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Awareness and planning will help you avoid these unnecessary charges.By Cameron HuddlestonSeptember 9, 2010
It's easy to overlook fees when they're just a couple of bucks. But even the small ones quickly add up. However, most of the time you can avoid being nickle and dimed. With the help of BillShrink.com -- a free cost-savings site -- we created a list of ten fees you can escape.
1. Free checking fee. Some banks are starting to attach more strings to their free checking accounts. That is, you'll have to pay a monthly fee unless you meet certain criteria (see Free Checking Is Tougher to Find). However, several online banks and community banks and some major banks still offer free checking without all the requirements to qualify.
2. Balance-transfer fee. Some credit-card companies now charge up to 5% for balance transfers. So before you transfer a balance from one card to another with a low or 0% introductory rate, you should do the math to see if the amount of interest payments that you save with the introductory offer outweighs the balance-transfer fee that has to be paid immediately. See Are Balance Transfers Still a Good Deal? You might find that you'll get a better deal by negotiating down your rate on your current card.
3. Retailer credit-card fees. The new credit-card rules make it harder for retailers to extend credit on the spot. However, that doesn't mean you'll no longer hear "Do you want to save 10% on your purchase today by opening a card account with us?" The discount is tempting, but these cards usually come with higher interest rates than traditional credit cards. If you don't pay your bill in full, that discount you got will quickly be wiped out by the high rate you'll be paying on your balance.
4. Credit-card late fees. Although the new credit-card rules prohibit card issuers from charging $25 for a first-time late payment, issuers can charge $35 if you're late a second time within six months. To avoid these fees, sign up for payment alerts from your credit-card company. You'll receive an e-mail or text message several days before your bill is due.
5. Rewards card annual fees. An increasing number of rewards cards charge an annual fee. However, there are cards with great perks and no fees. BillShrink.com recommends Capital One No Hassle Miles Rewards, Chase Sapphire Card, and Pen Fed Visa Platinum Cashback Rewards.
6. Directory assistance fees. Calling 411 can cost $1.25 or more. You can get free directory assistance by calling 1-GOOG-411 or 800-FREE-411.
7. Baggage fees. Unless you fly on Southwest or JetBlue, you'll have to pay a fee to check even one bag. If you're flying with any of the other airlines and have to check a few bags, you might find it's cheaper to send your luggage to your destination by FedEx, UPS or U.S. Postal Service Ground Shipping. See Save Money by Shipping Your Luggage.
8. Airline booking fees. Don't even think about picking up the phone to book a flight -- unless you don't mind spending $15 or more for the privilege of talking to a booking agent. Book your flights online to avoid this fee.
9. Cell phone early termination fees. You can face a termination fee of up to $200 if you cancel your service before your contract is up. You can avoid these fees by signing up for prepaid service (and save money because these plans usually are cheaper).
10. Roaming fees. Make sure that you understand the way your cell-phone roaming and international charges work. According to BillShrink.com, some roaming rates are $2.49 per minute. And, some carriers will even charge you to access your voicemail (a charge of $4.99 for a missed call) even when you don’t pick up that call while you are roaming. If you send a video while roaming, you could be charged up to $7.
See 10 Expenses You Don't Need for more ways to save by avoiding unnecessary costs.
Get on the road to financial success before you reach age 30.
By Stacy Rapacon September 13, 2010
I recently celebrated my 29th birthday. Well, “celebrated” might be an overstatement considering that being this close to hitting 30 gives me a bit of a fright. Don’t get me wrong -- I don’t think of myself as old (claims that 40 or 50 is the new 30 remind me that this is an attractive age to be). But my next birthday is undoubtedly a milestone that will commemorate a more official entrance into adulthood -- complete with all the daunting responsibilities.
So, before I hit my three-decade mark, I want to review four important steps we should all take in our twenties to grow up and reach financial glory. And if you can suggest any other tips (or you just want to wish me a happy birthday), please do so in the comment box below.
1. Find your career path. Obviously, having a source of income tops this checklist. But by the time you hit 30, you need more than just a job that pays the bills; you ought to have a career, or at least be on track to get one.
If you’re still in school, remember that, as much fun as college may be, your primary reason for being there is to prepare yourself for gainful employment. Make sure you learn some marketable skills before graduation day (excellence at “flip cup” does not count) and hone those skills throughout your twenties. This doesn’t mean everyone has to study accounting, business administration or computer science, which are among the majors most likely to land you a job right out of college, according to the National Association of Colleges and Employers. For example, I earned a B.A. in English -- often (and I’d say unfairly) dubbed a “useless degree.” But I complemented the comprehensive reading and writing skills I learned from my major with additional coursework in math, statistics and economics. Put that all together and ta-da: I’m now happily starting my career as a personal-finance writer.
If you’re already working, are you in a field you can picture yourself continuing in for the next three, five, ten and 20 years? If not, you need to start looking for a career that works for you. (Just don’t jump plane the Steven Slater way – see Quit Your Job the Smart Way.) Here are a baker’s dozen worth of choices: 13 Careers for the Next Decade.
Once you get started in your choice career, figure out the track you want to follow. What’s the next step up from your current position? How long has it typically taken others to get there? What salary and benefits come with that role? Of course, as this recent recession taught many of us, no matter how well you plot your career path, you may be forced to take some detours. Still, knowing your desired destination will certainly help you navigate through those difficult times.
2. Build an emergency fund. As a responsible adult, you should abide by the same motto as any good Girl or Boy Scout: Be prepared. In case the unexpected happens, you should always have enough cash on reserve to cover at least three to six months’ worth of expenses. Keep it in a regular savings account, where you’ll have easy access to your funds. You can search BankRate.com for the accounts currently offering the best rates. For example, American Express Bank’s high-yield savings account currently yields 1.3% per year and has no minimum balance or monthly fees. See How Much Cash You Really Need for more about emergency funds.
3. Create a plan to repay your debt. I won’t pressure you to pay off everything you owe before you turn 30. After all, according to Sallie Mae, college graduates left school in 2008 with an average credit-card debt of $4,100, up from about $2,900 in 2004. And 10% of that same graduating class also carried $40,000 or more in student debt, according to the Project on Student Debt, an advocacy group.
But if you’re buried under student loans or crippled by credit-card debt, you need to at least figure out how to tackle it before you turn 30. “With cleaning up debt issues, the most important thing is to have a plan and not just assume it’ll go away,” says Carlo Panaccione, a certified financial planner based in Redwood Shores, Cal. Often, Panaccione encounters people who count on a big future bonus or bump in salary to pay off large debts. “Well, that may never happen,” he says. A better strategy: Set up a schedule and figure out how much you’ll need to pay each month to clear the debt by your target date. For more information on paying off school loans, see Digging Out of Student Debt.
4. Start funding a retirement account. Most people don’t start planning for such long-term goals until they’ve reached their forties, says Panaccione, “and then they panic-save later on.” Gentle readers, be the tortoise: Choose the chill path to savings and take advantage of this 20-year head start. Even if you can afford to put away only a small amount each month, slow and steady can win big.
For example, if you start saving just $150 a month at age 25, assuming an 8% return, you’ll wind up with $527,142 by the time you turn 65. Waiting an extra five years to start saving will cost you $180,766. Even if you crank your savings up to $200 a month starting on your 30th birthday, you’ll only net $346,376 by 65. And if you wait until you’re 40 to start saving $200 a month, you’ll have just $191,473 when you’re 65. Crunch your own numbers with our 401(k) calculator.
Ideally, you’ll want to save much more for retirement -- about 10% to 15% of your income would be best. But exactly how much you’ll need depends on what kind of lifestyle you’re planning for your golden years. For help figuring out a dollar amount, try our Retirement Savings Calculator.
The best place to build your retirement account would be in a 401(k) or a Roth IRA. Both vehicles offer appealing tax advantages, but the employer-sponsored 401(k) may also score you free money if your boss makes a contribution, too. To find out more about these types of accounts, see Why You Need a 401(k) Right Away and Why You Need a Roth IRA.
Delta Project, which studies postsecondary education costs and spending. Schools would muddle through by slashing budgets and raising tuition. “Now we’ve got a triple whammy,” she says: Revenues and spending at unsustainable levels and a president who wants to increase the number of postsecondary degrees attained each year. To meet Obama’s goal for the population aged 24 to 35 alone would require 15 million degrees above what’s likely at the current pace.
If your children are worried about the economy, reassure them and keep your discussion age-appropriate.By Janet Bodnar April 20, 2009
When I talk about teaching kids about money, I often get this response from nervous parents or curious reporters: How can adults teach their kids about money if they're not very good at managing it themselves?
It's true that adults often have a lot to learn. For instance, in recent surveys by Econ4U, 53% of those responding didn't know what the Dow Jones industrial average was; 52% couldn't describe the advantages of a Roth IRA; 43% couldn't identify a FICO score as the most important factor in getting a loan; and 64% didn't have enough savings to pay their bills for six months if they lost their job.
But to mark Financial Literacy Month, let me offer parents some words of encouragement: No matter how little you think you know about money, you still know more than your kids.
They're not going to ask you how TARP funds are being distributed or even for a rundown of your family's balance sheet. They're likely to ask far simpler financial questions: "Why can't you get money out of the bank machine so we can go to McDonald's for lunch?" "Do you have 20 bucks so I can go to the mall with my friends?" "Can I have [fill in the blank]?"
I love to tell the anecdote about my own son, then a freshman in high school, who was surprised to learn that you could deposit cash (and not just checks) in a bank. And even college students really do think that as long as you have checks in the checkbook there must be money in the account.
So when discussing money with your kids, remember these principles: Keep it age-appropriate, and above all keep it simple.
To answer the previous questions, for example, you might tell your preschooler that a bank ATM is like a piggy bank for you; just as his piggy bank is sometimes empty, so is yours until you deposit more money. Tell your middle-school student that mall money comes out of her allowance. Tell a child of any age that he or she can't have a [fill in the blank] because it doesn't fit into your budget right now. (See more money lessons by age group.)
In fact, the current economic situation is a prime teachable moment. Nearly 80% of teens polled by Junior Achievement said their parents are talking about the economy more than they used to.
And kids are listening. What they crave most now is reassurance. They want to know that despite what they see on TV, your family is going to be all right, with food on the table and a roof over your head (see Talking to Young Kids About the Financial Crisis and Talking to Teens About the Financial Crisis).
If you are facing a financial crunch, such as a job loss or home foreclosure, it will make them (and you) feel better if you have a plan for dealing with the situation.
If kids do ask a question that puzzles you or makes you uncomfortable, consider it a nudge to get your own house in order.
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