The poll, conducted in June, further reveals that consumers who have a personal finance plan are more likely to contribute to the economy. They are more optimistic about the economic outlook and more likely to make home improvements, splurge on a personal item, buy a new car, invest in the stock market, or search for a new job. “While our country continues to grapple with sustained unemployment and other economic headwinds, Americans have a more positive outlook on their own personal finances. And those people who have a financial plan believe that their own financial situation will improve over the next year and are willing to contribute to the economy by spending more,” says Charles A. Moran, chair of CFP’s Board of Directors.

The majority of Americans polled were negatively impacted by the recession, causing 45 percent to dip into their savings and 53 percent to delay making a big purchase. Because of the weak economy, the majority of respondents did not have an official, written financial plan (such as the debt rollover plan) in place even though 58 percent said they would feel better about their financial outlook if they did. Rather, 46 percent said they had a plan in their head and 11 percent said they had some ideas written down. But when presented with the statement, “Everyone should have a financial plan. Even if you have very little money it is good to know in advance how you will spend it and the best means of growing what you have,” 86 percent agreed with it. “Creating and following through with a financial plan can be overwhelming for many people,” explains Eleanor Blayney, the CFP Board’s consumer advocate. “The survey shows the importance of our efforts to educate consumers about the value of financial planning. There are many different sources of advice, and consumers need to be aware of the breadth of options to identify the resource that best suits their individual needs. For many, turning to a certified financial planner professional can help them develop and manage an actionable strategy for meeting their financial goals.”

A significant reason behind the lack of having a formal personal finance plan is the public’s perception of financial advisors. According to the survey, most consumers are less trusting of financial planners, mainly because of revelations during the recent financial crisis. On the other hand, the majority of respondents, if given the opportunity, would take advantage of an hour with a financial planner to review their budget and retirement planning. The survey’s findings, Moran points out, suggest “a gap between how Americans view financial plans and knowing the best way to build and maintain one. They clearly understand the importance of a financial plan, but too many Americans are not taking the necessary steps to formalize it in a concrete, comprehensive way.”

So how can you get rid of stuff you don’t need without inviting the masses to your home?

Give It Away

The easiest way to get rid of your clutter is to give it to a charitable organization.  Goodwill Industries and The Salvation Army are legitimate charitable organizations who will take your used stuff and sell it in their thrift stores.  Since they’re nationwide, there is probably a location near you.  They will take just about anything that isn’t stained or damaged.  If you have lots of stuff to donate, or large items, they will also arrange for free pickup.  If these organizations aren’t an option, check your phone book for other charitable organizations in your area who will be happy to accept your castoffs.  You won’t get any cash for your stuff, but if it’s in decent condition and you’re giving it to a legitimate organization, you can take a tax deduction. 

Also, think about other organizations who might want your stuff.  Got lots of old books and magazines?  Ask a local library or nursing home if they’re interested.  Lots of old clothes?  Check with your local community theatre – chances are, they always need costumes.  You get the idea.

Sell It Online

You can use the cloud to find buyers for your excess stuff.  An internet search for online auction sites will reveal dozens of hits, but eBay is, by far, the most popular.  You can list your belongings for a nominal fee and attempt to find a buyer.  Make sure that you’re honest about the condition your items are in, however, or buyers may trash you online.  Also, make sure to get good estimates for shipping costs; if you underestimate these costs, you may wind up paying more to ship your items to the buyer than you collected on the sale.

Another popular site is Craigslist.com, which allows you to post a classified ad free for thirty days. You can also check your local newspaper; although classified ads usually cost money, your local paper may let you advertise a low dollar value item free of charge.

Consignment

If you have good quality, gently used items for sale, consider your local consignment shop.  These folks will take your castaways and sell them, turning over a portion of the profits to you.  Just keep in mind that consignment shops usually want items that are in very good condition, and may want only seasonal items (no summer clothess in December, for example). 

Trade-Ins

Got some old electronics to sell, like printers, digital cameras, or cell phones?  Kodak – the maker of cameras and film – has just introduced a website where you can offer up your old electronics (any brand) for sale.  If there’s resale value, Kodak will give you a shipping label and will send you a check when it gets the items.  If there’s no resale value, they’ll suggest options for recycling. 

Think Before You Buy

Once you’ve de-junked your life, make sure that you don’t wind up in the same situation again.  Think long and hard before you buy something new.   Do I really want this?  Will I use it?  Do I already have something like this?  Preventing the impulse buy will keep your home clutter-free.

Conclusion

Inevitably, we all wind up with stuff we don’t need or want. But there are plenty of ways to get rid of excess belongings.  Once you’ve cleared the clutter, learn from your past mistakes and don’t let it build up again.

Check Your Insurance

If a natural disaster should destroy your home, will your insurance cover it?  To make sure, review your insurance policies at least annually to see what’s covered – and what isn’t.  For example, most homeowners’ policies don’t cover flood damage, so if you live in a flood-prone area, you’ll need a separate policy.  Also, most homeowners’ policies are based on “replacement value” of the home, so you should figure whether the amount of your policy enough to cover the cost of rebuilding your home from scratch.  To find out, you could call a local contractor for an estimate of what it would cost to build your home.  If that’s not in the cards for you, try an online service that can estimate the total amount.  An Internet search for “replacement cost estimator” will yield several websites that can calculate this for you.  There will be a nominal fee for the service, but it could be well worth it if you find you need a lot more insurance.

Keep Documents Safe

Unfortunately, most of us have only one copy of important documents, such as insurance policies, birth certificates, contracts, or other important papers.  If your home is destroyed, locating these documents could be crucial to filing for insurance claims or government assistance.  You can create a “go-box” that contains your important papers in one box or file that you can grab on your way out the door.  However, if your home is on fire, you may not even have time to grab that one file, so consider a safety deposit box away from home that can house your important papers.

Another option is to create an electronic copy of your most important papers.  A number of online services offer you a place to save electronic copies of your documents that are accessible from anywhere in the world.  Consider this for saving insurance policies, tax returns, bank statements, or anything else that you might need.

Evidence Your Valuables

If your home and contents are destroyed, you’ll need to prove what you had in order to get it replaced.  Take photos or video of your home so the pre-disaster condition of your house is documented.  Also take pictures of the interior, to show the contents.  Especially important is documenting the value of high-ticket items, such as jewelry.  Save receipts and other proof of expensive purchases in a safe place in case you need them later.  The Internal Revenue Service’s Publication 584 has a worksheet designed to help you with this process.

File Your Claim Fast

If something should happen to you, don’t delay in filing a claim with both your homeowners’ insurance and with FEMA.  When a series of hurricanes ripped through Florida in 2004, FEMA was quick to pay initial claims to help those who’d suffered damage.  After media reports surfaced claiming that FEMA had paid undeserving homeowners, however, the agency knee-jerked into reverse, denying many claims outright for fear of further embarrassment.  If a disaster strikes, make your claims early, when memories of the disaster are fresh and sympathies are generous. 

Conclusion

There are some common-sense steps you can take to minimize the financial sting if a disaster should strike your home.  Freshen up your insurance, and document your belongings, and don’t let fear and frustration delay your claims for the assistance you deserve.

“This came forth as one issue that we can make a big impact on,” says Gary E. Knell, president and CEO of Sesame Workshop, the creators of Sesame Street. If the program can help youngsters understand the basics of how to handle money, they’ll take those concepts into adolescence and adulthood. We think this is right in the wheelhouse of what Sesame Street is all about.” The move reflects a growing desire to teach personal finance in a wide variety of settings.

Starting in September, the Sesame Street television show plans to feature segments that highlight portions of the “For Me, for You, for Later” project. It is the first time Sesame Street has addressed the fundamentals of personal finance beyond counting and identifying money. The financial literacy initiative, which is funded by PNC Bank, also includes kits containing printed materials and DVDs which are available at the bank’s branches or on the Sesame Street website.

The project explores the concept of earning money and explains the personal finance topics of spending, saving and sharing in a manner that young children can understand. For example, in one segment, Elmo earns a dollar and is deciding whether to spend it on an ice cream cone, flowers, or a “Stupendous Ball” that lights up and plays music when it bounces. He decides on the ball, but discovers it costs $5. Elmo learns that he has to earn the remainder of the money and save as he earns until he reaches his $5 goal. Other segments explore trying to save when other spending opportunities present themselves and sharing money to help others. “Introducing topics while kids are forming behaviors and attitudes is a good building block,” explains Laura Levine, executive director of JumpStart Foundation for Financial Literacy and an adviser to the Sesame Street project. “We’re not teaching them to balance their portfolios.”

Besides introducing the topic of personal finance to preschoolers, the initiative is also expected to help parents who watch Sesame Street with their children. Previous studies have shown that adults make mistakes with personal finance issues because they lack a firm understanding of financial concepts, which are often taught by their parents, such as the consequences of running up credit card balances or not saving enough for emergencies. “When it comes to money issues, people are hesitant to teach their kids about something they feel insecure about,” says Beth Kobliner, a personal finance expert and an adviser to the project who also appears in some of the videos. The printed materials and videos were purposely developed to enhance the financial literacy of parents along with their children. “That’s one of the key benefits,” notes Jim Rohr, CEO of PNC Financial Group. “When the children are learning, frequently there is an adult right there with them. It’s a way to get financial education into the marketplace.”

There are some ways that you can use less fuel, however, and save a few bucks.

Drive Less

It seems obvious, but all of those extra trips you make add up.  Try to consolidate errands into as few destinations as possible.  Make a shopping list so that you don’t have to run back out to the store for the item you forgot.  Consider carpooling with coworkers for your daily commute, or using public transportation if it’s available where you live. 

Lighten Up

Extra weight in your vehicle causes it to work harder and use more gas.  So, empty out the back seat and the trunk. 

Skip the Premiums

Unless you’re driving a luxury or high-performance vehicle that must use a premium-grade fuel, regular fuel is good enough for most vehicles.  By using the lower grade gas, you can save about five to ten cents per gallon.

Take it Easy

The U.S. Department of Energy says that speeding, aggressive driving, jackrabbit starts and sudden stops can reduce your gas mileage anywhere from 5 to 33%.  So slow down, avoid excessive idling, drive more smoothly, and don’t drive with your foot on the brake.  Not only will this save on gas, but it might save you a few traffic tickets, too.

Shop Smart

Where you buy gas also makes a difference in the amount you spend.  Big-name gas stations are usually contractually required to buy a particular type of gas, meaning that they may have to pay more – and pass that cost on to you.  Try to fill up at smaller, independently-run gas stations in your neighborhood.

Use Technology

Yup – there’s an app for that.  The Cheap Gas app available at iTunes, or Gasbuddy.com’s free app let you use your smartphone to find the cheapest prices in town.

Stay in Shape

Keeping your car well maintained can also put a dent in your gas budget.  If your gas cap is broken or missing, replace it.  Keep your engine properly tuned and replace filters regularly.  Check your tires, too; the U. S. Department of Energy says that properly inflated tires can improve your gas mileage by 3.3%, saving you ten cents per gallon on average.  If you’re not sure of the proper tire pressure, consult your owner’s manual.

What About Hybrids?

All-the-rage hybrid cars tout their fuel efficiency.  A hybrid, however, costs an average of $6,500 more than a non-hybrid car.  If you plan to own it for five years, you’d have to save $1,300 per year on fuel to make up the extra cost.  The U.S. Department of Energy’s fueleconomy.gov website contains a “Find and Compare Cars” section that can help you calculate whether the fuel savings of your dream hybrid will justify the higher purchase price. 

Conclusion

You don’t have to give up your car to save money on gas.  Simple, common-sense changes can have an impact on the amount you spend.  Drive less, drive defensively, shop around, and keep your car in good health, and you’ll feel less pain at the pump.

Online jobs are great because in the online world nobody cares where you work so it’s fairly easy to find employment that will let you work out of your house and in your free time. Writing jobs are pretty huge online. If you’re an average writer or above, try these guys.

Guaranteed Employment

Watch out for any “placement agency,” “employment agency,” or “job placement service” that guarantees to find employment for you.  No agency can make that sort of promise.

Up-Front Fees

Plenty of false employment agencies will ask you to pay a hefty price up front for their “exclusive” or “undisclosed” list of employment opportunities.  Typically, these types of agencies will take your money and guide you to job websites that you could have found on your own. Even if they give you a contract promising a refund if they fail to find you a job, read the fine print carefully.  There may be plenty of conditions and escape clauses that will prevent them from having to pay you back, even if you don’t get a job. 

Also, be skeptical of any employment agency who claims to have “secret” leads on government employment – all government agencies must advertise job openings publicly.

Pressure

Job placement agencies understand your hopes and fears about finding a job, and are quick to play upon them.  Beware any agency that uses fear mongering tactics, such as asking how you’ll survive if you or a family member gets sick, or reminding you of the consequences if your debts are sent to a collections agency.

Do Your Homework

Before you sign on with any employment agency, check them out.  The Better Business Bureau is a great resource for checking out any prospective placement agency.  Meanwhile, sites like ripoffreport.com can also alert you to potential scammers. 

Too Much Information

Scam artists love to ask for your personal information, so beware any so-called employment agency who needs a utility bill, drivers’ license, or social security number.  None of these are needed in order to help you find a job, but they can be used to access your personal accounts or steal your identity.  If any placement agency asks for these pieces of information, walk away.

Resume Services

Watch out for any service that claims your resume is outdated, incomplete, or simply not “catchy” enough for today’s job market.  They will, of course, demand a huge up-front fee in order to “fix” or “re-design” your resume, but the end result won’t be any more impressive than something you could have done yourself. 

Miraculous Email

That email you received today contains a job offer that sounds amazing, promising a huge income for working at home or secret shopping.  As the old saying goes, if it sounds too good to be true, it probably is.  Even if the sender has a slick-looking website and appears legitimate, this could all be a front for a scammer trying to steal your identity.  Just like anything else, avoid giving out bank account numbers, social security numbers, or any other personal information.

Conclusion

It’s hard enough to be down on your luck and in need of a job.  Don’t let desperation lead you to make bad decisions.  Check out any potential job offers or job placement services carefully, and think twice before giving up your money or personal information.

Authorities say that debit card readers in 80 Michaels stores in 20 states were surreptitiously outfitted with skimming devices, designed to read card and personal identification numbers, or PINs.  The fraud occurred between February and early May of this year.  Thieves stole card information and PINs from debit cards, then used the information to make withdrawals from shoppers’ bank accounts, usually in $500 denominations. 

The Irving, Texas-based retail chain says it disabled all of the tampered devices by May 6th, and is now working to replace all 7,200 card readers in its stores nationwide as a precautionary measure.  The total number of shoppers affected has not been disclosed.   

To carry out the fraud, thieves must gain access to a debit or credit card reader.  They install an electronic device to capture the card number from the card’s magnetic strip when it is swiped.  Then, a second device, either a pinhole-sized hidden camera or a clear electronic membrane placed over the debit card reader’s keypad, reads the customer’s personal identification number, or PIN, when it is entered.

Once the thieves have your debit card number and PIN, they can fashion a new card, and start using it to make purchases or withdrawals from anywhere in the world. 

Credit card skimming is not a new scam, but is growing in popularity among thieves.  Gartner, a research and consulting firm, states that skimming fraud has grown fivefold over the past five years.  Similar scams have been known to target ATM machines and gas station card readers – attractive to thieves because of their accessibility – but other retail chains, such as grocer ALDI, have been targeted.  One consultant quoted in the Wall Street Journal called the Michaels scheme “a very audacious, coordinated attack.”  It’s proof that fraudsters are becoming ever better at developing their illicit techniques. 

To prevent this type of fraud from happening to you, you could stop using your debit and credit cards and shop on a cash-only basis.  Since this isn’t a viable option for most people, however, there are a few things you can do to detect this type of crime if it happens and minimize your losses.

1.  Avoid using any ATM or card reader that appears to have been tampered with.
2. Check your bank account activity online daily.  Report any suspicious transactions to your bank immediately with a phone call, and follow up in writing. 
3. Find out your bank’s policy for dealing with fraudulent transactions.  How long do you have to report an illegal transaction?  Will they credit your account for the pilfered funds?  If so, how long will it be before you get your money back? 
4. Consider opening a second bank or credit card account with a nominal balance designed to cover your day-to-day purchases.  Use this second account to make your debit card purchases.  That way, if thieves get hold of your card number, they won’t have access to your main account – and all the money in it.

Conclusion.  Unfortunately, fraud will never go away, and thieves will continue to improve their methods.  Hopefully, it will never happen to you, but if it does, awareness is your best defense – stay on top of your financial activity, and cut your losses.

Patricia Seaman, a spokeswoman for the National Endowment for Financial Education, isn’t surprised by the survey’s results. “Moms do handle a lot of the day-to-day spending decisions, and that’s what kids see. When they’re young, they are dragged to everything with mom, for school, shopping for groceries, for clothes, to the garden center and to the ATM. Often during those trips, moms may be talking to themselves, saying things like, ‘This is on sale this week. Maybe this is a better product.’ It’s not just spending decisions. They may also be exposed to money handling habits, like using cash or credit cards or checks,” Seaman points out.

In particular, the survey found that 49 percent of 18- to 24-year olds were most influenced by their mother’s personal finance habits compared to 27 percent of respondents 50 to 64 years old and 14 percent of respondents age 65 and older. However, when it comes to day-to-day finances and big-ticket purchases, neither parent was the chief influencer. That honor goes to spouses.

And although mom may be the top dog with money matters, the poll found that dad is the go-to resource for information about investing. “Men and women are going to look to mom first for advice on finance. Traditionally, moms really did control the family finances. Men earned it and women managed it. We know that changes when you ask about investing. People are more likely to ask dad, or granddad, about investing,” says Leslie E. Linfield, executive director of the Institute for Financial Literacy in Portland, Maine. However, Linfield points out that there’s no guarantee that the financial guidance parents give their children is beneficial. She said a significant bad financial habit passed down through generations is bad money handling. “You have multiple generations where they are cashing the check at the convenience store, which is more expensive than a bank or a credit union, because that’s what mom did and that’s what grandma did. They don’t know otherwise, or they’ve been taught not to trust those institutions,” Linfield says. “The kids have learned that that’s the lender of first choice. If you need money for rent, you go and pawn grandma’s engagement ring.”

Bad financial behavior is less prevalent among children who had a strong relationship with their parents. “The stronger the relationship with the parents, the higher the sense of well-being, not only financially but in general, and the fewer risky financial behaviors young adults are likely to take, like using one credit card to pay off another one, going without health insurance to manage their cash flow or using high interest loans,” says Seaman. To ensure mothers are passing along sound financial advice, Seaman suggests that they should “think about what it is that you want your kids to know. Figure out what they are seeing you do and what they’re hearing you say and whether that’s really what you want them to see or hear.”

Carrying Too Much High-Interest Debt

It’s understandable to want the biggest house, the coolest car, the most fashionable clothes, and a luxury vacation every year.  But too many purchases racking up interest can cost you thousands over the course of a lifetime.  Commit to a debt-repayment plan.  Avoid using credit cards for your expenses, and pay off any that you have.  Refinance other high-interest debt if you can.  Don’t buy more house than you need.  And hold off on that new car for another year.

Ignoring Your Credit Report

Your credit history and credit score are crucial to getting good interest rates and loan terms.  Even if you’ve diligently paid your bills and done everything right, bonehead mistakes can still land on your credit report and cost you big.  Check your credit report at least annually for mistakes.  You can get it free by going here.  If you see anything out of place, file a dispute.

Not Paying Yourself First

It’s easy to let everyday emergencies take up all our available income and prevent us from saving for a rainy day or retirement.  But stop kidding yourself.  If you wait until you think you have enough money to start saving, you’ll never do it.  Don’t expect some miracle windfall to take care of your expenses after you retire.  While you may believe that you can’t possibly scrape together $50 or $100 per month to put in a savings or retirement account, once you commit to an automatic payroll deduction or debit to your bank account, you’ll be surprised at how easily you’ll survive without it. 

Ignoring Your Bills

Throwing your bank statement or credit card bills into a corner because you’re afraid to open them does not serve you.  Not only does it prevent you from coming to terms with your financial reality, but it also keeps you from finding mistakes or fraudulent charges against your accounts.  Check your credit card statements for any purchases that aren’t yours, and also to keep track of the interest rate you’re being charged.  Check your bank statement at least monthly (checking it online daily is best) for fraudulent transactions.  If you find any errors, dispute them immediately with a phone call and follow up in writing.  Depending on your bank or card issuer, you could have as little as 24 hours to do this. If you already have errors on your credit report, you can use this sample credit report dispute letter to get them removed.

Spending Carelessly

How often do you lament that you’re broke and wonder how much better your life would be if only you had more money?  Stop dreaming of winning the lottery or getting that big pay raise, and instead take a hard look at how you’re spending the money you do have.  Is it going to lots of dinners out?  Daily lattes?  Vending machine snacks?  Fast food?  Daily treats for the kids?  Look at the little ways you can save, and you can painlessly come up with extra dollars every single month.

Many of the worst financial mistakes are made little by little, every day.  They can be fixed in the same way.  Commit to taking charge of your finances, penny by penny.

Make Payments on Time

It seems obvious, but having only one missed payment is better than missing a series of them.  If you have trouble remembering to pay monthly bills, set up automatic payment plans that will deduct the money from your checking account when it’s due (just make sure you have enough money in your account to cover it – otherwise you’ll be slapped with an overdraft fee).  You can also use a reminder service like whatbills.com to send you an email whenever a bill is due; this is great for nonrecurring or less frequent bills, such as medical bills or annual insurance premiums. If you’re strapped for cash and struggling to make all your payments, this article explains tips for what bills to pay when you’re really strapped for cash.

Use Credit Wisely

Your credit score is a gauge of how well you manage credit. Don’t run up huge balances that will cost you big in interest, but you can charge a small amount every month and pay it off in full. This will demonstrate that you pay your bills on time, which will boost your credit score.  If you find it hard to get a credit card because of your bad score, check into “secured” cards that give you a credit card in exchange for a deposit you give to the issuing bank.

If you have credit cards, try asking for a lower credit card interest rate. Sometimes all you have to do is ask.

Keep Accounts Open

Shutting down credit cards can hurt your score, so leave your accounts open if you can.  Just avoid the temptation to run up the balances again.  Take the cards out of your wallet and tuck them away somewhere that you’ll forget them.

Keep An Eye On Your Credit Report

Even if you have pristine credit, you should get a copy of your credit report at least annually to check for, and correct, any errors. You can get a free copy of your credit report here.  If you find any errors, follow the credit bureaus’ instructions to file a dispute.

Don’t Apply for Lots of New Loans

Each new application for credit you complete can dent your score, so avoid applying for lots of new loans or credit cards. And really, if credit card spending is a problem for you, you shouldn’t have lots of cards, anyway.

Watch Out for “Credit Repair” Scams

Many companies advertise that they can “repair” bad credit or erase negative information from your credit report, but the Federal Trade Commission warns that these promises are usually scams.  No one can remove negative information from your credit report if it is accurate.  Most credit repair companies will ask for an upfront fee and won’t offer much help.  If you choose to use a company or nonprofit organization to help you restructure or renegotiate your debts, check their record with the Better Business Bureau to make sure they’re legitimate and that they will actually help you. You can also follow our tips for removing collections from your credit report.

Conclusion

Reforming your credit history takes time and discipline, but it can be done.  Your efforts will pay dividends, however, in better credit terms in the future.

U.S. President Barrack Obama announced to the world in a statement late in the evening of May 1 that bin Laden was killed in a U.S.-led special forces military operation in Pakistan. The terrorist leader was the mastermind behind the September 11 attacks on the Twin Towers in New York City and the Pentagon in Washington, D.C. Almost immediately following the news, oil prices fell and stocks rose across the world, including the U.S. and Japan, where stocks reached a high not seen since March when the country suffered its devastating earthquake and tsunami. In upcoming months, more investment in Middle East countries and declining transportation costs are expected.

John Silvia, chief economist of Wells Fargo, says bin Laden’s death will lower the risk of doing business worldwide and particularly in the Middle East. “There’s a lot of positives out of this,” he said. “It lowers the risk premium of anything. It generally decreases what we would call event risk – in other words, a sudden outbreak of terrorism.” However, he cautions that an improved global economy environment will be realized only “as long as it’s perceived there’s no bin Laden junior coming along.”

While financial markets are reacting positively to the news of bin Laden, some anticipate the global economic boost to be short term. “One interpretation is that bin Laden’s death means that al Qaeda will be in disarray for some time, leading to relative calm with respect to new terrorist threats, which in turn reduces the potential for disruption in oil supply,” explains Andrew Lo, a finance professor at MIT. “Financial markets will likely react positively to this news in the short run, but the repercussions may be more complex over time as we learn how bin Laden’s death affects his organization and, consequently, the political economy of the Middle East.”

In the meantime, French Finance Minister Christine Lagarde believes bin Laden’s death is likely to boost consumer confidence and economic growth in the United States. “The U.S. economy is like the American people. It reacts very quickly either positively or negatively,” says Lagarde. “I wouldn’t be surprised if this event prompted a pick-up in confidence.” On the other hand, Yang Chia-yen, a director at the Taiwan Institute of Economic Research, sees bin Laden’s death as more of a political issue rather than an economic one. “Osama bin Laden being killed will not change anything in the global economy. It will only be a ‘one-day’ impact, if any,” he predicts. Yang adds, “The current economic problems the U.S. government is encountering came from inflation and an unstable situation in the Middle East and North Africa. It is not directly related to terrorist activities or bin Laden.” Cheng Cheng-mount, chief economist at Citigroup Taiwan concurs, noting, “The only thing that I can think of at this moment would be the military budget, that the U.S. government will be able to cut a lot and use it for domestic needs instead.”

The economic crisis has a lot to do with Americans’ concerns toward home ownership. A survey that tracks home ownership finds that in December 2010 only 64 percent of people felt a house is a safe investment, compared to 83 percent in 2003, prior to the housing collapse. “If we’ve learned anything from this mess, it’s that housing is not a risk-free investment,” Michelle Meyer, a senior economist at Bank of America Merrill Lynch Global Research points out. “Everyone knows someone underwater in their mortgage or struggling to sell a home.” The U.S. Census Department finds that the home ownership rate fell to 66.5 percent in the fourth quarter of 2010, the lowest in more than a decade.

According to CoreLogic Inc., a real estate information company based in Santa Ana, California, as of December 2010, an estimated 11 million homes in the U.S. were worth less than their mortgages. Furthermore, a March 2011 report finds an additional 2.4 million borrowers had less than 5 percent equity in their homes. But real estate agents are hoping low home prices and borrowing costs will lure buyers back. Mortgage rates recently released by mortgage financier Freddie Mac puts the average mortgage rate for a 30-year fixed home loan at 4.80 percent and the 15-year average rate at 4.02 percent. “If you can jump through the hoops to get a mortgage, and there will be hoops, then this is an amazing time to purchase real estate,” notes Robert Stein, former head of the U.S. Treasury Department’s Office of Economic Policy. “There are going to be a lot of people kicking themselves a few years from now because they didn’t take advantage of the low prices and the low mortgage rates.”

Based on median U.S. income, property prices and mortgage rates, homeownership affordability is at its best yet. The median home price dropped 32 percent from its 2006 peak. “We expect that purchase activity will pick up slowly as the improvement in the job market eventually leads to greater willingness to buy,” the Mortgage Bankers Association anticipates. The group expects home sales to increase 4.1 percent in 2011 and 5.9 percent in 2012. The latest figures from Freddie Mac support the group’s optimism. Sales of existing homes below $100,000 increased 3.7 percent in March and mortgage applications rose 5.3 percent in the week ending April 15. “People will still aspire to own their own homes,” said Lea, the finance professor at San Diego State University. “They’ll just be a lot more practical about it.”

The BBB reported that homeowners have been receiving official-looking letters from out-of-state law firms that invites them to join a “Mass-Joinder” lawsuit that would force their lenders to reduce monthly payments, interest rates, or the balance of the mortgage, and dangled the possibility of receiving hefty punitive damages from their lenders.

To join the purported lawsuit, however, they were asked to hand over a massive upfront fee. In one case, the BBB reported that a Missouri homeowner responded to the letter and was told he could reduce his interest rate by 2 percent or cut down his mortgage balance by 80 percent – if he handed over a “retainer” of $5,000. Fortunately, the homeowner was experienced in the real estate business, realized the scam, and didn’t pay up.

In a statement, the BBB said that complaints from homeowners who have paid for mortgage help have been mounting.  They said, “Few, if any, of these people got help. Many ended up worse off than before the mortgage modification companies entered their lives.”

The Federal Trade Commission recently banned the collection of upfront fees from mortgage relief companies, but exempted law firms under certain circumstances. That’s why the notices are coming from law firms. 

This latest scam is a twist on the advance fee mortgage scam. In that scam, businesses purporting to help troubled homeowners get mortgage modifications charged large up-front fees in order to get their loans updated. While some homeowners did get modifications, the end result was not much better than the original loan. 

This new scam has caused the California Department of Real Estate, the Attorney General for Washington State, and Denver, Colorado’s district attorney, all to issue warnings to consumers to avoid being scammed. 

If you are a homeowner struggling to keep up with your house payments, the Better Business Bureau recommends following these steps:

•  Contact Your Lender Directly.  Try talking to your lender first to obtain a modification on your mortgage before going to a third party.   
• Beware offers of “Help.”  Beware law firms, lawyers, companies, or other groups who promise to allow you to join a “mass joinder” lawsuit against your bank or mortgage company in return for an advance fee.  The BBB reports that your chances of actually getting relief from such a suit are slim. 
• Advance Fees Not Allowed.  As of January 31, 2011, the Federal Trade Commission has banned any company from asking for an advance fee in order to help you modify your mortgage, except under certain circumstances.  If any company is asking you for a huge upfront payment, ask them how they are legally permitted to charge the fee. 
• Watch Out for the “Forensic Loan Audit.”  Yet another twist on the advance fee scam is the company who asks for an upfront payment for a “forensic loan audit.”  Much like the other scams discussed above, you are throwing your money away. 
• Check the BBB Before You Pay.  Check the Better Business Bureau’s Business Reviews at their website before you pay any company promising a mortgage modification.  If there are complaints against the company, or if they’ve gotten a failing grade from the BBB, it’s likely a scam and won’t help you.

 Conclusion.  Unfortunately, scammers think nothing of trying to kick you while you’re down.  If you’re struggling to pay your mortgage, beware any company or law firm who offers you an easy solution.

Know the Debt Consolidation Company

First, look to see if the consolidators you’re considering are legitimate.  Check with your state’s attorney general or the Federal Trade Commission to make sure the company is real.  Then, check with the Better Business Bureau to see what kind of complaints have been filed against the company.  An Internet search of the company’s name might also lead you to message boards and sites where you can compare notes with other customers.  Beware any company that promises to get you out of debt for free – that is certain to be a scam.  Also, don’t assume that a “non-profit” or “not-for-profit” agency will get you a better deal; the Federal Trade Commission has fined companies for falsely claiming nonprofit status.

Shop Around to Avoid Debt Consolidation Scams

Don’t sign up with the first company you find.  Debt consolidation companies know that you are afraid to lose your home or your car, want to get out of debt, and don’t want to go into bankruptcy.  Their representatives will play upon these fears to try and get you to sign up for their services right away without comparing other companies.  Resolve to stay calm and resist signing up until you have at least three competing offers.

Read the Fine Print

Get the details on every offer in writing.  What kind of fees will they charge?  Are they flat fees or a percentage of your debt?  Can they charge you fees later on?  A common complaint is that debt consolidators will sneak in additional fees after you’ve signed on with them.  What kind of monthly payment can they get you?  How successful have they been negotiating terms for other customers?  Get all the details in writing and then compare against competing offers.  You should not have to pay just to get a quote or an analysis; if a company demands that you pay up front for this, go elsewhere.

Keep Your Information Safe

A debt consolidator needs to know only the names of your creditors and the amounts you owe to each in order to give you a quote for their services.  They should not ask for your Social Security Number, account numbers, or any other personal information up front.

Will Your Creditors Accept the Debt Consolidation Plan?

Before signing on with a debt consolidator, the Federal Trade Commission recommends that you check with your creditors to make sure they’ll work with the consolidator.  If you do sign up for their services, make sure your creditors have accepted the consolidator’s plan before you start paying them; if not, keep making the monthly payments yourself.  Check your credit card statements to make sure the debts are being paid off as promised.

You don’t have to use a consolidator – you can try renegotiating terms with your creditors on your own.  A consolidator does the work for you, but will charge you for its services.  If you choose to work with a debt consolidator, take care to protect yourself and make sure the consolidator is truly getting you out of debt and isn’t running debt consolidation scams.

The apps, generally designed for the iPad, iPhone and Android smartphones, help consumers stay on budget with user-friendly personal finance management tools. For example, CashMap for the iPad is a personal budgeting app that enables consumers to manage their average daily balance, lower their borrowing costs, make better use of their positive cash flow, pay off debt, accelerate a loan payoff, refinance their mortgage, maximize their savings, and see their financial picture in upcoming years. “This application is a game changer for consumers who are serious about regaining control over their financial destinies in the best and most challenging of times. Instead of viewing budgeting as a boring, tedious task that rains on your parade, you’ll discover a new motivation, hope and discipline to say ‘no’ today in favor of a better tomorrow that is now in clear view,” says Dennis Williams, CashMap app founder and inventor.

Personal finance apps range from help with personal spending habits to tracking bank and investment accounts to credit card management. For example, the Pageonce Money & Bills app features a one screen calendar view of all your finances, sends reminders about your accounts and provides real-time alerts from your financial institutions. For those who are more comfortable using envelope budgeting (setting aside money in envelopes designated for household spending areas, such as mortgage, groceries, utilities, etc.), the Myelopes app for iPhone, iPod Touch and iPad manages your personal finances and spending in a similar manner so you live within your income. A comparable family budgeting app for Android devices is Easy Envelope Budget Aid, where you can record transactions at point of sale and check how well you’re staying on budget for the week or month.

On a more basic level, the Mint app for Android devices enables consumers to track bank accounts and personal spending habits. Also for Android, consumers can track and manage debt, and establish a payment plan using the IOU or Debt Snowball apps. Another Droid app geared towards budgeting is Ultimate Budgets, which helps users analyze the areas where they are spending the most money. In the area of personal investments, the sophisticated MarketDash app for iPad offers real-time market data and interactive charts so consumers can manage their investment portfolios and stock watch lists. “We see momentum building as smartphone and tablet adoption and popularity continues to grow,” says Guy Goldstein, CEO of Pageonce, the California based daily finance service for mobile devices.

Tax Scam 1: Hiding Income Offshore

Many dishonest promoters may try to convince you to hide your money in offshore banks or brokerage accounts, through offshore banks, or trusts, in order to avoid paying taxes on it.  Unfortunately, that’s illegal, and if you’re caught, you’ll be on the hook.  If you’re being pitched one of these deals, be wary.  And if you have used one of these schemes in the past, the IRS has a voluntary disclosure initiative that allows you to come clean through August 31, 2011.

Tax Scam 2: Go Phishing

Smart scammers can design official-looking emails designed to get you to reveal personal information, such as a Social Security number or credit card number.  Beware any email that purports to come from the IRS.  The IRS will not send you an email seeking this sort of information.  If they plan to audit you, they will send you a letter or show up in person.  So, beware an email that purports to come from the agency.

Tax Scam 3: Bad Preparers

While most tax preparers are honest, some unscrupulous preparers may skim a portion of your refund, charge inflated fees, or promise a huge refund.  No preparer should promise a big refund, or try to pressure you to take deductions or credits you didn’t earn.  The IRS has recently stepped up its enforcement of paid preparers, but you still need to do your homework to ensure you’ve hired an honest one.

Tax Scam 4: False Refunds

Scammers will frequently file fake information returns, then try to claim a refund based on the bogus information.  Sometimes scammers will fabricate a Form 4852 (replacement W-2) or Form 1099 as a way to reduce tax liability or claim an undeserved refund.  If someone tries to get you to go along with such a scheme, don’t let it happen.  If you’re caught, you could be on the hook for a $5,000 penalty.  Similarly, a scam artist might try to use your information to file a false return and claim a refund.  This happens often with family or friends of taxpayers, so if someone asks to use your information in order to file a false return, don’t give in to temptation.

Tax Scam 5: Bogus Charitable Deductions

Be careful when claiming noncash contributions to a charity – there are strict rules for claiming the value of noncash contributions, and the IRS specifically looks for donations reported at an inflated value.

Tax Scam 6: Bad IRAs

Beware any financial advisor who suggests that you transfer appreciated assets into an IRA, or proposes any other scheme to get around the IRA contribution limits that apply to you.

Tax Scam 7: Hidden Corporations

The IRS is also working with states to find corporations that have been formed specifically to hide income and prevent the owners of the corporation from reporting it, or allow them to report fictitious deductions.  If a financial advisor is suggesting that you establish “shell” companies to shield income, take a second look.

While you may not think of some of these as true tax scams, the IRS looks at them that way, and really, that’s all that matters.

Tax Documents

The thought of an IRS audit strikes fear in just about everyone.  But that doesn’t mean you have to keep every scrap of paper forever.  The IRS has only three years to come after you for more taxes, or 6 years if you under-reported your income by 25% or more.  So, keeping the backup documentation for your tax return  – receipts, Forms W-2, Forms 1099, etc. – for six or seven years is long enough.  As for the return itself, keep it – it shows that you filed, and it’s something of a chapter of your personal history.

An important note about tax records, however – for assets that you may sell one day for a taxable gain or loss, you’ll need to be able to prove the purchase price.  This includes stocks and other investments, retirement accounts, and your home.  So, save any document that shows the initial purchase of these items.

Copies of Bills

There’s not much need to keep your monthly bills, like power or phone bills, once the next month’s bill has come in showing that you’ve paid for the prior month and that there’s no balance due.  The only exception would be a bill that proves a deduction on your tax return, which you should keep with the rest of your tax return backup.

Bank and Credit Card Statements

Check your statements as soon as they come in for mistakes or fraudulent charges (and really, you should be going online to check your accounts more often, but that’s another post).  If it all looks good, you can throw them away after a few months.  Most banks and card issuers allow you to access old statements online at no charge, but the length of time they remain available varies widely, so find out what your bank’s retention period is.  For statements that go further back, the bank can get them, but might charge you.

Documents to Keep Long-Term

In addition to the proof of purchase for assets mentioned earlier, you should keep loan agreements, such as your mortgage, until the loan is paid off.  The same goes for insurance policies, in case questions arise regarding coverage.  Wills and trust documents should be kept permanently.

Should You Go Digital?

Most companies are campaigning hard to get their customers to go to electronic billing, saving them the cost of paper and postage.  You might switch to a digital filing system of your own, too.  While this will help you tame the paper monster, there are some caveats to keep in mind.

First, make sure your documents are safe.  An encrypted flash drive is a good choice because you can keep it in your possession and it’s password-protected (just don’t forget the password!).  Less sound choices:  saving files in your email inbox (it can be hacked), or to your computer’s hard drive (it can crash).

Second, make sure your technology stays up-to-date.  As things change, you may have to move your documents to a different storage medium.  You should also check from time to time that you can access the data you’ve saved.

Conclusion

There’s no need to let fear turn you into a financial pack rat.  Throw away what you don’t need, and consider electronic storage to put an end to the clutter forever.

Mortgage brokers say the regulation will be detrimental to the way they make money and likely force many small brokers out of business. Currently, mortgage brokers earn higher commissions through a yield spread premium. Consumer advocates, calling the practice a “kickback from the lender,” say it’s high time such a rule is being enacted. “They made more money when they were able to stick you with a loan that was worse than what you otherwise would have qualified for,” says Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington, D.C.

But mortgage brokers counter that yield spread premiums are part of the retail banking process. Brokers receive wholesale pricing for home loans from banks and add in additional fees to cover their expenses while still remaining competitive with rates offered by other banks. Robert Petrelli, who owns Mount Vernon Mortgage Corp. in Weymouth, Massachusetts, says yield spread premiums are simply one way that mortgage brokers make money. Petrelli likened the process to that used by retailers who buy at wholesale and set a retail price above the wholesale cost to cover overhead and other business expenses. “Yield spread isn’t a kickback,” he emphasized, adding that banks outsource their mortgage business to brokers to save on overhead costs.

Mortgage brokers also point out that the new regulation would make it difficult for them to compete with big banks. Under the rule, brokers would be tied to a certain profit margin, while banks would have flexibility in the mortgage rate they charge customers. “We are hearing from mortgage brokers across the country that say they’re going to let all their loan officers go and become one-man shops,” says Mike Anderson, chairman of the government affairs committee for the National Association of Mortgage Brokers. The organization has filed a federal lawsuit against the Federal Reserve System requesting an injunction that postpones enactment of the new rule.

Regardless of how the new law changes the mortgage brokering landscape, mortgage finance experts say consumers should still do their homework and compare mortgage rates at several financial institutions, including mortgage brokers. “It really helps to get multiple offers or bids and compare them against one another and to try to bid them against one another,” advises Guy Cecala, publisher of Inside Mortgage Finance, which covers the residential mortgage business. Rheingold agrees, adding that the new law would make it easier for consumers to comparison shop by creating “a place where consumers have a better chance of not being cheated in the marketplace when they’re buying a mortgage.”

Have you skipped filing a tax return because you didn’t owe anything? You may be passing up a sizable refund. The Internal Revenue Service recently announced that $1.1 billion in previously unclaimed tax refunds are waiting for nearly 1.1 million people who did not file a Federal income tax return for 2007. Half of these potential refunds could be $640 or more, says the IRS.

Free Tax Money

Even if you think you didn’t earn enough money to merit filing a return, there may be credits that could snag you a refund. For example, you may be entitled to the Earned Income Tax Credit which is available for individuals and families with income below certain thresholds. You may also be eligible for a $400 credit ($800 if you’re married filing jointly) under the Making Work Pay Credit. These credits are refundable to the taxpayer, which means that you don’t have to have taxable income to offset them – if the credits exceed your tax liability, the balance is paid to you.

Also, if you had a job that withheld Federal taxes, file a return; if you don’t owe any taxes, all of that withholding comes back to you.

Don’t worry about being late if you are due a refund – the IRS won’t penalize you. However, if you have a tax liability from prior years, or if you owe unpaid child support, a refund could be applied to those unpaid debts, and you would not receive any cash.

Unclaimed Property

In addition to owed money from the IRS, you may have unclaimed property from any state where you have lived or worked. This might be a deposit that never got refunded; pay that you didn’t collect; or a check mailed to you that you never cashed, either because you moved or just never got around to cashing it. The State of Florida’s official website says it has $1 billion in unclaimed property; California has over $5 billion; and New York has an eye-popping $10 billion.

To find unclaimed property in your name, do an internet search for states in which you have lived and worked, looking for the official state agency that handles unclaimed property. These agencies will have a website with a search engine that allows you to enter your name and personal information, then file a claim for the property if it is, in fact, yours.

Watch Out for Sneaky Tax Companies

You may have received a letter or email from a company who promises to retrieve this unclaimed property for you. While this is legal, there is no reason for you to pay that company a cut of your unclaimed property if you can claim it yourself at no charge. Also, avoid any company that promises to tell you how to find unclaimed property in exchange for a fee – they’ll just direct you to the official state website.

Given the billions of unclaimed property out there, there’s a good chance that some of it is yours. It’s not hard to claim this money, so if you think you have something coming, go and get it!