General Personal Finance Articles

Article / Updated 08-16-2022

The channel through which you hear of a financial planner may provide clues to the planner’s integrity and way of doing business. Beware of planners you find (or who find you) through these avenues: Cold calling: You’ve just come home after a hard day. No sooner have you sat down to dinner when the phone rings. It’s Joe the financial planner, and he wants to help you achieve all your financial dreams. Cold calling (whereby the salesperson calls you, without an appointment) is the most inefficient way for a planner to get new clients. Cold calling is intrusive, and it’s typically used by aggressive salespeople who work on commission. Keep a log beside your telephone. Record the date, time, name of the organization, and name of the caller every time you receive a cold call. Politely but firmly tell cold callers to never call you again. Then, if they do call you again, you can collect $500 in small claims court! Adult education classes: Here’s what often happens at the adult education classes that are offered at local universities: You pay a reasonable fee for the course. You go to class giddy at the prospect of learning how to manage your finances. And then the instructor ends up being a broker or financial planner hungry for clients. He confuses more than he conveys. He’s short on specifics. But he’s more than happy to show you the way if you contact (and hire) him outside of class. The instructors for these courses are paid to teach. They don’t need to solicit clients in class, and, in fact, it’s unethical for them to do so. Part of the problem is that some universities take advantage of the fact that such “teachers” want to solicit business, setting the pay at a low level. So never assume that someone who is teaching a financial-planning course at a local college is ethical, competent, or looking out for your best interests. Ethical instructors who are there to teach do not solicit clients. In fact, they may actively discourage students from hiring them. Smart universities pay their instructors well and weed out those who are more interested in building their client base than they are in teaching. “Free” seminars: This is a case of “you get what you pay for.” Because you don’t pay a fee to attend “free seminars” and the “teachers” don’t get paid either, these events tend to be clear-cut sales pitches. The “instructor” may share some information, but smart seminar leaders know that the goal of a successful seminar is to establish themselves as experts and to whet the prospects’ appetites. Be wary of seminars targeted at select groups, such as special seminars for people who have received retirement-plan distributions or seminars touting “Financial Planning for Women.” Financial planning is not specific to gender, ethnicity, or marital status. Don’t assume that the financial planner giving a presentation at your employer’s office is the right planner for you, either. You may be surprised at how little some corporate benefits departments investigate the people they let in. In most cases, planners are accepted simply because they don’t charge. Copyright © 2016 Eric Tyson. All rights reserved

Article / Updated 08-16-2022

When you're financial planning after 50, you may be faced with lots of Medicare questions. Medicare is administered and enforced by the federal Centers for Medicare and Medicaid. Chances are you have questions about Medicare, and finding answers can be a challenge, especially if you don’t know where to look. Here is some advice: Through the Medicare office: You can ask questions and order publications by calling 800-MEDICARE (800-633-4227). You can also find a wealth of information at the website medicare.gov. Two of the best sources of information are the publications Medicare and You and Guide to Health Insurance for People with Medicare. You can download these, and other publications, free from the site; you can also order free copies by calling the toll-free number. Through your state Office of Aging (or its equivalent): States also offer help and information about Medicare. Each state has an Office on Aging, which offers free counseling, seminars, and literature. Most state agencies regulating health insurers publish a booklet listing the premiums charged on policies by different insurers in the state and offer this information on their websites. A state’s corporation commission or insurance department usually is the appropriate agency to contact. The agencies also should have information on the financial condition of insurers selling policies in the state. Copyright © 2016 Eric Tyson and Bob Carlson. All rights reserved

Article / Updated 05-17-2022

Finding quality, affordable professional service providers can be a challenge. As can finding the myriad other service providers you may seek, such as an auto repair shop or a plumber. All of us have the battle scars from the school of hard knocks and making bad hiring decisions. Getting referrals from folks you know often doesn't pan out — and for good reason. Just because your friend or neighbor has had good experiences with a given contractor doesn't mean you will or that you value the same things in a provider. The Internet has long held the promise of being an information source and exchange for consumers interested in hearing the straight scoop about service providers, but message boards rarely have a critical mass of comments about locally focused companies. Firms such as Kudzu, which is owned by media conglomerate Cox Enterprises, provides consumers free reviews on companies, but here's a case where you may well get less than you paid for. Anyone can complete a simple registration by providing an email address, name, and zip code, and many service providers have just one or a few reviews. Due to the anonymity of the reviews and lack of screening, company owners, employees, and friends can easily post puffed-up reviews while competitors can easily criticize their peers. After reviewing numerous websites that purport to help consumers separate the best service providers from the rest, the sections that follow highlight those that I've found are doing the best job. On some ratings sites, companies are solicited to buy enhanced listings, and this disguised advertising may make them more appealing to prospective customers. For example, Kudzu's "Enhanced Profile" service promises the paying company "Higher placement in search" as well as the ability to add photos and video and a marketing description. Angie's List Angie's List subscribers get access to data and customer feedback on a wide range of service providers in their local market area. The service boasts more than 3 million members in hundreds of markets around the United States. Angie's List, which began operations in 1995, uses proprietary technology to process reports, and one of a team of thirty people employed by Angie's List reads every report before it gets posted. Reports praising your own business or dissing a competitor's are ferreted out and removed. As happens on eBay, customers and businesses can respond to one another. When Angie's List receives a report on an unregistered company, that company is allowed to register for free. By registering, the company can then respond by posting to each customer's report. Consumers may not report anonymously, but their identity is only disclosed to the companies they rate. Angie's List also offers conflict resolution when a customer and company are at odds over their interaction. Angie's List says that they have a "zero-tolerance policy" about companies hassling a customer over the posting of negative comments. The report is posted live for all members to see, which obviously offers an incentive for the service company to resolve the issue quickly. If the service company resolves the complaint to the customer's satisfaction, the dispute is considered "resolved" and the negative report is removed from the service company's record. That's the leverage Angie's List uses to get complaints resolved. The member can then choose to file a new report, but if they do, they must grade the company at a B or above. However, the member is not obligated to file another report. Co-founder Angie Hicks never really considered the advertising-only model so often used online when she started her company. "We offer a premium service with high-quality information. Consumers are willing to pay for good information. Consumers are looking for trusted filters," says Hicks. Angie's List has not totally forsaken ads. The company offers coupons from highly rated service companies. Companies pay to run coupons and must have an A or B rating. Like a school report card, grades range from A (best) to F (worst). If a company has any unresolved complaints, it can't advertise, regardless of its overall grade. (Note: At the time that this book goes to press in late 2017, Angie's List may merge into the parent company that owns HomeAdvisor.) HomeAdvisor HomeAdvisor (formerly Service Magic), another large online provider of service-company referrals, doesn't rely on member subscriptions. With HomeAdvisor, you register for free and provide personal information, including your home address and details of what you're looking for, and several companies, which have paid HomeAdvisor an annual membership (advertising) fee of about $300, will contact you offering their services. Home-Advisor argues that such fees weed out people who may be operating as a sideline or on a short-term basis and lead to higher-quality, committed contractors being listed on their site. HomeAdvisor, which is focused on home improvement, repair, and maintenance firms, also has a ratings and review feature where customers can rate the company. To prevent bogus reviews, HomeAdvisor only allows consumers who have found contractors through their service to rate and evaluate those contractors. Here's how their service works: Suppose you're seeking a contractor to build you a wooden deck. After completing background information on the HomeAdvisor site about your planned project, your information would be sent to three contractors in your area who would contact you, arrange a meeting to discuss your project, and give you a proposal (with some contractors, you can actually schedule these appointments through the HomeAdvisor site). Unlike other services, including Angie's List, HomeAdvisor screens all contractors, who must meet numerous criteria including being properly licensed within their state, carrying general liability insurance coverage, and passing a criminal and financial background check (which uncovers negatives such as liens, bankruptcies, and judgments), among other items. In addition to paying HomeAdvisor an annual membership fee of $300, contractors pay HomeAdvisor a lead fee, depending upon the type of work and ranging from $10 to $50, for each lead they are sent. HomeAdvisor's model allows contractors to target clients by zip code and task, which allows them to be more focused in their prospecting and spend less time driving long distances. Other resources Another resource worth checking out is Consumers Checkbook, which compiles service-provider data in the following metro areas: Boston, Chicago, Delaware Valley (Philadelphia area), Puget Sound (Seattle area), San Francisco/Oakland/San Jose, Twin Cities, and Washington, D.C. Checkbook is a nonprofit founded in 1974. Like Consumer Reports, it doesn't accept any advertising or money from companies it reviews. In addition to its website, it publishes Consumer's Checkbook magazine in seven local versions for each of the metro areas. Another option for checking out service providers is to access the Better Business Bureau (BBB) website in your area, which you can locate through their national site. BBB information, which is available without a fee to you the consumer, may tell you if the company you're considering has any recent black marks but will hardly give you a thorough review of many customers' experiences like those you will find on sites like HomeAdvisor or Angie's List. BBBs are non-profits that collect fees from member companies. Thus, they have similar conflicts of interest that Angie's List and Home Advisor have in being "pro" business.

Cheat Sheet / Updated 05-13-2022

Managing your money is crucial at all stages of your adult life — whether you’re interviewing for your first job, in the thick of your prime earning years, or enjoying your retirement. Some crucial aspects of managing your finances include taking stock of your finances, using a budget, building your savings, and investing your money.

Article / Updated 05-12-2022

Life can throw you some financial curveballs, but you don't have to be at the mercy of financial markets even if you're not able to control them. To protect against financial uncertainties, use the following strategies: Plan for life's certainties and prepare for life's uncertainties. Invest in and protect your ability to earn money; it's likely your most valuable asset. Adequately insure yourself, your stuff, and your income stream. Minimize or eliminate debt, and focus on building a great credit score. Maintain an emergency reserve fund. Invest for your goals, time horizon, and risk tolerance. Diversify your portfolio across a broad mix of asset classes. Monitor and rebalance your portfolio to maintain your target asset allocation.

Cheat Sheet / Updated 04-05-2022

You work hard for your money, and you should get to use your savings in your later years. In order to enjoy an enjoyable and stress-free retirement, you need to make the most of your finances and retirement planning. You can get on the right track by determining the appropriate age to retire, becoming familiar with Medicare, and understanding your pension and how it’s protected. © 2021 Eric Tyson and Bob Carlson. All rights reserved.

Cheat Sheet / Updated 03-10-2022

Everyone needs to know how to manage their money. Having that knowledge and know-how early in your life pays bigger dividends over the decades of your adult life. And everyone makes mistakes, so Personal Finance in Your 20s and 30s For Dummies can help you minimize bad decisions and maximize good ones.

Cheat Sheet / Updated 03-08-2022

Getting a handle on your personal finances can be tough. We’re constantly being urged to spend, spend, spend, while others encourage us to save, save, save! The good news is that you can create a healthy balance between the two. When you understand your personal financial situation, you can make smart decisions about what to do with your money.

Cheat Sheet / Updated 02-28-2022

If you’re searching for some helpful advice on how to manage your personal finances, congratulations! You’ve found it! If you’re like most Canadians, words like debt, RRSP, and credit score aren’t music to your ears. But no matter how much money you have, or how much you know about personal finance, there are many ways you can take charge of your money to improve your financial health. The following articles show you how, offering tips to help you tackle debt, understand RRSPs, and improve your credit score.

Article / Updated 12-21-2021

When you use a checkbook, you need to know basic addition and subtraction to keep it balanced. Balancing a checkbook means you've recorded all additions (deposits) made to your account and subtractions (withdrawals). Each deposit and withdrawal is called a transaction. The purpose for balancing a checkbook is to know how much actual money you have in your checking account at any given time. What's a checkbook register? Step one in balancing your checkbook is to mark down all transactions in your register, which comes with your checkbook. The register is a little booklet where you write down each transaction (check, ATM withdrawal, debit card payment, or deposit.) Your register probably will have at least six columns: Number: The check number. Date: The date you made the transaction. Description: To whom the check was written, or if you made an ATM withdrawal, or used your debit card. Amount or debit: The exact sum of the check, withdrawal or payment. Deposit: This is where you mark down any deposits such as paychecks, money gifts (from a super-wealthy relative, perhaps?), money you may have transferred from a savings account into your checking account, and so on. Balance: The actual amount of money that's in your account. You start with an opening balance (the amount of money you had when you opened the checking account). And then, by subtracting all checks, withdrawals, payments, and bank fees, and by adding any deposits or interest payments, you will arrive at your balance for that day. Checkbook no-no: A bounced check The lower your balance, the more important it is for you to be precise in recording all transactions; in so doing, you avoid bouncing a check. A bounced check is a check that the bank has returned (bounced back) to you because it's worthless; that is, the check is for an amount greater than the actual amount of money you have left in your account. For example, if you send the phone company a check for $100 but your actual balance is only $75, then that check will bounce. When the phone company presents that check to your bank for payment, it will get a notice that your account has insufficient funds. Your bank will charge you a fee, in the range of $25 to $50 (this is a fee that you should ask about when opening an account) and the other party's bank will charge them a fee, as well. So bouncing a check is not only embarrassing, it can be quite costly. Protect yourself against ever bouncing a check by having overdraft protection; ask your bank if it offers this service. The bank will then honor your bounced checks, but start charging you interest, usually at a high rate, from day one. To avoid bouncing a check, you need to know how much money is in your account, which you do by balancing your checkbook. (Going online or to an ATM to check your balance will not give you an accurate number if you have any outstanding checks, that is to say checks you've written that have not yet been presented to the bank for payment.) The most common mistakes when keeping a checkbook The most common mistakes when keeping a checkbook is forgetting to record each transaction, and forgetting to record it at the time it happens. Yes, your monthly bank statement will give you information on checks you've written, or an ATM withdrawal, or a debit card payment — but by the time your statement comes in, you could have written several more checks that remain outstanding. If you always keep more money in your account than you spend every month, you'll be safe. But if your balance is usually low by the end of the month the more careful you have to be in making sure you know how much money you actually have. To avoid making mathematical errors, buy a register cover with a built in calculator. Some even keep track of your balance for you, provided you enter all transactions. When your statement comes in, you should compare it to your register, fixing any mistakes, such as those times you took cash from an ATM and didn't record it when you got home. Of course, you can also just believe the bank and adjust the balance in your register to agree with the bank's closing balance on the closing date, which you can also do at any time by checking on line or at an ATM. But remember, your actual balance may be less than what the bank says if you have outstanding checks.