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FEATURE ARTICLE:   Evaluating life insurance needs.

Because life insurance typically becomes more expensive as we age, many people may believe they can’t afford to purchase coverage later in life. However, considering that life insurance is significantly less expensive today than it was a decade ago, you might be able to purchase new coverage and pay premiums comparable to those that were available when you were 10 years younger.

It’s a good idea to review your life insurance situation on a regular basis. Here are some reasons why your coverage may need to evolve to keep pace with your life.

Life Changes

If your income and/or net worth have increased significantly since you purchased your policy, ask yourself whether your current coverage would enable your survivors to maintain their current standard of living. Major life events such as birth, marriage, death, and divorce may also affect the amount of coverage you need.

Inflation

Because of inflation, a policy purchased years ago may no longer offer the same level of protection. For example, a 3% inflation rate can cut the purchasing power of a death benefit in half in about 24 years, based on the Rule of 72 (72 ÷ 3 = 24 years).

Estate Conservation

One popular reason for owning life insurance is to provide liquid funds to help heirs pay estate taxes and any other debts. Considering that the estate tax has changed several times over the past decade, it’s a good idea to review your coverage in light of current estate tax laws and your net worth.

As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.

This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

MONEY SAVING TIP:  Save with a purpose.

Don’t save in pursuit of a general desire to “get ahead” or to “have something to show for your years of work” or to “do the responsible thing.” Save in pursuit of a particular change that you want to make to enhance your enjoyment of life.

Reporters often begin their newspaper and magazine articles with anecdotes. Why? Because the specifics of a story possess an emotional pull that abstractions do not. If you save “to be responsible,” you will not save. If you save because you want to attend a family reunion, and saving is the way to get there, you will.

Many people look askance at those who don’t want to make contributions to buy a gift for the boss’s birthday because the amount of money involved is small relative to what must be saved to finance a retirement. It is better to save for lots of little things over the course of a lifetime, just as you spend for lots of little things. To make saving matter, direct your mental energies to the small things that saving can do for you at all stages of life instead of the big dramatic thing (financing an old-age retirement) that it will do for you only once near the end of your active years.

DID YOU KNOW…you can ask for a ‘good-will deletion’?

If you only have one or two bad marks on your credit record, you may be able to get them expunged, says John Ulzheimer, president of consumer education for SmartCredit.com, based in Costa Mesa, Calif.

Say you’ve paid late, but have an otherwise spotless credit history. You can ask your lender for a “good-will deletion,” he says. “It doesn’t mean it is wrong or was reported incorrectly. Essentially, what you’re doing is asking the creditor to cut you some slack.”

The good news: “You’ll be surprised how many times they will,” says Ulzheimer.

The bad news: “If you’re habitually late, it won’t work,” he says. This is strictly for folks who err rarely.

As for whom to ask, start with customer service. But you may have to go up the ladder. And make your request as soon after the error as you can. “The sooner, the better,” he says.

But it can make a difference in your credit score. “If you have two or three bad things on (your) credit report, and you get one or two removed through good-will deletion, you will be surprised how quickly your score will go up,” Ulzheimer says.

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Debt Management Credit Counseling Corp. http://www.dmcconline.org, a nonprofit charitable organization (“DMCC”), has published free tips for consumers to prepare for a possible pay cut. As the economic instability of our nation seems to threaten the financial well being of many individuals and families, it is essential that consumers plan for any potential reduction in their income. Consumers may view free educational article with tips at http://www.dmcccorp.org/how-to-prepare-for-a-paycut/.

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FEATURE ARTICLE:  What Are Some Smart Ways to Refinance?

Recently, fixed mortgages were near their lowest rates in almost 30 years. And if you are one of the many people who took out mortgages in the few years prior to that, you may be wondering if you should look into refinancing.

If your mortgage was taken out within the past five years, it may be worthwhile to refinance if you can get financing that is at least one to two points lower than your current interest rate. You should plan on staying in the house long enough to pay off the loan transaction charges (points, title insurance, attorney’s fees, etc.).

A fixed-rate mortgage could be your best bet in a rising interest rate environment, if you plan to stay in the house for several years. An adjustable mortgage may suit you if you will be moving within a few years, but you need to ensure that you will be able to handle increasingly higher payments should interest rates rise.

One way to use mortgage refinancing to your advantage is to take out a new mortgage for the same duration as your old mortgage. The lower interest rate will result in lower monthly payments.

For example, if you took out a $150,000 30-year fixed-rate mortgage at 7.5 percent (including transaction charges), your monthly payment is now $1,049. Refinance at 6 percent with a 30-year fixed-rate mortgage of $150,000 (including transaction fees), and your payment will be $899 per month. That’s a savings of $150 per month, which you can then use to invest, add to your retirement fund, or do with it whatever you please.

Another option is to exchange your old mortgage for a shorter-term loan. Your 30-year fixed-rate payment on a $150,000 loan was $1,049 per month. If you refinance with a 15-year fixed mortgage for $150,000 — including transaction costs — at 6 percent, your monthly payment will be $1,266. This payment is only $217 more than your previous mortgage, but your home will be fully paid for several years sooner, for a savings of more than $150,000! And some banks around the country are beginning to offer 10- and 20-year mortgages.

Either way you look at it, it’s an attractive idea.

If you’re considering refinancing your mortgage, consult your financial advisor and determine whether refinancing your home would be a good move for you.

MONEY SAVING TIP:  Translate dollars spent into hours worked to earn those dollars spent.

Money in itself means nothing. It’s little green pieces of paper. It is what money stands for that means something. When you go to work, you are trading the power to control what you do with the hours of your days to an employer in exchange for those little green pieces of paper. To save well, you need to keep in mind what it is that is at stake when you spend some of those little green pieces of paper. The real cost of buying stuff is losing power over what you do with your time.

 If you earn $25 per hour, a $50 expense is really the loss of control over two hours of time. Money can’t buy you love in a direct sense, but not spending money can buy you back control of your time, and you can then use your time to do things you love.

DID YOU KNOW…how to tell when BOGO and 2-fer deals are good?

BOGOs (buy one, get one), two-fers (two for the price of one) and bundled-item promotions successfully tempt you into shopping more often and spending more to raise the store’s number of sales as well as ticket averages, or amount of each sale. They’re not always a good deal for you if you’re not familiar with the store merchandise and its regular prices. “You’re not saving if you are actually spending more than you planned,” says Underhill.

Resist the urge: “Know your favorite retailers, brands, regular prices, promotions and discounts — and always check the clearance area first to find a similar item on sale to avoid buying two of anything and spending more,” says family financial expert Ellie Kay, author of “The 60-Minute Money Workout.“

“Ask yourself, ‘Do I really need two sweaters or two of the same jeans?'”

www.bankrate.com

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FEATURE ARTICLE:  What Tax Deductions Are Still Available to Me?

Tax reform measures are enacted frequently by Congress, which makes it hard for U.S. taxpayers to know which deductions are currently available to help lower their tax liability. In fact, a former head of the IRS once said that millions of taxpayers overpay their taxes every year because they overlook one of the many key tax deductions that are available to them.

One of the most overlooked deductions is state and local sales taxes.

Taxpayers may be able to take deductions for student-loan interest, out-of-pocket charitable contributions, moving expenses to take a first job, the child care tax credit, new points on home refinancing, health insurance premiums, home mortgage interest, tax-preparation services, and contributions to a traditional IRA.

Of course, some tax deductions disappear as adjusted gross income increases. And some deductions are subject to sunset provisions, which your tax professional can help you navigate.

Another key deduction is unreimbursed medical and dental expenses.

Remember that you may only deduct medical and dental expenses to the extent that they exceed 7.5% of your adjusted gross income (AGI) and were not reimbursed by your insurance company or employer.*

In addition to medical and dental expenses, certain miscellaneous expenses — primarily unreimbursed employee business expenses — can be written off if they exceed 2% of AGI. Some of the expenses that qualify for this deduction are union dues, small tools, uniforms, employment agency fees, home-office expenses, tax preparation fees, safe-deposit box fees, and investment expenses. Your tax advisor will be able to tell you exactly what’s deductible for you.

The end of the year is the time to take one last good look to determine whether you qualify for a tax credit or deduction or whether you’re close to the cutoff point.

If you’re not close, you may opt to postpone incurring some medical or other expenses until the following year, when you may be able to deduct them.

On the other hand, if you’re only a little short of the threshold amount, you may want to incur additional expenses in the current tax year.

With a little preparation and some help from a qualified tax professional, you may be able to lower your income taxes this year. You just have to plan ahead.

* The Patient Protection and Affordable Care Act of 2010 raises the floor on itemized medical expenses to 10% of AGI beginning in 2013. 1–2) Kiplinger.com, December 2010

MONEY SAVING TIP:  Don’t carry excessive debt.

Some debt in our lives may be essential. We may need a mortgage to purchase a home, we may need to use our credit card to make purchases until pay-day, but your aim to save money should be to have as little debt as possible. Credit Card deb is typically the most expensive debt we may carry. You will be able to save money every month if you make it an absolute rule to pay off your outstanding balance every month. If you can have the discipline to do this you will save money by effectively having no debt, and thus no interest charge on your credit card(s).

DID YOU KNOW…about the ‘magic’ of display?

We can learn a lesson in Underhill’s book from a story told by a retailer about a tempting display of T-shirts.

“We buy them in Sri Lanka for $3 each. Then we bring them over here and sew in washing instructions, which are in French and English. Notice we don’t say the shirts are made in France. But you can infer that if you like. Then … we fold them just right on a tasteful tabletop display, and on the wall behind it we hang a huge, gorgeous photograph of a beautiful woman in an exotic locale wearing the shirt.”

Resist the urge: “Write a monthly mall shopping budget and stash cash in an envelope specifically for that purpose. When the envelope is empty, stop spending,” says Ramsey. “A written budget makes you think twice when you are tempted by impulse buys.”

www.bankrate.com

FEATURE ARTICLE:  Can Social Security be garnished?

If creditors and debt collectors are hounding you for money, you may wonder: Can Social Security be garnished? The answer is: It depends on who you owe money to.

Banks and other financial creditors can’t touch your Social Security benefits, but when the government is collecting on a debt, those funds are fair game.

The federal government can garnish your benefits for repayment of several types of debts, including federal income taxes, federal student loans, child support and alimony, nontax debt owed to other federal agencies, defaulted federal home loans and certain civil penalties. Supplemental Security Income cannot be garnished under any circumstance.

What you can lose

Among the government creditors who can grab a piece of your Social Security check, the strongest arm belongs to the IRS. Via the Federal Payment Levy Program, Social Security benefits are subject to a 15 percent levy to pay delinquent taxes. Unlike nontax debts to other agencies, for which the first $750 of your monthly benefits are off-limits to garnishment, the IRS can take its 15 percent cut regardless of how little money you’re left with. Lump-sum death benefits and Social Security benefits paid to children are not subject to this levy.

If you owe money on a student loan, it doesn’t matter how long ago you were in school. A 2005 U.S. Supreme Court case (Lockhart v. U.S.) determined there is no statute of limitations on Social Security offsets to repay student loans. The government can shave off up to 15 percent, provided your remaining monthly benefit doesn’t drop lower than $750.

Delinquent child support and alimony cases are processed through the national Court Ordered Garnishment System. In these situations, the maximum reduction to your benefits depends on the state where you live. The garnishment is limited to either the maximum allowed under state law or the maximum under the Consumer Credit Protection Act, or CCPA, whichever is less.

Per the CCPA, you can theoretically lose up to half your benefits if you are supporting a child or spouse in addition to the one involved in the court order; 60 percent if you’re not supporting another child or spouse; and up to 65 percent if the original court-ordered support is more than 12 weeks in arrears.

From the time you receive your first notice of a liability that is subject to garnishment, you generally have about 120 days to respond before the garnishment takes effect, says John Harman, an attorney and licensed taxpayer representative with JK Harris & Company, a tax-resolution firm based in Goose Creek, S.C. Every agency issuing a garnishment is required to provide information about how to appeal the decision.

The IRS will issue three notices before a levy goes into effect. You have 30 days from the date of the final notice to make a pay arrangement before the agency starts docking your monthly benefits. Other agencies have similar procedures, Harman says.

Losing the levy

Once you make an arrangement with the appropriate agency to repay your debt, the Social Security garnishment is released, says Harman. In some cases, you may be able to negotiate a settlement.

“There are rules allowing all the agencies, when someone owes money to them, to make some compromises with the debtor, to set up payment plans and, in true hardship circumstances, provide some other relief,” says Carolyn Carter, deputy director of advocacy with Boston-based National Consumer Law Center.

For tax debt, you may be able to negotiate an agreement to pay less than your full bill if you are truly strapped. But be aware that the IRS has strict eligibility rules for this arrangement, called an Offer in Compromise, and charges a $150 nonrefundable fee to apply.

In the case of a tax debt, your notice of liability may not pinpoint the specific reason you owe the tax, Harman says. Finding the root of the problem may require some investigation on your part, starting with a request for a review of your files.

“There could be a situation where, for example, a homeowner had been foreclosed on in a previous year,” he says. “Most individuals don’t understand that this can be considered income when the mortgage company writes off that liability. So the individual who had their home foreclosed on can actually end up with a tax debt that they’re not aware of.”

While tax law in effect through 2012 protects some homeowners from foreclosure taxes, affected homeowners must file a special IRS form to avoid the tax.

Escaping garnishment

Harman says people need to be proactive to avoid the threat of garnishment.

“They need to be aware of any potential debts that they have and be thorough when they’re sorting through their mail,” he says. “Don’t throw away any notices from any federal agencies, particularly the IRS.”

For student loan debt, Carter says you’ll have a wider range of options if you haven’t already defaulted. The National Consumer Law Center operates a website that offers information and advice for those having trouble repaying student loans. Find more information at NCLC.org.

“There are all sorts of programs for them to do what you might call workouts of their student loans — reducing the interest rates, changing the payment schedules,” Carter says. “In some circumstances, deferments are available. If the student is totally and permanently disabled or if the school closed while the student was there, and in some other circumstances, the student can get the loan discharged.”

www.bankrate.com

MONEY SAVING TIP:  Decide where to put that ‘payment.’

If you plan to sock money away for several years until you reach a specific savings goal, your “pay-yourself-first” money could become automatic contributions to a mutual fund or other stock-oriented fund. If you need the money to be more liquid than that, consider an online savings or money market account that gets linked to your current checking account. Many of these online-only accounts are insured by the Federal Deposit Insurance Corp. (FDIC) and pay annual percentage yields between 4 percent and 5 percent or even higher, as opposed to paltry yields of about 0.2 percent to 0.5 percent for traditional savings accounts. To find such an account, go to Bankrate.com, find the “Compare rates” section on the home page, select “Checking & Savings,” and then “MMAs/Savings Accounts.” (Just keep choosing MMAs and savings accounts as you click through.)

The important thing is that you commit to a savings plan. Delaying it or depositing your money into your everyday checking account where funds are easily accessible, won’t work.

www.today.msnbc.msn.com

DID YOU KNOW…that stores keep their clearance area messy on purpose?

“It’s really hard to conquer the clearance area in some stores because it’s actually designed to make you not want to spend time there,” says Kay.

Retailers know shoppers want to easily find the size, price and item neatly displayed. So they purposely create the frustration of the poorly marked and poorly organized clearance area to tempt you toward the beautifully displayed and perfectly organized full-price merchandise.

Resist the urge: “Never shop when you are rushed for time,” says Kay, “because this leads to making rash decisions.” Instead, she advises setting aside time to shop, dig and search for what you truly want, need and can afford from the clearance section.

www.bankrate.com

Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (“DMCC”), provides free seminars to support South Florida school efforts to teach students financial literacy. Focusing on teaching students the importance of credit and how it works, this educational program has been a part of DMCC’s mission since 2001. Covering everything from how credit is established to how to use a credit card, DMCC speakers make the presentation fun and easy to understand. Seminar schedules are currently being developed; administrators and faculty interested in taking advantage of this free service should contact DMCC’s Education Department to reserve a date.

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FEATURE ARTICLE:  Buried under your dead relative’s debt?

Death is a fact of life, and when someone dies, the deceased’s family naturally may wonder what will happen to his or her mortgage, auto loan, credit card bills, unpaid income taxes and other debts.

The simple answer is that debts become part of the deceased’s estate and typically should be paid before the remaining assets are distributed to the heirs.

Beyond that, debts after death are a very complicated subject, best approached with professional help, says Martin Shenkman, an estate and tax planning attorney in Paramus, N.J.

“When somebody dies, the executor or personal representative, different lingo is used depending on which state you’re in, is charged with marshaling the assets for the estate and paying all the debts.” Shenkman says.

Finding debts

Exactly how debts should be paid depends on the nature of the debt, the terms of the deceased’s will and state law. For example, a loan collateralized by an asset usually stays with the asset, which means someone who inherits a house might get a mortgage as well. Someone who receives a car might get an auto loan to go with it. However, sometimes a debt may be paid off by the estate.

Executors and heirs also need to consider the possibility of hidden debts. To find out about undisclosed loans — or to ensure there aren’t any — an executor can monitor the deceased’s mail, search for P.O. boxes in the local area, review recent bank statements and speak with the deceased’s financial advisers, Shenkman says.

Credit card bills can be among the easier debts to resolve, unless the estate is insolvent. That’s because credit card companies may reduce or stop the accumulation of interest and fees on an account once they’re notified of a death. They might even, as Shenkman says, “accept a flat payment and call it a day” since they know resolving an estate can take months.

Debts also can come to light when a legal notice is published, as required by law in most states, says Michael Halloran, a wealth management adviser at Estate Strategies Group in Jacksonville, Fla.

“Before the estate can go through the court system, you have to publish, ‘Mike Halloran died, and I’m the executor or personal representative of the estate, and if we owe you anything, you need to tell me,'” Halloran says.

Creditors usually have a 60- or 90-day period in which to respond to a notice.

Jointly owned assets

Debts after death can become even more complicated if the deceased owned a business or guaranteed or co-signed someone else’s loan, Shenkman says. The estate may be responsible for such debts, depending on the ownership structure of the business and the legal wording of any loan guarantees. Again, legal advice is a wise investment.

Another complication is some assets may be shielded from certain creditors. For example in Florida, a life insurance policy is safe from most creditors, Halloran says. In other states, no assets are protected. Again, the word “may” should be emphasized due to differing state laws.

Assets transferred through joint ownership or community property generally don’t escape the rules, though collection may be more difficult for creditors, in some cases. In other cases, the asset may simply be repossessed. “Say I own a car jointly with Sue, and I die,” Halloran says. “If the bank has the collateral on the car, they can say, ‘Sue, you have a choice. Mike died, but if you don’t pay us, we are taking the car back.'”

Not enough money

If an estate is insolvent, meaning the assets aren’t enough to pay off the debts and the bequests in the will, the executor must sort out some tricky and sensitive issues. Shenkman says he’s seen an increase in such situations due to the poor economy.

“If there is insufficient money to pay off all the debts being claimed, you need to know legally what the priorities are of who gets paid or who doesn’t,” he says.

Such situations can get ugly because people may be grieving the death of the relative.

“When someone dies, it’s a very emotionally charged event for the family and loved ones. When you combine that with the potential of not getting an inheritance but instead having to deal with debt, you’re really talking about a hypercharged situation,” Shenkman says.

www.bankrate.com

MONEY SAVING TIP:  Keep your car as long as possible.

When possible, try to keep your car as long as possible. Find the balance between the money spent on repairs versus the monthly installment on another vehicle and choose to run your old car as long as the repair costs are low.

DID YOU KNOW…why clearance items are in the back of the store?

The clearance racks are placed in the back of almost every mall store on purpose — so you’ll be tempted by everything else more expensive in your path.

You have to pass all the new trends and displays, all the sales and promotions. Retailers are betting that your hands may be full by the time you reach that clearance area, so you will not be able to stay there and search for the better deals, says Underhill in his book.

Resist the urge: “Head to the clearance area first to find the best deals,” says Kay. “This way, you will have a frame of reference for comparing prices of similar items in other parts of the store and will be able to make smarter choices.”

www.bankrate.com

Debt Management Credit Counseling Corp (www.dmcconline.org), a nonprofit charitable organization (“DMCC”), has been designated an Approved Housing Counseling Agency by the U.S. Department of Housing and Urban Development. Initial housing counseling services to include budget counseling and financial management workshops. Individuals and families who are interested in creating a budget or attending a workshop, and organizations interested in scheduling an onsite workshop, should contact the DMCC Education Department.

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FEATURE ARTICLE:  8 Things You Should Shred Right Now

According to financial  services consulting firm Javelin Strategies and Research, identity theft affects 11 million people a year, at a cost of $54 billion.

If you don’t want to become a statistic, a good place to start is to get a shredder.

Shredding documents isn’t just for accounting firms and people with something to hide — every day working Americans have houses full of documents containing potentially compromising information, from Social Security numbers to bank account information. To dispose of them, security experts recommend getting a good cross-cut shredder (which makes your documents into confetti, as opposed to the long strips that a determined thief could reconstruct).

Old Tax Returns:  As a general rule, you should save your tax returns on the chance you get audited. But after three years, you’re in the clear — that is unless the IRS suspects you are guilty of fraud, in which case the agency can audit you as far back as it likes. “Keep three to four years of tax returns in a firebox,” says Brent Neiser, senior director of the nonprofit National Endowment for Financial Education. Shred anything older than that.  The biggest concern here is Social Security numbers. Yes, that’s numbers, plural. “Your dependents’ Social Security numbers are on those, too,” points out Gabby Beltran of the nonprofit Identity Theft Resource Center.

Bank Statements:  Anything with bank account numbers should be shredded, and that obviously includes your paper bank statements. That’s especially true for that box of old bank statements you just found in your attic that you don’t know why you kept in the first place. To avoid having to shred your statements every month, some experts recommend just making the switch to online statements.  “We recommend people turn off bank statements and get as many as you can via email,” says Phil Blank, managing director of security, risk and fraud for Javelin. “The most commonly perpetrated means of defrauding people is to steal things out of their mailbox.”

Credit Card Offers:  Unless you’re going to actually take the bank up on its offer and open an account, you should destroy these mailed offers right away. “A lot if identity theft happens within families, so don’t leave them lying around,” warns Neiser. “Somebody in the house who knows your basic information could fill it out.”  Whether you need to shred or simply rip up the offer is a matter of disagreement among advisers though. The priority is making sure someone doesn’t open a card in your name, but since there shouldn’t be any information like your Social Security number on these offers, you probably don’t need to obliterate them into tiny pieces.  Still, tearing it up may not be enough to stop someone from opening up a credit card and shredding your credit rating. A couple years ago, MainStreet reported on someone who tore up a credit card offer, then taped it back together, sent it in and got a credit card from Chase.

Old Photo IDs:  Maybe you like to save your old college ID and security badges from previous employers for sentimental reasons; we won’t begrudge you a little scrap booking. But if you want to dispose of them, consider using a shredder. While a photo ID alone isn’t enough to steal your identity, keep in mind that the ID — and the information it contains — could be used as part of a larger identity theft scheme to bypass fraud prevention measures. “A driver’s license has height, weight and date of birth — biometric information they can use to verify an account,” says Beltran.

Pay Stubs:  It might not seem like it at first glance, but your pay stub is rife with information that can be used by a skilled identity theft.  “Absolutely shred your pay stubs,” says Blank. “Some [financial] institutions will ask you as validation the amount of your last deposit; if they have that pay stub, they can give the bank that information.”  He adds that the information contained there can also provide a fraudster with other targets. “They’ll know who your health care provider is, and what bank accounts you have,” he says.

Credit Card Convenience Checks:  Credit card companies often send so-called “convenience checks” to cardholders, which are basically checks you can use to borrow against your line of credit for quick cash. Needless to say, you don’t want these to end up in the wrong hands. “The worst thing people get in the mail are these convenience checks,” says Neiser. “It looks like a credit card bill, but if you open it up, there are checks in there that are live loans … that to me is very dangerous.” If you don’t plan on using these, shred them immediately.

Canceled Checks:  Just because you write “void” on it doesn’t mean a canceled check can’t be a ticking time bomb. Remember, your account and routing numbers are listed on the bottom of every check. “Not only is the bank account number on there, but there’s also your address and possibly your phone number,” says Neiser. “And some people write their full credit card number on the check [to pay their bill].”  As for duplicate checks, those should have the checking account number omitted for your security. But if you have any security concerns, but still want proof of payment, Neiser points out that you can usually request a receipt from the recipient (for your property tax payment, for instance), then shred the duplicate check.

Canceled Credit Cards:  Sometimes you need to cancel a debit or credit card — maybe you want to rein in your spending, or you’re leaving your bank, or you suspect the number was stolen. So do you need to shred the old one? “Theoretically it’s not supposed to be problem, but we recommend that people cut through the magnetic stripe, as there’s encoded information on there,” says Blank. “Also, you don’t want people to know where you bank.” If your shredder can’t handle plastic, Blank recommends cutting it into four pieces, and then throwing the parts into at least two different trash bags. Hey, you can’t be too careful.

MONEY SAVING TIP:  Consolidate and pay off debt as soon as possible.

If you carry any debt, focus on consolidating it to a lower interest and paying it off as soon as possible. Money paid in interest is money thrown away! Why spend your hard-earned cash to make the financial institutions rich?

DID YOU KNOW…You’re not supposed to turn right when entering the store?

“Retail shopping studies have found that most people turn right when they enter a store. That’s because the majority of the population is right-handed and right-oriented,” says Underhill.

Knowing this, stores highlight tempting new items and trends to the right of the entrance. You’ll find that the music is louder and the displays are brighter to attract you where you will look and turn first. This is also where the most expensive items in the store are generally displayed.

Resist the urge: “Shop with blinders on,” says Kay. “Stick to your list with the cash in your hand. Avoid credit card debt at all costs, and head straight to what you came for.”

www.bankrate.com

Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (“DMCC”), provides businesses in the State of Florida with a custom Partner Program in order to increase employee financial education, work productivity and revenue, at no cost to the employer or their employees. Companies and providers of employee assistance programs interested in partnering with DMCC to construct an individualized educational program should contact the DMCC Education Department. This valuable employee benefit will teach employees about managing money and dealing with financial issues, so that their personal financial stress does not affect the overall quality of their work.

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Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (“DMCC”), provides consumers free help assessing available options for debt relief. Certified credit counselors educate consumers on three major options for the satisfaction of unsecured debts when budgeting is not enough; debt management plans, debt settlement plans and filing bankruptcy. Consumers considering one of these options should contact DMCC for free help determining what is best based on their personal situation.

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FEATURE ARTICLE:  Save now or save later?

FEATURE ARTICLE:  Why Purchase Life Insurance? 

We have all heard about the importance of having life insurance, but is it really necessary? Usually, the answer is “yes,” but it depends on your specific situation. If you have a family who relies on your income, then it is imperative to have life insurance protection. If you’re single and have no major assets to protect, then you may not need coverage.

In the event of your untimely death, your beneficiaries can use funds from a life insurance policy for funeral and burial expenses, probate, estate taxes, day care, and any number of everyday expenses. Funds can be used to pay for your children’s education and take care of debts or a mortgage that has not been paid off. Life insurance funds can also be added to your spouse’s retirement savings. 

If your dependents will not require the proceeds from a life insurance policy for these types of expenses, you may wish to name a favorite charity as the beneficiary of your policy. 

Whole life insurance can also be used as a source of cash in the event that you need to access the funds during your lifetime. Many types of permanent life insurance build cash value that can be borrowed from or withdrawn at the policy owner’s request. Of course, withdrawals or loans that are not repaid will reduce the policy’s cash value and death benefit.

When considering what type of insurance to purchase and how much you need, ask yourself what would happen to your family without you and what type of legacy you would like to leave behind. Do you want to ensure that your children’s college expenses will be taken care of in your absence? Would you like to leave a sizable donation to your favorite charity? Do you want to ensure that the funds will be sufficient to pay off the mortgage as well as achieve other goals? Life insurance may be able to help you meet these objectives and give you the peace of mind that your family will be taken care of financially.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. Any guarantees are contingent on the claims-paying ability of the issuing insurance company.

If you are considering the purchase of life insurance, consult a professional to explore your options.

MONEY SAVING TIP:  Buying brand names.

People are finally wising up to this one – generics have been gaining market share since 2006. While prescription drugs have the biggest price tags versus generics, the dollars add up at the grocery store too. In many cases, the only difference between generic and brand name is price. Can you really tell the difference between name-brand and generic when it comes to water, cleaning supplies, or spices?

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DID YOU KNOW…about the Electronic Transfer Fund Act?

This law caps out-of-pocket expenses for consumers in cases where a thief charges up their debit, ATM or credit card, provided consumers meet time constraints. Consumers also have the right to dispute charges on their bank statement.

• Limits your liability to $50 if you report your credit card lost or stolen. 
• Limits your liability to $50 if you report your debit card lost or stolen within two business days. 
• After two days but within 60 days after you receive your statement, limits liability to $500. After 60 days, you could owe all fraudulent charges. 
• Fraudulent signature-based purchases will only run you up to $50. If you report the missing or stolen card before someone uses it fraudulently, you shouldn’t be liable for the charges. 
• Liability periods should stretch if consumer had extreme circumstances that prevented prompt notification. 
• If state law or issuer’s terms and conditions provide lower liability limits, then the lower limits apply. 
• Provides for a record of all electronic transfers in the form of receipts at ATMs or point-of-sale terminals and periodic bank statements showing all electronic transfers. 
• If you find an error in a bank statement you can contact your bank and dispute charges. The bank generally has 10 business days to investigate your claim and report back to you, but may request more time. The consumer has 60 days from the date the statement was sent to report errors to the bank. 
• ATMs that charge fees to process transactions must disclose the fee amount before the transaction completes.

If a bank is in violation of the ETF Act, try complaining to the bank first. Beyond that, you can file a complaint with the federal agency that regulates that bank.

Cards with predetermined values such as gift cards may not apply to the ETF Act.

FEATURE ARTICLE:   Better management of your short-term cash

For the vast majority of people, it is essential to keep a portion of their assets in liquid form in order to meet monthly commitments.

For example, most families have to meet their mortgage or rent payments, grocery, utility, and transportation bills out of their monthly paychecks. There are a host of other expenses that arise from month to month, such as auto insurance, that help keep the pressure on the family cash flow.

If people are fortunate enough to have anything left over once all the expenses have been met, then they can worry about saving or investing for the future.

The paychecks that you deposit in your checking account, which seem to swiftly disappear as you pay monthly expenses, constitute a portion of your short-term cash. The money is no sooner in your bank account than it flows out again as payment for goods and services.

However, because the money that we use to meet our monthly expenses is so liquid, there is a tendency to simply look at it as a method of payment. We often leave more than we need in our checking accounts, gaining little or no interest until we need it for a future expense.

By actively managing the short-term cash that passes through your hands, you can provide a means of saving for the future. You can use this money to increase your net worth with little or no additional risk to your principal.

Short-term investment instruments, such as Treasury bills, certificates of deposit, and money market mutual funds, can provide you with the liquidity needed to meet expected and unexpected expenses and to increase your short-term investment income.

There are numerous alternatives available to enable you to get your short-term cash working for you. The key to successfully managing your short-term cash lies in understanding the alternatives and choosing the one most appropriate to your particular needs and circumstances.

Treasury bills are backed by the full faith and credit of the U.S. government as to the timely payment of principal and interest. Bank CDs are insured by the FDIC for up to $250,000 per depositor, per institution in interest and principal.

Money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in money market funds.

Mutual funds are sold only by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

This material was written and prepared by Emerald.
© 2011 Emerald Connect, Inc.

MONEY SAVING TIP:   Try not accepting initial offers. Many people pushing for a sale are willing to negotiate because they want your money as much as you want the product. In Confessions of a Serial Haggler, I explained how I have personally gotten discounts on cable service, hotels, doctor bills, and more. It never hurts to ask.

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DID YOU KNOW…debt collectors may not reach you at odd hours, such as before 8 a.m. or after 9 p.m., unless you grant permission for them to do so?  Under the Fair Debt Collections Practices Act you are protected from aggressive debt collectors. The law holds collectors to strict conduct rules.

• Debt collectors may not contact you at work if they know your employer dislikes such calls.
• Debt collectors must go through your attorney, if you have one, in regard to your debt. They can only contact a third party once about where and how to find you.
• Consumers must receive written notice five days after first contacted by a debt collector. It must detail the amount owed and provide instructions on how to dispute the amount if the consumer believes it to be wrong.
• A collector may not contact you if within 30 days after you receive the written notice, you fire off a letter to the collection agency stating you do not owe the amount. However, a collector can resume collection procedures if they send proof of the debt, such as a copy of a bill for the amount owed.
• Collectors may not threaten harm, harass the debtor or third parties, make repeated calls to annoy the debtor or use profanity during the calls.
• Collectors may not misrepresent themselves as attorneys, government agents, credit bureau workers or any other entity other than debt collectors, nor may they lie about the amount owed or what will happen they don’t receive payment.
• If you have a complaint, file it with the FTC and your state’s attorney general.

Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit charitable organization (“DMCC”), is now providing bankruptcy certificates for the pre-filing counseling and pre-discharge education required under the U.S. Bankruptcy Code. Consumers are not required to pay for the counseling or education course in advance. Open accounts are provided to attorneys to expedite the issuance of bankruptcy certificates for their clients.

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FEATURE ARTICLE:  A safe way to invest

A relatively safe investment instrument is the traditional certificate of deposit (CD) that you may purchase from your local bank. Federally insured for up to $250,000 per depositor, per institution in interest and principal, CDs offer you a fixed interest rate for depositing your money for a specific period of time. If you withdraw your money before that period is up, you may be subject to interest rate penalties.

CDs may also be purchased through most brokerage firms. The brokerage firm will shop the market and find the most attractive rate for you, even if it is out of state. This is something you might find difficult to do on your own. CDs purchased this way are called Brokered CDs.

CDs are most suitable for purchasing and holding to maturity. However, you may find it necessary to dispose of CDs prior to maturity. An important distinction between Brokered CDs and Bank CDs is the different means for early redemption. With a Bank CD, should you redeem your CD early, you will typically be assessed an early withdrawal penalty. Brokered CDs trade in the secondary market which provides you with the opportunity to sell your CD at prevailing market prices, which may be worth more or less than the original amount you invested.

Brokered CDs are more complex and carry more risks than CDs offered directly by banks. Brokered CDs may not be suitable for all investors. Before you purchase a Brokered CD, make sure you fully understand all of its terms and carefully read its disclosure materials provided by your financial professional.

MONEY SAVING TIP:  Don’t buy new

There’s no two ways about it – getting something in the original packaging often means paying twice the price. This mistake is most costly when it comes to cars, but it applies to many things: furniture, clothing, textbooks…the list is endless. So whenever practical, skip the stores and showrooms and choose thrift stores, yard sales, eBay, and Craigslist.

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DID YOU KNOW….Many employers use credit history as a tool in their pre-employment screening?  It is used as a measure of judgment and character. If you can’t manage your financial obligations, employers may think it’s a sign of irresponsibility. Some employers think that if your monthly debt payment is higher than your salary, it may distract from your performance.

To make sure you know what employers will be looking at, check your credit reports before they do.  Consumers can check their credit report as often as they would like, without it affecting their score. Everyone is entitled to one free report from each of the bureaus every 12 months. Visit www.annualcreditreport.com for more information.

FEATURE ARTICLE:  What advantages does a biweekly mortgage offer?

One of the most precious assets that you are likely to possess as you progress through life is your home. Owning their own homes is something that most Americans strive for.

Unfortunately, for the vast majority of people, one of the major drawbacks in owning a home is the long-term mortgage that must be paid off. Mortgages often stretch out 30 years with interest and principal repayments.

Most mortgage repayments are made on a monthly basis. However, arranging to make payments biweekly can have a dramatic effect on the amount of money you have to pay and the time frame before it is all paid off.

Under a biweekly mortgage, instead of making the payments once a month, you make half the payment every two weeks. If your mortgage is $1,000 per month, under a biweekly system it would be $500 every two weeks.

You make 26 payments per year, which is the equivalent of 13 monthly payments rather than 12. The extra payment should be taken directly off the principal, reducing the payment schedule accordingly.

The effect of biweekly mortgage payments can be dramatic. For example, if you currently have a $150,000 loan at 8 percent fixed interest, you will have paid approximately $396,233 at the end of 30 years.

However, if you use a biweekly payment system, you will pay $331,859 and have it completely paid off in 21.6 years. You save $64,374 and pay the loan off 8.4 years earlier!

The savings you realize using a biweekly payment schedule can save you nearly half of what it cost to buy the house in the first place.

An increasing number of mortgage companies are now offering a biweekly payment option. It is even possible to convert your current monthly payments into a biweekly schedule.

Some companies will attempt to charge you to refinance the loan. However, this is not always the case and shopping around can save you money in refinancing charges.

Be wary of independent companies offering to do this for you for a fee — you can do it for yourself for free.

You should receive professional financial advice when considering switching to a biweekly mortgage payment schedule.

MONEY SAVING TIP:  Got Milk?

Unless you are a vegan, look for generic brands of cow’s milk no matter where you shop. It’s packed with the same nutrients as name brands, and is produced following the same guidelines. The only difference is the higher price tag.

DID YOU KNOW…that with your car loan, you may also need gap insurance?

After you got rid of that old car, you purchased a shiny new car complete with that brand new car smell that everybody loves. You took out a loan for $25,000 and drove home. Two weeks later your car was totaled and the insurance company offered to pay you $21,000 for the car. The bank is going to still want the $25,000 you owe, so you’ll be on the hook for the other $4,000.

Without gap insurance, you have to pay it out of your pocket. Bottom line, if you have a loan for your car, you should also consider gap insurance

FEATURE ARTICLE:  How long will it take to double your money?

Before making any investment decision, one of the key elements you face is working out the real rate of return on your investment.

Compound interest is critical to investment growth. Whether your financial portfolio consists solely of a deposit account at your local bank or a series of highly leveraged investments, your rate of return is dramatically improved by the compounding factor.

With simple interest, interest is paid just on the principal. With compound interest, the return that you receive on your initial investment is automatically reinvested. In other words, you receive interest on the interest.

But just how quickly does your money grow? The easiest way to work that out is by using what’s known as the “Rule of 72.”¹ Quite simply, the “Rule of 72” enables you to determine how long it will take for the money you’ve invested on a compound interest basis to double. You divide 72 by the interest rate to get the answer.

For example, if you invest $10,000 at 10 percent compound interest, then the “Rule of 72” states that in 7.2 years you will have $20,000. You divide 72 by 10 percent to get the time it takes for your money to double. The “Rule of 72” is a rule of thumb that gives approximate results. It is most accurate for hypothetical rates between 5 and 20 percent.

While compound interest is a great ally to an investor, inflation is one of the greatest enemies. The “Rule of 72” can also highlight the damage that inflation can do to your money.

Let’s say you decide not to invest your $10,000 but hide it under your mattress instead. Assuming an inflation rate of 4.5 percent, in 16 years your $10,000 will have lost half of its value.

The real rate of return is the key to how quickly the value of your investment will grow. If you are receiving 10 percent interest on an investment but inflation is running at 4 percent, then your real rate of return is 6 percent. In such a scenario, it will take your money 12 years to double in value.

The “Rule of 72” is a quick and easy way to determine the value of compound interest over time. By taking the real rate of return into consideration (nominal interest less inflation), you can see how soon a particular investment will double the value of your money.

1 The Rule of 72 is a mathematical concept, and the hypothetical return illustrated is not representative of a specific investment. Also note that the principal and yield of securities will fluctuate with changes in market conditions so that the shares, when sold, may be worth more or less than their original cost.The Rule of 72 does not include adjustments for income or taxation. It assumes that interest is compounded annually.Actual results will vary. 

MONEY SAVING TIP:  Master the 30 day rule

Whenever you’re considering making an unnecessary purchase, wait thirty days and then ask yourself if you still want that item. Quite often, you’ll find that the urge to buy has passed and you’ll have saved yourself some money by simply waiting. If you want, you can even keep a “thirty day list” where you write down the item and the day you’ll reconsider it, but I prefer just to keep this one in my head – that way, I often just forget about the unimportant things.

DID YOU KNOW…you may not need collision insurance?

So you purchased an older model car. It’s only worth $2,500 and is seven or more years old. As your car depreciates, it gets closer and closer to your deductible. Remember that the insurance company won’t pay you any more than the value of your car, so if the value is the same or less than your deductible, you won’t get any money. If you’re driving an old car, consider not getting collision insurance. The minimum policy required by law is enough in your case. Don’t count on your insurance agent to tell you, though.

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