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
Part 1: Getting Started with Personal Finance 5
Chapter 1: Your Financial Checkup 7
Calculating Your Financial Worth 8
Defining net worth 8
Figuring what you own: Financial assets 8
Determining what you owe: Financial liabilities 9
Netting the difference 10
Grasping the Importance of Your Savings Rate 10
Calculating your income and outgo 11
Assessing the change in your net worth 11
Understanding and Improving Your Credit Score 13
Deciphering how lenders use credit reports and scores 13
Obtaining your credit reports and fixing errors 14
Getting your credit score 15
Improving your credit reports and score 15
Comprehending Your Investment Options 16
Examining Insurance Coverage 17
Identifying Common Financial Mistakes Young Adults Make 18
Chapter 2: Budgeting, Goal Setting, and Valuing Saving 21
Developing a Savings Mindset 22
What It’s Worth: Valuing Savings over Time 24
The power of continual savings 24
The rewards of earning a (slightly) higher annual return on your investment 25
Budgeting and Boosting Your Savings 26
Setting and Prioritizing Your Savings Goals 28
Identifying common goals of accomplished savers 28
Valuing retirement accounts and financial independence 29
Dealing with competing goals 30
Saving When You’re Strapped 31
Chapter 3: Using Loans and Paying Down Debts 33
Eyeing the Causes of Generational Debt 34
Making the Most of Loans 35
Dealing With Student-Loan Debt 36
Tracking your student loans and making timely payments 36
Prioritizing the payback of student loans 37
Using education tax breaks 38
Weighing the costs and benefits of education expenditures 39
Making the most of student loans, grants, and other financial aid 40
Benefits for military people 41
Paying Off Consumer Debt 41
Kicking the credit-card habit 42
Discovering debit cards: Convenience without credit temptation 42
Lowering the interest rate on consumer debt 44
Negotiating better rates from your current credit card 44
Tapping investments to reduce consumer debt 45
Paying down balances 45
Getting Help for Extreme Debt 46
Seeking counseling 46
Considering bankruptcy 47
Preventing Consumer Debt Relapses 50
Chapter 4: Everything Credit: Scores and Reports 51
A Primer on Credit Reports and Credit Scores 52
Differentiating between credit reports and credit scores 52
Understanding how credit scores are determined 53
Valuing of a good credit score 55
Jump-starting your credit score as a young adult 55
Getting Your Hands on Your Credit Reports and Scores 56
Recommended websites for free credit scores 57
Websites to avoid 57
Scrutinizing Your Credit Reports to Improve Them 58
Identifying errors and getting them fixed 58
Boosting your credit score 59
Preventing Identity Theft 60
Part 2: Saving and Earning More 65
Chapter 5: Proven Ways to Spend Less and Save More 67
Containing Housing Costs 68
Reducing rental costs 68
Slicing homeowner expenses 71
Cutting Your Taxes 72
Managing Food and Restaurant Spending 73
Trimming Transportation Expenses 75
Finessing Fashion Finances 76
Relaxing on a Budget 78
Taming Technology Spending 79
Keeping Down Insurance Costs 81
Getting Affordable and Quality Professional Advice 81
Handling Healthcare Expenses 82
Chapter 6: Taxes: Reduce Them When You Can! 83
Understanding Taxable Income 83
Comparing Marginal Taxes 84
Changes from the Tax Cut and Jobs Act Bill 86
Reducing Taxes on Work Income 87
Contributing to retirement plans 87
Using health savings accounts 89
Deducting self-employment expenses 90
Increasing Your Deductions 91
Lowering Investment Income Taxes 92
Investing in tax-free money market funds and bonds 92
Selecting other tax-friendly investments 92
Making your profits long term 93
Enlisting Education Tax Breaks 93
Preparing Your Tax Return and Minimizing Your Taxes 94
Chapter 7: Housing: Comparing Renting and Buying 97
The Ins and Outs of Renting 97
Seeing the benefits of renting 98
Considering the long-term costs of renting 98
Completing your rental application 99
Figuring the Costs of Owning and Making It Happen Financially 100
Deciding to buy 100
Comparing the costs of owning versus renting 101
Considering your overall financial health 103
Calculating how much you can borrow 104
Accumulating your down payment 104
Finding the Right Property 105
Working with Real-Estate Agents 108
Financing Your Home 109
Understanding your mortgage options 109
Deciding which mortgage type is best for you 109
Avoiding negative amortization and interest-only loans 110
Getting your mortgage approved 111
Putting Your Deal Together 112
Chapter 8: Relationships and Money 115
Handling Roommates 115
Living-Together Contracts 117
Getting Married 118
Understanding Your Money Beliefs and Practices 120
Examining your money history 121
Exploring your attitudes toward money 122
Understanding your friends and money 123
Making sense of your environment and money 124
Getting a Grip on Procrastination Where Money Is Concerned 124
Diagnosing procrastination 124
Coming to terms with why you may procrastinate with money issues 125
Overcoming money avoidance 127
Chapter 9: Making the Most of Your Career 131
Getting Your Career Going 131
Putting everything in order 132
Educating and training your way to career success 133
Seeking value for your education dollars 133
Investing in your career 138
Exploring Entrepreneurial Options 138
Starting a small business 138
Purchasing a small business 140
Investing in a small business 140
Changing Jobs or Careers 141
The Young and the Unemployed 142
Understanding how joblessness can hit younger adults harder 142
Accessing unemployment benefits 143
Taking action 143
Part 3: Investing for Your Future Goals 145
Chapter 10: Successful Investing Principles 147
Examining Bonds and Other Lending Investments 148
Investing in bonds 148
Considering the downsides to lending 149
Exploring Stocks, Real Estate, and Small-Business Investments 150
Socking your money away in stocks 150
Generating wealth with real estate 153
Going the small-business investment route 155
Considering Options, Cryptocurrencies, and Other Hot Vehicles 156
Opting for options 156
Calculating cryptocurrencies 157
Noting leveraged and inverse ETFs aren’t investments 158
Getting a Handle on Investment Risks 159
Establishing goals and risks 160
Comparing the risks of stocks and bonds 160
Spreading Your Investment Risks 161
Understanding why diversification is key 161
Allocating your assets 162
Holding onto your investments and shunning the herd 163
Selecting an Investment Firm 164
Evaluating Pundits and Experts 164
Chapter 11: Making the Best Use of Bank Accounts 167
Looking at Different Types of Banks 167
Brick-and-mortar banks 168
Online banks 168
Other choices 169
Understanding Your Bank Account Options 169
Transaction accounts 169
Options for getting cash 170
Savings accounts 171
Banking Online 171
Evaluating a bank: What to look for 171
Protecting yourself online 174
Considering Your Alternatives 175
Brokerage accounts with check writing 175
Money market funds 175
Chapter 12: Portfolios for a Purpose 177
Before You Begin Investing 177
Investing Nonretirement Account Money 178
Emergency money 178
Long-term money 179
Investing Retirement Account Money 182
Establishing and prioritizing retirement contributions 182
Allocating money in employer plans 183
Designating money in plans you design 185
Investing for Education 187
Understanding the importance of applying for financial aid 187
Paying for educational costs 190
Chapter 13: Real-Estate Investing 193
Understanding Real-Estate Investment Pros and Cons 193
Evaluating Simpler Real-Estate Investments 196
Assessing Residential Housing Investments 197
Investing in Commercial Real Estate 198
Shunning Sure-to-Lose Real-Estate Investments 199
Researching Where and What to Buy 201
Considering economic issues 201
Taking a look at the real-estate market 201
Examining property valuation and financial projections 203
Digging for a Good Deal 205
Part 4: Insurance: Protect Yourself, Your Loved Ones, and Your Assets 209
Chapter 14: Taking Care with Health Insurance 211
Making Sure You’re Covered 212
Transitioning your coverage 212
Seeing how Obamacare changed your coverage 213
Recent developments and likely future changes 214
Finding Your Best Health Plan 215
Selection of doctors and hospitals 216
Plan benefits and features 216
Shopping for Health Insurance 217
Uncovering the best policies 217
Dealing with Obamacare’s high health insurance prices 218
Handling insurance rejection 220
Health Savings Accounts: Tax Reduction for Healthcare Costs 221
Chapter 15: Safeguarding Your Income 223
Protecting Your Income for You and Yours: Disability Insurance 224
Understanding disability coverage you may already have 224
Determining how much disability insurance you need 225
Identifying useful disability policy features 226
Shopping for coverage 227
Protecting Your Income for Dependents: Life Insurance 227
Assessing your current life insurance coverage 228
Determining how much life insurance to buy 228
Deciding what type of life insurance to buy 229
Shopping for life insurance 231
Caring for Your Loved Ones: “Peace of Mind” Insurance 231
Chapter 16: Home, Auto, Renter’s, and Other Insurance Policies 233
Protecting Your Home and Possessions: Homeowner’s and Renter’s Insurance 234
Dwelling coverage 234
Personal property protection 235
Liability insurance 235
Renter’s insurance 236
Natural disaster protection 236
Shopping for homeowner’s insurance 237
Insuring Your Car 238
Liability protection 240
Collision and comprehensive 241
Riders you should bypass 241
Getting a good buy 242
Avoiding Policies That Cover Small Possible Losses 243
Extended warranty and repair plans 244
Home warranty plans 244
Dental insurance 244
Credit life and credit disability policies 245
Daily hospitalization insurance 245
Cell-phone insurance 245
Little stuff riders 246
Part 5: Your Information Diet 247
Chapter 17: Using Media Resources 249
Going Online: The Wild West of Advice and Predictions 250
Eyeing the real cost of “free” 250
Being aware online 252
Using the web for gathering information 252
Getting Financial Perspectives and Advice from the Media 254
Being a smart news consumer 255
Separating the best from the rest 256
Trusting unnamed “sources” is a bad idea 256
Understanding that political partisans are hazardous to your wealth 258
Chapter 18: Professionals You Hire 261
Seeing the Value of Professional Advice 261
Considering Financial Advisors 262
Preparing to hire a financial advisor 263
Finding good financial advisors 264
Interviewing advisors 264
Taming Your Taxes with Help 266
Working with Real-Estate Agents 267
Using Online Resources to Find Service Providers 269
Angi 270
HomeAdvisor 270
Other resources 271
Part 6: The Part of Tens 273
Chapter 19: Ten Ways to Save on a Car 275
Don’t Buy a Car in the First Place 276
Pay Cash: Shun Leasing and Borrowing 276
Consider Total Costs 277
Compare New with Used 277
Understand a Car’s Real Value Before Negotiating 277
Take Care of Your Car 278
Explore Your Servicing Options 278
Drive Safely 279
Take a Lean and Mean Insurance Policy 279
Track Tax-Deductible Auto Expenses 279
Chapter 20: Ten Things to Value More than Your Money 281
Investing in Your Health 281
Staying active and at a healthy weight 282
Using fitness trackers to monitor your activity level 282
Making and Keeping Friends 283
Appreciating What You Have 284
Minding Your Reputation 284
Continuing Education 285
Having Fun 285
Putting Your Family First 285
Knowing Your Neighbors 286
Volunteering and Donating 286
Caring for Kids 286
Chapter 21: Nearly Ten Things to Know about Apps 287
You May Well Get What You Paid for with “Free” Apps 288
Conduct and Manage Financial Tasks 288
Use Apps Only from Legitimate Companies with Lengthy Track Records 289
Consider the Alternatives to an App 289
Keep Focused on Your Spending 289
Settle up with Friends But Beware Fees 290
Save Money on Commonly Purchased Items 290
Tap into the Latest Economic and Financial Data 291
Invest with Confidence 292
Index 293
