Description
Book SynopsisTable of ContentsIntroduction 1
About This Book 1
Foolish Assumptions 2
Icons Used in This Book 3
Beyond the Book 3
Where to Go from Here 3
Book 1: Taking Charge of Your Finances 5
Chapter 1: Assessing Where You Are Financially 7
Asking Some Preliminary Questions 8
Evaluating Your Relationship with Money 9
Recognizing emotional spending 9
Living for the moment 9
Checking Out Your Credit Reports 10
Getting copies of your credit reports 10
Knowing why your reports matter 11
Finding Out Your FICO Score 11
Comparing Spending and Income 12
Gathering the necessary materials 12
Categorizing your expenses 13
Figuring out the fritter factor 17
Totaling spending and earnings 17
Calculating your financial bottom line 18
Assessing Your Spending Habits 18
Cataloging What You Own 20
Adding Up What You Owe 22
Chapter 2: Improving Your Relationship with Money 25
Working with Your Partner to Achieve Financial Goals 26
Recognizing your financial strengths and weaknesses 26
Identifying long-term goals 28
Establishing savings goals 29
Finding peaceful solutions to differences 29
Pulling together with your spouse or partner 30
Talking money with your children 31
Believing in Yourself 33
Handling Setbacks 35
Asking for Help 37
Digging Out of Debt 38
Step 1: Acknowledge the problem 38
Step 2: Cut the cards 38
Step 3: Set a good budget and live within it 39
Step 4: Contact your creditors 39
Budgeting for the Future 39
Step 1: Categorize your expenses 40
Step 2: Estimate what you spend 41
Step 3: Calculate and adjust 41
Chapter 3: Building and Sticking to a Budget 43
Comparing Monthly Spending and Income 44
Tackling a Budget Deficit 49
Cutting expenses 49
Reducing debt before saving 49
Using other strategies 50
Paying the Important Stuff If You Can’t Pay Everything 52
Distinguishing between secured and unsecured debt 52
Knowing when to prioritize an unsecured debt 53
Examining a Budget Surplus 54
Finalizing and Sticking to Your Budget 54
Steeling your resolve 55
Checking your progress each month 55
Chapter 4: Cutting Spending and Boosting Income 59
Finding Ways to Spend Less 60
Looking for good deals 60
Spending less on your housing 60
Lowering your utility bills 61
Eating for less 62
Paying less for transportation 64
Having fun for less 65
Looking good for less 66
Dressing for less 66
Reducing your phone costs 67
Saving on prescription drugs 67
Inching down your insurance costs 68
Bringing in More Bucks 70
Earning more at your current job 71
Looking for a new job 71
Getting (and surviving) a second job 74
Considering freelancing 75
Chapter 5: Cleaning Up Your Credit Reports 77
Understanding the True Value of Good Credit 78
Reviewing Your Reports for Problems 81
Using the Law to Get Your Credit Record Clean and Keep It That Way 84
Identifying and Disputing Inaccurate Information 87
Understanding the dispute process 87
Correcting all your credit reports 88
Contacting the creditor 93
Adding Positive Information to Your Credit Report 94
Asking your landlord to report your rent payments 94
Adding your utility and cell-phone payments to your report 94
Opening new credit accounts 95
Adding a 100-word statement 95
Book 2: Managing Home and Personal Finances 97
Chapter 1: Running a Money-Smart Household 99
Reaching Out to Touch Someone 99
Saving on phone bills 100
Using email and texting to stay in touch 100
Rediscovering the joys of letter writing 100
Saving on Climate Control 101
Dressing for the weather 101
Keeping your cool when the weather’s not 101
Warming the house 104
Cutting Back on Electricity and Gas Use 106
Improving your appliance efficiency 107
Shedding some light on the subject 107
Trash Talk: Controlling Garbage Costs 108
Reducing what you throw away 108
Reusing household items in creative ways 109
Cutting Down on Water Use 110
Keeping a Ceiling on Housing Budgets 111
Saving money on rent 111
Saving money on home ownership 112
Cutting Transportation Costs 115
Finding a deal on a set of wheels 115
Using public transportation 117
Biking and walking 117
Finding bargains on airfare and rental cars 118
Opting to travel by train or bus 119
Purchasing Appliances 119
Keeping energy efficiency in mind 119
Shopping for scratch-and-dent and secondhand 120
Thinking twice about renting-to-own 120
Chapter 2: Selecting the Best Home Purchase Loan 121
Three Questions to Help You Pick the Right Mortgage 122
How long do you plan to keep your mortgage? 122
How much financial risk can you accept? 123
How much money do you need? 124
Fixed-Rate Mortgages: No Surprises 125
Adjustable-Rate Mortgages (ARMs) 127
How an ARM’s interest rate is determined 129
How often does the interest rate adjust? 132
What are the limits on rate adjustments? 132
Does the loan have negative amortization? 133
Fine-Tuning Your Thought Process 135
Finding funds 136
Making the 30-year versus 15-year mortgage decision 136
Getting a Loan When Rates Are High 137
Chapter 3: Handling a Mortgage Meltdown 139
Assessing the Damage from a Mortgage Meltdown 140
Understanding How Mortgages Differ from Other Loans 141
Spotting a foreclosure on the horizon 142
Counting to 90 142
Knowing Where to Turn for Help 143
Finding good help for free 143
Working with your mortgage servicer 144
Avoiding help that hurts 145
Considering Alternatives to Going Down with the Ship 146
What to do first 146
What to do for more serious problems 147
What to do to end matters 147
Managing a foreclosure 148
Strategic default: Stopping payments 149
Dealing with Deficiencies 151
Preparing for “Credit Winter” 152
Chapter 4: Keeping a Lid on Medical Costs 155
Saving on Medical Expenses 155
Keeping a close eye on bills 155
Looking into payment plans 156
Coordinating insurance benefits 156
Finding less-expensive prescriptions 156
Discovering What Makes a Great Health Insurance Plan 157
Deciding Between Individual and Group 158
Pricing 158
Underwriting 158
Benefit levels 159
Renewability 159
Coverage flexibility 159
Saving Money on Individual Coverage 160
Saving directly 160
Saving indirectly with self-care 163
Coping with Health Insurance Problems 164
Insuring the uninsurable 164
Staying insured through hard times 165
Insuring your kids when your policy no longer covers them 165
Evaluating insurance available through college 166
Understanding temporary health insurance 167
Continuing coverage following a divorce 168
Deciding on a conversion policy 169
Considering HIPAA instead 170
Taking Decisive Action 174
Reviewing bills with a fine-tooth comb 175
Making your plan pay what it should 175
Taking advantage of hospital discounts 176
Reducing your medical debt 177
Chapter 5: Using the Internet to Help Manage Your Finances 179
Giving Yourself an Online Financial Makeover 180
Using the Internet to Budget 181
Finding Online Resources to Track Your Income and Expenses 184
Using the Internet to Get Free Financial Advice 185
Finding Out What You’re Worth 186
Book 3: Dealing with Debt 189
Chapter 1: Tackling What You Owe 191
Taking Stock of Your Finances 192
Using a Budget to Get Out of Debt 193
Taking the Right Steps When You Have Too Much Debt 194
Handling Debt Collectors 195
Realizing your rights 196
Understanding why debt collectors behave as they do 197
Getting a Financial Education 198
The difference between good debt and bad debt 198
Distinguishing between types of credit 199
Seeing yourself through a creditor’s eyes 200
Building a better credit history 201
Chapter 2: Starting or Restarting Your Credit in Real Life 203
Debunking Misinformation about Banking and Credit 204
Why you need credit 205
Why credit is safe 206
Obtaining Credit: Starting Out on the Right Foot 207
Establishing a credit file without a Social Security number 208
Setting goals before you set out 209
Establishing a relationship with a financial institution 210
Using prepaid and reloadable cards 212
Fattening up your credit file 212
Avoiding high interest, fees, and scams 214
Overcoming Credit Fears and Mistakes 215
Qualifying for First-Time Cards and Lending 217
Getting a credit card 217
Using savings for credit 219
Considering Credit for Students and Military Members 220
Giving credit to students 220
Following military credit rules 222
Chapter 3: Consolidating Your Debts 225
Knowing When Debt Consolidation Makes Sense 225
Considering Your Options 226
Transferring balances 227
Getting a bank loan 229
Borrowing against your life insurance policy 233
Borrowing from your 401(k) retirement plan 234
Avoiding Dangerous Debt-Consolidation Possibilities 236
Chapter 4: Negotiating with Creditors and Getting Help 237
Getting Ready to Negotiate 238
Listing all your debts 239
Zeroing in on certain debts first 239
Reviewing your budget 240
Pulling together your financial information 241
Getting Down to Business: Contacting Creditors 243
Making the Agreement Official: Putting It in Writing 244
Knowing the Deal with Credit Counseling 246
Finding a Reputable Credit Counseling Agency 246
Differentiating the good from the bad 247
Locating agencies in your area 248
Knowing what to ask and what to expect 249
Working with a Credit Counselor 250
Sharing your financial situation 251
Whittling down your debt with a debt management plan 251
Avoiding Debt Settlement Firms 254
Being wary of false promises 254
Preventing worse financial problems 255
Getting Relief If You Get Ripped Off 255
Chapter 5: Considering Bankruptcy 257
Viewing Bankruptcy in a Historical Context 258
Debunking Bankruptcy Myths 260
“People who go bankrupt are sleazy deadbeats” 260
“Bankruptcy is the easy way out for folks who can pay their bills” 262
“Bankruptcy threatens the ethical foundations of our society” 262
“Honest folks pay a ‘tax’ to support people who are bankrupt” 263
Understanding What You Can Gain Through Bankruptcy 263
Stopping creditors in their tracks 265
Wiping out most of your debts 266
Catching up on back mortgage and car payments 267
Filing bankruptcy to pay some debts over time 267
Using bankruptcy to pay all your debts 267
Knowing What You Can Lose in Bankruptcy 268
Considering Alternatives to Bankruptcy 269
Introducing the Different Types of Personal Bankruptcy 270
Liquidations (Chapter 7) 271
Consumer reorganizations (Chapter 13) 271
Weighing the Consequences of Not Filing Bankruptcy 272
Claims secured by your car 272
Claims secured by your home 273
Student loans 273
Support obligations 273
Fines and restitution 273
Taxes 274
Lawsuits 274
Using the Statute of Limitations 274
Book 4: Saving and Investing 275
Chapter 1: Becoming a Saver 277
Eliminating Most of the Fat 278
Making lists of where you are now 278
Carving away the truly wasteful 279
Lowering Your Debt 280
Trimming Other Costs 282
Changing Your Perspective and Watching Your Savings Grow 283
Paying yourself first 283
Educating yourself about investing 284
Taking advantage of giveaways 287
Saving While in Debt 289
Chapter 2: Investing in Stocks, Bonds, and Mutual Funds 291
Stock: Owning a Piece of the Rock 292
Understanding stock 292
Conducting business in stock exchanges 293
Brushing up: A quick stock glossary 294
Picking a stock investment strategy 296
Buying Bonds for Fixed Income 297
Understanding bonds 297
Sorting out different kinds of bonds 298
Interpreting bond ratings 299
Mutual Funds: The Power of Many 301
Understanding mutual funds 301
Defining different kinds of mutual funds 302
Doing It Your Way versus Using a Broker 302
Full-service brokers 303
Discount brokers 304
Online brokers 304
Avoiding Five Common Investing Mistakes 304
Investing before you’re ready 305
Investing without goals 305
Believing those “hot” tips 306
Not diversifying your portfolio 307
Selling too soon (or too late) 307
Chapter 3: Saving for Retirement 309
Targeting Your Retirement Date 310
Getting Your Hands on Your Money 311
Drawing on your Social Security 311
Tapping into other sources 316
Living the retirement life 317
Testing the waters in your gene pool 318
Developing Your Retirement Savings Plan 318
Cutting down on your expenses 318
Picturing your progress 320
Counting on compounding 324
Chapter 4: Saving for College 327
Doing the Numbers 328
Exploring Section 529 Plans 329
Checking Out Coverdell Accounts 329
But Wait! There’s More! 330
Maximizing Your Savings, Minimizing Your Tax 332
Checking Out the Cost of College 332
Tackling tuition 333
Accounting for housing 333
Factoring in books and supplies 335
Looking into the Costs of Various Types of Schools 336
Exploring career and vocational training schools 336
Taking community college and continuing education classes 336
Going for a four-year public education 337
Getting your education in private 337
Chapter 5: Working with an Online Broker 339
Finding the Best Broker for You 340
The nine main factors to consider 340
Gotchas to watch out for 342
Separating the Types of Brokerages 342
Paying the minimum with a deep discounter 343
Get more with a discounter 344
Full-service traditional 348
Avoiding Hidden Fees 350
Finding Out What Reviewers Think 351
Is Your Money Safe? Checking Out Your Broker 352
Cutting the Cord: Mobile Trading 354
Opening and Setting Up Your Account 355
The checklist of what you need to know 356
The checklist of what you need to have 356
Book 5: Protecting Your Money and Assets 357
Chapter 1: Combating Identity Theft 359
Keeping Thieves at Bay 360
Getting on the technology train 361
Looking out for phishing scams 361
Safeguarding your computer data 363
Keeping passwords secret 364
Protecting your mail 365
Storing financial data in your home 366
Putting your credit information on ice 366
Shielding your credit card number 367
Catching Identity Thieves in the Act 369
Watching for early-warning notices 370
Getting early warnings from the IRS 371
Handling a collections call 372
Detecting unauthorized charges 372
Being denied credit or account access 373
Noticing missing account statements 373
Taking Fast Action When Identity Theft Occurs 374
Communicating with the right people 374
Protecting your identity through the FACT Act 377
Sending out a fraud alert 379
Blocking fraudulent credit lines 380
Getting and Using Credit After Identity Theft 380
Closing and reopening your accounts 380
Altering your PINs and passwords 381
Changing your Social Security number and driver’s license number 382
Chapter 2: Online Banking 383
Online and Traditional Banks 383
Advantages of online banking 384
Online bank access 384
Accounting for Your Accounts 385
Savings account 385
Basic checking account 386
Interest-bearing checking account 386
MMDA or MMA 386
cd 386
Choosing an Online Bank That’s Right for You 387
Identifying your user profile 387
Noting the fees when you shop 388
Opening Your Online Bank Account 390
Chapter 3: Homeowner’s Insurance: Protecting Your Stuff 393
Introducing the Six Parts of a Homeowner’s Policy 394
Insuring your residence (Coverage A) 394
Insuring detached structures (Coverage B) 396
Insuring your belongings (Coverage C) 397
Insuring additional living expenses (Coverage D) 398
Insuring your personal liability (Coverage E) 399
Insuring guests’ medical bills (Coverage F) 401
Choosing the Right Homeowner’s Property Coverages 401
Understanding the causes-of-loss options 402
Introducing the six most common homeowner’s policies 403
Establishing Property Coverage Limits 404
Determining the replacement cost of your home 405
Guaranteeing you’ll have enough insurance to rebuild 407
Estimating the cost to replace belongings 408
Choosing your deductible 409
Documenting Your Claim 411
Chapter 4: Auto Insurance Basics 413
Managing Your Lawsuit Risks 413
Reviewing noninsurance strategies 414
Buying liability insurance 414
Insuring Your Personal Injuries 419
Understanding how uninsured and underinsured motorist coverage works 420
Saving money on medical coverage 423
Dealing with Damage to Your Vehicle 424
Choosing cost-effective deductibles 425
Knowing when to drop collision and comprehensive coverage 428
Evaluating Road Service and Car Rental Coverages 429
Chapter 5: Insuring Yourself: Life Insurance 431
Assessing the Need 431
Who doesn’t need life insurance 432
Who does need life insurance 432
Determining How Much Coverage You Need 433
Looking at a hypothetical family 433
Using the multiple of income method 434
Using the web to estimate needs 434
Speaking the Language 436
Understanding the Types of Life Insurance 437
Ideal use 437
Pricing 438
Agent commissions 438
Understanding the Variations of Permanent Life Insurance 439
Whole life 440
Universal life 441
Variable life 442
Cash value options when dropping permanent insurance 443
Understanding the Variations of Term Life Insurance 445
Annual renewable term (ART) 445
Fixed-rate level term 445
Decreasing term 447
Insurance from your mortgage company 447
Making Your Choice 448
Evaluating Life Insurance Sources 449
Considering an agent 450
Buying without an agent 452
Debunking Myths and Mistakes 454
Mistake: Trading cash value for death protection needs 454
Myth: Supplemental group life is cheaper 455
Mistake: Buying life insurance in pieces 455
Mistake: Accidental death/travel coverage 456
Mistake: Covering only one income 456
Mistake: Ignoring a stay-at-home parent’s value 456
Mistake: Covering children, not parents 457
Mistake: Decreasing term insurance 457
Mistake: Being unrealistic about how much life insurance you can afford 457
Mistake: Buying before you need it 458
Myth: It’s cheaper when you’re young 458
Book 6: Dealing with the Tax Man 459
Chapter 1: Tax Return Preparation Options and Tools 461
Preparing Your Own Return 462
Taking Advantage of IRS Publications 463
Perusing Tax-Preparation and Advice Guides 464
Using Software 464
Accessing Internet Tax Resources 465
Internal Revenue Service 466
Research 467
Tax preparation sites 468
Hiring Help 468
Deciding whether you really need a preparer 469
Unenrolled preparers 469
Enrolled agents (EAs) 470
Certified public accountants (CPAs) 470
Tax attorneys 471
Finding Tax Preparers and Advisors 473
Chapter 2: Getting and Staying Organized 475
Maintaining the Burden of Proof 476
Keeping Good Records 477
Ensuring a complete and accurate tax return 477
Setting up a record-keeping system 479
Tracking tax information on your computer 480
Deciding when to stash and when to trash 481
Reconstructing Missing Tax Records 481
Property received by inheritance or gift 482
Securities received by inheritance or gift 485
Improvements to a residence 485
Casualty losses 486
Business records 487
Using duplicate account statements 487
Understanding the Cohan Rule 488
Chapter 3: No Form Fits All (Or, What Kind of Taxpayer Are You?) 491
What Rendition of 1040 Shall You Play? 492
Form 1040 492
Form 1040-SR 493
Form 1040-NR 494
Choosing a Filing Status 494
Single 495
Married filing jointly 495
Married filing separately 496
Head of household 500
Qualifying widow(er) with dependent child 502
Counting your dependents 502
Deciding who is your dependent 503
Securing Social Security numbers for dependents 506
Filing for Children and Other Dependents 508
Defining Who Is a Qualifying Child 509
Age test 509
Relationship test 510
Residency test 510
Support test 510
Must You File? 511
When to file 513
If you don’t file 513
Where to file 514
How to file 514
Book 7: Retiring Comfortably 517
Chapter 1: Checking the Benefits of a 401(k) 519
Realizing What a 401(k) Does for You 520
Lowers how much tax you pay 520
Gets you matching funds from your employer 525
Makes room for a little something extra: Employer non-matching contribution 526
Allows you to save without tears 527
Vesting: When Your Employer’s Contribution Is Yours to Keep 527
Vesting of employer contributions 528
Making exceptions 529
Letting the Pros Work for You 530
Protecting Your Money 530
Meeting minimum standards 531
Avoiding losses in bankruptcy 532
Watching Out for Potential Pitfalls 532
Earning more may mean contributing less 532
Being at the mercy of your plan 533
Chapter 2: Retiring Your Way: IRAs 535
Looking at the Basics of Your IRA 535
Staying traditional 536
Touching on Roth IRAs 537
Benefiting from a spousal IRA 538
Starting an IRA for a child 538
Setting Up Your IRA 539
Deciding where to invest your money 540
Opening your account 541
Maintaining Your IRA 542
Moving Your IRA 542
Chapter 3: Paychecks from Your House: Reverse Mortgages 545
Grasping the Reverse Mortgage Basics 546
Considering common objections 547
Who can get a reverse mortgage? 548
How much money can you get and when? 549
When do you pay the money back? 551
What do you owe? 551
How is the loan repaid? 552
What’s the out-of-pocket cost of getting a reverse mortgage? 552
What are the other reverse mortgage costs? 553
What’s the total annual rate? 554
How do reverse mortgages affect your government-sponsored benefits? 555
Shopping for a Reverse Mortgage 555
Making major choices 556
Counseling 557
Deciding Whether You Want a Reverse Mortgage 557
Chapter 4: Determining How Much You Need for Retirement 559
Improving Your Chances of an Ideal Retirement 559
Deciding How Much of Your Salary to Put Aside 560
Making use of your salary deferral agreement 560
Measuring your plan’s maximums 561
Being highly paid means different rules 562
Estimating what your budget can afford 564
Building Your Nest (Egg) 566
If you’re retiring in the near future 566
If your retirement is farther off 569
Using a retirement calculator 570
Chapter 5: Managing Money in Retirement 573
Looking Forward to Retirement 574
Decisions, Decisions: What to Do with Your 401(k) Money 574
Being older can save you money 576
Foiling the dreaded early withdrawal penalty 577
Leaving money with your former employer 578
Making Withdrawals from Your IRA 579
Paying Uncle Sam His Due: Required Withdrawals 580
Developing a Strategy to Deal with the Tax Man 583
Which comes first: Plucking the chicken or emptying the nest egg? 583
Dealing with that darned company stock 584
Managing Your Investments in Retirement 585
Live long and prosper 585
Stay practical 586
Managing Risk 587
Balancing investments 587
Buying an annuity 588
Consolidating Your Accounts 590
Tending to Your Nest Egg 591
Row, Row, Row Your Boat, Gently Down the Income Stream 592
Treating Your Home Like the Asset It Is 594
Adding up the expenses 594
Making use of your equity 595
Book 8: Planning Your Estate and Will 597
Chapter 1: The Fundamentals of Estate Planning 599
What Is an Estate? 600
The basics: Definitions and terminology 600
Property types 603
Types of property interest 604
Why You Need to Plan Your Estate 607
Why Your Estate-Planning Goals Differ from Your Neighbors’ 608
The Critical Path Method to Planning Your Estate 610
Getting Help with Your Estate Planning 613
Making sure that your team of advisors is “FAIL” safe 614
Working with Certified Financial Planners (CFPs) and other professionals 615
Knowing what to expect from your accountant for your estate planning 616
Working with your insurance agent 617
Working with your attorney 617
Chapter 2: Where There’s a Will 619
Planning for Your Will 620
Knowing the Different Types of Wills 621
Simple wills 621
Other types of wills 622
Choosing Your Will’s Contents 623
Opening clauses 624
Giving clauses 625
Ending clauses 627
Safeguarding Your Will 628
Changing, Amending, and Revoking Your Will 629
Why you may need to change your will 630
Ways to change your will 631
Protecting Your Loved Ones from Your Unloved Ones 632
Figuring Out Your Will Status 633
Testacy: You’ve nailed everything down 633
Intestacy: You die with zero “will power” 633
Partial intestacy: The vultures start circling 634
Chapter 3: The Limitations of Wills: What You Can and Can’t Do 635
Making Your Peace with Statutes That Affect Your Will 636
Identifying Statutes That Your Will Can Change 636
Abatement: There’s not enough in the cupboard for everyone 637
Ademption: Some property is missing 639
Antilapse: Someone dies before you do 640
Divorce: High noon in Splitsville 640
Simultaneous death: Sorry, but we have to talk about it 641
Living (And Dying) with the Laws That Your Will Can’t Change 642
Community property 642
Spousal elective shares 644
Homestead allowance: Keeping a house for kiddies and spouse 645
Homestead exemption: How the law protects your house from your creditors 645
Exempt property: How the law protects your personal property from creditors 646
Family allowance: Drawing from your estate to protect your family 646
Oops! Taking care of VIPs who aren’t in the will 647
Chapter 4: Estate Planning with Online Resources 649
Understanding Wills and Trusts 650
Where there’s an online will, there’s a way 650
Avoiding probate 651
Getting the Basics of Trusts 652
Trusting in Living Trust to Avoid Probate 654
Joint Tenancy and Beneficiary Arrangements 655
Not all heirs are created equal 656
Don’t keep your estate plans hush-hush 657
Customizing Estate Planning for All Ages 657
Under 30 and loving it 658
Grooving in your midlife 659
Retired and enjoying the good life 660
Selecting an Estate Planner 661
Preparing to Meet Your Estate Planner 662
Index 663
