tough times:

First, calculate how much you can afford to spend without blowing your overall budget or racking up debt. Consider spreading some purchases like clothing throughout the school year – added bonus, your kids won’t outgrow everything all at once.

Next, make a comprehensive list of all anticipated expenses, and leave wiggle room for unexpected ones as well. A few strategies:

Try to recall what you bought in previous years – and compare notes with other, more experienced parents.
Ask the school which supplies they expect parents to purchase. Go in with other families to take advantage of volume discounts and sales.
Find out the financial commitment for extracurricular activities like athletics, music and art programs. Consider things like uniforms, membership dues, private lessons, field trips, etc.
Don’t forget public transportation, school bus charges or your share of gas for the car pool, if any apply.
Compare the cost, convenience and nutritional value of school lunches and food you prepare yourself.

Prioritize “needs” versus “wants.” Although outgrown shoes should be replaced to ensure proper physical development, you can probably get one more year’s use out of an older computer if money is tight. Share your decision-making process with your kids – it’s never too soon for them to learn about delayed gratification and compromise.

Before buying new clothing or accessories, look for “gently used” items in the closets of your older kids, friends and neighbors, at garage sales, thrift or consignment stores, and at online shopping sites like eBay and Craig’s List.

Many retailers post discount coupons in newspapers and on their websites. In addition, numerous consolidation websites post downloadable coupons and sale codes you can enter at online shopping sites. Some of the better sites I’ve seen include: www.dealnews.com, www.couponcode.com, www.mybargainbuddy.com, www.dealcoupon.com, www.dealhunting.com and www.alexscoupons.com.

A few additional shopping tips:

Wait until after school starts to shop fall clearance sales – that’s when department stores want to make room for holiday merchandise.
Although shopping online can save you money, time and gas, shipping and return costs can undo your savings, so anticipate these expenses before making a purchase.
Understand your school’s dress code so you don’t buy inappropriate clothing.

Help your school. To stretch your dollars even further, you can join school fundraising organizations like eScrip (www.escrip.com) and OneCause.com (www.onecause.com/schoolpop). A percentage of all purchases made by members at participating retailers and service organizations are donated to the school of your choice.

With a little careful planning, you can stretch your dollars and ease the financial pain of back-to-school shopping.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

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Accidents happen: Get your affairs in order
July 12, 2010

By Jason Alderman

Recently, a man stepping off a curb near my office was struck and killed by a passing bus. Only 49, he clearly had many productive years ahead. Reading about it reminded me how quickly unexpected accidents can turn your family upside down, and how vitally important proper planning is.

No matter what your age, you should have already drafted a will and other key documents that outline how you’d like your financial and health matters to be handled if you die, become disabled or fall seriously ill. Even if you already have such documents in place, however, it’s important to review them periodically, particularly if your financial or family situation changes – say you get married or divorced, have a baby, a beneficiary dies, etc.

Among the things that could go wrong if you haven’t made your current wishes known:

Court-supervised probate could hold up your estate and result in costly fees.
Your ex-spouse might still be named primary beneficiary of certain assets.
The state usually awards assets to surviving spouses, children and other relatives, so friends and favored charities could be passed over.
With no will, the state decides guardianship for minor children if both parents die.

Here are a few documents to consider for preventing these scenarios:

A will declares who should receive your assets, chooses an executor to handle your estate and names a guardian for your minor children, among other decisions.

A revocable living trust creates a trust to which ownership of your assets is transferred. As trustee, you control the trust and as beneficiary, you own its assets. After you die, assets are transferred to your successor beneficiaries (heirs) without having to go through probate.

A financial durable power of attorney specifies who has legal authority to pay your bills, manage assets and conduct other financial matters if you become incapacitated.

A healthcare durable power of attorney assigns someone to make your medical decisions if you’re unable. Be sure to pick someone who would closely follow your wishes and can make tough decisions.

A living will instructs doctors and hospitals which medical treatments and life-support procedures you do or don’t want. Have your doctor put a copy in your medical file.

There are a few additional considerations for any of these documents:

Sign, date and notarize them and file for safekeeping.
Compare will or trust beneficiaries to those named in your insurance or retirement plans to eliminate conflicts.
Before naming an executor or power of attorney, make sure they are up to the task.
Name alternate beneficiaries and executors in case anyone dies before you.

Do-it-yourself kits like Quicken WillMaker Plus are available, although you should probably have an attorney who specializes in estate law review your documents. And if trusts, complex estates or large assets are involved, definitely hire a professional – one typo or skipped signature could end up costing far more than the lawyer’s fee.

Free or low-cost legal assistance is often available for lower-income people. A few helpful sites include LawHelp.org (www.lawhelp.org), Legal Services Corporation (www.lsc.gov) and the American Bar Association (www.abanet.org under “Public Resources”).

My motto: Hope for the best, but plan for the worst.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

Federal Student Loan Program Changes

July 5, 2010

By Jason Alderman

My wife recently enrolled in graduate school, so like millions of other Americans we've paid close attention to news about student loan programs. One recent example: A key component of the Health Care and Education Reconciliation Act will result in several significant modifications to the how federal student loans are offered and processed.

According to the nonpartisan Congressional Budget Office, the changes will save approximately $61 billion over the next 10 years – money that will partially be used to expand the Pell Grant program for low-income students, beef up community college funding and eventually lower monthly loan repayment amounts for lower-income earners participating in the Income-Based Repayment Plan.

Here’s an overview of key changes:

As of July 1, all new federally backed student loans are now issued directly through the Department of Education’s Direct Loan program, thereby eliminating the Federal Family Education Loan Program (FFELP), which had allowed banks and other private lenders to offer federally guaranteed loans. The government is essentially eliminating banks as the middleman for these loans.

Affected loans include subsidized and unsubsidized Stafford Loans for undergraduate and graduate students, PLUS Loans for parents and PLUS Loans for graduate and professional degree students. Under Direct Loan, the latter two actually have lower interest rates than they did under FFELP (7.9 percent vs. 8.5 percent); and, the approval rate for parent loans tends to be higher.

Private lenders will continue servicing student loans already on their books and may continue offering student and parental loans that are not federally guaranteed, just as they always have. Such uninsured loans typically have higher interest rates but may allow larger loan amounts.

Another feature: For federal loans granted beginning in 2014, lower-income graduates with outstanding Stafford or Grad PLUS loans who opt for an Income-Based Repayment (IBR) plan will see their monthly repayment amount capped at 10 percent of income, compared to the current 15 percent, provided their loan debt qualifies as high relative to income and family size. Go to www.studentaid.ed.gov and search “IBR” to read about eligibility requirements.

These changes do not impact the process of applying for federal grants, loans or work-study programs or change the amount of federal aid that students are eligible to receive. The first step for students interested in receiving federal aid is still to complete a Free Application for Federal Student Aid (FAFSA), which is available online at www.fafsa.ed.gov, from the school’s guidance counselor or financial aid office, or by calling 1-800-4-FED-AID.

Most of the savings reaped by eliminating the FFELP will be applied toward the Federal Pell Grant program. (Pell Grants are scholarships given to students from lower-income families that needn’t be repaid.)

Beginning with the 2010-2011 academic year (July 1, 2010 to June 30, 2011), the maximum Pell Grant amount increases by $200 to $5,550, where it will remain until 2013-2014. In addition, from the 2013-2014 through 2017-2018 academic years, the amount will be indexed for inflation, as measured by the Consumer Price Index for all Urban Consumers), capping out at $5,975.

For more details on the budgetary impacts of this Act, visit the Congressional Commitee on Education and Labor’s website, www.edlabor.house.gov and search “SAFRA” (Student Aid and Fiscal Responsibility Act.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.

Farmers & Merchants Union Bank is participating in the FDIC's Transaction Account Guarantee Program. All funds in a “noninterest-bearing transaction account” are insured in full by the Federal Deposit Insurance Corporation from December 31, 2010, through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to depositors under the FDIC’s general deposit insurance rules. The term “noninterest-bearing transaction account” includes a traditional checking account or demand deposit account on which the insured depository institution pays no interest. It also includes interest on Lawyers Trust Accounts (“IOLTAs”). It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, and money-market deposit accounts. For more information about temporary FDIC insurance coverage of transaction accounts, visit www.fdic.gov.

Your Money Matters A Consumer Financial Column

Resolve to improve your finances December 27, 2010

Healthcare Reforms Kick Into Gear December 20, 2010

Make Sure You Are Cyber Secure December 13, 2010

Are your kids ready for a cell phone? December 6, 2010

To Smartphone, or Not to Smartphone? November 29, 2010

Tis the Season to Be Cautious

Avoid holiday spending hangover November 22, 2010

Choose your charities carefully November 15, 2010

Cut Your Taxes November 8, 2010

Super Bowl MVP tackles financial illiteracy November 1, 2010

Feds strengthen debt settlement rules October 25, 2010

Watch out for taxes in retirement October 18, 2010

Financial responsibilities for the self-employed October 11, 2010 By Jason Alderman

Be careful when choosing 2011 benefits October 4, 2010

Navigating marriage’s financial minefields September 27, 2010

Not a millionaire? Better study gift tax rules September 20, 2010

When elderly parents need financial guidance September 13, 2010

Slash your phone bills September 6, 2010

The financial challenges of divorce

Improving your credit score August 26, 2010

Final credit card law provisions go live

August 23, 2010

The high cost of dying August 16, 2010

Turn the Tooth Fairy into a Teachable Moment August 9, 2010

Can you afford a new car?

August 2, 2010

Credit 101 for your college freshman

July 26, 2010

Stretch your back-to-school budget July 19, 2010

Accidents happen: Get your affairs in order July 12, 2010

Federal Student Loan Program Changes

Your Money Matters
A Consumer Financial Column

Resolve to improve your finances
December 27, 2010

Healthcare Reforms Kick Into Gear
December 20, 2010

Make Sure You Are Cyber Secure
December 13, 2010

Are your kids ready for a cell phone?
December 6, 2010

To Smartphone, or Not to Smartphone?
November 29, 2010

Avoid holiday spending hangover
November 22, 2010

Choose your charities carefully
November 15, 2010

Cut Your Taxes
November 8, 2010

Super Bowl MVP tackles financial illiteracy
November 1, 2010

Feds strengthen debt settlement rules
October 25, 2010

Watch out for taxes in retirement
October 18, 2010

Financial responsibilities for the self-employed
October 11, 2010
By Jason Alderman

Be careful when choosing 2011 benefits
October 4, 2010

Navigating marriage’s financial minefields
September 27, 2010

Not a millionaire? Better study gift tax rules
September 20, 2010

When elderly parents need financial guidance
September 13, 2010

Slash your phone bills
September 6, 2010

Improving your credit score
August 26, 2010

The high cost of dying
August 16, 2010

Turn the Tooth Fairy into a Teachable Moment
August 9, 2010

Stretch your back-to-school budget
July 19, 2010

Accidents happen: Get your affairs in order
July 12, 2010