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Say Yes to Paying Less for a Wedding Dress

MoneyTalksNews — Fri, 17 May 2013 17:52:28 -0400

By Dori Zinn

NEW YORK (MoneyTalksNews)—First comes love, then comes marriage. Then comes the mountain of wedding debt you'll now have to pay.

Last year, couples spent an average of $28,427 on weddings and nuptial-related events, according to TheKnot.com. While the venues, the engagement ring and even the entertainment can cost thousands of dollars, the wardrobe isn't far down the list.

The average cost of the dress: more than $1,200.

In the video below, Money Talks News founder Stacy Johnson offers multiple ways to avoid spending so much on a wedding gown. Check out more tips after the video.

If you're looking to dress for less while still wearing a spectacular gown, there are plenty of places to look.

Online

Dozens of websites offer new wedding dresses tailored to your taste and your budget. Some examples:

TheKnot.com. Sign up for the free website to browse thousands of dresses. The site offers a custom search that can browse popular collections and sort by price. You can also search for dresses for other members of the wedding party.
Brides.com. This site also offers a custom search, and has tips on how to find the right dress for your body type.

BestBridalPrices.com. While the search isn't as user-friendly as the other two sites, there are more options for dresses that cost $200 or less.

Amazon.com. If you didn't think Amazon had wedding gowns, you were wrong.

Chances are, you're going to wear your gown only once. Buy one secondhand and then sell it after you say "I do." Even if you have to pay for dry cleaning, it's still less expensive than a brand-new dress.

OnceWed.com. Grab designer dresses without paying designer prices. I found at least seven Vera Wang dresses for less than $300.
PreOwnedWeddingDresses.com. I found dresses by Carolina Herrera for as low as $600. Note that sellers pay a one-time $25 fee for posting the listing.
Tradesy.com. This site was formerly known as Recycled Bride.
Ebay.com. Narrow your search by price, size and color. For some, you may have the option to bid or "buy it now." Check out the groovy vintage dresses in your search.

Rent

Some bridal shops that sell dresses also rent them, although there are also specialized boutiques that offer rental-only dresses. While renting eliminates the hassle of selling a dress you bought, look out for a damage deposit – often a $200 upfront fee.

Around town

Consignment shop. Keep a lookout for consignment shops that specialize in wedding dresses.
Thrift store. This may take some extra digging, but secondhand stores carry all kinds of treasures, and wedding dresses are no exception. Use The Thrift Shopper to search for a store near you.
Discount department stores. If you're looking for a nontraditional dress, browse Ross, Marshalls, T.J. Maxx and even Target for less expensive dresses that aren't strictly the wedding type. A less formal dress can work, depending on the ceremony setting.

From the family

Does your mother, grandmother or sister have a wedding dress she kept? What about friends who have tied the knot? You could land a dress for only the cost of dry cleaning and a bit of tailoring.

Where did you get an affordable wedding dress? Tell us your story on our Facebook page.

Subscribe by email

Like this article? Sign up for our email updates and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's '205 Ways to Save Money' as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

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Divorce and the Cost of Kids

Elise Pettus — Fri, 17 May 2013 14:11:45 -0400

NEW YORK (MainStreet) — Let me begin by saying that the word "haggle" does NOT abbreviate to "hag" any more than the word "dicker" abbreviates to ... never mind. Regardless, it's a frustrating truth that years after most divorcing parents have signed their separation or divorce agreements, the subject of child-related costs is a source of ongoing squabbles.

Also see: When Do you Need to Hire a Divorce Litigator?

And whereas the emotional pain fades and the custody issues become fewer, kids' expenses never do. They just seem to grow along with the kids until you hit the big one — college, which for most parents is the final but most treacherous challenge of all.

When you are drawing up your divorce agreement, think through all the big-ticket items — school tuition, summer camp, music lessons etc. — and how they will be covered. Beyond your state's legal requirements that apply to child support and expenses, there are options for negotiating who pays what. In a divorce agreement, major expenses — health care, child care and education — are negotiated separately from general child support. And the more specifically the terms are laid out, the less room there is for argument.

"You want to avoid the fight over $100 here or there," says Barbara Rothberg, who works with divorcing couples to hammer out the gritty details of post-divorce parenting. "The cleaner the agreement, the better off you are," she likes to say.

Rothberg favors the simplest formula possible. If both parents make more or less equal incomes, they often split the expenses 50/50. If one of you makes considerably more money, the bread-winner agrees to take on the big-ticket expenses (i.e., medical, summer camp, private school) and you split all the rest down the middle. If the income of each spouse is something like 70/30, you might logically split all child costs according to the same ratio. In many co-paying scenarios, it helps to open an account that each spouse deposits into monthly or quarterly, and out of which all the kids' bills get paid.

It helps to remember that even in the best of marriages, spouses often disagree about how much things such as clothes or camp or computers should cost. In a divorce, you subtract the trust and communication, and that often creates some pretty sharp exchanges.

Also see: Divorcing Toward a Barter Life

In break-ups where the husband has been the primary earner and the wife has been spending her time raising the kids, the acrimony can be particularly sharp. She insists on her right to make the majority of kid-related decisions the way she always has. Meanwhile, he no longer feels comfortable handing over a large chunk of money when he has no control over how it gets spent.

"Husbands often tend to feel that child support payments are really payments to their ex-spouse," says Ani Mason, a collaborative divorce attorney in New York. And, Mason adds, since the couple no longer shares a financial future together, the man may feel his ex-wife has no incentive to be frugal. Some agreements stipulate that expenses under a certain amount can be decided by one spouse, but expenses over that amount need to be discussed.

"When discussions go on and on about a single relatively small expense," Rothberg says, "it's usually about something else." Spoken like a therapist, but probably true in many cases. Unless we are talking about college — Mason and Rothberg agree that college is its own separate major expense and needs to be discussed at the time of the split.

Also see: Is the $399 Divorce for Real?

"Ideally, if there's enough money, it would be a good idea to set aside college funds now," Mason says.

But the key is to work out clearly on paper how the responsibility will fall. In a majority of states, parents can be ordered by the court to help pay a child's college tuition. Enforcement, of course, is another question, as many divorced parents know all too well. A solidly drafted agreement will at least provide recourse: If one parent willfully defaults on his or her obligation, that person will have to pay his or her share plus the fee for both attorneys.

The best bet for parents considering a split? Haggle or dicker now over the terms of your divorce agreement for the sake of greater peace down the road.

Elise Pettus is the founder of UNtied, a website for women navigating Separation and Divorce. Check out the site's free monthly info events.

Cramer Divines Vine: Old Dog, New Blog

Ross Kenneth Urken — Fri, 17 May 2013 12:34:38 -0400

NEW YORK (MainStreet)—Jim Cramer hates the helplessness he feels from not being in the know, so when his CNBC colleague Carl Quintanilla filmed him as part of a Vine, the Old Dog wanted to explore the six-second video app in further detail.

That's where my sister Nicole, and I came in for this episode of Old Dog, New Blog as we made a Vine of our own--in which I play a morose and over-worked writer on a desperate dash for coffee--and instructed Cramer on the possibilities of using this new tool. The French electronic music duo Daft Punk, for example, used Vine to promote its new album, Random Access Memories, which was released today.

Check out Cramer's newest quest to keep up with the Joneses below:

video platform video management video solutions video player

And see the cinematic tour de force that is our test Vine:

ODNB Archives

How 8 Popular Brands Got Their Names

Kristin Colella — Fri, 17 May 2013 11:29:25 -0400

From Wheaties to Snickers to Starbucks, here are the stories you might not have heard.

How to Beat Retirement Derailers

Fri, 17 May 2013 07:10:31 -0400

NEW YORK (MainStreet)—Suzanna de Baca, VP of wealth strategies at Ameriprise Financial, tells TheStreet's Gregg Greenberg some tips for staying on the right retirement track.

Student Loan Bill from Sen. Elizabeth Warren Gains Traction

John Sandman — Fri, 17 May 2013 06:40:49 -0400

NEW YORK (MainStreet)—Senator Elizabeth Warren (D-Mass.) is gathering support for her bill to lower federal student loan interest rates to the level of the fed funds rate, but so far there hasn't been any movement on the one-year time frame.

Also see: The Geography of Student Debt

A House bill that is a companion to The Bank on Students Loan Fairness Act, which drops the rate on federally subsidized Stafford loans from the Department of Education, has been introduced in by Rep. John Tierney (D-Mass). Warren's bill already has a co-sponsor in the Senate by Jeff Merkley (D-OR).

"Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about 0.75%," she said Thursday in an email blast to supporters. "Those are the same big banks that destroyed millions of jobs and nearly broke our economy. That isn't right. And that's why I introduced legislation to give students the same deal we give to the big banks. This was my very first bill in the U.S. Senate, and I'm going to fight for its passage."

According to Warren's statement, The Bank on Students Loan Fairness Act would allow students who are eligible for federally subsidized Stafford loans to borrow at 0.75%. "For one year, the Federal Reserve would make funds available to the Department of Education to cover the loans and give students relief from high interest rates while giving Congress time to find a long-term solution," she said. That solution may leverage the difficulty Congress would have in replacing what may become a popular piece of legislation—one that involves a reduction in student loan interest rates—with one that may be extremely unpopular 12 months later—a rate hike.

Also see: Will Student Loan Interest Rates Double?

Tierney engaged this issue with a May 14 op-ed in the Lowell Sun. Kevin McDermott, Tierney's Washington, D.C. based legislative assistant could not be reached for comment.

Also see: Sallie Mae Cancels Bond Offering

--Written by John Sandman for MainStreet

Dressing for Success Means Leaving the Chicken Suit at Home

Hal M. Bundrick — Fri, 17 May 2013 06:26:44 -0400

NEW YORK (MainStreet)—Put the chicken suit back on the hanger. It's no surprise that 80% of executives believe that clothing choices affect an employee's chances of earning a promotion -- and they think the parachute pants aren't helping your cause. But what may be surprising is what some employees are wearing to work.

Also see: 5 Stories of Innovation for Business

With America's growing tendency to dress down at the workplace, what you wear in a corporate culture is less important these days. When the survey was last taken back in 2007, 93% of executives tied a professional look to the potential for job promotions.

In a survey of more than 1,000 senior managers at companies with 20 or more employees, executives were asked, "To what extent does someone's style of dress at work influence his or her chances of being promoted?" Their responses:

2013
Significantly 8%
Somewhat 72%
Not at all 20%

Also see: Will Student Loan Interest Rates Double?

2007
Significantly 33%
Somewhat 60%
Not at all 7%

According to the managers interviewed, some of the strangest apparel they've seen worn to work – not including outfits worn in observance of Halloween – were a dinosaur costume, pajamas, parachute pants, a chicken suit, coveralls, a space suit, studs with motorcycle gear and a wolf mask. Particularly unusual ensembles included:

"A T-shirt, tie and flip-flops"
"Short pants and a winter jacket"
"One red sock and one white sock"
"Tennis shoes and men's knicker pants"
"Shorts and house slippers"
"A red suit with sporty footwear"

Also see: Would You Buy The Ariel Castro House Where He Brutalized Three Women?

Some employees chose bolder looks:

"A see-through dress"
"Fishnet stockings and stilettos"
"A bathing suit"
"A tube top"
"A backless shirt"

Sports-minded office workers were seen wearing:

"A muscle shirt"

"A sweat suit"

"Yoga pants"

"Very tight bike shorts"

Employees not soon to be seen in a corner office were donning:

"Torn jeans"

"A vest with a big hole in the back"

"A T-shirt with cut-off sleeves"

"Saggy pants"

"Sandals with socks"

"Flood pants"

The survey was conducted on behalf of temporary staffing firm OfficeTeam, a division of Robert Half International.

Are No-Cost Mortgages Always a Good Deal?

Credit.com — Thu, 16 May 2013 13:50:37 -0400

By Scott Sheldon

NEW YORK (Credit.com) —A program made popular in the height of the subprime lending environment was the no-cost mortgage. No-cost mortgages have gotten quite a bit of exposure lately, as consumers seek to better understand loan terms, interest rates and how to qualify for mortgages in an ever-tightening credit market. And then there's the low-cost mortgage. No-cost mortgages, low-cost mortgages -- two distinct differences. Here's how they differ.

Some Lending Lingo

Annual Percentage Rate (APR) is a function of blending the closing costs with the loan amount and re-amortizing that figure over the term of the loan. On traditional loan financing, the APR is usually within .125% of the actual note rate tied to the amount borrowed.

What to know: APR is a comparative tool enforced by the Truth In Lending Act to quickly assess cost differences between loan choices. The APR has no bearing on your principal and interest payment amount nor the note rate. APR is a barometer of loan cost solely. The interest rate, rather than note rate, determines the monthly mortgage payment.

No-Cost Mortgage is truly a "no-cost" loan -- no appraisal fee, no lender fees and no closing costs. These fees are assessed by virtue of taking out the loan. The mortgage lender provides a credit at the close of escrow equal to the amount of the closing costs, thereby creating a "no fees" loan. APR is equal to the interest rate, but disclosure will have a higher APR just as a traditional mortgage would, as lenders are required to disclose APR whether there is a lender credit or not.

What to Know: No-cost mortgages will contain a higher interest rate and APR, so you're in essence amortizing the closing costs over the life of the loan (i.e. 360 months representing a 30-year fixed rate mortgage). The higher interest rate allows the lender to generate "overage" for the benefit of the consumer taking out the no-cost mortgage.

Low-Cost Mortgage is a traditional mortgage all lenders offer that is considered the norm, taking out a loan while paying any applicable fees associated with doing so, excluding discount points, which are usually optional. (In some cases paying discount points may very well make sense, but for our purposes a low-cost mortgage is under the assumption of no discount points.)

What to Know: Low-cost mortgages will contain lower rates than their no-cost mortgage counterparts. Because the lender does not have to inflate the rate for generating overage to pay the borrower's closing costs, the lender can offer the consumer premium pricing when it comes to the interest rate and terms. Not always, but in most cases.the interest rate and APR are lower on low-cost mortgages than on no-cost mortgages.

Which Is Better for You?

The benefits you would gain from either type of loan depends on how long you plan to hold the loan and your financial goals. For example, because the future for many is unknown in terms of how long the loan will be held for and/or how long the property will be held for, a low-cost mortgage is a more appropriate long-term strategy as the realized benefits of the lower cost mortgage materialize over time -- i.e., lower interest savings over the life of the loan. Conversely, if the property hold time or the loan payoff is going to be dramatically shorter, such as within the next 12 months, a no-cost mortgage is more appropriate despite the higher interest rate.

Here is a typical no-cost versus low-cost mortgage scenario to see how the numbers change over time...

	SUMMARY
Program	No-Cost Mortgage	Low-Cost Mortgage
Loan Amount	$300,000	$300,000
Interest Rate	4.13%	3.63%
P & I Term (months)	360	360
Financed Loan Amount	$300,000	$300,000
Monthly Payment	$1,453	$1,368
Net Savings		$85
Closing Fees	None	$2,500
	COST OVER 30 YEARS
Program Details	A	B
Principal Paid	$300,000	$317,000
Interest Paid	$223,422	$192,535
Total Loan Cost (P&I)	$523,422	$509,535

Assumptions based on primary residence, with excellent credit and 65% loan to value.
No-cost mortgage rate: 4.125%/APR 4.26%
Low-cost mortgage rate: 3.625%/3.76% APR

Based on the figures, after backing out the $2,500 in closing costs, the low-cost mortgage is $28,387 lower in mortgage interest for the life of 360 months. Looking at the monthly figures, $78.85 per month is the monthly interest benefit attainable on the low-cost loan. Adding the interest savings and payment savings provided a total benefit.

Subtract the total interest of the low-cost mortgage from the no-cost mortgage.

Take this figure and divide it by the term of the loan -- 360 months for a 30-year fixed-rate mortgage -- and then subtract the one-time closing costs from this figure (title fees, loan origination fee, recording fees, etc.).

If you do this correctly it will give you a monthly figure representing the monthly interest savings between the two loans.

Next add in the payment savings generated by the lower interest rate and you'll have the total monthly loan benefit of a low cost mortgage

Don't be fooled by a no-cost mortgage, because there's no such thing as a free lunch, and no matter how good the advertisement is, you'll pay the closing costs over the life of the loan term. A low-cost mortgage will always net a better interest rate and payment.

Related Links:

PayPal Founder Invests in Bitcoin

Juliette Fairley — Thu, 16 May 2013 13:29:53 -0400

NEW YORK (MainStreet)—The world's leading bitcoin processor BitPay Inc. has raised $2 million in seed money led by Founders Fund, which includes PayPal founder Ken Howery.

"It's a natural evolution given our payments background at PayPal," said Howery. "We were intrigued and spent time trying to get comfortable with questions around regulation but eventually decided to make our first investment in BitPay."

Also see: Gastro-Lounge EVR Taps Into Bitcoin Craze

Yet, it's still unclear as to when consumers can expect to be using bitcoins when they make purchases using PayPal. Homeland Security Investigations recently took action to seize the assets of Mt. Gox, the world's leading Bitcoin exchange. Mt. Gox's account was frozen at the request of investigators. The first federal action against the currency isn't a surprise.

Bitcoin advocates have spoken of the currency's potential ability to sidestep government supervision.

Also see: Bitcoin Should Be Treated Like A Commodity, Not A Currency

"From PayPal's perspective, I assume the management is taking a wait-and-see approach to Bitcoin adoption," Howery said.

Howery should know. He helped raise $90 million in 2001 for PayPal's fifth round of financing, the vast majority of which came from abroad.

"After the stock market crash in 2000, it was hard to raise money in the U.S., so we had to go to groups in the MiddleEast, Asia and Europe for funding," Howery said. As a co-founder of PayPal and partner at Founders Fund, Howery invests in about three new companies a year with typical investments ranging from $2 million to $25 million per company. Every couple of years, the fund he manages with Peter Thiel and two other partners will make bigger re-investments of $75 to $100 million in companies they have already invested in.

Also see: Is the Bitcoin Bubble for Real?

"We are focused on breakthrough tech businesses in areas including space, artificial intelligence, robotics and healthcare," said Howery, who invested $12.2 million in ZocDoc in the healthcare IT space and $10 million in SolarCity, the largest full service solar provider in America. The 37-year-old is not your typical red-flag raising venture capitalist.

He met the CEOs of ZocDoc and Domo socially through friends before deciding to invest in their start-ups.

"Our investment in SolarCity came out of what people have dubbed the PayPal mafia due to our relationship with Chairman Elon Musk and his cousin Lyndon Rive who is co-founder and CEO," Howery said. "We invested at the IPO in December and since then, our investment has quadrupled."

Howery is also not your typical shark-like venture capitalist. The CEO of ZocDoc Cyrus Massoumi met Howery at a mutual friend's brunch in New York.

"I am friends with many of the entrepreneurs we fund," Howery said. "At Founders Fund we engage in founder-friendly investing. We've never fired a CEO founder that we back unlike most VCs. We support our founders and they can trust us."

Friendly and innovative Howery's VC tactics may be, but this new vote of confidence in Bitcoin from the "Paypal mafia" gives a peculiar surge of confidence in the crypto-currency just as it comes under added scrutiny.

--Written by Juliette Fairley for MainStreet

Will Today's Teens Out-earn Their Parents or Just Live in the Basement Eating Wheaties?

Mark Henricks — Thu, 16 May 2013 12:21:08 -0400

NEW YORK (MainStreet)—One in four teens expects to be 25 to 27 years old before becoming financially independent from parents, according to a new study from Junior Achievement USA and The Allstate Foundation. Michael Horan is one of them. The 18-year-old from Duluth, Georgia plans to study orthodontia for the next several years. "By 25, I think I'll still be needing help paying for dental school," he said. "So 27 is what I'm aiming for."

A lot more teens, including many who aren't in dental school, anticipate being dependent on parents until their mid-20s these days. This 2013 Teens and Personal Finance Poll found twice as many teens -- 25% compared to 12% in 2011 --didn't anticipate achieving financial independence until 25 or later.

Stephanie Bell, spokesperson for Junior Achievement USA, a nonprofit financial literacy organization based in Colorado Springs, Col., called the results surprising. "Those of us who are parents might be shocked to learn that teens might be depending on their parents for almost 10 years past the time you think a teen might move out of the house," Bell said.

That's not the only surprise lurking in recent research into twenty-somethings living at home. A recent Clark University poll of parents whose 18- to 29-year-old children lived with them found 61% were "mostly positive" and only 6% were "mostly negative" about the arrangement. Among benefits most parents cited were feeling closer to kids, getting help with household responsibilities and having more companionship, reported Jeffrey J. Arnett, a research professor of psychology, co-author of a new parenting guide, When Will My Grown-Up Kid Grow Up? (Workman, 2013), and director of the annual Clark U. poll.

Although they may be staying home longer than previous generations, today's teens are also more likely to expect they will eventually climb higher on the economic ladder than their parents. Compared to the 2011 poll by Junior Achievement and Allstate, that optimistic group increased by 20%.

Optimism is tempered by reality for many young adults who have watched parents navigate the so-called Great Recession of 2007 to 2009. Cardin McKenna, 23, just graduated in May 2013 from the University of Georgia with a finance degree and considers out-earning her parents more of an aspiration than a certainty.

Also see: Financial Literacy Summit Addresses Gaps in Understanding

"I would definitely like to think that, because that's what everyone wants to think," McKenna said. "The short answer is 'yes'; the practical answer is 'I hope so.'" For now, she's deciding whether to test her skills in the job market or go back to school for more education.

While the job market is a concern for many teens and recent college graduates, experts in personal finance find additional cautionary content in studies of what young people know about managing their personal finances. For instance, the Junior Achievement poll revealed that 33% of teens do not follow a financial budget. "It's kind of disconcerting that a third of teens don't see the importance of using a budget," Bell said.

Similar weaknesses showed up on the topics of credit cards, with 20% of teens unsure of their ability to manage plastic, and investing, where 34% expressed a lack of confidence. Saving for college, which would seem more pertinent, had not been discussed with parents by nearly 30% of teens. It's hard to blame teens for not knowing something they haven't been taught, of course. And that's very much the case with financial knowledge, with only 29% of teens saying their schools had programs for teaching them about personal finance.

Then again, teens are still learning about personal finance even if it's not in a classroom, according to Joe Sicchitano, senior vice president and head of financial planning for SunTrust Private Wealth Management, a part of Atlanta-based SunTrust Banks. "They're keen observers," Sicchitano said. "They watch and judge and get wisdom from that. Very few teens are taught proactively, but don't think they're not getting a lesson."

Also see: Does Financial Literacy Matter?

While teens may learn about finance from watching parents, observation doesn't necessarily teach everything well. Teens who've witnessed parents cope with the recent economic downturn may be sensitized to financial factors without understanding them very well. "They know they should have a good credit score," Sicchitano said. "But if you ask them what a credit score is, they can't tell you."

Even finance majors like McKenna may be thrust into the world without much grounding in personal finance. All the courses required for her degree dealt with business finance, she said. As an elective, she took a single personal finance course.

"I was pretty shocked at how much more I learned in the personal finance course than in the courses that were directed toward working for large companies," McKenna said. Along with course material on budgeting and personal investing, she learned about student loans, which may come in handy if she goes on to graduate school, she said.

Whether they're in graduate school, medical school or just studying in the school of hard knocks, it seems clear that today's teens are more likely than yesterday's to be living a home for several more years. Yet Arnett said that's not necessarily by choice.

When young adults he surveyed were asked whether they'd rather live independently but on a tight budget, 74% said they did. "They really would prefer to live on their own, even if it means not being able to live as well," he said.

Not being able to live as well on their own is par for the course for young people, Arnett notes. Whether we are in recession or not, the unemployment rate for 15- to 24-year-olds is consistently twice as high as overall unemployment.

Also see: Financial Football Tackles Financial Literacy

"When times were good and unemployment was 5%, it was 10% for them," Arnett said. "In the depths of the recession, when unemployment was 10%, it was 20% for them. So it's always tough."

Despite that, today's teens remain optimistic. That includes Horan, who is just completing his freshman year at the University of Georgia, and beginning a long course of preparation for what he anticipates will a career with financial rewards exceeding those he grew up with. "I do believe," he said, "I'll be either as prosperous or more prosperous than my parents."

--Written by Mark Henricks for MainStreet

Abercrombie's Sexy Abs Don't Do It for Facebook

Rocco Pendola — Thu, 16 May 2013 10:26:28 -0400

NEW YORK (TheStreet) -- As you may or may not know, I double as TheStreet's Director of Social Media. That sounds fancy, but an alternative title could just as easily be Tweet Boy. "Hey boy! You best Tweet this story for me!.

You might also know that, unlike a vocal and somewhat annoying peanut gallery, I don't just think, I know Facebook advertising works and couldn't be more fair. So I love Facebook. Don't construe this as a shot at the company; it's merely an issue -- pulled from behind the scenes at TheStreet -- I thought was interesting and wanted to open up to the opinionated masses.

Out of all TheStreet's writers, Laurie Kulikowski threatens me with physical violence most if I don't post her stories to our various social media channels.

On Wednesday, Laurie suggested we post her story about Abercrombie & Fitch -- Abercrombie's Jeffries Provokes Even As Investors Cheer -- on Facebook. In reaction to fear of another beating, I quickly agreed and commissioned my image boy, Adam Leverone, to fetch a photo that would drive home the meat of this passionate story.

Also see: Men's Underwear Sales Show Bulge in the Economy

If you don't know what I'm talking about, just read Laurie's piece to get up to speed on the controversy the ANF CEO triggered. It involves "fat chicks."

Anyway, as usual, Adam delivered the goods, selecting an image that you might have seen on the side of a skyscraper in a major urban core. See the image and Facebook post here.

As you may or may not know, I moonlight as an Abercrombie model for spending cash.

As I often do, I put some of the massive advertising budget TheStreet provides me behind the above-linked Facebook post to get it in front of more of our fans. Somewhat to my surprise, Facebook rejected the ad for the following reason (as lifted verbatim from Facebook's email to me):

The image of your ad violates our Ad guidelines. Please note that we don't allow images that promote an ideal body/physical image for health related products.

I don't feel strongly about their decision one way or the other, which is part of the reason why I put this out for debate. I want to see if I can be convinced to go one way or the other. But, first some close to objective thoughts to consider ...

The first thing that stood out was that Facebook referred to "health related products." This is fashion. Apparel. Clothing. Not health related. But I get their point.

Second, this is quite arbitrary of Facebook. Why do they take exception with this post of an already widely circulated advertisement of, let's face it, a very attractive abdominal region, but not ...

The various photos of guns I have posted, like this pretty gnarly one of an AR-15 or whatever it is. You could certainly make a similar case against that as you can against the Abercrombie one.

But this puzzles me even more. This excellent Ross Kenneth Urken story made Jay Leno for goodness sake -- Men's Underwear Sales Show Bulge in the Economy -- and I posted it on Facebook with this provocative shot of an underwear model. I submitted an ad. Facebook approved it.

But the Abercrombie ad was a no-go. Arbitrary and capricious, it seems. A response to the current controversy? A judgment call made by one person who happened to be on duty?

Also see: Would You Buy The Ariel Castro House Where He Brutalized Three Women?

Anyhow, back in my sports talk radio days this is the type of thing we would have debated for hours. Yes. On sports radio. We love sports. We love stocks. We also loving arguing about the controversy of the day.

Put simply, should Facebook be making this relatively subjective call? And how do they determine what sort of image to reject vs. accept?

--Written by Rocco Pendola in Santa Monica, Calif.

Retirees Constantly Underestimate Health Care Costs

Brian O'Connell — Thu, 16 May 2013 09:00:00 -0400

NEW YORK (MainStreet) — Uh-oh.

Not only are U.S. health consumers lax in their effort to go see the doctor, and in taking steps to improve their physical well-being, they also consistently underestimate how much money they'll need for decent health care in retirement.

Hey, maybe Americans think they'll live forever, or that Uncle Sam will bail them out if they're waylaid by illness or injury.

Whatever the reason, American adults — especially retirees — really need to get their act together on health care issues, or disaster may well await them in retirement.

Take a look at these numbers from Aviva USA and the Mayo Clinic and their most recent Wellness For Life study, released this week:

Roughly one in six U.S. adults visit their doctor less than once every two years, a huge health care "no-no," according to the Mayo Clinic.
One in eight U.S. adults view themselves as "currently unhealthy," with 30% categorized as obese.
About 50% of Americans say they have gained weight since 2002, as opposed to 16% who say their weight has declined.

The data don't get rosier when you factor finances into the health care equation, particularly for Americans of retirement age. The survey estimates that U.S. retirees will need to shell out 30% of their income for health care expenses in their so-called Golden Years.

But retirees and near-retirees just don't see it that way. According to Aviva and the Mayo Clinic, 90% of American adults expect to spend less than 20% of their annual income on health care costs, while 70% say they will spend 10% of their annual income or less.

This, the groups say, is a recipe for disaster for Americans already struggling to save enough after their working years.

"These are staggering discrepancies between people's perception and current reality," warns Philip Hagen, a medical director at the Mayo Clinic. "This survey revealed most Americans are unrealistic about some of the repercussions of lifestyle choices and aging — specifically, that as you get older, your health is apt to decline and your need for health care increases. That need for additional care also means there will be additional costs."

Hagen says Americans need to act now to get their health care act together. "Getting regular preventive care and improving lifestyle habits to decrease health risks can help reduce these expenses and improve health and quality of life," he adds.

If it were only that easy.

The study says only 40% of Americans expect to have enough cash for medical expenses in retirement, a chilling figure considering heath care costs are widely expected to rise in the coming decades.

Aviva and the Mayo Clinic urge Americans to stash away more cash for retirement health care needs and to "rethink" what role health care expenses play in retirement panning.

"Wellness" is the key, the study says. Oh, and $100,000 or more added to your retirement fund just for health care costs won't hurt either.

— By Brian O'Connell

How to Make Your Real Estate Make Sense

Jeff Brown — Thu, 16 May 2013 08:26:49 -0400

NEW YORK (MainStreet) — A house is a home. No, it's an investment. O.K., then, it's both.

And that's problem — a muddled view that can be used to rationalize an unsuitable property. If the home's too expensive, we figure, well, it's a good investment. And if the value isn't rising as we'd hoped, we say, well, it's a good home. In fact, the property may not be serving either purpose as well as it should.

Disentangling these two functions is key to making the homeownership decision more rational. That's becoming more important as some experts warn about a new housing bubble, at least in some parts of the country.

Also see: RelayRides Acquires Wheelz, Shows P2P Car-Sharing Strength

"Bubble Fears Emerge As Experts Predict Home Value Appreciation Will Remain Above 5 Percent This Year," proclaims the headline on a recent press release from Zillow , the mortgage and home-selling website. Zillow said its survey of 105 economists unearthed growing concerns that low mortgage rates will push home prices up too fast. If a bubble follows and bursts, homeowners would be left underwater — owing more than their homes are worth.

Also see: Will Student Loan Interest Rates Double?

To avoid this, you can keep the home you already have or rent instead of owning. But renting means you don't build any equity. So how do you figure how much of your home expense is an investment that will grow in value and how much is the cost of shelter — a cost you'd have whether you rent or own?

Actually, it's fairly simple. The investment portion of your cost is the down payment and principal portion of the monthly payment, plus the cost of major improvements. That's the money actually put into the home you hope to get back after a sale, plus gains from appreciation.

For the investment to pay off, the value must grow enough to leave you with more than you put in, accounting for costs of buying and selling such as the real estate agent's commission, real estate transfer taxes, legal and document fees and so on.

Imagine you'd bought a $300,000 home with 20% down and 4% for transfer tax and other purchasing expenses — an initial investment of $72,000. Now assume you had a 3.5% loan for 10 years and put the home on the market. Your investment would come to $126,176 -- the initial $72,000 plus $54,176 in principal through your monthly payments. (In other words, your loan balance would have dropped from $240,000 to $185,824.)

If the home sold for $400,000, you'd pay $24,000 in commission, plus, let's say, $3,000 in other costs, so you'd net $373,000. After paying off the loan balance, you'd have $187,176. So you'd have made $61,000 on your $126,176 investment, or about 4% a year.

The home would have been a good investment if you found 4% an acceptable return. Generally, that would mean a bigger return than you could have earned on other investments of similar risk.

But wait, you had the use of the home for shelter. Yes, and that value can be measured separately, as the total of all the other costs — mortgage interest, property tax, homeowner's insurance, routine repairs and maintenance. (For interest and real estate tax use an after-tax figure to account for the federal income tax deductions on those expenses.)

These are unrecoverable expenses that come on top of the investment. That means they are expenses you would not have with other types of investments, such as mutual funds. These costs are comparable to rent, which is not recoverable. They are what you pay to be able to use your home, just as you'd pay rent for the right to use an apartment.

If these costs exceed what you'd pay to rent a comparable property, you're paying too much. They're not part of the investment, which was already analyzed separately.

Keep in mind that as the years go by the interest portion of your monthly mortgage payment will get smaller while the principal portion will get larger. In other words, your shelter cost of housing you own — equivalent to rent — will get smaller, while the value of your investment will rise. That's why owning makes financial sense if you keep the property long enough. Note that other shelter costs, such as taxes, insurance and maintenance, will rise with inflation, offsetting some of the progress you make from the shrinking interest cost. But if you rented, that cost would probably rise with inflation, too.

The ideal homeowning situation is one in which you are happy with the investment return and have a shelter cost below what you'd pay for rent.

If the investment return will be exceptionally high, you might feel it's OK to pay more for shelter. But if the investment return will be low, a high shelter cost would just make things worse.

Also see: Saving For A Rainy Day: A How-To Guide

A final thing to note: For this analysis, it doesn't matter whether the home is expensive or cheap. Either way, it can be a good investment or a poor one, depending on how fast you expect home prices to rise — 3% to 4% is the long-term average. But if you buy a cheaper home, the consequences won't be as bad if you bet wrong.

--Written by Jeff Brown for MainStreet

5 Stories of Innovation for Business

Ilana Greene — Thu, 16 May 2013 07:30:00 -0400

NEW YORK (MainStreet) — A person can't just sit down in front of a computer and expect to innovate. Innovation comes about in many ways and in response to many things — real-world problems, conflicts, situations, complications or confrontations. There is just no telling where the next new idea will come from.

Here are some amazing tips and insights just from among my mentors, colleagues and peers:

Vapor Corp.: CEO Kevin Frija introduced electronic cigarettes to a market saturated with traditional tobacco cigarettes. Vapor has achieved four consecutive years of sales growth since 2009, when Frija became CEO, increasing 33.6% year over year. "We researched the product in China and thought it could find a niche in the U.S. because it was new to the market," he says, "but we discovered how innovative it was after seeing competitors sprout up overnight."

But innovation does not necessarily mean constant change in your core product, he says. "If we were to completely change the technology in our e-cigarettes so that they would be different from the competition, we would lose our customer base and the curiosity of new users," he says. "Our goal has been to keep up with market trends, but continue to innovate in other ways, like making our products available on the mobile app market to connect ourselves to customers."

TravelSolutions by Campbell: This travel and expense solutions company was one of the first U.S. companies to deploy an online booking system. That's because, CEO Bill Campbell says, the company had to reinvent its business after the birth of the Internet and its radical realignment of the travel industry. By embracing robotics technology instead of running from it, the company gained a significant advantage over the competition. Many travel agencies went out of business while TravelSolutions by Campbell (then Campbell Resources) grew explosively.

"In the late '80s, robotics technology was just being introduced; however, it was very costly to install. We made the decision to reinvest in our business and used robotics to automate fare scanning to look for lower airfare opportunities. Today, we take a variation of this same software and blend it with a new invention called ChangeGuard to enable customers to secure even lower airfare post purchase, because ChangeGuard mitigates the heavy airline-imposed ticket change penalty."

TravelSolutions by Campbell says it is able to save an average customer an additional $30,000 in net savings per $1 million in air travel spend by eliminating change fees from airlines worldwide. As a result, it is quickly becoming one of the most successful corporate travel agencies in the country.

"We have always been innovative and driven by customer ideas," Campbell says. "Following the airlines' commission eliminations and subsequently 9/11, our only chance of survival was to do something different. Now it is engrained in our culture. We are currently launching numerous new inventions, such as a Travel Command and Control Center and a hotel cluster shopping application" — steps he expects to create another "tidal wave" of growth.

Ultimately, the lesson Campbell learned was that when new technology threatens to change or destroy an industry, companies have to embrace, adopt and incorporate that technology and bend it to their needs.

Gigwalk: According to CEO Bob Bahramipour, innovation at Gigwalk — which gives fast access to a corps of temp workers via smartphone — occurred unintentionally, a result of the unreliability of job search sites. "The concept came about because I needed to find part-time, temporary workers, but I needed to get in touch with them fast," he says. "The response time from Craigslist and other temporary job sites was often hours or days. So I developed the concept to connect my business to potential workers right away. And how better to do that than their smartphones?"

Between its low overhead and a nominal subscription fee, the company turned an immediate profit. It has reached out to more than 200,000 people since launch in 2011.

Headsets.Com: Founder and CEO Mike Faith created his business as an answer to a problem — but the innovation lay in combining a market, product and service. "The innovation came as a result of unproductive work days, which were proving costly," Faith says. "As an independent consultant, I needed people to work as efficiently as I did, but it was unrealistic to request that. So I thought of a product that could help them maximize their time."

Since its launch in 1997, Headsets.Com has become one of the premier wireless headset providers and service providers in the U.S. "Sometimes, it's more innovative to create the market for something rather than design the product yourself to profit," Faith says.

Polaris Project: The project was launched by Thorn: Digital Defenders of Children and the National Human Trafficking Resource Center as a way to give child victims an easier way to escape sex traffickers.

"Our goal was to develop a free service for victims to contact the National Human Trafficking Resource Center's hotline. Many trafficking victims cannot just pick up the phone and call for help, because of extreme isolation or constant monitoring by their trafficker," says Julie Cordua, the executive director of Thorn.

This innovation was named BeFree, a free SMS texting service that allows victims to text in short code directly to the NHTRC's hotline database through a Twilio and Salesforce service cloud.

"We did not stumble upon the idea by accident," Cordua says. "But we could not find a feasible way to ensure free communications. So through careful research, we discovered that we had to develop it ourselves."

A common denominator among these business leaders became clear: Innovation is not mystical. My difficulties with innovation were the result of sitting at a desk and staring at a blank page, trying to wrest an idea out of thin air. The reality is that original ideas can come from anywhere for small-business owners — but mainly from the messiness of real life, not airy philosophizing.

"Innovation can come from replacing, repairing or modifying something that already exists," Frija says. "But whatever it is, it has to solve a problem."

— By Ilana Greene

7 Things You Can't Ask Your Intern to Do

Kathryn Tuggle — Thu, 16 May 2013 07:00:00 -0400

NEW YORK (MainStreet) — Interns almost always offer cheap, reliable labor, but how far should you push your younger part-timers their first time on the job? This year, 53% of all American companies with 100 or more employees will hire more interns than they did in 2012, according to Internships.com. Thankfully, the talent is there — 65% of companies report receiving more applications than ever before.

Although interns can eventually turn into valuable full-time staffers (69% of companies made full-time offers to their interns last year) experts say there are some things your interns should never be asked to do, no matter how much you trust them — or how desperate you are for a helping hand. We've got a rundown on the top seven duties best left to full-time staff.

1. Keep them away from sensitive information

Anything pertaining to employee records or sensitive customer information should always be off limits for an intern, says Michelle Benjamin, CEO and founder of TalentREADY, a talent management company.

"Depending on the industry, there can be several types of sensitive information," Benjamin says. When in doubt, leave anything private to full-time workers.

If interns will have access to confidential information — even limited access — it's essential to provide them with the proper nondisclosure agreements and training, says Amy Burton Loggins, attorney at Atlanta-based law firm Taylor English Duma.

"You want to limit access to the most valuable or secret information," Loggins says, especially if it's proprietary or trade secret information.

2. Don't give them too many menial tasks

Most interns will be doing their fair share of printing, copying and ordering office supplies, but this should not be their main focus, Benjamin says. Make sure that they have a defined project that they can complete during their internship.

"A good litmus test on how to treat your intern is asking yourself, 'If you were them, what would you feel about the task you're asking?'" says Liz Carey, co-founder of leadership development firm Emerge. "If your answer is, 'I wouldn't feel too good about it,' then probably it is not a good idea to ask them to do that."

For example, you probably wouldn't feel right about saying: "I had them drive my car to pick up my dry cleaning," or "I had them get my Starbucks each morning," Carey says.

In general, avoid making "busywork" assignments, says Nathan Parcells, co-founder and CMO of InternMatch, an online platform that matches college students with employers.

"Your interns are with you to learn; giving them busywork wastes everybody's time," Parcells says. "Having them do filing and administrative duties will make your interns lose engagement, feel undervalued and unmotivated."

3. Avoid giving them unsupervised access to customers

Simply put, an intern should not be placed in a role where they will have direct interaction with your customers, Benjamin says. Due to their inexperience and lack of knowledge about your company and your processes, they could say or do something that could hurt your business.

"They could job shadow or observe a customer service person, but should not be dealing directly with your customers," she says.

4. Limit social media exposure

"At first glance, interns and social media might seem like a perfect fit. They are young; they use social media platforms on a regular basis and they are up to date on the latest tools, right?" Benjamin says. "Wrong."

The content you are posting to social media defines your brand, and once it's posted it is difficult to remove or correct. Because postings may often have to do with customer service issues or negative comments about the business, these types of communications are better handled by someone with experience, she says.

"The assumption is that because interns are usually part of the social media generation, they inherently know how to construct a social media presence," says Peter Whalen, assistant professor of marketing at the University of Denver. "Some do and some don't."

Even though many young people may be heavy users of social media, they probably have never managed the effort for a third party, Whalen says. Also, because interns are temporary, it can be dangerous to have them start a series of connected social networks and leave the company, taking with them all the understanding, design and passwords your other employees should have been learning.

5. Don't put them behind the wheel

It may be very tempting to ask your intern to pick up an important client presentation or take it to a customer luncheon, but it's important that they don't get behind the wheel of a car on "official" company business.

"Unless you are going to perform motor vehicle checks on interns, do not have them drive on company business," Loggins says. "Liability can attach to the company for any of their actions, as they are representing you regardless of their roles."

This means that if your intern has a wreck while "on the job," the company could be held liable for any damages.

6. Don't let them near payroll or finances

Mistakes are bound to happen during an intern's time with you, and you definitely don't want that mistake to involve an employee who doesn't get paid or a client who doesn't get billed.

"Unless the position is dedicated to accounting or finance, don't let them get involved with your billing, payroll or any other form of monetary task," Parcells says. "You wouldn't want to find any errors after the fact."

7. Don't put them on any project without a supervisor

Delegating your interns tasks or projects without the guidance of a direct supervisor could spell disaster, Parcells says.

"It's very unlikely for an intern to produce a knockout piece of work without the correct amount of guidance and feedback from a great supervisor," he says.

Interns should be given a "robust" experience if it is to benefit them at all, Loggins explains. "The purpose of an internship should be viewed like an apprenticeship, not a way to use cheap labor.

"Internships are not easy to coordinate or supervise, and it sometimes feels like a tremendous amount of work to provide a person with a robust experience," Loggins says. "Mentoring is not a small task and one should not expect it to be simple."

— By Kathryn Tuggle

Diversifying Your Portfolio For Beginners: The Stockpick Whiz Kid

Max Levin — Wed, 15 May 2013 17:38:49 -0400

Max Levin, MainStreet's Stockpick Whiz Kid, runs StockPick101.com, an online forum where the average person can post and comment about different investments and stocks.

NEW YORK (MainStreet)—It is very important for young investors as well as a new investors to diversify their portfolios. The reason for diversification is to protect the you: in the event that one specific sector in the stock market fails, or is at a low, other investments in other sectors may bring you back. Profitable opportunities can be missed and disasters can arise if not done properly. But if done correctly, diversification can be a life saver.

Also see: Introducing The Stockpick Whiz Kid, Max Levin

In the stock market sectors range from basic materials and consumer goods to health care, industrial goods and technology. Data will be released 24/7 about these sectors and the stocks within them. Each sector has different news, either good or bad, that could sway your portfolio dramatically.

Let's say that you have not diversified your portfolio correctly, and you have only stocks within the Pharmaceutical sector. You eventually buy Pfizer Inc. (PFE), Johnson & Johnson (JNJ) and Novartis (NVS), which are very recognizable companies in medical and drug sector services. You have low liquidity within your portfolio and are depending on these specific stocks. Let's say the International Foundations of Medicine (IFOM) releases a statement that a generic ingredient, used in most drugs, has been labeled unsafe. All of the sudden, most of the stocks within this sector have dropped dramatically including the three that you have purchased. Not knowing how long the dip could be for, your funding could be trapped in those stocks for months until you have fully recovered.

Also see: 5 Stocks to Buy Now And Sell in 50 Years: The Stockpick Whiz Kid

As you hold these three stocks in the pharmaceutical sector, they are getting hit hard. Let's say, the next day, a chip is released into the market that is said to "revolutionize the technology world": as a result, all of the companies are using it to produce new products. Most companies within the technology sector are going up because of how the investors are "excited for the future." Now not only are you losing money in the pharmaceuticals, but now you have missed a huge opportunity in the technology sector.

Those two examples might be a little exaggerated, but occurances of that nature are completely plausible. This could absolutely happen to anyone in the market if they are not diversified correctly. The goal is for you not to spread your funding too thin, but rather to contain stock in more than one place at a time for security.

Let's take three stocks and move them to different sectors of the market. Now you contain Amazon.com (AMZN) in the services sector, Exxon Mobil Corporation (XOM) in the basic materials sector, and Wells Fargo & Co. (WFC) in the financial sector. Each stock has virtually nothing to do with the others. Let's say that the companies in the basic material sector are not having a good quarter due to scarce resources and minerals. When quarterly earnings reports are released, the investors will not happy. Unfortunately XOM spikes harshly downwards. Now that you have diversified your portfolio correctly, you still have AMZN and WFC holding their head above the water, and the fluctuation in your portfolio is not too dramatic. Now you still have two dependable stocks, which may be in positive territory. In the event that you need funding, it can be liquidated.

Also see: Choosing Your Investment Platform: The Stockpick Whiz Kid

Diversifying your portfolio also implies to the markets, such as the Nasdaq, Dow Jones, S&P 500, and the international exchanges. As you know, the Dow Jones has reached an all-time high north of 15,000, and the S&P 500 at 1658.78 while the Nasdaq is stretching its 52 week high.

When picking stocks, either long-term or short-, make sure not to invest in only ONE stock or ONE sector of the market; that is only a recipe for disaster. It is very important for new and young investors to understand diversification at an early stage. Many do not understand how volatile the stock market really is.

--Written by Max Levin for MainStreet

More from StockPick101.com.

3 Quick Fixes to Help Your House Sell for More

Credit.com — Wed, 15 May 2013 14:47:41 -0400

By Shannon McNay

NEW YORK (Credit.com)—Are you in the process of selling your home? Could you use some help selling it for more — without breaking your budget? You're in luck! Here are a few tips to help you move your home off the market faster and sell for more so you can move on to the next home of your dreams.

The first thing to do is put yourself in the mindset of people who will be looking at your home. They've gone through their list of things to do before buying a house. They've figured out how much of a mortgage they can afford. And now they're ready to buy your house. But you'll need to fix a few things in order to get the maximum value for it.

Spruce it Up

Sounds obvious, right? Well, if you're on a budget and your home has been sporting the "lived-in" look for a few years, then it can be hard to decide where to start. Looking at all the things that could use a makeover in your home could make you run the risk of feeling mentally (and fiscally) overwhelmed. So let's start with the first thing everyone sees: the front of your house.

Adding curb appeal to your home is the first thing you should do. It's easy to neglect this part of the house since you see it less often than anything else. However, it's the first thing potential buyers will see — and it can dictate their opinion of your house before they've even walked in the door. See now why it's important to spruce it up? Luckily doing this doesn't have to be a budget-buster.

In order to make the outside of your home more appealing, start with your lawn. Is it well-maintained? Is the grass a nice shade of green? Some extra nutrients from your local hardware store can make a big difference. Then plant some flowers and maybe even shrubs to give more dimension and color to the outside of your home. This can be done at a relatively low cost (if you do the day's work yourself) by obtaining plants at your local hardware store or flower shop. Finally, if you have a little extra room in your budget, consider a paint job. Pretty soon your home might be the shiniest on the block.

[Related Article: The First Thing to Do Before Buying a Home]

Neutralize It

Now that the outside is spruced up, neutralize the inside. This might feel contradictory, but bear with me. If you've made a lot of personal design and style choices with your furniture and paint, your home might actually be off-putting to someone whose style choices differ from your own.

It's not easy to remove some of your most beloved decor, but remember that you're moving out of this home and into something better for you. This home is no longer about you — it's about the future owner. Give them a clean slate so they can picture themselves (and their own sense of style) in your home as soon as they walk in. The best way to do this is to pare down any brightly painted walls, remove excessive family photos, clean up clutter (especially from toys), and store away furniture that is of a very specific taste.

While it may seem obvious that potential buyers should look past anything that doesn't fit their style, at the end of the day you don't want them to think about anything when they do an initial walk-through. All you want is for them to feel like this is a place they can immediately move into and love. It's hard for even a savvy buyer to look past cosmetic things that are easily changeable. Plus, any change they want to make equals money they will want to negotiate off the offer price so they can allocate that to making the improvements themselves.

[Credit Score Tool: Get your free credit score and report card from Credit.com]

Manage Minor Repairs

Do you have a door that creaks every time you open it? How about nails in a floorboard that trip you up every time you walk by? Do all the doors and windows in your home close all the way? These things may sound minor, but they have a bigger impact than you might think. Before you allow buyers to tour your home, take a day or two to oil up rusty door hinges, repair anything that's cracked, leaking, or not fully functioning, and give everything else a nice deep clean.

Managing minor repairs costs you more in time than it does in budget, which is actually good news. The power is in your hands to exponentially improve the appearance of your home (and thus increase the final sale price). Think of it this way: a mortgage can last up to 30 years. Is that a purchase you would make lightly? Or would you go into this both feeling like you can't wait to buy but terrified at the same time?

I would venture to say the latter. That means that even if someone finds a home that they swoon over, small things will stand out and make them doubt if they really should put in an offer — or see if they can put in a lower offer to save money for repairs. Homebuying is something that's easy to be talked into if someone loves a home, and just as easily to be talked out of anything appears to be wrong. Don't let minor repairs that you could have done on a Saturday afternoon give someone an impression that even more might be wrong with your home. Keep everything in perfect working order and wait for the potential buyers to swoon — and sign.

Selling your home for more doesn't mean you have to renovate every room with the help of an interior designer and a fat budget. You can simply increase your home's value by making it sell faster and with less negotiation. Sprucing up the outside, neutralizing the interior, and making all necessary repairs will make your home look new and in perfect working order. All of this equals a few days of work for you but potentially thousands more on the final sale price.

[Featured Products: Research and Compare Mortgage Rates at Credit.com]

More from Credit.com

14 Traffic Tickets That Can Raise Insurance Rates

MoneyTalksNews — Wed, 15 May 2013 14:20:29 -0400

By Angela Colley

NEW YORK (MoneyTalksNews) —Getting pulled over is a funny thing. No matter how old you are, you still feel like a teenager behind the wheel when those blue lights come on.

But after you get a ticket and the squad car is pulling away, you have two very adult thoughts: "I wonder how much this is going to cost?" and "Oh no! What is this going to do to my insurance rates?"

In the video below, Money Talks News founder Stacy Johnson has an answer to that question. From reckless driving to not wearing your seat belt, a recent study shows just how much that ticket will raise your insurance rates. Check it out and then read on for what you can do about it.

Tickets and your insurance rates

A study by Insurance.com analyzed 490,000 insurance quotes to figure out how different violations affect your car insurance rates. Here are their findings for 14 different violations:

Reckless driving – 22% increase.
DUI (first offense) — 19%.
Driving without a license – 18%.
Careless driving – 16%.
Failure to stop – 15%.
Driving 30 mph or more over the speed limit – 15%.
Improper turn – 14%.
Improper pass – 14%.
Following too closely – 13%.
Driving 15 to 29 mph over the speed limit – 12%.
Driving 1 to 14 mph over the speed limit – 11%.
Failure to yield – 9%.
Driving without insurance – 6%.
Seat belt infractions – 3%.

It could be even worse; those are just averages. Your actual rate will depend on a variety of factors, including your age, sex, where you live, your marital status, and how long you've been with your carrier. You can calculate your own results on Insurance.com. It could be even worse; those are just averages. Your actual rate will depend on a variety of factors, including your age, sex, where you live, your marital status, and how long you've been with your carrier. You can calculate your own results on Insurance.com.

How to prevent a rate hike

Traffic violations show up on your state driving record, which is accessed periodically by your insurance company. There are a few things you can do to keep a ticket from appearing on your driving record or minimize the impact on your insurance rate.

Go to court. If you go to court, you may end up getting the ticket reduced to a lesser offense or having the case dismissed entirely. There are several reasons why a judge might dismiss your case. Among them:

The officer who issued the ticket didn't appear in court.
The ticket contains inaccurate information.
You can prove you did not commit the offense.

Hire a lawyer. A lawyer could help your case. You'll have to pay, but probably not much. A lawyer we interviewed charges $80 to handle a basic traffic case.

Attend traffic school. Some states allow you to keep a violation off your record by attending traffic school. You can attend traffic school in person (many have night and weekend classes) or online and you'll have to pass a test, but it shouldn't be difficult if you were paying attention. The fee to attend the school is usually small.

If you end up paying the fine, here are some steps to take going forward:

Avoid getting pulled over again. This seems obvious, but more violations will further increase your insurance rates. Keep your car maintained — no broken or malfunctioning lights – wear your seat belt, drive safely and defensively, and renew your registration on time.

Be patient. Some insurance companies will reduce your rate after a year with no violations. Many moving violations will no longer affect your rate after three years.

Comparison shop for new insurance. Insurance companies treat violations differently, so another company may offer you a better rate. But don't lie about past infractions. The company will be reviewing your driving record, even if you've moved to another state.

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Would You Buy The Ariel Castro House Where He Brutalized Three Women?

Ross Kenneth Urken — Wed, 15 May 2013 11:05:45 -0400

NEW YORK (MainStreet)—The home of Ariel Castro, the Cleveland man charged with the kidnapping and rape of three women he held captive for a decade, is in legal purgatory and may be available for purchase. But would you buy and live in a property that had been host to years of brutality and torture?

The Cuyahoga County Prosecutor's office had started foreclosure proceedings against Castro on May 3—even before the victims escaped on May 6. Castro had bought the house at 2207 Seymour Avenue for $12,000 on April 29, 1992, and it is now valued at 36,100.

But if you can tolerate the heebie-jeebies of stigmatized properties—homes with a troubled past involving a murder or other criminal act—you may be in for a bargain, according to Randall Bell, CEO of Bell, Anderson & Sanders, a firm specializing in real estate damage economics: a typical stigmatized property, he says, will sell 15 to 20% below market value and stay on the market three months to a year longer than normal.

Also see: How Force-Placed Insurance Leads to Foreclosure

"Remarkably there are people who will live on tainted property," Bell said. "Usually the discount is an enticement for someone to buy it."

Though states may require that a real estate agent reveal whether a home has a history of termite infestation or flood damage, only about half require disclosure regarding a property's criminal past. Ohio does not require buyers to disclose whether a crime occurred on the property, but the high-profile Castro case will make it difficult to cover up the house's past from an unwitting buyer.

New York and California have among the strictest disclosure laws, with Realtors in the Golden State required to reveal any "material fact" including any deaths in a residence within the last three years (unless the cause of death was AIDS-related). Other states like Connecticut, Delaware, New Hampshire, North Dakota and Oklahoma require real estate agents to be forthcoming only if the buyer asks about deaths on the property.

There are numerous lawsuits that stem from a buyer's ignorance of a house's horrific past before he's bought the property. Reed v. King from 1983 in California is one of most famous cases of this type, where a man was unaware that a woman and her four children were murdered in a house he purchased for $76,000. The seller and his real estate agent knew about the troubled past but purposely didn't reveal this information to the buyer, who unsuccessfully tried to knock the price of the home down to $65,000 because of the crimes.

Also see: The Canadian Takeover of U.S. Real Estate

Other sites of notorious crimes are often razed, and those that aren't face difficult market dynamics. Nicole Brown Simpson's 3,400-square-foot condo stayed on the market for two years being sold for $200,000 below the asking price, according to Ilona Bray, a Berkeley, Calif.-based lawyer and author of Nolo's Essential Guide to Buying Your First Home (NOLO, 2011) . The buyers changed the address and remodeled. Jeffrey Dahmer's Milwaukee apartment building was so stigmatized by his series of gruesome murders that the entire neighborhood's occupancy rates went from 80% to 20%. The building itself was purchased and subsequently demolished by developers.

In 2006, almost ten years after child pageant star JonBenét Ramsey's body was found in the basement of her family's Boulder, Col. mansion, it was put on the market for $1.7 million—about $300,000 less than its estimated value. It brought in only $650,000, and has passed through several owners' hands since. The Castro house may expect a similar fate despite some advantages in its favor.

Also see: Homeownership Equals Unemployment

"If it's an urban area, these crime situations have less of an impact than in suburban and rural areas," Bell said, but that the Castro house is in a city-setting in Cleveland may not matter. "This crime is so outrageous that might not matter as much," he said. "A potential buyer would be turned off by that history." It's not necessarily doomed. There are some who try to inject some good vibes back into a place with a troublesome past. Associate Broker from Discover Arizona Real Estate's Marge Peck was working with a couple who were purchasing a stigmatized home where a murder took place in the home. The previous owners of this Northeast Mesa, Ariz. home were a husband and wife and the husband murdered his wife in the master bathroom.

"I was with the buyers looking at a property and we couldn't figure out why this house was priced so low," Peck said. "The buyers loved the house. It had take-your-breath-away-views of the mountains."

It was a track home with a large yard, perfect for having a catch.The couple's kids were playing with neighbors when they came running to tell their parents about the property's troubled history.

Also see: The Cost of Violence Against Women

"We were shocked, and we go up to the master bedroom sat on the floor and had a conversation," Peck said. "I was honest. I couldn't live there. The wife said she felt blessed that she was getting everything she wanted in a house and this is going to make somebody in heaven happy that she was going to love the house the way she did."

--Written by Ross Kenneth Urken for MainStreet

Next Recession Postponed Until 2016

Hal M. Bundrick — Wed, 15 May 2013 10:01:29 -0400

NEW YORK (MainStreet)—These days we'll take good news wherever we can find it, and today we find it in an optimistic forecast from BNY Mellon Chief Economist Richard Hoey.

Also see: The 'Mom' Value: The Moola Files

"I continue to expect a prolonged global economic expansion," says Hoey. "What tends to bring a global expansion to an end is a big upsurge of inflation sometimes caused by soaring oil prices which makes the central banks shift to an aggressively restrictive monetary policy. There's no sign of that now, and I think the result is going to be a prolonged global economic expansion."

Also see: Obamacare: What a Rise in Nongroup Health Insurance Premium Costs Means for You

Hoey admits that the U.S. has experienced a slower than normal economic recovery with real GDP growth hovering around an average of 2.1% since the expansion began, which he expects to continue through the end of this year. But better growth lies ahead.

"Next year, we're anticipating a faster pace of growth in the U.S. economy, probably closer to 3%," Hoey says. "Housing is doing well. Inventories have come down. House prices are rising. Residential construction is increasing. The automobiles have an aged fleet, and there is continued demand for automobiles, and especially for pick-up trucks which are used in housing." This supposed perfect storm creates an auspicious environment.

With a projection for continued low interest rates combined with the U.S. budget deficit declining faster than many analysts expected, Hoey predicts another recession is not likely in the near-term.

Also see: Purple Pricing: Real-time Demand-based Ticket Pricing

"We do not expect the early emergence of substantial inflationary pressures any time soon, so a shift to truly restrictive monetary policy is likely to be many years in the future," he says. "As a result, we expect the next recession in the U.S. is likely to be postponed until after the next presidential election in November 2016."

--Written by Hal M. Bundrick for MainStreet

Obamacare: What a Rise in Nongroup Health Insurance Premium Costs Means for You

S.Z. Berg — Wed, 15 May 2013 09:15:14 -0400

NEW YORK (MainStreet)—Nongroup health insurance, which is typically more expensive and often provides fewer benefits than group coverage, is generally going to have an even higher price tag under Obamacare.

In an online perspective piece, the nonprofit Kaiser Family Foundation (KFF) stated the organization expects "that average, unsubsidized premiums for nongroup coverage will be somewhat higher under reform than they are today (as does the Congressional Budget Office)" and that "patient cost sharing will still be quite high."

Also see: Affordable Care Act Rate Shock?

"Someone who is young with a bare-bones plan could easily see rates double as the plans are brought into compliance," says Brad Leddon, vice president of the employee benefits division at Coffey & Company, an insurance agency.

But the news is not completely grim. In the piece, KFF stated that "many people will be getting better insurance."

Beginning 2014, the Affordable Care Act will require all nongroup health insurance to include certain benefits, such as preventive services, maternity and mental health. There also will be a cap on out-of-pocket costs. And insurers will be required to cover people with pre-existing conditions at the same cost as healthy individuals. So, people who have health problems may see their premiums reduced from current costs, according to KFF.

Women and older people may also see a savings as premium differences for gender are eliminated and variation in premiums due to age are held to a maximum of three to one.

Also see: Disability? Truck Insurance? Americans Have the Wrong Idea About Health Care Reform

"The richer the plan currently is and the older the insured, the less of a [rate] increase," Leddon says.

Other "unhealthy" practices will also fall by the wayside. Joel Winston, a former New Jersey deputy attorney general and founder of AnnualMedicalReport.com, points out that currently in most states, insurers can charge more or spend less by increasing premium rates or denying coverage for treating conditions, sell policies with lifetime caps on medical conditions, and use software to identify policyholders who have been recently diagnosed with expensive health conditions and search their medical files for legal grounds to revoke their policies. Not so under Obamacare.

For those people who are young and healthy and think it may be cheaper to pay the penalty and get insured only when sick, the strategy may fail, because the government will have special enrollment periods when plans can be purchased in order to deter such practices and include more healthy individuals into the health insurance pool. While younger people will be eligible for subsidies, the young and healthy are expected to bear more of the burden.

S.Z. Berg is the author of College on the Cheap.

Shoppers Feeling Better Than Expected, and That Helps the Economy

Brian O'Connell — Wed, 15 May 2013 09:00:00 -0400

NEW YORK (MainStreet) — The U.S retail economy may be poised for a bounce-back.

The latest MarketPulse survey from Chicago-based Information Resources tells the tale: U.S. consumers feel significantly better in the first quarter of 2013 than they did the last quarter of 2012.

"Consumers were feeling a bit of the gloom and doom as 2012 came to a close, because they simply didn't know what to expect on the financial front for the new year," says Susan Viamari, an IRI analyst. "With a looming debt ceiling crisis and expiration of the 2% payroll tax cut, they were preparing for another bumpy ride."

But U.S. consumers are proving more resilient than economists may have expected.

"Our survey finds that consumers weathered the latest round of economic storms very well and are feeling more optimistic than they have in quite some time," she says. "Of course, consumers will continue to be cautious about their spending, but we may see wallets open slightly more as we approach summer."

IRI has also just released its latest Shopper Sentiment Index, in which a benchmark index of 100 (higher shows stronger shopper strength, lower shows a weaker outlook) sets the pace for U.S. consumers.

While that index fell to 92 in December, IRI's most recent poll shows the index rising to 103, as U.S. consumers were apparently underwhelmed over talk of government budget cuts — the "sequester" — and expiration of the 2% payroll tax cut in January.

That tax cut was touted by economists and pundits as a sour note on an otherwise improving U.S. consumer economy. But only 28% of U.S. consumers say they now have less cash to buy food, clothing and other goods.

One key demographic — millennials — say they feel the impact more than the rest of the country. In that group, 38% say they have less money for consumer goods.

"This analysis is rather interesting, because it points to the fact that many consumers are finding it a bit easier to buy groceries in 2013, and that the payroll tax expiration didn't impact consumers as hard as expected on this front," Viamari says. "But it also highlights the continued struggle of millennials that we've seen for the last couple of years. Millennials are in the unenviable position of starting their independent lives in a tough economy, and they simply are having a hard time making ends meet."

One fly in the ointment for everyone could come from U.S. gas prices, which are on the upswing. The AAA Fuel Gauge Report says gas prices are up 8.8%, and that's cash that comes directly out of the wallets and pocketbooks.

Past gasoline prices, though, the feeling from U.S. consumers entering the busy summer travel season is vibrant — something economists and retail business owners hope stays around for a while.

The Geography of Student Debt

John Sandman — Wed, 15 May 2013 07:36:52 -0400

NEW YORK (MainStreet) —Where is student loan debt coming from? Which parts of the country have the most? Which parts owe the least?

Also see: Should You Consolidate Student Loans?

The New York Fed's new report, "Quarterly Report on Household Debt and Credit for 2013 Q1," draws on the Fed's Consumer Credit Panel plus Equifax credit data to form its conclusions. Information is charted on a set of maps that displays its student loan data by region and by state, featuring the extent and location of student debt.

The report, released on May 14, examines student loan borrowers as a share of the U.S. population. The number of people with active student loan debt as a share of the population with a credit record varies substantially throughout the country when identified by region. For example, in Hawaii, under 12% of people with a credit report have student debt, while in the District of Columbia over 25% owe money on student loans.

The report also looks at loan balances per student loan borrower, which the Fed found to be significant in virtually all states. At the state level, debt per borrower runs from just under $21,000 in Wyoming to over $28,000 in Maryland. Washington, D.C. is again the high water mark and in a state all its own: the average borrower in the nation's capital is on the hook for over $40,000. "In general," the report concluded, "we find student loan debt levels are highest in California and along the Atlantic and Gulf coasts."

Also see: Will Student Loan Interest Rates Double?

Delinquency rates also rise and fall according to region. Generally higher rates have turned up in the south and southwest than in the north. South Dakota boasts the lowest delinquency rate—a little over 6.5%, and West Virginia leads the nation with almost 18%.

The authors of the report-- Andrew Haughwout, Donghoon Lee, Wilbert van der Klaauw and Joelle Scally – who have expressed their own views and not necessarily those of the New York Fed, are mindful of the importance of student loan debt—to the borrowers, the lenders, and the economy in general. "Student loan indebtedness and delinquency continue to generate intense interest," they write, "and we look forward to sharing data and perspectives that help define the scope of this important issue."

Also see: Are MOOCs the Answer to Massive Tuition Hikes?

Prom Spending Hits Four Figures

Tue, 14 May 2013 17:05:49 -0400

NEW YORK (MainStreet) —Parents and teens are spending over $1,000 and more on prom, prompting Visa to create a prom budgeting app. Debra Borchardt reports below and gets up close and personal with the Cotillion wares:

Purple Pricing: Real-time Demand-based Ticket Pricing

Hal M. Bundrick — Tue, 14 May 2013 15:26:05 -0400

NEW YORK (MainStreet)—Imagine buying tickets for your favorite sports, music or theatre event -- getting the best seat in the house and being guaranteed the best price, or your money back. No, don't expect William Shatner to waddle out from behind the curtain, Karate-chopping high ticket prices. Two Northwestern University economics professors have developed a new dynamic pricing model that maximizes venue profitability while ensuring that patrons receive the best seat at the best price.

Buy a ticket at full price today, if the price goes down you get the difference refunded to you. You never over-pay for a seat -- and ticket prices always go down. Never up.

Also see: RelayRides Acquires Wheelz, Shows P2P Car-Sharing Strength

It is a modified Dutch auction the professors call Purple Pricing. Sandeep Baliga and Jeff Ely, economics professors at Northwestern University, came up with the idea.

In a Dutch auction, the price starts off high and is lowered until someone buys. "We are using a system which could roughly be described as a uniform price multi-unit Dutch Auction," Ely says on his blog Cheap Talk. "We are setting an initial price and allowing prices to fall gradually until either the game sells out or we hit our target price. Thus we are implementing a form of dynamic pricing but unlike most systems used by other venues our prices are determined by demand, not by some mysterious algorithm."

But there's a key feature to the pricing system.

Also see: Biggest Loser: My Fight Against Big Debt

"As prices fall, you are guaranteed to pay the lowest price you could have got by delaying your purchase," Ely writes. "That is, regardless of what price is listed at the time you reserve your seat, the price you will actually pay is the final price. It also removes another common gripe with dynamic pricing, different people paying different prices for the same seats. Our system is fair: since everyone pays the lowest price, everyone will be paying the same price."

As prices go down, ticket buyers at higher prices get refunds for the difference. The goal is to maximize ticket revenue and re-capture income lost to secondary ticket markets like Stub Hub.

Also see: The 'Mom' Value: The Moola Files

"Purple pricing can be applied to any service which is provided at a certain time in the future, has a restricted capacity and is reserved in advance," Ely told MainStreet. "We have had numerous discussions with professional sports teams and other entities facing similar pricing problems."

In fact, Ely and Baliga are planning to roll out the "fan friendly" pricing model for the upcoming college football and basketball season and are seeking a software developer to help them build out the technology.

Also see: 'Investing' in Knicks vs. Heat: NBA Eastern Conference Finals

--Written by Hal M. Bundrick for MainStreet

Kabbage Expands Small-Business Financing

Laurie Kulikowski — Tue, 14 May 2013 13:44:07 -0400

NEW YORK (TheStreet) -- Small-business financing outfit Kabbage, which made its mark by focusing exclusively on funding small e-commerce merchants that sell through Amazon , eBay , Yahoo! and Etsy, among others, is expanding its reach to fund both online and offline small businesses.

The company announced a partnership with Intuit to use QuickBooks data to instantly approve and extend funding, it said Tuesday.

It is a significant expansion for the two-year-old Atlanta startup, which has offered approximately $85 million in short-term financing through more than 70,000 advances to e-commerce businesses since its launch in August 2011. In 2013, it plans to make over 100,000 advances.

Earlier this year, the company expanded its funding offering to the U.K.

Also see: Google Looks To Profit From Alternative Lending

More than 4 million small business customers use Intuit's QuickBooks across industries that include retail, manufacturing and service providers.

Merchants funded by Kabbage sell a portion of their anticipated future credit card receivables to Kabbage, and in return can receive as much as $50,000 per six-month period. Businesses pay between 8% and 18% on the advance if they take the full six months to pay back the amount. The percentage is based on a store's monthly revenue, credit quality and time to pay back.

The more platforms businesses sell on, the more incentive Kabbage offers them in the form of funding. Even the amount of social media interaction between businesses and customers can lift advance limits.

"Small businesses need partners that understand their business and can help them save time and money," said Marc Gorlin, co-founder and chairman of Kabbage. "We are incredibly proud to be the first to exclusively use QuickBooks data to make real-time decisions and deliver funding to businesses in minutes. We've been often asked when Kabbage would support the bricks and mortar counterparts to online businesses. That day has arrived. Today's expansion dramatically accelerates Kabbage's vision of democratizing access to capital for all small businesses."

The move, though, puts Kabbage in direct competition with other tech-driven alternative small-business lenders that came on the scene as a result of the disruption of the capital markets following the financial crisis. Even players like eBay's PayPal and Amazon have begun experimenting with lending to merchants on their platforms.

Investors seem to be circling the alternative lending space sniffing out opportunity. Earlier this month, Google took a $125 million stake in Lending Club. Separately Google Ventures participated in a Series D round of financing to On Deck Capital.

Also see: Go into Business with Your Pet

Kabbage also has some heavy hitters backing it, including venture funds like Thomvest Ventures, run by Peter Thomson, director of Thomson Reuters , Mohr Davidow Ventures, BlueRun Ventures and the UPS Strategic Enterprise Fund.

David Bonderman, founder of TPG Capital, is also an investor in Kabbage.

Kabbage announced last month that it completed a $75 million credit facility, led by Victory Park Capital - a new investor - and existing investor Thomvest Ventures.

"Kabbage's underwriting platform and ease of use has positioned it as the leading online provider of credit solutions to small businesses," Peter Thomson said in a statement at the time. "We are pleased to partner with Victory Park in funding the growth of Kabbage and its small business clients through this debt financing and to share in Kabbage's future growth as an existing equity investor."

-- Written by Laurie Kulikowski in New York.

How Force-Placed Insurance Leads to Foreclosure

Brian Penny — Tue, 14 May 2013 13:14:38 -0400

"Let the truth be known
But they talked that freedom at us
And didn't even leave a ladder" – Lil Wayne, "Tie My Hands"

NEW YORK (MainStreet)—I constantly hear banking and insurance industry professionals stating that only 1% of loans in their loan portfolios have force-placed insurance as a way of defending the practice. According to the Census Bureau, this equates to 7.56 million American citizens being price gouged. That the banking and insurance industries consider this staggering number to be inconsequential isn't even the disgusting part.

Also see: DFS Force-Placed Insurance Legislation is a Joke

The statistics they provide to back this up are a fallacious argument. Banks only report 1% of their loan servicing portfolios as having force-placed insurance, because the product is four to ten times more expensive than a regular homeowner's policy (as reported by Birny Birnbaum during the NY Department of Financial Services hearings on the product, the transcript of which can be viewed here), and it leads people to foreclosure. This allows the bank to remove that homeowner from its portfolio and not include them in the reporting. Allow me to illustrate:

If your insurance policy is $900 per year (the national average, according to Homeinsurance.com), your force-placed policy will be a minimum of $3,600 per year. It's important to know these policies are often backdated (by 6 months on average). Remember the banks give you 90 days' notice before placing a force-placed policy by their own admission. The other 90 days is how long it takes for your insurance company to report your policy as cancelled.

It's also important to know that escrow accounts are a prepaid account for insurance. What this means if you have an escrow account is $75 per month of your mortgage payment goes into an escrow account held by the bank (the bank accrues interest on this account that is opened in your name, but you do not), and at the end of the year, the bank uses these funds to pay your $900 premium (pocketing any interest accrued).

In the event of a policy lapse, that $3,600 force-places insurance policy is backdated 6 months. Assuming you never missed a payment, this means your escrow account at the time of placement is at $450. The placement of this $3,600 policy will wipe out your $450 and leave you with a negative escrow balance of $3,150. This is assuming you have an escrow account. If you don't, your escrow balance will be minus $3,600.

Now remember an escrow account is a prepaid account for insurance. Since the force-placed insurance policy is backdated six months, it's also set to renew in six months. You now have six months to make up for the negative $3,150 (if you had your insurance in escrow) or negative $3,600 (if you did not have your insurance in escrow) balance, along with an additional $3,600 for next year's premium. This means you owe the bank between $6,750 and $7,200.

If you applied for a loan modification and were denied, check your paperwork. There's a good chance it's because you have a negative escrow balance.

This deficit will trigger an escrow analysis by the bank, and the $6,750 to $7,200 will be spread out into your mortgage payments. Assuming you're notified immediately and this escrow analysis is completed immediately, this will increase your mortgage by $562.50 per month if you had an escrow account or $600 per month if you did not.

Also see: Ethical Risk Management: Anonymous Reveals Its Face

Since few American middle class consumers can afford a $560 to $600 per month mortgage increase, this alone will cause a foreclosure, removing them from the bank's loan portfolio and keeping them out of the reported 1% of homeowners affected by this problem...but that's still not even the worst of it...

I was using the smallest end of the premium range (4x) when they can be as high as 10x your premium. I was also assuming you actually deserved to have force-placed insurance placed on your account and it was placed in good faith. There are many ways in which the banks fraudulently place this product for more money, but I don't even have to bother getting into the details of that, because the math speaks for itself.

But wait...there's more...

Consider you live in a state like Florida, where wind/hurricane insurance is mandatory. In Florida, no insurance company will touch wind or hurricane coverage, so it is placed as a separate policy through Citizens Insurance. What nobody is telling you is that force-placed insurance includes wind coverage (read your force-placed insurance policy declarations). This means if you live in Florida and your homeowner policy cancels, but your Citizens wind policy is still active, you're being forcefully charged for duplicate wind coverage without your knowledge. By the same means, if your Citizens wind policy cancels, but your homeowners policy is still active, you're being forcefully charged for duplicate homeowners coverage. So not only is your mortgage payment being raised, but it's being done to provide you with coverage you already have, and that's once again assuming the entire deal was done honestly (which I can assure you, it's not, but that's a whole other issue).

Are you angry yet? Do you think I'm done? Think again...

Another issue being ignored by regulators is a form of force-placed insurance placed by QBE First and Assurant called Real Estate Owned (REO) insurance. REO insurance is placed on property after the bank forecloses on it. You, as the borrower, have no interest in the property and have been removed from the paperwork. The REO premiums, however, are charged to your escrow account. These premiums are highly inflated, and only the loan servicer is named as a payee of the insurance policy. If you, as the borrower, are able to pull your home out of foreclosure, you will be presented with these premiums to pay. If you don't pull it out of foreclosure, then we, the American taxpayer, will be stuck footing the bill through Fannie Mae and Freddie Mac (a situation I attempted on numerous occasions to get both the SEC & FHFA to correct and was ignored). REO insurance isn't included when the banks state only 1% of their portfolio has force-placed insurance.

Also see: Countrywide May Be a Worldcom, But BofA Is no MCI

Haha, and if you think I'm done there, you're wrong once again...

I haven't even touched on the subject of flood insurance, but that is a beast all to itself. I'm not going into detail about how these same companies add this same force-placed insurance product (known generically as Collateral Protection Insurance, or CPI) on every collateral loan to include automobile loans. I'm not showing you the dozens of ways I've seen this system abused to take advantage of innocent homeowners. I'm not factoring in how that negative escrow balance will cause you to miss your tax payments if they are also escrowed, leading to a tax foreclosure. I'm not bringing up the lack of transparency on escrow accounts. I'm only focusing on the math for now to show you why only 1% of homeowners are afflicted with force-placed insurance...because I'm sick and tired of watching these criminals get away with one of the largest fraudulent acts in human history...

Brian Penny is a former business analyst at Bank of America turned whistleblower and freelance writer. He's a frequent contributor to The Huffington Post, Lifehack, and HardcoreDroid. He documents his experiences working with Anonymous, practicing yoga, and fighting the the banks on his blog.

Will Student Loan Interest Rates Double?

John Sandman — Tue, 14 May 2013 10:57:53 -0400

NEW YORK (MainStreet)—While a bill introduced last week by recently-elected Senator Elizabeth Warren (D-Mass.) -- her first -- to cut the rates on federal student loans was a make-good on a campaign promise, it is part of a legislative land rush in Congress aimed at fixing rates, coming from both sides of the aisle -- and the White House.

Presidential candidates Mitt Romney and Barack Obama were working the same issue about a year ago, leading to a one-year extension of the 3.4% interest rate on subsidized federal student loans. Students lobbied hard against a scheduled increase, and the Obama administration extended the current rate for an additional year.

Also see: Young Student Loan Borrowers Are Bagging the Home Mortgage and Auto Markets

That rate expires on July 1, when it jumps from 3.4% to 6.8%.Republicans in Congress have responded with HR 1911, the Smarter Solutions for Students Act.

"We've got to stop kicking the can down the road with short-term fixes to this interest rate problem," said John Kline (R-Minn.), the Chairman of the House Education and the Workforce Committee, referring to the prospects of another temporary, one-year extension. "The Smarter Solutions for Students Act is a lasting solution that will serve the best interests of students and taxpayers. Our proposal ensures that millions of subsidized Stafford Loan borrowers will not see their interest rates double this July, and other borrowers will actually have their rates reduced." Kline said that politicians would get out of the business of calculating student loan interest rates, a solution also proposed in the Obama administration's Fiscal Year 2014 budget plan.

The House Republican plan would set interest rates for Stafford undergraduate loans at the 10-year Treasury yield plus 2.5 percentage points. Rates would rise with the market, but would be capped at 8.5%. For PLUS loans, where parents sign for student borrowers, the rate is based on 10-year the Treasury yield plus 4.5 percentage points. Stafford loans issued today under the plan would have an interest rate of 4.3%, lower than the current interest rate for unsubsidized student loans but also higher than the current 3.4% interest rate for subsidized loans, where the government pays interest when a student is enrolled in school. The Obama plan links rates to Ten-year Treasuries but with no cap. Rates will rise with the market.

Senators Dick Durban (D-Ill.) and Jack Reed (D-RI) are proposing a variable interest rate, also tied to Ten-year Treasuries, through S 909, the Responsible Student Loan Act unveiled last week. It is similar to the Republican proposal. The rate is synched with 91-day Treasuries yet is capped at 6.8%.

"Our immediate attention should be on defusing the July 1 trigger that would double the interest rate on subsidized Stafford loans," Reed said. "Once that hurdle is cleared, this legislation – a long term solution to reducing student debt – must be front and center. Last month Rep. Joe Courtney (D-Conn.) introduced a House bill, HR 1595, that would postpone the rate hike for two years.

Also see: Rural Areas Give Incentives to those with Student Loan Debt

The Warren proposal syncs student loan rates to the Fed funds rate, currently about 0.75%, on subsidized Stafford loans. In their Brookings Institute blog of last Thursday, Beth Akers and Matt Chingos gave Warren's bill, S 897, short shrift. "Sen. Warren's proposal should be quickly dismissed as a cheap political gimmick," they wrote. "It proposes only a one-year change to the rate on one kind of federal student loan, confuses market interest rates on long-term loans -- such as the 10-year Treasury rate--with the Federal Reserve's Discount Window and does not reflect the administrative costs and default risk that increase the costs of the federal student loan program."

Also see: Student Debt Diary: Wait, What was the ROI on my Education?

While a spokesperson for Warren could not be reached for comment, Warren told CNN's Jake Tapper last week that the 2008 financial crisis was evidence that banks themselves are capable of high-risk behavior. If 0.75% was good enough for them, she seemed to be saying, it's good enough for the nation's college students. The gap between the Fed funds and student loans rate was also noted by Senator Reed when the Responsible Student Loan Act was announced. "There is something glaringly unjust," he said, "when Wall Street banks whose reckless behavior nearly brought this country's financial system to ruin can access 'easy' or 'cheap' money while students and families have to pay steep interest rates in order to pursue the American Dream."

Akers and Chingos prefer a compromise that "takes the market-based proposal of both President Obama and the House Republicans, the fixed-rate proposal of the President, and the interest rate cap of the House Republicans and Senate Democrats." Then the devil will be in the details. How much would be added to market interest rates to finance the administrative costs and default risk of the federal student loan program, for example, remains to be seen.

Regardless of how the problem is attacked, Mark Kantrowitz, senior vice president and publisher at Edvisors Network, seems to think the cost of education has nowhere to go but up, even if interest on Stafford loans stay the same. "The main benefits of a one-year extension to the 3.4% interest rate are that it gives Congress more time to think about interest rates and it delays the student loans issue until 2014, when it can become a campaign issue," Kantrowitz said. "But it doesn't make college more affordable."

He also observed that government support has been decreasing on a constant dollar per-student basis for four decades. This shifts more and more of the burden on to the families. Since family income has been flat, this leads to increased debt. Enrollment, he said, will shift from higher-cost colleges to lower-cost colleges as lower-income students are being priced out of a college education.

These dueling interest rate options could crash and burn by the July 1 deadline. If there is no compromise and the loan rate almost doubles, Republicans in Congress may cut their losses and move on, especially since students won't feel the impact of the rate hike this July. They will likely feel it a year later, however, in the run-up to the 2014 election, when the same can that Rep. Kline referred to could be sitting in the road.

Also see: Big Banks Looking to Catch a Break on Student Loan Debt

--Written by John Sandman for MainStreet

RelayRides Acquires Wheelz, Shows P2P Car-Sharing Strength

Ross Kenneth Urken — Tue, 14 May 2013 08:41:14 -0400

NEW YORK (MainStreet)—Several months after Avis Budget Group's (CAR) $500 million acquisition of car-sharing juggernaut Zipcar, RelayRides, the nation's largest peer-to-peer car-sharing marketplace, announced the acquisition of peer-to-peer sharing platform Wheelz in a demonstration of consolidation in the car-sharing marketplaces.

Also see: Divorce and the New Wheels Dilemma

This new move also heralds the power of peer-to-peer car-sharing over the fleet-based model of Zipcar. Peer-to-peer car companies simply emulsify the relationship between car owners and those in need of a car. Though Zipcar controls 75% of the $400 million car-sharing market, the fleet model is increasingly old school in the world of the "share economy" with Airbnb and its ilk allowing the haves to share with the have-nots. Because the high overhead of managing a fleet, renting parking lots, and dealing with a corporate infrastructure makes for a low margins business, Zipcar has to charge more.

P2P users from RelayRides can snag a set of wheels for $15 to $30 a day--with a much larger variety of models and segments at their disposal--whereas Zipcar users in New York City, for example, have to shell out $25 for an application fee, $60 for an annual membership and then $9-an-hour or $83-a-day. Many of the logistics are transferred to the usersin the P2P model, lowering the price.

"The sharing ecoomy is really here to stay--it's growing and taking roots" said RelayRides CEO Andre Haddad. "What we're seeing is that peer-peer car sharing is evolving from being an hourly based model which was the focus over the last two years to being a mainstream rental."

Since the launch of RelayRides in 2012, it has expanded to more than 1,450 cities in all 50 states. Wheelz's DriveBox technology comes with the deal and makes peer-to-peer sharing more convenient by allowing renters to reserve, find, and unlock a car in minutes from their smartphone without the inconvenience of having to meet the owner in person.

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That's disrupting the traditional fleet rental model.

"Software is eating up the industries that have been here for decades," Haddad said. "Software is revolutionizing."

--Written by Ross Kenneth Urken for MainStreet

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Biggest Loser: My Fight Against Big Debt

Deepa Venkatraghvan — Tue, 14 May 2013 06:42:25 -0400

NEW YORK (MainStreet) —Paying off your debt can be a lot like losing weight. It's a complete mind game and often a frustratingly Sisyphean process. If you don't agree, you should listen to Natalie Warwick's story*. At 38, Warwick has been there, done that. From seeing poverty in the eye to running a successful bookkeeping business, hers is one inspiring tale you won't want to miss.

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In 1995 as a young, creative yet idealistic teacher, Warwick and her then musician-boyfriend were just starting off their life together. "I worked as an arts educator. I did after school art programs for kids and I loved it," she said. "It was a great job but just didn't pay very well. My ex-boyfriend was a musician who made a decent amount of money back then." Their two girls were born in 1996 and 1998 at which time Natalie took a short break from work to care for her daughters. But things weren't going too well between the couple and by 2000, Natalie and her boyfriend broke things off.

She was now a single mom with two kids and a low paying job. At that time, she made $1400 a month, and her rent was $1200. "It was the cheapest deal, a one bedroom house in suburban Oakland," she said. "I got my friend to make bunk beds for my kids in the closet."

Up until then, she had used her credit cards sparingly. She confessed that they spent a lot of money, sometimes for dumb things, but they rarely charged their credit cards. But now, that changed. She had the benefit of subsidized child and health care. But there were also other expenses like car insurance and occasional car repairs, groceries and other kids' expenses. "After I became a single mom, I was left with so little at the end of the month that I had no option but to put expenses on my credit card," she said. "My kids' father was not in great shape himself and was not able to contribute anything at that time. That was when my struggle with debt really began."

In her first four years of being single, she had added $17,000 to her credit card putting down only the minimum each month. Half of her expenses she believes were genuine and she could not have done anything about them. But the other half she said could have been much less. She remembered that her most foolish expenses were when she was the poorest. "We would go four days in a row eating just Mac and Cheese for dinner and on the fifth day I would say, 'What the heck?' and we would go out and eat at a restaurant," she said. "I would suddenly have an urge to take my daughter shopping, and I would go to the store instead of the thrift shop."

Also see: How Paying Just the Minimum on Your Credit Card is a Trap

"I think this is a very common mistake," said Ariadne Horstman, a private client specialist at Sensiba San Filippo Financial Advisers LLC. "People don't realize how much they are spending. They don't realize how tough it's going to be to get out of a bad money situation. It's difficult, but it's important that people learn to live within their means."

In 2004, Natalie got the opportunity to move in with friends in another, cheaper neighborhood. Her rent dropped to $700 per month, but unfortunately her car insurance doubled. "It's funny how the poor suffer," she said. "I had moved just four blocks away, but because the new place was in a bad neighborhood, my car insurance nearly doubled. But I had to keep the car."

The money freed up from the rent was good but still not good enough. Apart from paying more on car insurance, she had to put up money in deposits. So she kept charging her card for things like groceries. She remembered that back in the day, she would shop for groceries using a calculator, just to stay in budget.

Soon, while on one hand she tried to scale down expenses, on the other she was looking at ways to increase her income. She went back to college and got her degree in humanities. While she got grants for tuition, she had to spend on books and material. Again, she swiped her credit card. After all this, however, a degree in humanities didn't get her a high paying job.

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"It was early 2005 and I was at the bottom," she said. "I had to either find a way out or lean on my family's net worth. I really didn't want to do the latter. That's when I took this course that teaches you about the psychology of money. It was a four-month course, and the group met once a month. The instructor helped us explore our relationship with money. We had to answer questions like, 'When did you earn your first money? What did you do with it? Did you talk money at home as kids?' and so on. A lot of us in the group were deeply affected and these questions made us introspect."

This was really the turning point in Warwick's life. life. "Until now I was an artist, activist and social worker," Warwick said. "In my mind, money was the root of evil and I had the idea that if I had enough money for myself, it meant that I was taking it from someone else who needed it. And because of that, I had landed myself in debt and was depriving my children a good upbringing."

While the course helped her become more aware of her relationship with money, Warwick realized that its teachings were difficult to put to practice. She had to work hard to kick old habits, and it took two years before she could get her spending on track. "I would still spend brashly sometimes," Warwick said. "Like once I put down $700 to send my daughters to summer camp. When I think about it now, I think I could have saved that money." With a little help from her sister, she also learned the bookkeeping business and started doing small jobs in that area.

In 2006, her bookkeeping business started building good traction. She decided to completely give up on her career as an arts educator and focus on being a bookkeeper. She moved to Santa Rosa, Calif. At about the same time, the kids' father started contributing as well. He gave her $300 a month toward child support, which gradually went up to $500 by 2009. "My sister told me to start creating cushions," Warwick said. "So I started putting away all the child support money into a separate account that I use for important expenses. I started building a fund for emergencies like car repairs so I don't have to draw on my credit card for those expenses. Today, I have about $900 in there."

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"Creating an emergency fund is the most basic principle of financial planning," Horstman said. "We tell our clients to always keep six to twelve months' expenses in cash before they can even think of spending, so I think this must have been an important step for Natalie."

Today, Warwick has a growing business that helps her make $4,000 to $5,000 a month. Yet, her battles are not over. Her credit card debt is very volatile. In 2010 she had managed to pay down some money and bring it down to $19,000, but soon after she needed some major dental work which she put on her card, shooting her total debt up to $24,000. Today, with all the interest, her debt stands at $27,000, but she has stopped charging it completely.

"Today, I am not out of debt by any means," she said. "My situation is somewhat fragile, but it is much more stable than before and I can pay my bills. I have my emergency cushions which I don't touch. I have good control over my spending. I am strict with my budget to the extent that I review my finances every three days. I never charge my card and even if I do, I pay it off in full. And of course, I continue to put whatever I can toward paying off my outstanding credit card dues."

Today, as a bookkeeper, she helps keep track of other people's money. "The core message I like to give is to understand your relationship with money, the way you think about money," Warwick said. "There were times when as a single mom I did not earn enough and did not live within my means. I could only overcome all that when I went into the deeper psychology of it all."

"One of the biggest mistakes that people make is that they let their emotions override logic," Horstman said. "Secondly, they don't plan and manage their finances. I have seen clients who earn substantially well but are always stressed about not having enough. That's because they don't plan in a systematic way. Everyone should follow some basic mantras – keep money aside for emergencies, don't accumulate high cost debts or if you already have, focus on paying them off. And lastly, start saving early. It will go a long way in building a healthy financial future."

*Name changed to protect identity --Written by Deepa Venkatraghvan for MainStreet--

How to Find a Summer Camp Your Kid Will Be Crazy About

MoneyTalksNews — Tue, 14 May 2013 06:31:33 -0400

By Karen Datko

NEW YORK (MoneyTalksNews)—Mock me, if you will, but I still remember the official song of the Girl Scout camp I attended as a young girl many years ago. ("There's a camp along the dusty road ....")

Summer camp can be among the most memorable and wonderful experiences of a child's life. So, picking the right camp is very important.

But it's not easy. Camps offer an amazing array of activities and experiences to choose from. The camp of my youth (Camp Riamo near Farmington, Pa.) was pretty basic. Many camps these days – both day camps and overnight or sleep-away camps — specialize in a particular sport, or fine or performing art. Of course, the cost range is equally wide.

So, how do you figure out which camp to send your child to? Money Talks News founder Stacy Johnson offers some help in the video below. Check it out, then read on for specific questions you need to address.

First, here are some of the basics you need to cover with a camp you're interested in:

Is your camp accredited? The American Camp Association has a search tool to find camps accredited by the organization. (This valuable search tool also allows you to tailor your search according to location, cost, activities and other important factors in your selection process.) Accreditation may not be essential but it will help you decide.
How long has your camp been in operation?
What's your emphasis, and what types of activities are provided? You want the right match for your child, and you also want a program that provides a valuable experience.
What is the ratio of camp counselors to kids? Barbara Rowley wrote in Parenting that one staffer for every 10 campers is a good ratio for kids ages 8 to 14.
Also, what type of training is provided to counselors and how are they screened?
How much does the camp cost? Is that all-inclusive or are there other fees, particularly for extra activities and field trips?
Can I visit the camp and/or talk to the camp director before I decide? I wouldn't send a child to a camp that doesn't provide such access.
Can you provide references? When you get those names, actually call those parents.
What if my child gets sick? Ask for a copy of the policies and procedures. Is medical care readily available?
What is your refund policy?
What supplies will my child need?
Do you allow cellphones? Rowley brings up this point in the Parenting article: If a camp allows a kid to constantly call and text home from overnight camp, that negates the lesson of independence that's essential to a good camp experience, no?

What type of camp is best for my child?

A major concern is whether your child is mature enough to attend overnight camp. Parenting magazine says 12 is about the right age to transition your child from day camp to overnight stays, while others say 7-year-olds can handle it. But it really depends on the child. What does he or she think?

Once that's decided, consider what type of experience would be best. Are you looking for a range of activities or a concentration in a particular area your child is interested in? (Note that your child should be a part of this deliberation too.)

Another concern is what the day-to-day experience will be like. The National Camp Association provides some questions you might ask, including:

Will the program encourage the child to try new things or things he or she is not skilled in?
What is the philosophy regarding competition and the level of competitiveness?
How structured is the program? Are there electives (choices the child can make)?

How expensive will this be?

Here's one of the biggest questions for many families: How much will this cost? The cost can range from less than $100 into the thousands for long stays and specialty camps.

There are ways to keep the cost in check:

Camps sponsored by government entities and nonprofits are generally more affordable. For instance, among the many camp offerings of Hillsborough County in Florida is a two-week day camp for $76. Parents can apply to pay less based on their income.
Camps may offer scholarships.
Camps may provide an early-registration discount or a break if more than one sibling attends.
Some day camps are considered child care by the IRS, and qualify for dependent care flexible spending accounts and the child care tax credit.

Do you have a summer camp experience to share? Let us know on our Facebook page.

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Work and Social Media Harmed My Mental and Physical Health

Rocco Pendola — Mon, 13 May 2013 16:39:42 -0400

NEW YORK (TheStreet) -- Last week, with the exception of a Monday appearance on CNN, I did not work. I did not use social media. I did not send, receive or check email. I only used the Internet to stream music and video and schedule exercise classes.

I was on "staycation."

I am not exaggerating when I say taking a week off -- the way I did -- was one of the best moves I ever made in my life. I learned a lot about myself as well as the efficacy of the routines and activities that had become daily habit.

In no particular order, here's some of what I learned:

Speaking of exercise, after attending Spinning classes five days a week religiously, I stopped going at the end of December. My excuse? Work.

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What a lame reason to end an exercise program. I love my job, but, honestly, the way I was going at it was counterproductive. It made me look cool to go on Twitter and brag about 16-18 hour days or being up at 3:30 in the morning working, but what did that accomplish other than occasional exhaustion, a couple extra pounds and a heart rate that stopped recovering as quickly as it used to?

A week ago this past Saturday, I went outside for a bike ride. What was once a warmup for me -- 15 miles at around 20 MPH -- beat the hell out of me. I came home pissed at myself. Quite simply, I had allowed my job to take away my fitness. Not the job's fault. All mine. And it's never going to happen again.

I was on the Spinning bike five times this past week. I will be on it at least that much this week and every week thereafter with few exceptions. It didn't take me long to fall out of shape. Thankfully, it still doesn't take me long to get back into shape. But I turn 38 years old in July so I expect that to change.

Speaking of looking "cool" on Twitter, I allowed that social media platform to turn me into some flavor of dumb ass. This became all too apparent too many times seconds into the staycation.

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Every time I had a thought, I instinctively wondered if it would work or could be adapted to work as a Tweet. I did this without even thinking about it. It took me a few days to completely break the habit. By the end of the week, I was thinking like my old self again. Instead of scrolling through Tweets for hours a day -- a practice that, when overdone, does nothing but saturate your brain with more information (so much of it meaningless) that it can or should be able to process -- I was working the argument and logic sections of the LSAT over the weekend.

Something as seemingly innocent as Twitter can hinder your thoughtfulness. Not to get all philosophical on you, but think about it. If you're looking to translate every thought you have into a Tweet, it sucks much of the life out of thinking. Instead of reflecting on your thoughts -- and seeing where they go "naturally" -- you immediately take that thought and put into a 140-character vacuum.

It was difficult for me to pull back from work and disconnect. But I'm more than glad I did. If I didn't, I risked going down a mentally and physically unhealthy path that I presume gets tougher to deter the deeper you get sucked into it.

Written by Rocco Pendola in Santa Monica, Calif.

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The 'Mom' Value: The Moola Files

Ross Kenneth Urken — Mon, 13 May 2013 14:38:51 -0400

NEW YORK (MainStreet)—Mother's Day lent us the opportunity to recognize the value of all the moms out there, but Reuters reporter Atossa Araxia Abrahamian came on The Moola Files to explain why the economy may not agree with our robust appreciation:

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Saving For A Rainy Day: A How-To Guide

Ellen Chang — Mon, 13 May 2013 12:35:23 -0400

NEW YORK (MainStreet)—Stashing away a few bucks in case of an emergency seems like the sensible thing to do, especially if a curveball heads your way.

If you have a rainy day fund in place, you can tackle the problem easily and avoid jeopardizing your financial security or even credit score. Setting up an emergency cash fund gives you options to replace the broken radiator or take that unexpected trip back home.

Even if you can use your credit card, it's better to use your cash so you can avoid high interest rates or other fees. It's always good to have some cash handy that you can access quickly from your bank.

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Starting your emergency fund can be as simple as stashing $50 a month into a savings account, said Nick Drew, a financial advisor for Liberty Partners Financial Services, LLC, based in The Woodlands, Tex.

He recommends that you open an account at another bank or credit union so that the money is "out of sight and out of mind." Automatic debits are one of the best methods, because the money is taken out of your paycheck each month, preventing you from spending it.

"Just start doing something and increase it every quarter," he said. "People are amazed how they can easily save $50 a month and increase it to $100 a month and wind up with thousands of dollars in savings in less than two years."

While most financial advisors have traditionally advised saving three to six months of your expenses, the downturn in the economy has made some people more cautious.

If you work in a field that experiences frequent turnover, you might consider saving 12 months of expenses, said Drew.

While savings and money market accounts are paying under 1% in interest at traditional banks and even credit unions, a better option is to invest your cash in CDs. Expect a greater yield with a longer maturity.

One option is to buy several CDs with various maturities or what is known as "laddering."

"CDs can be a safe way to diversify the underlying investments in an emergency savings account while generating a higher yield," said Eric Greschner, a financial planner at Regatta Research & Money Management, LLC, based in New Orleans.

"Make sure that the fund is liquid so you can tap into it if and when you need it," he said. "You never know what can happen in life. Those unknowns can be an illness, a car accident, job loss or a divorce. It is better to plan in advance for the unexpected."

CDs are sold with short-term maturities such as three or six months. At the end of the maturity, you should reinvest the principal in another six month or even 12 month CD.

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If you need money for an emergency, then tapping into a CD is not an issue, because investors do not pay a penalty and lose only a small portion of the interest they have earned, said Drew.

Steer clear of buying stocks for your rainy day fund. While buying stocks may seem like an attractive option since the returns are extremely high compared to a money market account or CD, they can be volatile, said Greschner.

"Avoid stocks, particularly highly volatile ones, as they can often decline considerably during market sell-offs," he said. "If the emergency funds were unexpectedly needed at the same time a market sell-off was occurring, an investor could potentially be forced to sell at an inopportune time. Making sure the money is there when you need is the one is a top priority."

Investors should avoid the temptation to reduce the credit quality or extend maturities to increase the yield. Instead, they should favor highly liquid, higher quality investments with shorter maturities so the cash is safe and easily accessible, said Greschner.

Allocating more money into your rainy day fund can be achieved easily, said Drew. Avoid using money from a raise, bonus or tax return and instead stash that money into your emergency fund.

Once you have paid off a large purchase such as a car, you should invest the same amount into your emergency savings account, he said.

An emergency cash fund prevents you from borrowing money at unattractive rates or being forced to tap into a retirement account. Borrowing money from a retirement account should be avoided, because there is a 10% early withdrawal penalty and a tax liability.

Investors who are more aggressive or saving for longer time periods, like when looking to purchase a house, can invest their cash reserve in a mutual fund with tax exempt municipal bonds, said Drew.

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"Investors will see better yields of 4.5% to 6% instead of money market rates of less than 1%," he said. "You are getting a real rate of return without increasing your tax burden."

Even if you have to withdraw cash for a crisis, a rainy day fund will prevent more stress and problems in the future. Replenishing the fund as soon as possible is key to maintaining your financial security.

"Procrastination is very prevalent," said Drew. "Once you start an emergency fund, you will have less of a tendency to use it. Your money will just build and build."

Go into Business with Your Pet

Kerri Fivecoat-Campbell — Mon, 13 May 2013 11:18:27 -0400

NEW YORK (MainStreet) — When Dee Dee Murray, a Seattle artist, taught her dog to paint, she never dreamed putting a paintbrush in the Dachshund's mouth would also help her own business.

"When I would paint, she would always come up and lie beside me, and I just wondered if she wanted to paint," Murray says. "She wasn't one who I could just put a brush in her mouth — it took about two months — but once she learned, there was no stopping her."

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The then 10-year-old Hallie was already working up doggy masterpieces when she suddenly developed an eye condition that caused her to go blind. Hallie eventually returned to the canvas, though, and Murray, selling the works for $100 each, has raised more than $13,000 for a local animal rescue. The dog enjoys painting so much that Murray has to limit her time with the brush so she doesn't get burned out.

What's even more surprising to Murray, though, is how Hallie's career has helped her own. I have ridden a bit on Hallie's coattails through this," Murray says. "Last year I would say she increased my dog portrait commissions by about 30%."

About 50% of Murray's income is made through paintings of wildlife and commissioned pet portraits. She also owns a business with her brother doing Web design and selling pinewood derby cars.

Jeanette Dugas, a CPA with Dugas & Dugas CPA in Winter Haven, Fla., says that if you're going to go into business with your pet, you need to make sure everything is completely documented. "The IRS looks at pets as a personal expense and generally doesn't like to see them deducted," Dugas says.

There are exceptions to every rule and service dogs are one big exception. The rules for service dogs are generally very liberal, allowing almost all of the expenses associated with the dog to be deducted.

In a case such as Murray's, Dugas says if you have a pet that has suddenly found a talent, the first thing the IRS will look at is if you're producing income from the pet.

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"You have to report income properly, and if you're reporting income, then they aren't going to have so much of an issue of deducting maintenance, such as health and well-being, food, paint, canvases for the dog and other related expenses," Dugas says.

Another dog that has made headlines this year for his sudden fame is Otis, a photobombing dog in Chicago, Who at first accidentally appeared in a couple of photos his owner was taking of the apartment he was putting up for rent.

"I showed the pictures to my wife, and we thought it would be funny to put him in all of the pictures," John Kanive says.

Kanive says Otis, a Shepherd/Great Dane mix rescue dog, will do anything for cheese, so he bribed him to sit in certain spots throughout the apartment in exchange for Kraft singles.

When the photos of the apartment were put up on Craigslist, Kanive says he got tons of responses, most of them starting out, "I love your dog. By the way, is the apartment still for rent?"

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Kanive and his wife, Sarah, rented their apartment in under 24 hours and also snagged a contract with realtor.com for its member Realtors to use Otis' image to create their own photobombs to advertise pet-friendly listings around the country.

"He's always been a model, he's a good looking dog," Kanive says. "I'm hoping maybe he will climb the corporate ladder."

Kanive isn't seeking any other work for Otis, and he and his wife aren't quitting their day jobs.

Cats, too, can become Internet sensations, as Grumpy Cat has. The cat's owners have turned the pouty feline into a protected image and brand by filing for copyright protections on her image and trademark protection on associated merchandise.

Other animals that can be deducted, Dugas says, are service animals, as explained above. But they have to be taken under medical deduction for guide dogs and service dogs.

As service animals are being constantly redefined, Dugas says she knows of at least one cat that has received a private letter ruling from the IRS. The cat was trained to alert its deaf owner to door knocking and other sounds the owner needed to respond to, and the owner sought a private letter ruling from the IRS before taking the deduction. "That doesn't mean everyone can do it," Dugas says. "But there is that precedent now."

Another deduction people often try to seek is for a guard dog, Dugas says, but be warned that the IRS will look at the breed, the training the dog got and whether that dog is protecting the property all of the time or maybe comes home with the owner. "Most dogs don't meet that threshold," Dugas says.

As with any type of business, if you're going to go into business with your animal, you will eventually have to show an income and prove that your animal isn't merely a pet. That means eventually not showing a loss. Most people would agree that going into business with a pet that shows unconditional love, though, is most likely the only business you will ever go into where there is never a loss — at least not in the heart.

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When It Pays to Hire a Financial Planner

Billy Fisher — Mon, 13 May 2013 09:17:03 -0400

NEW YORK (MainStreet)—A financial planner can prove to be an invaluable asset for individuals or families looking to get their financial houses in order. Not all matters require the consultation of an advisor, but in certain cases it can be beneficial. Here are a few situations where it can pay to hire an expert.

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Skill Gap

Bringing in the assistance of a financial planner is a smart play if you have already come to the conclusion that financial planning just is not for you. "If you want a financial planner that is going to manage your money because you have no skill or interest in doing it, that's O.K.," said Neal Frankle, a CFP and founder of Wealth Pilgrim. "That person's strategy should match your own risk tolerance."

Once you have decided to outsource your financial planning, Frankle emphasizes the importance of finding a planner that will work with your best interest in mind. "It should be an independent planner," he said. "It also should be a person that asks their clients a lot of questions rather than filling them up with how great they are."

If you are a do-it-yourselfer and prefer to do the bulk of your financial planning on your own, it still may make sense to have another resource review your approach. "You can do it yourself, but you can also spend a lot more time and get it wrong than just by hiring someone who is really good at it," Frankle said.

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Life Events

A financial planner can turn out to be a lifesaver for individuals encountering life-changing events. "If you are preparing for a marriage or a divorce, you may need a financial advisor," said Lisa Fox, a CFP and director for financial planning at South Texas Money Management. "I work with a lot of divorcees that have never had anything to do with finances before and have no idea of how to manage an investment portfolio or even how to manage their budget."

Fox says it may be prudent to seek the guidance of a financial planner in dealing with complex financial events. "If you have stock options in your company and you are not sure exactly how best to manage those, a financial planner can help," she said. "If you are buying, selling or passing on a family business, those are good trigger events also."

Golden Years

Individuals nearing retirement may also want to tap the experience of a financial planner to ensure that their preparations are adequate. "The majority of my planning-focused clients are from the pre-retirement group," said Joan O'Connell, a CFP for Blue Water Capital Management. "These are people that are on the average about five years or so away from when they would hope to retire."

O'Connell says that the cost of hiring a financial planner can be a pivotal investment for individuals who find themselves on the brink of retirement. "They are trying to figure out: 'With everything I've done and the income streams I'm going to get, is that going to do it?'" she said. "I think those people are prime candidates to get some professional help. It's very worthwhile to spend a little money then."

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For individuals that have already settled into retirement, financial planners can play a vital role in ensuring that the nest egg is used in an optimal manner. "There is a lot of information out there about investments and stocks and such," O'Connell said. "You don't see a lot about how to actually manage your distributions."

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5 Things You Didn't Know About Taking a Vacation

Brian O'Connell — Mon, 13 May 2013 09:00:00 -0400

NEW YORK (MainStreet) — At first glance, it's not exactly a shocker when Americans say they link vacations with happiness.

Of course they do, and in big numbers. Expedia , the Bellevue, Wash., online travel firm says that 86% of U.S. love their vacations because they make them happy.

Evidently, the more one vacations, the sunnier their disposition. Expedia says that those "happy" trip-takers are more likely to take three or more vacations annually.

But it goes further. Here are five surprising superlatives about travel:

It's better than the happiest day of your life. U.S. adults who take a regular vacation say their trips make them happier than their marriages, weddings, birthdays and religions. Vacations even surpass the happiness associated with owning a cat among U.S consumers, Expedia says. "I love my husband, and I love my cat, but like most Americans, I love them both more when I'm on the beach — with my husband of course, not the cat," says Sarah Gavin, a travel expert at Expedia.com.

Travel means better sex. According to the Expedia Travel Index (and let's never forget that Expedia wants you to travel — that's why it's in business), sex is better away from home. More than 88% of U.S. Travel consumers say they have more physical intimacy and better sex while on vacation, and that loving feeling doesn't go away soon; Expedia says the romantic lives of constant vacationers are improved for up to four years after a trip ... but only as long as you keep taking those vacations.

Travel is better with a loved one. Americans who travel alone are much less likely to report feeling happy about a vacation compared with vacationers who go as a couple. Married couples, in particular, report high levels of happiness and contentment after taking a vacation.

Atlantic City is better than Rome. What travel destinations triggers the most bliss? Expedia ranks Atlantic City first, followed by the Florida Keys, the Oregon Coast, and Cape Cod in the "top five." Expedia doesn't say why Atlantic City ranks ahead of Barcelona (eighth on the list) and Rome (10th on the list), but the lower cost associated with traveling domestically may keep bank savings accounts healthier, thus contributing to overall happiness.

Travel is better for men than women. This one qualifies as an eye-opener, but guys come back from a trip happier than their girlfriends or spouses. Expedia says that's because men travel more than women (four trips annually versus three), and when they go away on vacation they tend to stay away longer — up to five nights longer than women.

How about a bonus takeaway?

Expedia says travelers, men and women alike, tend to have happier vacations if they check into their offices less often or, better yet, not at all. Pulling the plug is important for harried workers, so the more you disconnect from the office, the better your mindset and the slower your pulse on vacation.

— By Brian O'Connell

New Rule Makes It Easier for Stay-at-Home Spouses to Get Credit Cards

S.Z. Berg — Mon, 13 May 2013 08:15:20 -0400

NEW YORK (MainStreet)—Thanks to a change in the Credit Card Accountability Responsibility and Disclosure Act (CARD Act), stay-at-home spouses and partners age 21 and older will now have an easier time qualifying for credit cards. Earlier this month, the Consumer Financial Protection Bureau (CFPB), the federal government's consumer financial services watchdog that first proposed the change in October 2012, sent the final rule to the Federal Register.

Also see: How Paying Just the Minimum on Your Credit Card is a Trap

The CARD Act, enacted in 2009, required credit card issuers to base their decisions on an applicant's income or assets and not on household income. Under the new rule, credit card issuers may now consider income from the stay-at-home applicant's spouse or partner, if the applicant has a reasonable expectation of access to the money, when an applicant applies for a new account or increased credit limit.

Without access to credit, these individuals have been paying higher premiums on insurance and cell phone plans, according to Jana Castanon, community outreach coordinator at Apprisen, formerly the Consumer Credit Bureau Counseling Service. If used responsibly, this new access to credit can bring down home and car insurance premiums and interest rates on loans, she says.

Also see: Tech-Savvy Start-Up Apps

Credit card issuers have 6 months to comply with the new rule.

This change may make it easier for the more than 16 million married individuals who do not have an outside income. Consumers under age 21 will still need to show an independent ability to pay or have a cosigner.

S.Z. Berg is the author of College on the Cheap.

Also see: Teaching Your Kids How to Borrow

The Math Behind Why You Should Contribute to a Matched Retirement Plan

Steven Orlowski — Mon, 13 May 2013 08:04:08 -0400

NEW YORK (MainStreet)—Don't Turn Your Back Free Money

Everybody likes to get free stuff, right? But who in their right mind would turn down money for nothing?

O.K., technically it's not for nothing (you need to be employed to get it), but for many U.S. workers "free money" is available through their employer sponsored retirement plans.

Unfortunately many employees, and frequently younger ones, do not take advantage of their retirement plans and therefore say no to what amounts to an increase in pay.

How to Master a 401(k) and Roth IRA at the Same Time

You see, younger workers sometimes think that retirement planning can wait until they are older. But it's a mathematical truism that the best time to start saving is when you're young...

...and the younger the better.

Now, if you're planning on being the next Mark Zuckerberg then maybe you don't need to read the rest of this article...but most of us will not be like Zuck.

However, you can get rich. And one way to make sure you do is to start saving early, save a lot and take advantage of your employer's retirement plan matching contributions.

Sign-up Yesterday

Most of us will not retire with an old-school defined benefit pension. You know the kind. You retire after working for the same company for 25 years and a deposit magically hits your checking account every week for as long as you live.

You parents may have one, and your grandparents probably have one; but you most likely won't. You should however have access to a defined contribution retirement plan like a 401(k) or a 403(b).

These accounts allow you to save a percentage of your income up to a maximum limit which is set by the government. That's a maximum of $17,500.00 for 2013.

Now, some people would rather spend money today than save for a retirement that seems so far, far away...

But if you do, you could be forgoing a very big benefit that your employer may be providing you with...those matching contributions.

You see, as traditional pension plans were phased out companies instead shifted to plans like 401(k)'s where the burden is on you to save.

If you choose to participate in the plan, terrific; your employer might match a percentage of your savings.

If you do not participate you're turning a blind eye on extra compensation. And it's your problem, not your employer's...

How does it work?

How To Consolidate Your 401(k)s

Let's say we have a friend named Fred. Fred is 25 years old and he makes $50,000 a year. Right now Fred has a $0.00 balance in his 401(k).

Let's see how much Fred might have saved for retirement if he started now under a couple of different scenarios. To get these numbers I'm using the Fidelity Investments Contribution Calculator.

Fred has been thinking about putting $1,500.00 per year into an IRA. But an IRA has no matching contribution. But if Fred does contribute $1,500.00 to his IRA every year until he's 60, for 35 years, and his investments grow at 8% per year, Fred would end up with $289,369.00 saved for retirement.

That's O.K. But he could do better by using his employer sponsored 401(k).

You see, his employer will match dollar for dollar up to 3% of Fred's contribution to his 401(k). If Fred were to contribute $1,500 to his 401(k) instead of his IRA Fred's employer would match his contribution (3% of $50,000 = $1,500) and also put $1,500 into Fred's 401(k).

When Fred reached age 60 he'd have twice as much as in the IRA - $578,728 - thanks to those matching contributions!

And if he got aggressive with his contributions, let's say contributing 6% of his salary ($3,000.00) each year, Fred would end up with much more - $1,061,019.00.

But Fred needs to start right away. If he waits, let's say until he's 35, he'll have to contribute far more to retire with a similar 401(k) balance.

In fact, a 35-year-old Fred making the same amount of money would have to contribute 23% of his income each year (instead of 6%) in order to match the amount he'd have had if he'd started at age 25 - $1,037,972.00 to be exact.

Of course many of us do not expect to have the same job with the same income for our entire careers like Fred. Most of us strive for bigger and better things - better jobs with higher incomes which would enable us to save more...

But we never know what the future has in store for us.

So start saving now and take advantage of your employers matching contributions.

Are Our Caveman Roots Preenting Us From Effective Retirement Planning?

Berkshire's B-Share Generation

Antoine Gara — Fri, 10 May 2013 13:00:00 -0400

OMAHA (TheStreet) -- Nick Antoine traveled to Berkshire Hathaway's annual shareholder meeting with air miles and lodged in a "dirt cheap" hotel room with a ceiling that leaked water from an overflowing toilet a floor above.

The 24 year-old Princeton University graduate was forced to splurge on taxis due to unseasonably cold weather at the May 4 investor gathering in Omaha, Nebraska.

Antoine entered Princeton on track to become a musician and had been a semi-professional saxophone player in his high school years in New Jersey. Those plans changed, however, when he read Benjamin Graham's The Intelligent Investor and Berkshire CEO Warren Buffett's essay The Superinvestors of Graham-and-Doddsville over a few days in his freshman year of college.

Also see: Cover Your Private Equity With Buffett Boxers

"It was like a light switch had been turned on in my head. I'll never forget it," Antoine says.

Antoine decided on a history major and now aspires to become a professional investor or an entrepreneur. Saturday was his first shareholder meeting after buying shares in Berkshire's Class B stock last year.

"I didn't go to see Warren speak because he has a lot of money, I went because he thinks differently and I want that type of thinking to rub off on me," Antoine says. "I'm interested in developing a skill set that will set me apart from the rest of my generation."

Berkshire's 82-year old CEO and Chairman has referred to the annual meeting as 'Woodstock for Capitalists,' but the event has also caught on with members of the Millenial generation such as Antoine. They seek out the 'Oracle of Omaha' and his 89-year old lieutenant Charlie Munger for guidance on how to position their careers amid a tepid post-crisis economic recovery.

Twenty-somethings like Antoine describe the pilgrimage to Omaha as an affirmation of independent thinking in business and investment. Buffett's values and Munger's lucidity also carry an appeal beyond their stewardship of Berkshire and its more than 80 operating subsidiaries.

Those youthful shareholders are building in number, according to longtime attendees of Berkshire's meeting. The company has dramatically expanded its investor base since splitting Class B shares, first issued in 1996, by 50-to-1 in 2010.

Class A shares closed at $166,100.00 on Thursday, while Class B shares ended the trading session at $110.66 a share.

Both classes of stock receive invitations to Berkshire's annual meeting, though no 20-something interviewed for this article owned A shares.

Call them Berkshire's growing B share generation.

Ryan J. Morris, 28, head of burgeoning investment firm Meson Capital may have cut an even thriftier itinerary in Omaha than Antoine.

At Berkshire's meeting a year before, Morris booked a $48-a-night room in what he calls a "scummy motel" to share between himself and three friends from the hedge fund industry. They tried to subsist on free food and Berkshire-owned See's Candies and Dairy Queen, in a contest of sorts to see who could be the most frugal.

Morris says his friends wouldn't let him book accommodations this year. For Saturday's meeting, Morris and four colleagues piled into a slightly more upscale hotel room, but maintained a premium on value.

"It's the one time of year when my friends from all over the country are in the same place," Morris says of the 30 or so value investors he now regularly sees at the Berkshire meeting. He compares it to attending old friend's wedding.

Morris, who lives in San Francisco, started reading Berkshire's annual letters at the age of 12. He bought one Berkshire B share before the stock was split as part of the firm's acquisition of BNSF Railways.

"I just own a nominal amount to go to the meeting," Morris says.

After graduating with a master's degree in engineering from Cornell University in 2008, Morris created VideoNote, a software company, though he now describes himself as a passive owner.

Morris then founded Meson Capital at the market bottom in February 2009 and earned a 753% gross return in the fund's first year.

Meson Capital has underperformed the S&P 500 in recent years, but remains up 172% net of fees in its history, outperforming the S&P, in what Morris calls a 'lumpy' performance. He was profiled by Bloomberg BusinessWeek in a December 2012 issue.

"I'm not doing this to earn fee income. I'm doing this because I want to be the best investor I can," says Morris, who relishes the intellectual challenge of managing money and the practical skills he's learned in negotiating a portfolio of small cap stocks he compares to Warren Buffett's earliest investments.

Morris currently serves as chairman of InfuSystem Holdings and Lucas Energy after winning activist campaigns in recent months.

As an 11 year-old growing up in Hong Kong, Jason Fang, 30, learned the principles of vertical integration when his favorite comics company Marvel bought distributor Heroes World in 1994. He mentions Fortune Magazine as another popular publication from his youth.

Fang graduated Stanford University in 2005 and earned master's degrees in management science and engineering a year later. After a stint at a startup in Palo Alto, Fang now is a part-time consultant and bides his time practicing money management with his savings.

"Priority number one is saying without any hesitation I can be a good steward of other people's money," Fang says of his goal to start an investment fund. "For me, it could mean I am living on Ramen for the next few years."

Fang's interest in investing was piqued by Peter Lynch's One Up On Wall Street. He grew more familiar with Buffett after investing in Berkshire at the onset of the financial crisis. Saturday was Fang's fifth shareholder meeting.

One year, he spoke in front of a near 30,000 audience at Berkshire's meeting when a shareholder commented that the firm's MidAmerican Energy unit was contributing to global warming. Fang argued it wasn't Buffett and Munger's practice to intervene with operating subsidiaries like MidAmerican, even if issues such as climate change have legitimacy.

Berkshire's audience took an aversion to his comments and the shareholder motion on combating climate change was overwhelmingly rejected.

Warren Buffett said at Berkshire's shareholder this past Saturday few seeking to raise their own funds will succeed. He nonetheless advised aspiring professional investors to have an audited track record as early as possible. "To attract money, you should deserve money," Buffett said.

Even if a majority of Buffett devotees are unlikely to manage money professionally, Morris of Meson Capital maintains the 'Oracle' isn't a false idol.

"The ties between investing and business are very close," says Morris, who sees Buffett and Munger's teamwork, ability to delegate responsibility and ethics as transferable to life outside the investment world.

For young attendees, the Berkshire meeting is a whirlwind.

Saturday morning, Morris waited in rainy darkness outside Omaha's CenturyLink Center so he could grab a seat close to Buffett and Munger's podium. Once inside, Morris found himself standing next to George Lucas, the billionaire Star Wars creator. He also ran into Mario Gabelli, head of GAMCO Investors, who recommended Morris for a board seat on Telecom & Data Systems in April.

"It's just so cool that you could catch up with these famous billionaire investors, but that we are all students of the grand masters, Buffett and Munger," says Morris. "It has this leveling effect."

At a gathering hosted by Whitney Tilson of Kase Capital, Antoine, the Princeton graduate, ran into William Ackman, the billionaire head of hedge fund Pershing Square Capital Management.

They discussed books they were reading, a recent investing competition run by Pershing at Columbia University and work of mathematician Kurt Godel. Ackman's last leisure read was The China Study, a popular book covering nutrition, weight loss and health, according to Antoine, who had met the hedge funder before as an intern at Tilson's Value Investing Congress.

Tilson says he has been going to the Berkshire meeting for 15 years.

"It is heartening to see how many young people are attending," he says.

Meetings like the one between Ackman and Antoine are the kind of thing that attracts newcomers like James Sullivan, 26, an aspiring financial professional and 2011 graduate of New York University School of Law.

"The beauty of the meeting is you could be worth $100 million to $200 million or you could have just one B share. It does have a democratic appeal in that everyone is there to learn and be proselytized," Sullivan says.

Sullivan also says Buffett's six-hour question and answer session can be a calming influence against the mania of asset bubbles. "Rationality will win out in the long-run."

Some Berkshire neophytes inherited the gospel of Buffett from their parents.

Dennis E. Prendeville, 62, bought Berkshire A shares with a market order in the stock market crash of 1987. Prendeville, who has been an investor his whole life and even published a book Common Stock Price Histories, 1910-1987, says it took three days to find out he had bought Berkshire shares in the rout.

Prendeville says gains he made on A shares helped him open a water park in his hometown Anchorage, Alaska about a decade ago. His 22 year-old son is now a regular at Berkshire's shareholder meeting.

"Warren Buffett and Charlie Munger are great role models and a lot of young people are recognizing it," says Prendeville, who has been attending the meeting in Omaha since 1995.

Prendeville's son owns B shares.

"He could have an A share if he bought it on margin," he says.

-- Written by Antoine Gara.

Living Together but Not Married? 5 Tips

MoneyTalksNews — Fri, 10 May 2013 09:54:45 -0400

By Stacy Johnson

NEW YORK (MoneyTalksNews) —Here's some sobering information:

According to a March 2012 analysis of census data conducted for USA Today, about one in 15 unmarried American heterosexual adults were in live-in relationships.

In fact, nearly half of U.S. adults in their 30s and 40s have lived together in a romantic relationship outside of marriage.

I call this "sobering" not because I object, but because I suspect that many unmarried couples haven't considered the financial ramifications of living together. That's a mistake because they're not afforded all of the same protections and advantages that married couples have.

Every young couple that breaks up has faced the issue of "this is yours, that's mine" – from books and music to pets and furniture. But living together as you get older (and hopefully wealthier) can pose additional challenges.

I did a TV news story offering advice for cohabitating couples. Check it out, then read on for more information.

It's essential to remember, whether gay or straight: When it comes to money, the law doesn't recognize relationships not documented with paper.

How to buy half a house

With mortgage rates near historic lows and home prices rising, unmarried couples may decide to not only move in together, but buy their own place. This could be a great move, but be aware of potential problems.

Keep in mind what I said above: The house belongs to the person whose name appears on the legally recorded deed. It doesn't matter what verbal agreements were made or who paid the mortgage. So make sure both parties are named on the deed.

The two basic ways of taking title with other people are joint tenancy with right of survivorship and tenancy in common. The difference is that with right of survivorship, your interest in the property automatically transfers to the other owner when you die. With tenancy in common, it doesn't.

Also keep this in mind: If you both apply for the mortgage, you're both responsible for paying it — even after you break up. Also, if both parties are on the deed as owners, but only one is on the mortgage, the one responsible for the mortgage remains responsible, even if that person has moved out and moved on.

Another common scenario: John already owns a house, then Jane moves in and, because she makes more than John, proceeds to make the monthly mortgage payments. Is Jane then entitled to any of the equity she's creating by paying down John's mortgage? No. Absent a legal document to the contrary, it's John's house and his equity.

So, if you're thinking of buying a house together – or taking on the responsibilities of someone who already owns a home – go into the transaction with your eyes open. The steps are simple:

Think it through.
Talk it out.
Draw it up.
Have a lawyer look it over, then have it notarized or recorded.
Live together for a significant period of time (not defined in any state).
Hold themselves out as a married couple — i.e., share a last name, refer to each other as husband and wife, and file a joint tax return.
Intend to be married.

Where there's a will, there's a way

It's bad enough when married couples don't have a will, especially when it's so easy to do. (See "How Do I Get a Will on the Cheap?") But even without a will, the law won't leave a surviving spouse high and dry, because of another piece of paper — a marriage certificate. If there's no paper, as far as the law is concerned, you're strangers even if you've shared a bed for 20 years.

If you're married and die without a will, your estate will eventually go to your spouse because, according to the law, your spouse is your next of kin. If you're unmarried and die without a will, your estate will still go to your next of kin – not to your partner. If you don't relish the idea of a parent, a sibling or some distant uncle inheriting everything, get a will.

Something else to consider: If you're rich – say, with assets exceeding $5 million – you could have estate tax issues wealthy married people don't. So talking to an estate attorney is a good idea.

A taxing health care plan

Many big companies and government agencies extend health insurance coverage to unmarried couples. While it may not matter to your employer if you're hitched, however, it does to the IRS.

When you're married, the IRS doesn't tax your health benefits, nor does it tax the benefits your spouse receives under your plan. But if you're providing your domestic partner with health care benefits, the portion applying to them could be taxable to you. In other words, if John covers Jane as a domestic partner under his employer-sponsored health plan, John could be taxed by Uncle Sam for any benefit extended to Jane.

Why? Federal tax law specifically excludes employee benefits received by spouses from taxation, but Uncle Sam doesn't recognize domestic partners. Thus, if John's and Jane's employers both pay for their health coverage, they're better off keeping them separate.

If John has coverage and Jane doesn't, they have to make a calculation: Do John's extra taxes exceed what it would cost Jane to get a private health insurance policy? The correct path will depend on John's tax bracket and Jane's cost of health insurance.

But there's something else to consider. Suppose Jane develops a health condition? If she's on John's group policy through his workplace, she'll continue to be insured. But if they split up and John cancels her coverage, she could be denied individual insurance on her own because she has a pre-existing condition. (Luckily that won't be the case in 2014 when health care reform prohibits denial of insurance because of health history.)

In case of medical emergency

If one partner has a medical emergency, absent paper to the contrary, the other has no legal right to information or to make decisions about care.

The solution to this problem is an advance health care directive, which allows each of you to legally make decisions if the other is incapacitated. It also allows hospitals to share information usually reserved for spouses. Like a will, these directives aren't hard to get. Your hospital or county health department can give you the form, or you can download one online.

Marriage without paper

There is one situation where a heterosexual couple living together can enjoy the rights of marriage without getting hitched the traditional way: They can claim a common law marriage — which is recognized by law in 15 states.

But if you think a common law marriage is created simply by living together, you're wrong. According to Nolo.com, these couples must:

Keep in mind that the burden of proving you're a common law married couple will fall to you – it's not automatic. Once you've proved it, you'll then have the privileges of married couples – including the privilege of going through a legal divorce if you break up.

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Jumping into a Summer Job? Here's Where (and How) to Get Hired Now

Kathryn Tuggle — Fri, 10 May 2013 09:00:00 -0400

NEW YORK (MainStreet) — Warmer weather and beach vacations aren't the only reasons to get excited about summer this year. If you're seeking part-time employment, 19% of hiring managers plan to hire more summer workers this year than they did last year, and average hourly wages are up by 5%, to $11.50 from $10.90, according to online job marketplace Snagajob.

If you're ready to jump into a summer job, some industries are hotter than others. We checked in with experts for some tips on landing your perfect position and how to determine where your summertime will be the best spent.

Where to find the job:

Some of the best industries to look for a job this summer include leisure, hospitality and retail, says Snagajob vice president of marketing Jason Hamilton.

"Job-seekers should concentrate their efforts on jobs related to summer tourism and family activities — amusement parks, ballparks, beaches, quick-service restaurants, ice cream stores, camps, malls, retail outlet centers and casual dining," Hamilton says.

For the most part, jobs in the summer tourism industry tend to be "economy proof," says Joe Weinlick, vice president of marketing for online career network Beyond.com. With that said, health care jobs also have an uptick in the summer months, including home health aides, pharmacy techs and personal trainers.

"People tend to take stock of their health more when the weather gets nicer, especially after a long winter," Weinlick says.

For younger job-seekers who may be college students or college-bound, Nathan Parcells, co-founder of online job platform InternMatch, recommends looking in the industry in which you're getting a degree.

"Since more paid internships are being offered each year, students across all education levels and industries can now gain valuable hands-on experience while also being able to make money," Parcells says.

Specifically for internships, there are always a number of communication, marketing, business and hospitality internships available during the summer semester, he adds.

For people seeking a job that could lead to more serious professional opportunities, Weinlick recommends checking with companies you admire to see if they're in need of temporary hires.

"Even if they are in a slowdown from a hiring perspective, they might need to fill in for workers taking vacations," Weinlick says. "That way you can get your foot in the door and prove your skills."

Don't forget about sectors in need of employees during the summer months due to kids being out of school, says Chris Mader, director of corporate accounts for staffing and recruiting firm Randstad.

"Jobs that pay well include service industry jobs, such as retail and food. Child care also offers promising salaries. The good news is there is a wide range of jobs available depending on a candidate's background and skill set."

Other industries to check out include financial services, banking, IT and human resources, Mader says.

How to land the job:

"According to the feedback Snagajob received from hiring managers, there are three top traits they desire from summer hires: a positive attitude, the ability to work the schedule they need and previous experience," Hamilton says. "If you're friendly and upbeat, willing to work nights or weekends and show initiative, you'll increase your odds of being hired over another candidate."

Applicants should plan to be available as soon as possible. With hiring confidence high, employers are looking to staff their teams early, Hamilton says. According to Snagajob data, almost half of all summer hiring will be complete by the end of May, and 77% will be complete by Memorial Day.

No matter where you find a job, it's important that you don't treat it "like just another summer job," says Tom Gimbel, president and CEO of LaSalle Network, a Chicago-based staffing firm.

"Yes, your summer job may not be directly congruent with your long-term career goals; however, the contacts you meet now will prove valuable partners in the future. Treat every interview, every interaction with employers and every hour of your workday as you would a 'real' job," Gimbel says.

If job-seekers are serious about gaining professional experience, they should plan to make themselves available as much as possible, even though summer jobs might not have the most desirable schedules, Mader says.

"This is particularly true for working in hospitals, where health care professionals are in higher demand due to the Affordable Care Act. Illnesses and ailments demand 24-hour attention and health care employers may request summer employees to work odd hours," he explains.

If the position you're applying for is without scheduling guidelines, it's best to make yourself as flexible as possible, Parcells says.

"During the hiring process, ask your interviewer for more information regarding the schedule and make sure to adapt yours to meet the needs of the positions you're interested in," he says.

— By Kathryn Tuggle

Crowdsourcing Your Investments: The Twitter Effect

Hal M. Bundrick — Fri, 10 May 2013 06:46:45 -0400

NEW YORK (MainStreet)—When Twitter momentarily crashed the market with a false news event, an interesting question was raised: rather than destroy the market, can we profit off the minds of the collective herd? We can crowdsource a logo, the financing of a festival -- or our next indie film – how about crowdsourcing our investments? Traders are doing that right now on social investment platforms like eToro, ZuluTrade and ForexCopy. For now, due to regulatory restrictions, U.S. trading is limited to currency and commodity transactions.

As the largest player in the field, eToro.com lets you tap into the tribal "wisdom" of nearly 2.8 million users from 190 countries. You can choose your favorite market guru, share trades, copy those trades in your own portfolio – and according to ongoing MIT research – enhance your return by 5 to 10% over "normal" traders. Flush with a new $15 million round of venture capital, eToro allows you to get into the action for as little as $50.

Also see: SEC Member Predicts 'Armageddon' for Municipal Bonds

"I had been trading in the financial markets for a long time before establishing eToro, and I was always frustrated at the needless complexity of most the tools at my disposal," said Yoni Assia, founder of eToro. "I also realized that the Internet and the social movement that followed it would have to be an integral part of this new platform. Instead of investing in traditional market instruments, an eToro user can invest in another trader, and eventually build a 'people-based' portfolio."

Yaniv Altshuler, a post-doctoral associate at the MIT media lab headed by Professor Alex 'Sandy' Pentland, has been researching social investing for the past two years.

"A few years ago, the retail investor was at the bottom of the food chain," Altshuler said. "The fat cats -- the hedge fund managers -- were making the real money. So now, with access to the wisdom of the crowd, for the first time, retail investors can significantly improve their performance -- if the platform adheres to the correct model. So the hedge fund managers will have to settle for some lower returns."

"When you hear this concept of social trading you say, 'Why should people disclose their investment secrets to their peers? I want to make as much money as I can, why would I reveal my secrets?'" Altshuler says. "However my mathematical model stated that under some conditions this would actually help users make additional ROI."

So the concept of "help me help you" can actually enhance profit?

"Not all the time, but in many cases," Altshuler replied. "Our research can actually help guide the social network to make it as efficient as possible." Part of Altshuler's research has focused on ways to improve the flow of tribal information within social networks to make that knowledge more useful.

Also see: Google Predicts the Next Stock Market Crash--And Bull Market

Within the structure of a crowdsourced investment platform, certain "gurus" rise to the top with the most followers. So how do you know you are following a trading champion rather than a chump?

"This I cannot answer, because everyone has their own strategy for picking the gurus they want to follow," Altshuler admits. "I can tell you that if you show me the structure of the network that is formed, namely who is following whom, then I can tell you if this network is likely to generate a higher return or not. And if not, I can help you alter it via recommendations to improve the user return."

Altshuler says following several gurus rather than just one is a key component to successful investment crowdsourcing. "My research shows that, in general, social investing beats non-social investing, however -- it depends on the dynamic that evolves between the investors," he said.

Altshuler notes that if you follow the trades of like-minded investors, "echo chambers" form and the result is that you are basically following your own trading advice in an endless, unproductive loop. Just as having a mix of traditional investments lowers your risk, diversifying your trading gurus makes the internal structure more complex and enables what he calls the "sweet spot" of crowd wisdom. Altshuler calls that "tuning" the social network.

"I believe that we have only touched the tip of the iceberg, as far as the potential of social trading is concerned," eToro's Assia said. The company is constantly adding new features, such as its Social Index tool, which allows users to copy an entire index comprised of selected top traders.

Also see: Money Managing Machines: Should a Bot Invest for You?

Written by Hal M. Bundrick for MainStreet

Financing Fertility Options in the U.S.

Amy Lieberman — Fri, 10 May 2013 06:33:12 -0400

NEW YORK (MainStreet)—Senator Kirsten Gillbrand (D-NY) recently reintroduced a Congressional bill that would create a tax credit for out of pocket infertility medical treatment.

"Thousands of women struggle with infertility each year, with insurance companies denying access to treatments," said Gillibrand spokesperson Angie Hu. "Senator Gillibrand believes this legislation will provide women and couples with more options and bring the dream of raising a family within reach."

Also see: How Most Men Get Mother's Day Wrong

It's not that alternative fertility options for people who cannot easily conceive a baby on their own – couples diagnosed with infertility, or gay male couples seeking a surrogate – are expensive, or not worth the money, says Barbara Collura, president of the non-profit national infertility association RESOLVE.

The problem is simply that the vast majority of insurance plans will not cover the hefty cost of assisted reproductive technology options like in vitro fertilization, or IVF, or a surrogate.

"It's a financial burden because you are paying out of pocket," said Collura. "You already have a lot of tension and stress and emotional and relationship upheaval that you are dealing with, and then you have to start thinking about making these really frustrating financial decisions."

About 10% of women, from ages 15 to 44, in the United States have difficulty getting or staying pregnant, according to the U.S. Centers for Disease Control and Prevention – about one third of infertility problems are attributable to the male partner, while another third are attributable to the female.

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IVF is only one option that people experiencing infertility might be advised by their doctors to consider – one that Collura herself underwent after she received a diagnosis of blocked fallopian tubes when trying to conceive in the late 1990s. But IVF did not work for Collura, and she wound up adopting her son from Guatemala.

IVF costs between $10,000 to $20,000 for one round of treatment, and couples can expect to undergo two to three courses for the best outcomes, as ART success rates range from 5% to 42%, depending on a woman's age, according to the CDC.

The average surrogacy can range from $50,000 to $200,000, says Corey Whelan, the program director of the New York-based non-profit American Fertility Association, which serves as a resource for couples considering different fertility avenues.

"People max out multiple credit cards trying to get pregnant one way or another," Whelan said. "There's no one that's more Type A than a woman trying to get pregnant. Once upon a time people were taking out second mortgages to do in vitro but that is no longer viable, since the recession, for a lot of people."

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Some people are increasingly turning to friends, family and strangers online through crowdfunding – appealing for financial support on web sites and fundraising their way to accumulate enough to cover the costs, says Whelan. But the process can be emotionally draining, as people share intimate details of their struggles to have a baby with a mass audience.

A handful of organizations, like the Cade Foundation, also offer $10,000 grants to couples that have been diagnosed with infertility, to cover fertility treatment or adoption service costs. But there aren't enough of these organizations to cover the heavy flow of couples, both straight and from the LGBT community, who seek out support from the American Fertility Association, says Whelan.

"It's a really heartbreaking element of what we do," she said. "A lot of the options out there are just rich people's options."

Mindy Berkson, a fertility consultant based in Chicago, says the majority of her clients, topping 150 a year, sell acquisitions and stocks, use credit cards or receive traditional bank loans, if they are able to do so, to finance the cost of a surrogate and possibly an egg donor.

About 30% of Berkson's clients come from overseas and an additional 25% of them are gay male couples.

Berkson and her company Lotus Blossom Consulting helps their clients through the entire process of pairing them with a surrogate, with an egg donor, if needed, and then covering the legal and financial and medical matters that come with the process. The total cost can range from $70,000 to $90,000 without an egg donor, she says, to $110,000 to $120,000 with an egg donor.

Also see: How To Close the Gender Wage Gap

She says insurance benefits are typically limited and people often have insurance policies that negate surrogacy.

But that isn't stopping the influx of people pursuing surrogacy. The biotechnology-focused research group the Council for Responsible Genetics found in 2008 that the surrogacy market in the U.S. is exploding, as the number of babies born via surrogate doubled from 2004 to 2008, from 734 babies to 1,400.

"There's a lot of growth in the industry and that is based on women consciously choosing to have kids later in life," Berkson said. "The second indicator is gay men choosing to have biological kids. I'm seeing a big increase in my business based off of that."

Written by Amy Lieberman for MainStreet

The Canadian Takeover of U.S. Real Estate

Juliette Fairley — Fri, 10 May 2013 06:30:00 -0400

NEW YORK (MainStreet)—Canadian real estate investor Victor Menasce has bought and sold 30 American properties in the past two years, including houses and condos in the Sun Belt, Pennsylvania, Illinois, Florida and Arizona. He even bought a baseball stadium in New Jersey.

Also see: Homeownership Equals Unemployment

"We see value in places that Americans don't notice quite so readily," says ottawa-based Menasce, who is author of the book The Great Canadian Takeover (CreateSpace, 2013).

In fact, international buyers purchased $82.5 billion in U.S. real estate last year up from $66.4 billion in 2011.

"The reason this is happening is because we're living in a global economy," said Rick Raddatz, a political commentator and founder of TheSolution.org in Denver, Colorado. "As international market places become integrated, we're discovering more efficient ways to work with each other. The internet also enhances global interaction,"

Menasce is one of many Canadians who are buying $19.8 billion of residential real estate in the U.S., according to the National Association of Realtors.

Also see: Net Lease, Residential and Healthcare REITs Are Hot

"The trend is a result of a combination of factors including the devaluing of the US dollar, a strong Canadian dollar, an inexpensive U.S. real estate market and properties selling far below construction costs," said Menasce. Compared to the prices of homes in Canada, U.S. residential real estate appears to be on sale. The median sale price for a house is $353,000 in Ottawa, $510,000 in Toronto and $149,000 in Tampa, Flor.

"Initially, the impact is positive, because when Canadians buy a home, they also spend money on furniture, restaurants and other things, so it's positive for the U.S. economy, because there's more cash coming into the country," said Jenny Witterick, a chartered financial analyst and president of Sky Investment Council.

Also see: Forecasters Fear Another Housing Bubble

While real estate opportunities vary from state to state, Menasce offers five tips for investing in U.S. real estate:

1. Finding the deal- "We go to auctions and trustee sales on the court house steps," Menasce said. "There are also wholesalers in the market that specialize in finding deals who are paid a fee for finding a good deal through sellers."
2. Figure it- "I want to purchase assets that are at a discount so that I can turn around tomorrow, sell and make a profit," Menasce said. "You make the profit by buying at a significant discount of 40 to 60%."
3. Fund it- Locals have an advantage in financing. "American citizens can leverage housing projects with local lenders in a way we cannot," Menasce said. "Canadians bring their funding from across the border or partner with someone locally who can work with a lender."
4. Fix it- The cost of improvement depends on the property. "We sometimes prefer more complex renovations because other investors are scared of them," Menasce said. "This affords us the opportunity to buy properties at a greater discount as a result."
5. Flip it – A profit depends on whether an investor decides to sell or hold. "In either case, I want a minimum profit margin," Menasce said. "This margin ensures that I can refinance a property if I choose to hold it and the lender's loan to value ratios will be met."

TW Steel Brings Bold Watches: What's wURKEN?

Ross Kenneth Urken — Fri, 10 May 2013 06:00:00 -0400

NEW YORK (MainStreet)—Dutch entrepreneur Jordy Cobelens, 30, is the CEO of TW Steel, a watch company whose products have outlandishly huge faces. A former DJ who would play in Holland's underground joints and major festivals, Cobelens applied the business acumen he acquired in launching his music company, JC Records, to his foray into the luxury fashion market.

Now collaborating with musician Kelly Rowland, who has a signature watch for the brand, and the Sahara Force India Formula One Team, Cobelens has expanded TW Steel to more than 100 countries. Check out this episode of What's wURKEN? below.

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5 Over-the-Top Burgers for National Burger Month

Mia Taylor — Fri, 10 May 2013 03:09:54 -0400

If your burgers have never been topped with tomato cooked in duck fat for three hours or ripe brie and figs ... this is the time.

Big Banks Looking to Catch a Break on Student Loan Debt

John Sandman — Thu, 09 May 2013 13:45:57 -0400

NEW YORK (MainStreet)—Student loans are becoming a matter of concern to big bank lenders, who are seeking permission from their federal regulators to extend the time borrowers have to pay off some private loans. Among them are Citigroup, Discover Financial Services, JPMorgan Chase, KeyCorp, PNC Financial Services, SunTrust Banks, U.S. Bancorp, Wells Fargo and Sallie Mae Bank, a wholly-owned subsidiary of the SLM Corporation, the private student loan provider.

Also see: Can the Student Debt Crisis Outshine the Housing Bubble?

In a related event, Senator Elizabeth Warren (D-Mass.) introduced legislation yesterday that would cut the interest rates on federal student loans while looking at a long-term overhaul of loans and the lending process.

Lenders hope that banking regulators will allow them to avoid taking an accounting hit when they offer forbearance to new graduates, many of whom are either in low paying jobs or looking for work.

In a March 27 letter, Richard Hunt of the Consumer Bankers Association asked the Federal Reserve Board, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency (OCC) to loosen their rules on repayment. "Specifically, we propose that banks should be granted greater flexibility to work with borrowers experiencing financial difficulty who are recent graduates, or early in their careers, when it is more difficult to enter the labor force and establish financial independence and stability," he said. "This could be structured in a way designed to assist borrowers who are looking for their first job, or who are between jobs, during a 3-year period following graduation, while at the same time maintaining adherence to safety and soundness principles at regulated financial institutions."

A bank that offers a borrower a workout of this type runs the risk of having examiners classify the loan as a troubled debt under current regulations. Once that accounting designation is made, banks may have to set aside larger reserves for loan losses, which can have an impact on earnings.

Hunt also stated that "[l]enders should be able to offer forbearance more frequently and for longer periods than is currently permitted."

Also see: Student Debt Diary: Wait, What was the ROI on my Education?

Forbearance is typically requested when a borrower is in bad financial straits, usually due to unemployment, loss of income, illness or disability that prevents the borrower from working. Even though payments are suspended, the loan balance will increase until they are resumed. Forbearance provides temporary relief from making payments, but they will have to be continued at a future date. A result can be an increase in the total cost of the loan.

Of perhaps greater concern are loans made before the credit freeze, chiefly those made in 2007 and 2006, when underwriting standards got short shrift in a rush to lend during those flush times. An August 2012 study by the Consumer Financial Protection Bureau found that about 60% of loans made by private lenders had co-signers during that period. Co-signed private loans have reached about 90% in the current decade. Michelle Person of the CFPB did not comment on student loan payment alternatives.

FDIC spokesperson Greg Hernandez referred questions on the matter to the OCC, where spokesperson Jennifer Collins refuse to comment because of the organization's pending response to the CBA. A spokesperson for the Federal Reserve Board could not be reached for comment.

The buck may stop with regulators who will decide on what constitutes safety and soundness. By the same token, consumer advocates say that they're trying to sort through the degree to which current regulation is handcuffing banks from offering loan modifications.

The Consumer Bankers Association, which represents numerous private student lenders, is arguing that regulators should treat such loans differently than other asset classes because they—and their borrowers—have unique characteristics.

"Statistics show that people with a college education have far more earnings potential than those without a college education," said the Consumer Bankers Association's Hunt in its letter. "However, for student loan borrowers, it usually takes time before a career can be launched and financial independence can be established, a far more pronounced outcome in the current economic environment."

The unemployment rate for Americans in their 20s continues to be high. The rate for those who were 20 to 25 was 13.3% last year and 8.9% for 25 to 29 year-olds. The overall adult unemployment rate was 8.1%.

Also see: Should You Consolidate Student Loans?

While Senator Warren's legislation doesn't affect private loans, it could foster a climate where changing the terms of student loans across the board becomes more acceptable. On July 1, interest rates on Federal loans are set to double to 6.8% from 3.4%. Students would be allowed to borrow at the Fed funds rate, currently about 0.75%, between July 1, 2013 and July 1, 2014. Unless Congress acts, rates would spike again.

"If the Federal Reserve can float trillions of dollars to large financial institutions at low interest rates to grow the economy, surely they can float the Department of Education the money to fund our students, keep us competitive and help grow the middle class," Warren said.

Also see: Obama's New Student Financial Tool--Does It Matter?

--Written by John Sandman for MainStreet--

When Do you Need to Hire a Divorce Litigator?

Elise Pettus — Thu, 09 May 2013 13:23:21 -0400

NEW YORK (MainStreet)—I'm hearing a lot of my divorcing friends say things that make me nervous. They say they want to go the mediation or the collaborative route ... because they don't want fireworks. They don't want a "big crazy angry mess," as one girlfriend put it.

What this really means is they want to be nice. Of course they do, that's part of why they are my friends. And of course, being my friends, they are usually in the right, meaning it was the other spouse who left or cheated or gambled them into bankruptcy. But I'm nervous, because I want them to be O.K. when they get through this whole process, and I think some of them might require bigger guns.

Also see: The ABC's of Affordable Divorce

To all of my friends, and all of you other nice people who are divorcing, take a look at the following. Here, gathered from attorneys in mediation, collaboration and litigation are some key indicators that you might need to double check your arsenal as you head to the negotiation battlefield.

1. Your spouse has, or makes way more money than you do.
2. You both have money, but he works in finance and you know nothing about money other than the best ways to spend it.
3. You both have a lot of money, property and other types of assets, which makes it, well, complicated.
4. Your spouse is an unreasonable bully.
5. You have reason to believe that your spouse may be hiding assets.
6. Your spouse is not just unreasonable, but sometimes seriously out to lunch, and might even be dangerous at times, either to himself, to you or to your kids.
7. Your spouse has a different passport than you do and enough money to purchase plane tickets (for himself and the kids) to someplace he or she can call home and you can't.
8. Your spouse is a chronic ditherer OR has reason to want to stretch out this process indefinitely, to your disadvantage.

Also see: Divorce and the New Wheels Dilemma

If any of the above is true for you, think hard before choosing the soft route.

Divorce is the moment to stop being nice. And if you can't stop being nice, then you might need to hire a mean lawyer. Did I say "mean"? I meant strong. As in powerful, experienced, smart and able, if necessary, to take your spouse to court. I probably don't need to mention that this lawyer will also be expensive (unless you have one in your immediate family). Not all expensive lawyers are good, but almost all good lawyers are expensive. And it's a painful truth that a cheaper lawyer, especially if he or she is a sole operator, can often cost you more in the end. Divorce chat rooms are rife with stories of people hiring the inexpensive lawyer only to have to start over with a pricier one in the end.

In most cases, you'll have to cough up a hefty retainer. "Some people get sticker shock--it's true," says Alyssa Rower of Aronson, Mayefsky and Sloan, the firm that represented Katie Holmes in her split with Tom Cruise. At $500 per hour, Rower is the cheap lawyer in her office (the partners charge $750). But along with that price tag, she says, you get the firm's depth of experience, reputation and resources.

Another upside of hiring a powerful firm, she says, is that they are not out to milk every case. Nobody wants to be milked. So what can you do to curb costs as you enter this most precious partnership?

Also see: Is the $399 Divorce for Real?

Get your documents ready. Don't throw piles of unsorted papers at your attorney, unless you want to pay an assistant attorney $100 per hour to sequence and file them. If you feel too unhinged to do it right now, or it just isn't your strong suit, get the help of an organizing assistant, a bookkeeper or maybe just a Virgo friend.
Don't use your lawyer as a therapist. At barely 5'0" with eager eyes and a friendly, outgoing demeanor, Rower could hardly be described as mean. In fact, like many divorce attorneys, she went into divorce law, because she wanted to help people. But while she may have endless compassion and patience, she is not a trained therapist, and she'll cost you more than twice the price!
Be a conscientious communicator. Take time to think about what you want to say, but don't take too much time saying it. Don't hold back your questions, but consider drafting them ahead of time for meetings or bouncing them off a relative or friend. Try gathering your questions and sending out one email a week or a day, rather than as soon as each question comes up. In turn, answer your attorney's questions as promptly and succinctly as you can. In general, staying on topic and focused can save you thousands in attorney's fees.

Enlist your lawyer's help in trying to stay within the retainer's parameters. He or she may be able to tell you when you are getting close to the end of it, or how you might save their time by using another, less expensive professional.

Nobody will come out and say it, but when it comes to divorce, it sort of boils down to this: The nicer you are, the more likely you are to need a "mean" lawyer. When it comes to paying them, you want to make sure the lawyer does their best to be nice to you.

Also see: Divorcing Toward a Barter Life

Elise Pettus is the founder of UNtied, a website for women navigating Separation and Divorce. Check out the site's free monthly info events.

Spending Is Up: Here's Where Your Dollars Are Going

Ross Kenneth Urken — Thu, 09 May 2013 12:33:14 -0400

NEW YORK (MainStreet)—People have relented their penny-pinching ways: according to the inaugural Intuit Consumer Spending Index, consumer spending is up 9% with the highest jumps in with gasoline, gift and healthcare expenditures.

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The numbers are based on aggregated data from Mint.com, Intuit's leading online and mobile personal finance software. Americans spent $4,220 per month in the first three months of 2013 versus $3,870 over the same period in 2009, with Arkansas and Washington, D.C. increasing most dramatically—up 34 and 30%, respectively.

And despite fears that the payroll tax increase and the discussions of the fiscal cliff and the sequestration would hamper consumer confidence, people are getting back up on the horse and spending.

"The data we've examined here reflects a period when the country recovered from one of the most dramatic economic shifts in recent history – showing how consumers tightened, and have since loosened spending," said Scott R. Baker, Stanford University economist and the data scientist working with Intuit to develop the index. "It demonstrates how Intuit's data can show the real-world impact of macro-economic trends on how people live."

Also see: American Colleges Rob Poor Students, Pay the Rich

Here's how the spending shook out:

Gourmet at the grocery: Grocery spending has increased by 17%, due in part to the price of premium groceries.
Dining out: Restaurant spending has also increased, up 11%, a sign that people are indulging in the luxuries of eating out instead of having humble meals at home that might serve as leftovers.
Got gas?: Gas spending almost doubled in the period examined, with the average American household spending $198 a month on gas in the first three months of 2013, up from $110 a month during the same time period in 2009. This is out of necessity with the price of crude doubling from 2009 to 2013.
Healthy, yes--but wealthy and wise?: Healthcare spending has increased at one of the fastest rates since 2009, with average increases more than 30%.

Also see: This Message Will Self-Destruct In...5, 4, 3: Old Dog, New Blog

Should You Consolidate Student Loans?

Allison Kade — Thu, 09 May 2013 11:53:42 -0400

NEW YORK (MainStreet)—Virtually no one is excited to deal with student loans, but given the 27 million odd borrowers with outstanding student loans and nearly 12 million Americans taking out student loans every year, millions are looking for ways to ease the burden of ever-accruing student debt.

One possible answer is loan consolidation, which basically means combining your various debts into one bill. Consolidating can simplify your life and reduce your monthly minimum payment, but it often comes with strings attached.

To break down the pros and cons, we spoke to certified financial planner Lauren Lyons Cole and Mark Kantrowitz, creator of FinAid, a comprehensive source of financial aid information and tools.

Also see Rural Areas Give Incentives to those with Student Loan Debt

Note that our advice will vary greatly depending on whether your loans are federal or private. "Private loans can't really be consolidated," Lyons Cole says. "It's more like refinancing." The two situations are very different, so be very clear on whether you're dealing with federal or private debt.

Federal Loans: Reasons to Consolidate

One of the biggest reasons is to simplify your repayments: When you consolidate, you go from having a bunch of separate loans to one monthly bill. "It's an easier, more organized way of keeping track of what you owe," Lyons Cole says.

Kantrowitz explains that consolidation might easily replace 8 to 12 loans in one fell swoop, because students typically take out a separate loan for each year of school. If you have three types of loans, then you might have a version of each from freshman, sophomore, junior and senior year. That's a lot of separate bills to remember. If you're feeling discombobulated by all the separate little loans, you might find consolidation helpful.

Another reason some people consolidate is to decrease their monthly payments. Lyons Cole tells us that when you consolidate, you restart the length of your loan, which means you can repay your debt over a longer time frame. While that can reduce your monthly minimum payment, don't fool yourself into thinking this is free money; easing your monthly burden now means paying significantly more over the lifetime of your loan, because there's longer for interest to accrue. Still, if you're in a pinch and struggling to pay your monthly minimums, this could help you get over the hump.

Also see: Student Debt Becoming More of a Family Problem

If you're pursuing Public Service Loan Forgiveness (PSLF) and have federal loans that you didn't receive under the Direct Loan Program, consolidation is a great option, Kantrowitz says. Only loans from the William D. Ford Federal Direct Loan Program are eligible for forgiveness. If you have, say, a Perkins Loan, that isn't eligible, but you can consolidate it into a Direct Consolidation Loan. Payments on that new, consolidated loan will count toward the payment requirement for PSLF.

Federal Loans: Reasons Not to Consolidate

Again, there's the double-edged sword of lower monthly minimums in exchange for higher interest over time. Plus, Lyons Cole points out that consolidating can get in the way of repaying your debt as quickly as possible because all your loans get lumped together with one weighted average interest rate.

Kantrowitz agrees.

"If you believe you will be capable of accelerating repayment of your loans, and if you have several interest rates that differ significantly, it may be worthwhile not to consolidate," he said. "For example, if you have a subsidized Stafford Loan at 3.4% and an unsubsidized one at 6.8%, and want to throw extra money against your debt, you'd want to "accelerate repayment of the higher interest rate first."

But if you've consolidated your debt, you can't pick and choose which loan to pay, since now it's all one big loan.

Lyons Cole says to be wary of grace periods and deferments. "Make sure you aren't losing any advantages," she recommends. Consolidation loans don't have grace periods, plus you could lose perks like lender-specific principal or interest rate reductions and cancellation benefits. (For example, Perkins Loans will cancel your debt if your school closes before you can finish your studies, if you serve in the U.S. armed forces in a hostile fire or imminent danger area, or become a full-time police officer. )

"Consolidation is a bit of a headache up front, which may not be worth it for everyone, particularly those who already have all their loans through one lender or don't owe very much," says Lyons Cole.

Private Loans: Reasons to Refinance

A big reason to refinance a private student loan is if your credit score is better now than when you originally got the loan. If so, you might qualify for a lower interest rate, Lyons Cole says.

"You're getting a new loan with a new interest rate based on your current history and credit scores," Kantrowitz explains. Each year you're in school, your credit utilization goes up because you're taking on more debt. That makes your credit score go down and your rates increase. "Right before graduation, your credit score at its lowest," he says. "If you want to reduce your interest rate, wait a few years and repay all your debts on time—not just student loans—show responsible credit behavior and improve your credit score. That will potentially yield a lower rate if you were to refinance."

Also see: Young Student Loan Borrowers Are Bagging the Home Mortgage and Auto Markets

Another big reason to refinance is to get a cosigner off the loan. "More than 90% of students applying for loans have parents as cosigners," Kantrowitz says. "Many parents don't realize that, by cosigning, they're equally on the hook for that debt." If the student is late on a payment, it shows up on her parents' credit history, too. Some lenders will allow the cosigner to be removed from the loan, but only if the student can meet strict criteria proving she's capable of repaying the loan on her own, Kantrowitz says.

If your lender won't simply let your cosigner off the hook, another option is to refinance and get a new loan, without a cosigner—as long as your credit score and history are good. Because you no longer have a cosigner, you'll have to qualify for the loan on your own merits.

Private Loans: Reasons Not to Refinance

If your credit score is worse than your cosigners', your rates will probably go up if refinance in order to get your cosigners off the loan. You might not even qualify for a refinanced loan at all. "Even a 50-point difference in credit score can lead to a difference of several percentage points in your interest rate," Kantrowitz says. "You might not even get approved. I've heard of cases in which a score of 780 or 790 is getting turned down ... which might be because lenders are tightening underwriting criteria as a result of the credit crisis."

As with consolidating federal loans, you should make sure consolidation doesn't get in the way of your plans to target your highest-interest debt first. "Choose the shortest plan where you can still afford the monthly payments," Kantrowitz says. "When you go from a 10-year term to a 20-year term, you're cutting your monthly payment by a third but doubling how much you pay overall, so you're better not doing it unless you really can't afford the higher monthly rate."

Lyons Cole adds that there may be fees involved with refinancing a private loan that make it not worthwhile. So, if you're considering going this route, make sure to read all the fine print and weigh any fees against the potential benefits of lowered interest rates or getting your cosigners off the hook.

Also see: Student Debt Diary: 5 Things I Wish I'd Known Before Borrowing

Some Words of Caution

Kantrowitz warns that you can't consolidate federal and private loans. Although it's theoretically possible to combine your federal and private debt into one loan, when you do so, you're basically nullifying all of the perks of your federal loan. Because federal loans generally have better terms, benefits and forgiveness options, this is not a good idea.

Another tip? Sign up for auto debit if it's offered. When the payments are automatically subtracted from your account, you're less likely to be late, Kantrowitz says, and some lenders will even offer a slight reduction in your interest rate if you sign up for auto debit.

Story by Allison Kade

How I Turned My Financial Life Around in a Year

Credit.com — Thu, 09 May 2013 09:23:40 -0400

By Gerri Detweiler

NEW YORK (Credit.com) —When Linda Mannerberg attended the Women's Money Conference in Las Vegas Nevada in 2012, she was struggling with debt and a gambling addiction she hid from those closest to her. She attended the conference again this year in April 2013, but this time she was in a completely different place. She received a standing ovation for turning her financial life around in just a year.

Like many of the other women at the conference who applauded her success, I was deeply touched by Linda's story and asked her if I could share it with our readers. She agreed, but said she didn't think it was a big deal. I told her I disagreed. Here is her story:

When I came to the conference last year, I was in a lot of debt. I had credit card debt, a car loan and payday loans. I would get paid and pay the interest on the payday loans, but I wouldn't have enough to pay off the loans.

I also had a gambling addiction -- I would get up in the middle of the night to go gambling.

My boyfriend and I have lived in Las Vegas about nine years now. When we first moved here, a new casino held a slot tournament. It didn't cost anything to join, so a friend and I decided to go. I ended up in the finals and won $5,000. That's when my gambling problem started. I thought that if I won that, then I can win again.

Of course I never did.

In fact, this year when we went to the casinos to get our gambling loss statements, I was shocked. It showed that I lost $35,000 with all the casinos. I used to play penny slot machines so I kept thinking, "I am only playing 40 cents at a time." But it adds up.

Keeping Secrets

No one knew about my financial problems. I hid them from my parents and my boyfriend. We've been together 22 years, and he didn't have a clue. I kept everything to myself. We have our own checking and savings accounts, so he didn't know what was going on.

So I listened carefully at the conference, and took lots of notes. I knew I needed to change because if I didn't, it was going to get worse. I sat down with my boyfriend and told him everything. I thought for sure he would throw me out on the street, but he was really nice about it.

He said he would help me, but I needed to follow what he said. He took over my money. I cashed my check and gave it to him. He paid off the payday loans and took over my payments on the other loans and gave me just enough money to put gas in the car or whatever.

Finally, after six months we decided I could open a savings account -- but he told me he wanted to see how I could handle it. I think he was making me prove to myself that I could have that money there without spending it.

Getting Help

After the conference, I also talked to a friend at work about my problem. She told me I would be surprised at how many people are gamblers, and that I should talk with one of my co-workers who, I was surprised to learn, also had a gambling problem. She took me to Gamblers Anonymous meetings.

Now, I don't want to be in casinos anymore. If I get a gambling urge I call a friend, or I stay home and don't get dressed.

Last year when all this happened I owed about $12,000. Since then I have been able to pay my boyfriend back all that money he spent paying off my debts. I only have student loans and my car loan now.

After the first Women's Money Conference, I ordered my free Credit Report Card from Credit.com to see my credit score, and so did my boyfriend. Once a month we look at it to see if my credit scores are getting better.

Recently I needed a new car, so I applied online to see what I could get. When I learned I qualified for a car loan at 2.9%, I started crying. My last car loan had a 9% rate. We ended up buying my car from a dealer in Utah, 404 miles away, because it saved me $3,000. Now I research things carefully.

Recently, I opened my own checking account. My goals now are to double up on my payments on my student loans and car. My boyfriend is going to get ready to retire and I want to be able to retire, too. Being ready for retirement is my goal now.

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Sympathy for the Tooth Fairy: 3 Ways to Give Your Kids' Dental Care a Boost

Brian O'Connell — Thu, 09 May 2013 09:00:00 -0400

NEW YORK (MainStreet) — In the pantheon of childhood holiday and cultural icons, the Tooth Fairy ranks well below Santa Claus (the reigning and undisputed champion), the Fourth of July's red, white-and-blue clad Uncle Sam and the Easter Bunny (arguably the Tooth Fairy's arch-nemesis).

There's no science to this exercise, but let's put the Tooth Fairy down that list, maybe in the same holiday class as the St. Patrick's Day Leprechaun, Arbor Day's Johnny Appleseed and Cupid, of Valentine's Day fame. Oh, and let's not forget the Sandman, although he sounds more like a villain from a Batman comic strip than a kids' cultural hero.

Considering how many visits kids get from the Tooth Fairy — who works 365 days a year, unlike those other slackers — maybe the fairy deserves more credit and attention.

According to Delta Dental of Virginia, the Tooth Fairy was working overtime last year. The group says that 90% of U.S. homes with children with baby teeth got a visit from the dental deity, who didn't come with empty pockets.

Delta Dental's Original Tooth Fairy Poll says the average gift per lost baby tooth rose to $2.42 last year, up from $2.10 in 2011. Still, that's down from around $3 in 2010.

Overall, the group says that the most common cash gift from the Tooth Fairy was $1 last year, and that the first dropped tooth that triggers the highest payout: $3.49.

"Leaving gifts from the Tooth Fairy is a great way to help make losing teeth less scary and enjoyable for kids," says Dr. George Koumaras, dental director at Delta Dental. "We encourage parents to use the experience as an opportunity to talk about good oral health even before a child loses the first tooth. Caring for baby teeth is important, as they help children chew and speak properly and hold space for permanent teeth."

Koumaras and Delta Dental offer the following tips for parents using the Tooth Fairy to develop chipper choppers for their young children:

Bring the Tooth Fairy in early. As children usually begin losing baby teeth around age 6, it's best to introduce the Tooth Fairy early and use the experience as a means to teach and develop solid dental health habits. "Use this as an opportunity to brush up on a child's everyday dental routine," the group says. "Kids not wanting to brush and floss? Remind them the Tooth Fairy is more generous for healthy baby teeth, not teeth with cavities. This will help get kids excited about taking care of their teeth."

Include a note. There's nothing like a memento of the occasion to build upon the experience. "A personalized note from the Tooth Fairy could be nearly as exciting for kids as the gift itself," Delta Dental says. "Parents should include tips for important oral health habits that the Tooth Fairy wants kids to practice, such as brushing twice a day, flossing once a day and visiting the dentist twice a year."

Get creative with sleepy-time swag. Delta Dental says overnight visitors left cash for kids 98% of the time last year. But nowhere in the Tooth Fair manifesto does it say cash is the only gift to give.

"Consider forgoing cash and providing oral health gifts instead, like a new toothbrush or fun-flavored toothpaste," Delta Dental says. Go even further and add books and bedware that can really make the experience fun and instructional for children. "For readers, there are numerous children's books about Tooth Fairy adventures in bookstores or online."

If you really want to get your point across, give a cash gift and an instructional gift — whatever it takes to associate good dental care with good results.

"It's hard for young kids to fully comprehend the importance of oral health" Koumaras says, "but tapping into a child's imagination can make taking care of teeth more compelling."

Parents who bite into that concept can not only make a difference in their kids' oral care; they can boost the reputation of the hard-working, uncomplaining Tooth Fairy. Upon further review, the fairy really deserves more recognition.

— Written by Brian O'Connell

The Great Gatsby's 5 Top Money Lessons

Kristin Colella — Thu, 09 May 2013 07:03:06 -0400

Here's some financial wisdom we've gathered from Fitzgerald's classic story about the excess and excitement of the Roaring '20s.

We Are More Comfortable Discussing Our Sex Lives Than Our Finances

Judy Feldman — Thu, 09 May 2013 06:24:41 -0400

NEW YORK (MainStreet)—More than half (63%) of Americans would rather reveal their weight than what is in their wallet, according to a recent survey conducted by Country Financial.

Whether feast or famine, we are all making decisions, constantly, about what to eat, what to spend, and what to talk about. "Decide" comes from the Latin, like "homicide"...to cut away and kill the alternatives. Don't talk about politics, religion, or sex... at least not at the dinner table, was the standard rule of thumb for social acceptable conversational etiquette. Don't divulge your age, or talk about

Also see: American Colleges Rob Poor Students, Pay Rich

"Money has long been the biggest taboo – much more than sex " says Kerry Sulkowicz, a psychiatrist and psychoanalyst in New York City who now consults for big businesses. "That was always the case when I saw patients. They would all readily talk about their sexual fantasies but not their money."

Will the real Pinocchio please stand up?

One in five Americans has lied about their income, the Country Financial Survey also found.

Americans are squeamish about money mainly because "we are frightened by money", according to Steve Siebold, author of the book How Rich People Think (London House Supply, 2010). Indeed, Country Financial's survey of 3,000 adults nationwide found that, on average, 1 in 3 of us are scared to check our own checking accounts.

"The middle class, in particular, does not like to talk about their finances, because they're living in a world of constant worry" says Siebold, a multi-millionaire. "Many believe that rich people are lucky or dishonest." He believes that the biblical passage stating that the love of money is the root of all evil has been misquoted and misinterpreted by many who think that money itself is the root of all evil. "As a result of poor programming and ignorance, the masses are infected with the disease of focusing on lack and limitation regarding money and are uneducated about what it means to be wealthy, " says Siebold.

But financial fibbing may be on the increase. Fully 20% of those polled say they lie about their income, and almost 25% of those ages 18-29 do so.

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And we even lie to our spouses. Almost half (46%) of Americans polled (in a random study including 23,000 adults) have lied to their significant other about money, says a recent "Financial Infidelity" survey from Today.com and SELF magazine, as reported by Globe Newswire. This lying involved even hiding new purchases as well as taking money out, "clandestinely," from joint accounts.

More than half of those polled (60%) said, "Cheating is cheating," whether it is about finances or sexual liasons – and about one-third said that one can sometimes lead to another. Is it a slippery slope? The most common fibs about money were just about shopping. Lucille Ball tells Desi, "It was on sale!" Not a big deal, or is it?

Sulkowicz says that most people are reluctant to talk about money openly due to deep seated conflicts. "The meanings we attach to money – the emotional meanings – are huge, and are unlikely to change with the economy," he said.

"The recession has made some of us more squeamish because we are in more dire straits, and has made others of us more willing to talk about money out of feeling that everyone is in the same leaking boat, " says Carole Lieberman, a psychiatrist on the clinical faculty of UCLA's Neuropsychiatric Institute. "We are, many of us, living above our means and desperately hoping that our friends colleagues and extended family don't find out."

Appearances matter to Americans. According to the recent Country Financial survey, 10% of those polled and 20% of 18- to 29-year-olds were making purchases they could not afford so as to be perceived as having a certain richer lifestyle.

Joe Buhrmann, Manager of Financial Security Support at Country Financial, is not terribly surprised by the results. "Its part of human nature. Just some of the little white lies we all have," he said. "Whether it is about money or what's on the scale... we are all a bit self-conscious about money, and are sometimes scared to look in the closet. What is important is that we make good important decisions...whether others are looking or not, and that we are honest to ourselves . The ultimate accountability is to ourselves."

Also see: This Message Will Self-Destruct In...5, 4, 3: Old Dog, New Blog

American Colleges Rob Poor Students, Pay the Rich

Hal M. Bundrick — Wed, 08 May 2013 15:25:38 -0400

NEW YORK (MainStreet)—America's colleges aren't looking for just the "best and the brightest" – they're looking for the wealthiest. In an effort to boost revenue, universities are playing "an elaborate shell game" using Pell Grants to replace institutional aid they would have otherwise provided to financially disadvantaged students and shifting these funds to help "buy" wealthier students, according to a report issued by the New America Foundation, a nonprofit, nonpartisan public policy institute in Washington, D.C.

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Stephen Burd, a senior policy analyst for the Education Policy Program for the New America Foundation studied "little-examined" 2010-2011 U.S. Department of Education data showing the "net price" — the amount students pay after all grant aid is exhausted — for low-income students at thousands of colleges. According to Burd, the analysis shows that hundreds of colleges expect the neediest students to pay an amount that is equal to or even more than their families' total annual earnings.

In an effort to lure "full-pay" students – whose families can afford full tuition – schools offer generous financial awards, diverted from the funds targeted for the most-needy of college applicants. "After all, it's more profitable for schools to provide four scholarships of $5,000 each to induce affluent students who will be able to pay the balance than it is to provide a single $20,000 grant to one low-income student," Burd says in the study.

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The report also says that some of the country's most prosperous private colleges are the stingiest with need-based aid. These institutions tend to divert financial aid to gain sought-after students, as well as the most affluent, in order to help the institutions score better in national university rankings, as well as to maximize revenue.

And universities aren't just tipping the financial scales in favor of deep-pocketed students.

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"The competition for the wealthy is so strong that 10% of college admissions directors at four-year colleges (and nearly 20% of those at private liberal arts colleges) reported that they give affluent students a significant leg up in the admissions process — meaning that they are admitting full-pay students with lower grades and test scores than other applicants," Burd says. "These colleges are, in other words, providing affirmative action for the wealthy, despite all of the extraordinary advantages that these students have over their less-fortunate peers."

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Homeownership Equals Unemployment

Hal M. Bundrick — Wed, 08 May 2013 12:09:04 -0400

NEW YORK (MainStreet)—Buying into the American Dream of homeownership may trigger the nightmare of rising unemployment. It's a startling hypothesis long considered by economists and reinforced in a new study by David G. Blanchflower, professor of economics at Dartmouth and Andrew J. Oswald, professor of economics at the University of Warwick in England. The research concludes that there is "a strong statistical link between high levels of home-ownership in a geographical area and later high levels of joblessness in that area."

The cause and effect is not immediately apparent, however, as the correlation between high levels of homeownership and resulting elevated levels of unemployment can take up to five years to be evident.

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Other findings in the study point to high home-ownership areas as having "lower labor mobility" – people are less likely to move to find a new job – as well as longer commute times and fewer new businesses. The researchers admit that the last conclusion seems most counterintuitive.

A homeowner resisting relocation to take a new job because of moving expenses makes sense, as does the possibility of longer commutes, as "the places with high home-ownership will see more workers staying put physically but working further from their family home." But the conclusion that areas with high levels of home ownership somehow impede the growth of new businesses is confounding. The professors can only guess that the anomaly might be the result of zoning restrictions and a "not in my backyard" attitude resulting in "a lower degree of tolerance for new businesses."

Also see: Forecasters Fear Another Housing Bubble

Blanchflower and Oswald are quick to add, "It is important to emphasize that our study does not claim that homeowners are unemployed more than renters (very probably they are not). Nor is it an attempt to build on the idea that homeowners are less mobile than renters (though they probably are). Instead, the patterns documented in the paper are consistent with the possibility that the housing market can generate important negative externalities upon the labor market."

In other words, it's the renters who are losing the jobs.

"The results in this paper are consistent with the view that high home-ownership impairs the vitality of the labor market and slowly grinds out greater rates of joblessness," the researchers conclude.

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Noting that the U.S. government spends billions of dollars a year giving tax-breaks as an incentive for homeownership, Blanchflower and Oswald warn, "Our findings should be worrying for policy-makers. High levels of home-ownership do not destroy jobs this year; they tend to do so, on our estimates, the year after next."

This Message Will Self-Destruct In...5, 4, 3: Old Dog, New Blog

Ross Kenneth Urken — Wed, 08 May 2013 10:37:21 -0400

NEW YORK (MainStreet)—My sister, Nicole, and I are all about introducing Jim Cramer to apps that improve his life and protect him from the perils technology can present. So for this episode of Old Dog, New Blog, we introduce him to SnapChat, a social messaging service whose photos and videos self-destruct after ten seconds...so that you don't fall prey to self-destructive behavior.

Video Platform Video Management Video Solutions Video Player

ODNB Archives

P2P Payments

Social Media Aggregators

Innovative Eating

Crowd-Funding

Cramer Branches Out

No Drunk Facebooking

Cramer's Carma

Pound-wise Apps

H(app)iness

Airbnb Anxiety

Cramer Gets Hip With Uber

The 'Urkel' and Measuring Twitter Impact

Learning the Hip Language of Emoji

How Far Would You Go to Get Out of Debt? Blood, Sperm, Garbage?

Rodric Hurdle-Bradford — Wed, 08 May 2013 09:31:03 -0400

NEW YORK (MainStreet)—Before the Great Recession the word 'income' used to be solely associated with one's salary at a part-time or full-time job. However, since the onset of the recession five years ago, many Americans are reassessing how they generate income.

Here are four income-generating options that have stepped out the shadows as Americans have felt the pinch in their pocketbooks.

The Plasma Plan

Donating plasma for money used to be a practice isolated for the outskirts of 'normal' society, which included drifters and poor college students. Now, plasma donation centers have seen an increase in professionals donating for additional income. The hour-long process is sedentary and those who donate enjoy using the time to balance checkbooks, complete work assignments and homework. While receiving the income you are helping assist with the hundreds of medical procedures that utilize blood plasma.

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"We saw an over 50% increase in donations over a few months after the recession hit," says Phil Maher, founder of Bloodbanker.com. "This is an alternative for a lot of people because it requires minimal skill and time. This is an alternative for a lot of people because it requires minimal skill and time."

What it Pays: You can donate plasma twice a week, and payment is often a tiered system, meaning that you can receive more the second time than the first time. Payments range between $20 to $60 per donation for an average of about $300 per month.

Generating Green From Your Genes

Sperm donation used to be a comedy punch line and hush-hush topic, until recent years.

"The increased interest we have seen from the general population is unlikely due to the economic environment but rater due to more readily information and media coverage regarding the topic," says Angelo Allard, a spokesperson for the Seattle Sperm Bank.

The standard demographic is men, ages 18 to 39 with some form of higher education and healthy family history. 90% of potential donors are screened out the acceptance process after their first semen analysis, based on their overall semen quality. Donations can occur twice a week, with a preferred span of 72 hours in between, while abstaining from sex, alcohol and drugs.

"Donors are reevaluated through laboratory screening, medical history update and physical examinations twice a year," says Amanda Mershon, spokesperson for XytexCro International. "A donor who remains in good health can continue to participate until age 40."

What it Pays: Donors can make anywhere from $65 to $100 per sample, if you give three times a week your could be up to $1200 monthly. Many places have a referral program that can pay over $200 for a sperm donor referral.

Also see: 4 Apps to Help You Snag Discounts

The Reinvention of Recycling

For the last generation recycling has been a part of mainstream America, but many people are rediscovering the economic benefits as well as the environmental impact. Public places such as parks, basketball courts, busy metropolitan areas, baseball and softball fields can be a 'gold mine' to find bottles and cans. Recycled materials are paid by the pound, and 26 cans equal a pound.

What it Pays: On the average, if it takes a person three to five hours to walk around a large park or field area, you can collect about $25-50 of recycled cans and bottles every night. Do that three times a week during the busy summer season and that quickly adds up...

Diving for Dollars...Sort Of

Perhaps the least acceptable form of generating income or revenue is dumpster diving, which is largely frowned upon in most social circles. Despite the stigma, new beverage food and clothing items can be found in public trash dumpsters.

"As more Americans are losing their jobs, income, unemployment benefits and their dignity, dumpster driving has become more mainstream," says the author of the Urban Dumpster Diver blog who did not want to be identified by name. "For every free item of food, produce, or non-food item I find in the trash, that is one more thing I do not have to purchase. Dumpster divers are falsely misconstrued as homeless drunken schizophrenics who enjoy digging in the trash."

The best practices for dumpster diving is to establish a routine and return to the dumpsters with the most valuable items over and over again.

What it Pays: The sky (or trash) is the limit!

Rodric J. Hurdle-Bradford, APR is a freelance writer based out of Scottsdale, Ariz. He covers casino gaming, personal finance and real estate topics for several publications. He can be reached at rodric@lasvegasluxuryvip.com.

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'Scrub' Your Online Image Before Applying for a Job

Brian O'Connell — Wed, 08 May 2013 09:00:00 -0400

NEW YORK (MainStreet) — With the U.S. unemployment rate down to 7.5% and the civilian workforce participation rate down to 63.3%, (down about 9.5 million since 2008, according to the U.S. Bureau of Labor Statistics), U.S. job-seekers have less competition than they have faced at any time in the past four years.

In fact, some job-seekers may find themselves in demand for the first time almost a half-decade. According to Robert Half International, some slivers of sunlight are indeed starting to shine on the U.S. job market:

There's a "global war" for quality employees. Half says there will be "a shortfall of up to 18 million highly skilled workers in advanced economies, including the U.S., by 2020.
It's tough finding good professional help. About 66% of global firms say they face recruiting challenges for specific job openings, up 14% two years ago.
More staffers are cutting ties with corporations. Approximately 2.2 million career professionals voluntarily left their jobs in February, an 18% upward spike from 2011, Half reports.
Companies are recruiting talent. Almost 20% of U.S. workers say they have been approached by a company or recruiter for posts they didn't apply for or seek.

To take full advantage, career professionals seeking a job upgrade may want to pause, take a breath, and set the stage for a winning job search.

Item No. 1 in that strategy should be cleaning up your online persona before embarking on a job hunt.

According to Monster Worldwide, the Maynard, Mass., online job search behemoth, 73% of U.S. workers say it's a great idea to "scrub" one's online image before a job search. (The firm conducted a survey of 1,275 U.S. adults to find that number.)

"Hiring has always been done, at least in part, on the basis of reputation," says Mary Ellen Slayter, a career advice expert for Monster.com. "These days, reputation is even more important because we all have the power to create our own public persona using the tools provided by the Internet and social platforms."

Slayter advises being diligent in covering your tracks. "Be prepared and do some spring cleaning," she says. "Use search engines to find out what comes up when you type in your name, and then actively work to build a strong professional image online. An important aspect to help you 'find better' is to keep your online resume up to date and freshen it up as you develop your skills."

Also, eliminate embarrassing "party pictures" and delete controversial tweets or Facebook posts that could raise red flags with potential employers. Then cut obscenities, potentially offensive posts or political rants that could ruin your chances for a good job.

The rule of thumb is this: If a post or photo could offend someone, delete it. It's just not worth the risk on your job hunt.

A successful career search is all about raising the odds, not reducing them. Scrub your online image and make sure you're working on the former, and not the latter.

Roller Coasters Are a Ride for the Parks that Build Them

Kerri Fivecoat-Campbell — Wed, 08 May 2013 07:01:19 -0400

NEW YORK (MainStreet) —When the owners and operators of Silver Dollar City, a 19th century themed park in the heart of the Ozark Mountains in Branson, Mo., were trying to come up with what they knew their visitors wanted – a big, new ride – they knew it would have to be something really thrilling.

That's when they came up with the idea of having a wooden rollercoaster that not only broke records in several categories that rollercoaster enthusiast's measure, but one that also carried the theme of the park.

Outlaw Run opened a few weeks ago to much fanfare in the rollercoaster enthusiast circles. It may not be the biggest or the fastest, but it is the first and currently, the only wooden rollercoaster with double barrel inverts. It is also the second fastest wooden coaster at 68 mph and is the first new wooden coaster built completely with a new technology on the track that allows for a smoother ride rather than jerky ones typical of wooden coasters.

The coaster is also built like a Hollywood movie set to represent a 19th century stagecoach, from the authentic stagecoach outside of the ride to the "depot" that passengers pass through while waiting in line.

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The ride also carries passengers through the natural forest of the Ozark Mountains and uses the natural steep slope and deeps into the valleys as part of the fun.

How did the $10 million ride go over on opening day? "They hit it out of the park," says Tim Baldwin, a coaster enthusiast and editor for RollerCoaster! Magazine, the official publication of the American Coaster Enthusiasts. "Everyone came off of the ride so jazzed, it's definitely a home run," added Baldwin, who will hit the 1,000 mark in Europe this summer for the number of coasters he's ridden.

News like that is good to hear for people such as Lisa Rau, director of publicity for Silver Dollar City.

The 53-year-old park was long known for its crafts and festivals much more than its rides, but Rau says about two decades ago, Silver Dollar City, like many amusement parks, entered into the competitive world of building bigger and better rollercoasters.

"We're still a friendly industry, but I would say a fairly competitive one," says Rau. "People want more, they want bigger and better."

Duane Marden, owner of The Rollercoaster DataBase, says that the industry, like coasters themselves, have peaks and valleys.

"There was a time in the 80s and 90s that we call the Coasters Arms Race, where parks were building them bigger and faster, but they weren't paying attention to whether they would last," says Marden.

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That died down in the early 2000s and continued until a couple of years ago, he says, possibly in sync with the declining economy. When the industry rode back, it did so by creating coasters that may not necessarily be the biggest and fastest but that are creative and make a mark in one or more of the markers measured in the coaster world.

Outlaw Run breaks several of those markers in the world of wooden coasters but also incorporates the theme of the park, which is to teach kids and adults alike, about life in the 1880s. "We have something that the parents realize, but the children typically don't--they're learning something while having fun, they're taking home a better understanding of what life was like over one hundred years ago," says Rau.

The coaster is even built in a new area of the park, on the western outskirts, symbolizing its adventurous theme into the unknown. Most importantly, Outlaw Run will be just as good of a ride in 10 years, says, Baldwin, as it is today. "It will not lose that smooth ride like many wooden coasters do over time, it's built to last."

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So far, Outlaw Run is pulling its weight in stagecoach gold. Although the spring season to date has been cooler than normal and rainy, the park drew 11,000 visitors on one wet Saturday and has booked several coaster enthusiasts groups throughout the season. The park is expected to draw an additional 80,000 visitors this year due to Outlaw Run. "That's good; we have to see the returns for us to continue to grow and bring new rides and attractions," says Rau.

Other coasters enthusiasts are watching this year and you should too:

GateKeeper at Cedar Point in Sandusky, Ohio: Full circuit wing coaster that will drop passengers 164 feet. This $30 million coaster is scheduled to open in May.
Iron Rattler (formerly the wooden coaster The Rattler) at Six Flags Fiesta Texas in San Antonio, Texas: This new steel coaster is using the former wooden support of The Rattler, but is using the new track technology in design as with Outlaw Run. It will be the first hybrid steel and wooden coaster to use the inverted barrel roll.

How to Get Your AC Summer-Ready

MoneyTalksNews — Wed, 08 May 2013 06:43:00 -0400

By Angela Colley

NEW YORK (MoneyTalksNews)—About 54% of your utility bill is from heating and cooling your home, says the U.S. Department of Energy.

Right now you might be enjoying low utility bills, especially if you live in a climate with perfect spring weather. But the "I can't believe it's this hot!" summer days are coming, and soon you'll be blaring the air conditioning around the clock trying to stay comfortable.

That could cost you a lot if your AC isn't ready.

In the video below, Money Talks News founder Stacy Johnson has a list of ways to get your air conditioner in shape for the warmer months. Check it out, then read on for an AC to-do list.

Now, let's break down all the steps you can take yourself to get your AC ready.

1. Change the filters

Replace the filters. It's probably the easiest AC maintenance you can do, and many people aren't doing it often enough. The filters should be replaced once a month to keep your AC running smoothly.

For central air systems, the filter is usually located behind a metal panel on the face of the blower unit. Unscrew the metal panel, remove the old filter, and install the new one.

For window units, the filter is located on the face of the unit behind a metal or plastic panel. Many window units come with a permanent filter. If you have one, take the filter out and gently clean it with a combination of white vinegar and water. Allow the filter to air dry before you put it back in.

2. Clean the condensation lines

The pipe that carries condensation away from your air conditioner can get clogged. If the pipe becomes clogged it could back up into the air conditioner (or into your house) and you'll have a messy problem and a big repair bill. To combat this, locate where the pipe drains out and check to make sure it's draining properly. If not, use an algaecide to clean the pipe. Algaecide is primarily used to remove algae. You can find it at pool supply stores.

3. Install a programmable thermostat

If you don't already have one, the California Energy Commission says you can save up to $100 a year by installing a setback thermostat. Fortunately, they're pretty easy to install yourself and require only a couple of tools. You can get written installation instructions at Lowe's or see an installation video from Home Depot.

4. Clean the coils on the outside unit

During winter your AC's outside unit has been collecting dust, mud and other debris, especially if you don't use a cover. All of that gunk clogs up the unit, causing your AC to run sluggishly. For lightly soiled units, disconnect the power and spray down the outside of the unit with a garden hose. For heavily soiled units, buy a commercial air-conditioner cleaner (available at hardware stores).

5. Clean the fins

Cleaning the fins on the outside unit will help your AC run better. To clean the fins, use a soft brush such as a toothbrush or small car cleaning brush. Gently run the brush across each fin, being careful not to bend the thin metal.

6. Check concrete slab

After your outside unit is clean, use a level to make sure the concrete slab is level. If it's not, the unit will have to work harder to keep your house cool. If the slab isn't level, pry it up with a board and add gravel underneath in small amounts until it is. Remove the board when you're done.

7. Remove debris from outside unit

Plants, leaves, high grass and debris located close to your outside unit can reduce your AC's performance. Before you start running your AC, cut the grass, clean out any debris, and consider removing plants that block the unit.

During the summer, check the unit for debris at least once a month.

8. Check ductwork for leaks

According to the University of Florida, you can save 10 percent to 20 percent on your heating and cooling bills by sealing leaky ducts. To check for leaking ducts, look for disconnected joints, separated pieces and small holes. If you find leaks, seal them with tape carrying an Underwriters Laboratories logo. Fabric and rubber-backed tapes break down quicker.

9. Clean the evaporator

Some AC units have an accessible evaporator located above the furnace. To tell the difference, look above the furnace for either a plenum wrapped in foil or one covered by a metal box. If you see a metal box, your evaporator isn't accessible. If you see foil, your evaporator is accessible and you can clean it.

To do so, gently remove the foil-covered insulation. Underneath you'll see several small screws holding a plate in place. Remove the screws and the plate. What's left is your evaporator. Clean the front and back of the evaporator with a wire brush. Screw the plate back into place and reinstall the plenum.

Once you've got your AC summer-ready, check out these other tips to keep your utility bills down this summer:

6 Tips to Deal With the Rising Cost of Energy

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Can We Stop Consumers from Purchasing Pressure Cookers?

Eric Reed — Wed, 08 May 2013 06:16:38 -0400

NEW YORK (MainStreet) —As is by now common knowledge, on April 15 multiple bombs went off near the finish line of the Boston Marathon killing three people and injuring as many as 144 others. Two brothers, Tamerlan and Dzhokhar Tsarnaev, have been accused of the attack, but even that hasn't stopped a nationwide search for answers, some of which might come from an unlikely place: the local shopping mall.

According to authorities the bombs used by the Tsarnaev brothers were a surprisingly sophisticated design that fused explosive nitrates likely taken from fireworks with household pressure cookers and triggered with the remote controllers for toy cars. By adding nails and bearings to act as shrapnel, these appliances became weapons deadly enough that the surviving brother has been charged with using a weapon of mass destruction.

In the aftermath of these attacks we have to ask ourselves, what happens next? When terrorists hijacked airplanes we could respond by increasing airport security. We could respond to dedicated explosives with an intelligence network to help sweep them off our streets. We even responded to the slaughter of children at Newtown Elementary, with our leaders rushing to confront the NRA. So how do we prevent a Tsarnaev copycat from getting hold of what he needs to build another bomb when it's all right there on the shelf?

The short and tragic answer is, we can't.

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Williams Sonoma stores in the Boston area reportedly yanked pressure cookers from their shelves out of respect, but this is not a widespread phenomenon.

As of printing, no state or federal government is discussing regulation on household goods in the wake of the Boston bombing. The idea has even become a punchline for some, with at least one politician mockingly comparing it to gun control legislation.

Ultimately this is unsurprising, although more than a little gratifying, considering that at the end of the day virtually any consumer product can be repurposed for violence. We didn't regulate garden supplies after the Oklahoma City fertilizer bomb, nor the plumbing industry when pipe bombs went off at Atlanta's 1996 Olympic Games. We can't treat appliances any differently. Two men found a way to stretch a benign tool in a perverse direction, but that doesn't mean we can try to bubble wrap the nation. April 15 wasn't even the first time we've seen a pressure cooker bomb, as one was unsuccessfully used in the 2010 attempted Times Square bombing.

Also see: Measuring the Economic Impact of the Arms Trade Treaty

The fact is, there's simply too much out there for us to ever regulate our way to perfect safety. If we were to crack down on everything that not only is dangerous but could also become so, the gas grill industry would shut down overnight. Hardware stores, stocked with shelves full of shrapnel, would become permit-only and cookers would simply be the first on a long list of pneumatic devices we would need to ban outright. Needless to say, we could forget about driving cars.

According to Michael Clark, a retired FBI special agent and Professor of Criminal Justice at the University of New Haven, law enforcement long ago adapted to this reality. Instead of trying to regulate every product that could inventively kill, law enforcement focuses on intelligence and information.

"[You don't] restrict access so much but perhaps to track individuals who might be ordering large amounts of certain products," he said. "There's a program in place where you educate people and companies you know sell certain products that could be used in bombs. When a customer comes along who they're not familiar with or an order comes out of nowhere, or any kind of suspicious order comes in, there's a system in place to alert law enforcement."

The program is called the Bomb Making Materials Awareness Program, "BMAP." Run jointly by the FBI and Department of Homeland Security, it attempts to stay on top of the marketplace through information. According to its website, "BMAP outreach materials are distributed by local law enforcement to local businesses to help employees more easily identify homemade explosives precursor chemicals and improvised explosive device (IED) components, and recognize suspicious purchasing behavior that could indicate potential bomb-making activities."

Also see: The Cost of Violence Against Women

Still, even this can't really respond to the idea of cookware as a tool of terror. Pressure cookers are simply too widespread, with Fagor, the pressure cooker brand used in the Boston bombings, selling more than 50,000 units in the last year alone. Since it only takes one device to build a bomb, there's almost no chance to find useable information.

"When you come to pressure cookers, someone ordering five pressure cookers wouldn't trigger any response," Clark said. "That can be a way that you can get overwhelmed with just too much information that's not actionable... But in the Tim McVeigh world where you're ordering a lot of fertilizer and you've never ordered fertilizer before, that's where this would work."

The fact is, we seem to have a hard enough time just regulating tools that actually are designed to kill people. Try to stay one step ahead of every creative lunatic out there and pretty soon the police will be drowning in data and we'll need to show ID before buying bath soap, sugar and coffee cups.

As of right now there is no evidence that any legislative or law enforcement body will regulate household goods after the events in Boston. Let's hope things stay sensible and Department of Homeland Security keeps out of the cookware section.

Countrywide May Be a Worldcom, But BofA Is no MCI

Brian Penny — Tue, 07 May 2013 16:32:09 -0400

NEW YORK (MainStreet)—Bank of America (BAC) wants us to believe it's MCI and Countrywide is Worldcom. The thing is...

I know MCI post-Worldcom...and BofA is no MCI post-Worldcom.

After the Worldcom accounting scandal rocked Wall Street a decade ago, MCI (now owned by Verizon, one of the last Baby Bells standing) ran mandatory ethics training throughout the company. MCI had transparency. MCI had auditing practices in place. MCI's company materials were easy to read and followed by every employee of the company.

Also see: DFS Force-Placed Insurance Legislation is a Joke

I was a Relay Operator at the time. My group translated telephone calls between voice phone users and text calls from the deaf and hard of hearing. To respect the privacy of our customers, MCI built a secure room in the back that could only be accessed with a special ID. Prior to the interview, we were tested for our ability to relay sensitive information without judgment. Within the first 10 minutes of sitting down to interview for my position (in my most professional suit and tie), I was handed a piece of paper and told to read five things straight-faced (these are just descriptions, not literally the things I had to read):

Something about killing a politician
Something anti-Semitic
Something sacrilegious
Something sexy (I actually did a sexy voice for this one and made him crack a smile)
Something obscene

After passing all of the interviews and aptitude tests, we were given a drug pre-screening and run through a standard background check. The first week of training, the checks came through, and one person was removed from the class...

Also see: Ethical Risk Management: Anonymous Reveals Its Face

MCI's training class was one of the more engaging corporate training classes I've ever been through (and I've been through a LOT of training courses). They played videos on ethics and quizzed us. The employees bought into the corporate culture. The honesty and morality was forced upon the company by the corporation, but it was genuine. There were checks and balances in place, and, as in nearly every company I ever worked for in my life, the customer was the focus. Ethics saturated the entire company from the top down. Unfortunately over the next decade, cell- and web-based calling rose up to dominate society, making MCI's Friends and Family plan obsolete. The company faded away soon after.

By the time Verizon took over MCI, I had already moved on. I got a job with Countrywide Home Loans. I found myself experiencing culture shock in an entirely different world. Ethics and morality were no longer discussed. It was the first job where we didn't take a course on sexual harassment and ethics as part of the initial training course. We were shown a dress code and vacation policy, but other than that—nothing. The business was entirely numbers driven. Critical thinking wasn't encouraged. Questions went nowhere. The only suggestions that were solicited were suggestions that led to higher production.

The customer was never a focus. In fact, the majority of workers in the mortgage industry don't work in customer facing positions. The industry is divided into front end and back end. When you speak to a customer service associate, he'll blame everything on the back end (aka "corporate," "the mailroom," etc). That back end is where I worked, managing multiple teams and projects at five processing centers in three countries for over a dozen of the largest lenders in the country.

In the back end, the only time we so much as looked at a customer's name was to spellcheck it. Not only are you not considered important as a customer, but you also aren't looked at as people. You're numbers and codes on a screen. We were completely detached from the effects of what we did.

Also see: 30-Day Blues: Americans Come Up Short On Cash Every Month

In the back end, everything is compartmentalized to the point that everyone is sitting in cubicles putting numbers in fields. Each department monitors certain fields for certain numbers. The meaning of these numbers and fields is never taught. In fact, it's purposely withheld.

In every meeting I ever had with executive management, we were encouraged to keep people disconnected so they would not understand the big picture. Explanations of the effects of each value in each field are purposely dumbed down or even left out of training material. Workers are taught what to do with no attention given to what it means or affects.

The fact of the matter is that the housing crisis and fraudulent foreclosures aren't committed directly by executives like BofA President and CEO Brian Moynihan. It's not the 1% directly raising your payments and manufacturing foreclosures. Corporate banks don't work like that. They work like the mafia. Brian Moynihan is the capo. BofA co-CEOs David Darnell and Thomas Montag are his consiglieri. Everyone else is a soldier...

And the only way we'll ever prove the fraud that the banks committed during the financial crisis and subsequently stop it is to hit them in their back ends...

Brian Penny is a former business analyst at Bank of America turned whistleblower. He documents his experiences van dwelling, working with Anonymous, training to be a yogi, and fighting the banks on his blog.

Net Lease, Residential and Healthcare REITs Are Hot

Juliette Fairley — Tue, 07 May 2013 13:48:34 -0400

NEW YORK (MainStreet) —Net lease and healthcare are the place to be right now in the REIT market, according to experts. And the most efficient way to get access is through ETFs and mutual funds.

"The net lease retail space is getting stronger because consumer spending has been increasing and the health care space is attractive because there's more demand for doctors. As a result, there's more demand for office space for doctors," said IndexIQ CEO Adam S. Patti, who is part of the team that created the IQ U.S. Real Estate Small Cap Index.

Also see: Forecasters Fear Another Housing Bubble

REIT ETFs are a market cap weighted broad survey of all REITs that are available, according to Morningstar. "REIT ETFs have done fairly well since the crash of 2008. They've had a solid and steady performance last year and so far in 2013," said Abby Woodham, a fund analyst at Morningstar.

Healthcare REITs like HCN REIT Inc. (HCN) and Sabra Healthcare REIT (SBRA) are among those that top the list.

"We maintain a diversified portfolio because we never know what kind of headline risk is coming. We have exposure to industrial companies, mall landlords, office landlords and lodging landlords," said James Kammert, manager of the Aston Harrison Street Real Estate Fund, which is 20% invested in healthcare and 6% invested in the net lease space.

Healthcare REITS can include assisted living facilities, Alzheimer's care centers and hospitals while net lease retail properties include gas stations, bank branches and fast food outlets, such as Wendy's and Arby's.

But the downside of investing in healthcare REITS is the economic or headline risk.

"A lot of the underlying tenants or the operators of these healthcare facilities may have Medicare/Medicaid issues," said Kammert. "The government sets the reimbursement rates, which is a big component of the tenant's revenue stream. This dependence can influence their ability to renew leases or pay higher rents."

Also see: 9 Great Freebies to Snag This Spring

As for net lease REITS, Kammert favors W.P. Carey (WPC) and Spirit Realty (SRC).

"The number of REITs specialized in owning these free-standing net leased retail properties has increased because the sector had average higher dividend yield in the overall index," said Kammert. "You can get a pretty nice price appreciation."

While 14.2% of Patti's small cap ETF (RooF) is invested in healthcare, 14.7% is invested in the net lease retail space and 4.4% in residential.

"Residential is hot right now because interest rates are low and there's pent up demand for consumers looking to buy a new house. Now that the economy has improved somewhat people think now is a good time to buy a house," said Patti.

Overall, REIT investors have seen performance upwards of 8% so far in 2013 based on the performance of the the Vanguard REIT ETF (VNQ), which was up 17.63% in 2012 and is up 8% so far in 2013.

"VNQ stands as a good proxy for the REIT Sector as whole because it is diversified," said Woodham.

Also see: 5 Ways to Negotiate Your Rent

Divorce and Finances: Gaining Financial Control

Michelle Zudeck — Tue, 07 May 2013 12:16:15 -0400

NEW YORK (MainStreet) —Divorce is not just an emotional split; it's also a financial one. For many people, the emotional trauma is so great during divorce that finances often get pushed to the back burner. One of the most important things you can do is separate the emotional and think about divorce as a business transaction. Understand your legal and financial options so that you will be better equipped to protect your interests and take charge of your future.

Also see: Is the $399 Divorce for Real?

Julie Arkush, a financial advisor at Morgan Stanley in New York, offers the following important financial guidelines for those going through a divorce:

1. Pay Attention to Credit

Paying attention to credit is particularly critical during and after divorce.

One of the first things you need to do is establish credit cards, savings and checking accounts in your own name. Eventually, you will want to close joint credit cards and accounts, but until that happens, you can contact any joint creditors and ask that any future charges by your ex or soon-to-be ex be stopped. As long as you have joint accounts, any actions by your former spouse can affect your credit rating.

You should also check your credit report. There are three primary credit reporting agencies that monitor your credit: Equifax, Experian, and TransUnion. Each scores and reports your credit slightly differently, but you are entitled to a free credit report from each agency once a year. Simply go to the government approved website: www.annualcreditreport.com and check your credit report for errors. You have the right to correct them and you should do so as quickly as possible.

2. Create a Budget

Know your spending habits. Even if you did not have a formal budget while you were married, now is the time to get one together. Additionally, if you are in the middle of the divorce process, determining a detailed and accurate pre-budget can be an indispensable negotiating tool when reaching a settlement.

Start by looking at some historical records. For example, take your tax returns for the last three years and see how much income you had as a married couple; check the sources of income which may include wages, salary, bonuses, investment income, income from real estate, bank interest, etc. Additionally, look at your expenses over the past three years of your married life. Expenses generally fall into several broad categories: home, utilities, food, transportation, medical, child expenses, entertainment, insurance, tax related, business and professional and miscellaneous.

Understanding this vital information will educate you regarding how much money you will need in the future and where changes can be made.

Also see: Divorce and the New Wheels Dilemma

3. Don't Go It Alone

Getting through divorce can be overwhelming. The good news is, you don't have to do it alone. There are many experienced professionals and advisors that can help provide guidance and support to help you make informed decisions so that you approach your new post-divorce life with confidence. For example, you will likely need a lawyer to guide you through the complex issues that divorce raises, whether you choose litigation, mediation, or a collaborative divorce. You will also likely need an accountant to advise you on your filing status changes, and income and capital gains taxes matters. Additionally, many people benefit from working with a therapist, counselor, or clergyperson that can help you deal with the private and emotional side of divorce.

Finally, a financial advisor can be indispensable in helping your plan and manage your assets. He or she can help you understand the assets that you own and can provide strategies to meet your short-term, mid-term and long-term objectives, such as saving for education or planning of retirement. A financial advisor can help you understand what you need in a divorce settlement and can help you manage lump sum settlements, alimony and child support payment in a prudent and sustainable way.

Susan Davis, divorced mother of two children, went through the divorce process 10 years ago. In hindsight, she wishes she had a financial advisor during her divorce. "Because I initiated divorce, I failed to consider financial aspects as I was overwhelmed by the emotion of my situation," she said. "A financial expert could have helped me plan for the future and I would advise other women to obtain financial advice during and after divorce."

The decisions you make during and right after your divorce can affect the rest of your life. Take comfort in the fact that there are qualified people who can help you through this process and help you get control over your financial future.

Also see: The ABC's of Affordable Divorce

Tech-Savvy Start-Up Apps

Leigh Held — Tue, 07 May 2013 10:35:23 -0400

NEW YORK (MainStreet) —Most great businesses at their inception are short on cash. The issues facing most new companies, even amid the excitement of a promising new product, can present logistical headaches. But with the latest technology, there are few quick savvy ways to save money on your start-up and conduct business more efficiently. Here are our tips:

Also see: P2P Payments: Old Dog, New Blog

Square Register: Square Register is a credit card reader that works with the iPhone and iPad. It syncs with your bank account and takes a 2.75% service charge. Jack Dorsey, the co-founder and chairman of Twitter, and his longtime friend Jim McKelvey, a glass blower from St. Louis, invented Square in 2009. Jim had just lost a sale on a $2,000 glass piece, because he was unable to accept credit cards, and the idea for square was born so that he or anyone like him would never miss another sale.

Katie Baynes a spokesperson for Square explained, "We launched Square Register with the goal of replacing the point of sale system with a beautiful, intuitive display that anyone could use anywhere. We support businesses of all sizes, from the individual making a one-off sale, to the coffee shop with hundreds of daily transactions, to house call doctors, lawyers and even chain businesses."

Square Register is a free application and the reader itself costs $10 to purchase through www.apple.com. Once that account is registered the customer is given a $10 credit in their account.

Also see: 4 Apps to Help You Snag Discounts

Business Plan App: The business plan app is easy to read through in a cab before a meeting, and it can provide quick definitions of basic financial terms such as fixed cost. It also provides templates for business plans, operating budgets, and cash flow budgets among several others. Mogens Thomsen is the founder of Business Plan. He commented, "You don't sit in your room reading a 500 page business plan book before you start. The business plan app is the book you read when you are on the move – the best business plan book is the one carry with you. It gives you business essentials to startup in a practical none-academic way." Business Plan is available in App Store and costs $8.99.

Docstoc.com: Many new companies use much of their initial investment on lawyers' fees and contracts. What if you cannot afford a lawyer for a simple non-disclosure or you need to create your own contract but do not have the cash? Doctoc.com does just that. The website has over 20 million professional documents uploaded to it, and the site can assist a new entrepreneur with professional licenses. Of course, it is always better to use an attorney, but for simple documents to use as a business is getting started, this site presents a wealth of options. Jason Nazar and Alon Shwartz launched Docstoc in 2007. Nazar holds a law degree from Pepperdine University and Shwartz was a product manager at Myspace.com. Docstoc is free; however, there are premium parts of the site that require a monthly membership that can be up to $19.95.

Time Sheet App: "Timesheet allows you to keep records of your work with a simple push of a button. It lets you manage your projects or daily tasks. Simple and clear statistics will give you a great overview of your work. It also has the ability to export your data to different kinds of formats such as Microsoft Excel," explained founders Florian and Alexander Rauscha. The timesheet app is great for freelancers or new start-ups that have a few employees who may be working remotely in sales and marketing. It is free to download and use in the Android Marketplace.

Wave App: Wave makes invoicing, accounting, payroll, receipt scanning, and payment tools for small companies ideally with 9 employees or fewer. It is cloud-based integrated software. Rob Maurin, spokesperson for Wave, "It is built for businesses where the owner him or herself is the one who handles the day-to-day finances of a company. We build the right tools, in a way that doesn't require any special expertise. For example, Wave has real double-entry accounting (which your accountant will probably insist on), but the business owner doesn't need to understand anything about accounting methods or principles to use Wave." Wave can help a new entrepreneur collect money faster, save money at tax time, and track when invoices are overdue. It can also create a complete personal financial snapshot. Wave is free to use; however, the payroll tools are $5 per employee per month.

Also see: 6 Powerful iPhone Apps to Accelerate the Conquest of Debt

Pex Card: Pex card offers a new way for entrepreneurs to tackle expense accounts. These Visa cards are pre-filled with cash by the business owner assuring that everything stays within budget. If the cards need more money they can be filled online as well as suspended or emptied. Pex Card's website allows tracking of which employees are spending what. This makes it easier for a new CEO to know where his money is going. "Its all about control," said Toffer Grant, CEO of Pex Card. "Based on what customers tell us, it is the fact they can issue a card to an employee without the risk of exposing thousands of dollars of open spending on a credit card. We provide instant card funding, which means the manager can top up a card at any time day or night, when the employee needs it. And then - the card can be locked down for approved merchant types only - i.e. YES for gas, NO for restaurants." The cost is $7.50 per card per month.

Also see: The True Secret to the Digital Wallet May Be In Your Other Pocket

Want Higher Education? Get Ready to Pay the Ambition Tax

Janet Al-Saad — Tue, 07 May 2013 09:32:17 -0400

NEW YORK (MainStreet) —If you're in the market for higher education – but can't afford the hefty price tag out-of-pocket – get ready to pay a tax on your ambition. The interest rates paid on federal student loans (especially at the graduate level) exceed those for other notes, effectively placing a tax on the most ambitious. A recent study by the New York Fed sheds light on the growing burden: Student loan borrowers are for the first time less likely to obtain mortgages or auto loans. That's capital being diverted from ostensibly more economically productive activities to debt repayment.

Private Austerity

Also see: Obama's New Student Financial Tool--Does it Matter?

If some economists argue austerity policies (such as higher taxes) are partly to blame for anemic economic recoveries, then the burden of student loans can be seen as a form of "private austerity," depressing borrowers' ability to save and consume. Student loan expert Heather Jarvis explains that this phenomenon's impact extends beyond the borrowers,

"Higher student loan burdens are limiting people's ability to participate fully in the economy, and this will have long-term, downstream consequences," she said. "They not only can't afford mortgages, but they also can't afford to invest or save for their own children's education. It creates a vicious cycle that impacts upward mobility."

Market-Sensitive Interest Rates?

For years, higher education was seen as a means for accelerating that mobility, and programs such as the G.I. Bill, federal grants and subsidized student loans put that dream within the reach of many. But even as the recession gained steam, most tuition bills kept growing, making college less affordable for struggling lower and middle class families.

Some federal loans (such as Grad Plus loans) bear fixed rates as high as 8.5%. With other borrowing costs at historically low levels, Jarvis thinks fixed student loan interest rates may be part of the problem,

"There is only so much the federal government can do to directly reduce education costs, but fixed interest rates for students are most concerning, because it's an example of how the cost of student borrowing is out of line with market forces," she said. "Variable interest rates would more strongly reflect the economy."

Also see: Student Debt Becoming More of a Family Problem

Variable rates would, of course, more closely mirror economic activity, but it's debatable whether they'd actually make college more affordable. Student loan industry activists note that federal loan's higher rates partly reflect the lower credit quality requirements. Lower the interest rates, and the government assumes an even greater risk in the event of defaults. That may have the unintended consequence of reducing federal loan availability for the neediest.

20 Years to Freedom

The government responded to the onerous burden of student loan debt by creating new income-sensitive federal loan repayment programs such as Income Based Repayment and Pay As You Earn. These programs enable borrowers to repay based on their earnings, capping payments at 10 or 15% of disposable income. For those having difficulty repaying on a traditional ten-year schedule, they can help reduce delinquency.

But the programs also have their drawbacks. Although all remaining debt is forgiven after 20 or 25 years (PAYE and IBR, respectively) of repayment, it still means borrowers are on the hook to the federal government for decades, often seeing their balance balloon despite making regular payments. And because these are government-run programs, collections on delinquencies can be a lot more aggressive -- including garnishing wages, confiscating tax refunds and imposing hefty collection fees of up to 18.5%.

Still, Jarvis, says, these are a lifeline for families struggling under the trifecta of higher tuition, lower student aid and limited professional opportunities,

Also see: Student Debt Diary: 5 Things I wish I'd Known Before Borrowing

"IBR and PAYE truly are helping students with loans – but whether they help enough is the question, and the fact that they need them even more now is the problem," she said. "Paying on loans for 20-25 years is hugely problematic, as is the whole debt-based program of educational access. But it's needed now that grant and scholarship money is more limited."

Also see: Reducing Your Student Debt (Or Why You Shouldn't Go to Law School)

Student Aid Market Cycles?

There's another parallel to the student loan - economic austerity argument that has gone unmentioned. Lower levels of scholarship and grant aid are partly a reflection of shrinking state and federal education budgets and reduced private giving in response to the recession. So, federal loan burdens (at least for new borrowers), much like higher taxes, may ease when economic conditions improve and state and private sources of funding increase.

In times of plenty, austerity eases and taxes tend to decline. The "ambition tax" may, too, if economic conditions improve markedly and borrowers no longer need suffer the burden of heavy loans – or if standard repayment simply becomes feasible again.

Also see: Student Debt Diary: Wait, What was the ROI on my Education?

Forecasters Fear Another Housing Bubble

Hal M. Bundrick — Tue, 07 May 2013 09:23:45 -0400

NEW YORK (MainStreet) —As home values rise, helping to heal a battered market, real estate forecasters are beginning to fear another housing bubble is looming on the horizon.

The survey of 105 economists, real estate experts and investment and market strategists predicted home values to end 2013 up an average of 5.4% year-over-year, with a median U.S. home value to rise to $165,280, up from $156,800 at the end of 2012.

Also see: 5 Consumer Activism Campaigns that Changed the Garment Industry

While survey respondents were more optimistic on near-term home value appreciation this year and into 2014, their expectations for nationwide home value growth for the following three years were slightly more pessimistic than in prior surveys. On average, panelists said they expect annual home value growth between 3.5% and 3.7% from 2015 through 2017, down modestly from previously expressed expectations in the 3.6% to 3.8% range. Cumulatively, survey respondents predicted home values to rise 22.3%, on average, through 2017. The survey was conducted by Pulsenomics for real estate information marketplace Zillow (Z).

Also see: Tips From 100-Year-Olds on Living Longer

But the good news regarding rising home values is tempered with a gloomy forecast, as most expressed fears that the Federal Reserve could be inflating a new housing bubble.

"The panel's expectations of near-term home value appreciation remaining above historic norms are consistent with a market struggling to satisfy strong demand from buyers attracted by rock-bottom interest rates and improving economic conditions," said Zillow Chief Economist Stan Humphries. "But looking further out, that appreciation will have to moderate as interest rates rise, or else homes that seem affordable today – despite rapidly rising values – are going to look very expensive relative to people's incomes as it gets more costly to finance a home. How the Federal Reserve handles the eventual winding down of its policy of quantitative easing will be critical in determining if the current period of rapid appreciation is a benign bounce off the bottom, or a more dangerous bubble being re-inflated."

To boot, 48% of survey respondents said there was a moderate to high risk of a new housing bubble, due to the Federal Reserve's current intent to maintain mortgage interest rates near historic lows.

Also see: 5 Ways to Negotiate Your Rent

Sticker Shock: Car Prices Vary From City to City

Brian O'Connell — Tue, 07 May 2013 09:00:00 -0400

NEW YORK (MainStreet) — If you're in the market for a new Ford F-150 truck, you're better off looking in Chicago than Atlanta.

Edmunds.com's True Market Value Calculator says you can save $4,100.

Or maybe you yearn for a Toyota Camry? If so, buy it in Dallas and not New York City — you'll save $2,300.

Like it or not, especially if you live in Atlanta and New York, the price you pay for a brand-new car or truck differs from city to city. That's mostly due to regional variations and some other factors (hello, Mother Nature) beyond the control of new-vehicle buyers.

"A new or used car in New York won't necessarily sell for the same price as a similar car in California," Edmunds.com pricing analyst Richard Arca says. "Car buyers should be aware that, along with regional incentives, factors like increased local demand and even local weather conditions can affect car prices within a market."

"It's not too different from what we see every day in the fluctuation of gas prices," he says.

The F-150 deal comes down to cash incentives; consumers in Chicago can expect a $5,000 incentive compared with just $500 in Atlanta. That explains the $31,942 price tag in the Windy City compared with $36,080 in Hotlanta.

In fact, Atlanta is the most expensive city in the U.S. to buy a new truck, while New York City is the priciest to buy a midsize sedan ($22,355 for a 2013 Toyota Camry). If it's an SUV you want, avoid Chicago ($22,859 for a 2013 Ford Escape), and San Francisco will have you digging deepest into your bank account for a compact car ($17,854 for a 2013 Toyota Corolla.)

Edmunds says that sometimes vehicle prices vary for no special reason.

A 2013 Mercedes-Benz C250 Sport Sedan costs $33,624 in Houston and Chicago, but only $32,036 in Philadelphia. Mercedes doesn't offer cash incentives, but prices for the sedan vary geographically anyway.

That makes the Edmunds TMV calculator worth a look. Just pop in the make, model and year of the car or truck you want, then add ZIP codes for different cities to get the best deal.

After that, a $300 plane ticket can get you behind the wheel of a new vehicle with savings of several thousands of dollars in your back pocket.

— By Brian O'Connell

3 Ways to Save Big on Mother's Day Gifts

Credit.com — Tue, 07 May 2013 07:51:11 -0400

By Gerri Detweiler

NEW YORK (Credit.com)—If you're on a budget, you can still find ways to show Mom you appreciate her without breaking the bank. Two of the most requested gifts are flowers and spa days, according to the Shoppers Trend Report from RetailMeNot.com. Gift certificates or gift cards are also likely to be a popular gift this year according to industry research firm IBISWorld, which predicts consumers will spend about $17.1 billion on Mother's Day gifts this year.

Here are tips for making the money you spend on these popular gifts for Mom stretch as far as possible.

Flowers

If you are able to deliver flowers in person to Mom, consider putting together your own bouquet or centerpiece from flowers you purchase yourself. "The nice thing about DIY arrangements is the love that goes into them," says Louann Shenberger, a former florist who offers step-by-step instructions for flower arrangements on her website, Wedding-Flowers-and-Reception-Ideas.com. "Choose flowers that don't have yellow leaves and don't shed petals if you give them a gentle shake. Rose heads need to be tight and feel firm when you lightly squeeze them. Lilies are best if they are still partly closed. This means they just arrived and are ready to open to their full beauty soon." She also suggests calling your local supermarket or discount store and asking them when their flowers are delivered. Get there when the flowers do to get the best selection.

Don't live close to your mother? If you'll be sending flowers, Shenberger suggests calling a florist near her home directly and ask her to suggest an arrangement within your budget. "Ordering through a wire service costs the shop a fee, plus the arrangements are already planned and the cost is set for across the country," she notes.

You may also want to check out the flower deals your credit card issuer may be promoting. "Most credit card issuers feature online shopping malls that offer bonus points, miles, or cash back for purchases from certain retailers," says credit card expert Jason Steele. "And these bonuses are often the largest for the kind of gifts that are popular for Mother's day. For example, it is not uncommon to see 15x, 20x, or more bonuses for flower purchases."

Whether you choose to make your own arrangement or buy one online, Shenberger recommends avoiding the most popular blooms and colors. "Remember that flowers that are hot in demand during Mother's Day (especially pinks and whites) may have been stockpiled for a while at the wholesaler, ready to ship for the heavy demand that comes in that week," she says. "Choosing a mixture of different bright colors may result in fresher flowers."

Finally, consider a blooming plant instead of a cut arrangement to get the most value for your money. If you choose something that can be planted afterward, your mother will have a gift that can last for many years. If you live nearby, offer to help her plant it.

Spa Day

Subscribe to daily deal sites like Groupon or LivingSocial, or check your local newspapers for discounted spa services. Many will offer specials for Mother's Day. If you do give Mom one of these gifts, also give her cash for the tip, based on the retail price of the package, not the discounted cost.

You can also check directly with spas themselves to find out about Mother's Day promotions, and don't overlook hotels within driving distance. You may be able to buy Mom a package deal that includes a night away, spa treatment, and brunch, for less than those three would cost separately.

If you are really on a strict budget, and aren't too klutzy, you can take a DIY approach. Pick up some pretty (or fun) polish and offer to do Mom's nails yourself. While you are at it, pick up a box of chocolates, and perhaps some Champagne and orange juice for mimosas. You and she will get to spend time together, which is something many Moms will enjoy more anyway.

Gift Cards

If you know Mom's favorite place to shop, then see if you can snag a gift card at a discount from a site that resells gift cards other people can't use. You may be able to pick one up for a discount of 2.5%-30%.

Just be careful: buy from reputable sites to make sure the cards are legitimate. And keep in mind that some of these cards may carry seasonal designs. That means Mom may get a card with a birthday cake or Christmas tree on the front!

If you plan to buy her a gift card in a store, consider using a credit card that will offer you maximum reward points for your purchase. For example, if your credit card offers bonus rewards for supermarket purchases, buy a gift card there.

Again, check out the promotions your credit card issuer is running. Chase Ultimate Rewards, for example, is offering cardholders 10% off gift cards to the Gap, Macy's, Cabela's and other retailers. Or you can redeem your reward points for a discounted gift card and use it to purchase your gift from one of these retailers. Cardholders can also redeem points for gift cards to Bed Bath & Beyond, AMC Theaters, Barnes & Noble and other stores and then give that gift card to Mom to spend as she chooses. Be sure to ask about shipping times, since redeeming points for gift cards can take anywhere from a few days to a few weeks, depending on the issuer's policies.

Whatever you do, try to do something. According to a NPD Group for Child's Play Communications survey, one in five moms with children under 18 said their families won't spend anything on gifts for them this year. If you don't have money to spend (or even if you do), consider doing something meaningful instead.

Gary Foreman, editor of personal finance site Stretcher.com, shared how one reader wrote an essay about "what my Mom means to me," then printed it from her computer using a fancy font and framed it. "There were all kinds of tears when Mom opened the gift," he says. He suggests teens and tweens give Mom "a 'clean up my room without talking back' card."

He may not be too far off in thinking that Mom would like a gift from the heart. The survey found that the top present moms want for Mother's Day 2013 is a handmade gift from their child. But the second most wanted? A day off entirely for herself.

"I think that things like flowers, candy, spas are all disposable (and) quickly forgotten," says Foreman. "I'd rather encourage something that would make a lasting memory for Mom -- and the giver, too."

Related Links:

Groupon Warns: Don't Blow It On Mother's Day

Brian O'Connell — Tue, 07 May 2013 07:30:00 -0400

NEW YORK (MainStreet) — Mothers Day pops up on the calendar Sunday, meaning that soon mothers across the nation will be waiting, if lovingly so, for dad and the kids to commemorate the occasion.

Or, as the Chicago-based daily deal discount firm Groupon calls it, not "blowing it" on Mothers Day (now that's harsh).

Groupon has taken the pulse of U.S. moms on what they expect out of family members on Mothers Day, and the gist of the research is this: To mothers, getting a "thoughtless gift is worse than no gift at all."

The firm's study of 1,002 U.S. consumers concludes that "finding the right gift" is the biggest challenge for Americans this Mothers Day (47% of survey respondents say so), followed by "staying within budget" (42%), and "finding a gift that shows you care" (37%).

As far as what Americans expect to give their mother's on their big day, Groupon breaks it down like this:

55% of consumers buy flowers for Mother's Day.
44% buy brunch or a dinner for mom.
30% opt for a spa gift.
28% buy jewelry.
21% give mom a "family activity" on Mothers Day (think barbecue, picnic or day at the beach.)

How will you know if you bought the wrong gift for your mother? Groupon says to look for signs of "quiet disappointment" or any sign of your mom regifting.

Oh, and don't give a gift late, even though Groupon says 51% of Americans tempt fate by waiting until the last minute to buy a Mothers Day gift.

Your best move? Two-thirds of moms say they want to be surprised on Mothers Day, so the more creative the better, and a gift ideally involves something the whole family can do together and something moms would not usually buy on their own (such as a day at the spa.)

Be careful about giving your mother a full day off on her own. She may like that on any normal day, but on her day, mom expects full attendance, if not full attention. Only 5% of mom's want a "day off" from the family Sunday, according to Groupon.

Groupon has a horse in this race — it obviously wants you to use its deals portal to buy a Mothers Day gift — but does offer a Mothers Day gift finder to help whittle down your options.

The takeaway? Groupon says being creative and giving the gift of time are your best options.

Boomers Saving for Kids Too

Mon, 06 May 2013 16:47:58 -0400

NEW YORK (MainStreet) —Merrill Lynch managing director David Tyrie discusses the new retirement realities and says that more Boomers expect to support their kids.

5 Consumer Activism Campaigns that Changed the Garment Industry

Jessica Marati — Mon, 06 May 2013 13:53:21 -0400

The Rana Plaza garment factory collapse has called attention to past reforms within the industry.

14 Ways to Make Clothes Last Longer

MoneyTalksNews — Mon, 06 May 2013 12:36:47 -0400

By Amanda Geronikos

NEW YORK (MoneyTalksNews)—I own a beautiful black sweater that has nearly faded to gray. You probably have an article of clothing that has suffered a similar fate.

You and I may find comfort by telling ourselves that it can be easily replaced — “Oh, great. An excuse to go clothes shopping!” – but we both know what a waste this was.

Money Talks News founder Stacy Johnson, in the video below, offers some great advice to care for your clothing and extend their wearability. Watch the video, then read on for more tips.

Use these preventive measures to preserve your wardrobe and your wallet:

1. Sort carefully

While this might seem like a no-brainer to many, plenty of people combine everything in one load — colors, delicates, whites, you name it. It’s usually not until we wash a red pair of pants with white socks that we realize the importance of sorting clothes and washing colors and whites separately.

2. Don’t wash jeans after one wearing

Jeans don’t need to be washed every time you wear them. Unless they’re stained or covered with mud or dirt, you can get away with washing them every third time you wear them. If they start to feel loose by the second or third wearing, throw them in the dryer for a few minutes.

3. Hang dry your clothing

While we love the convenience of dryers, our clothes do not. Dryers actually weaken the fabric’s fibers much faster than if clothing is air-dried. (Where do you think the lint in your dryer’s lint screen comes from?) Plus, if your dryer malfunctions, items inside can be damaged. A $50 mattress cover I had was ruined that way.

4. Watch your zippers and buttons

Zip up the zippers on your jeans and hoodies so they don’t catch on other clothing in the washing machine. On the other hand, don’t button your buttons. Otherwise, the buttons and buttonholes could be damaged.

5. Turn your clothes inside out

Turning all your clothing inside out before washing and when ironing will preserve the quality (including color) and life of them. This is particularly true for T-shirts, sports jerseys and items subject to pilling.

6. Use cold water

Not only does using cold water save energy and money, it also saves your clothing. Hot water causes some clothing to shrink and wrinkle.

7. Don’t over-dry clothing

A hot dryer is likely the reason your favorite skirt shrank, or your T-shirts wrinkled. (Do you really want to iron those?) If you’re going to use a dryer, keep clothes in the dryer until they are dry or just about dry, but not a minute longer.

8. Don’t overload the washer and dryer

We’re all guilty of this, mostly because we want to save time and don’t want to deal with a second load of laundry. But stuffing the washer means clothes won’t get as clean, and you may damage the washer in the long run. Overloading the dryer can prevent clothes from drying properly and can also damage that machine.9. Use white vinegar

White vinegar is an inexpensive fabric softener. It doesn’t stain your clothes or make them smell like vinegar. Add three-quarters of a cup to your final rinse cycle.

10. Wear undershirts

Wearing an undershirt is a simple solution to embarrassing sweat stains that can also ruin our clothes.

11. Use coffee or tea for fading black clothes

Adding some strong coffee or tea to your rinse water can help black clothing maintain its dark shade. LifeTips says washing black clothing with Ivory Soap Flakes and a small amount of detergent in cold water will prevent future fading.

12. Take your work clothes off when you get home

Who wants to stay in a suit or dress anyway? Change into more comfortable clothes when you get home to avoid cooking stains and extra wear on your best attire.

13. Read the labels

This one’s another no-brainer, though plenty of us forget or simply ignore the labels. Before you wash anything, especially delicate clothing, be aware of the label instructions and follow them accordingly. If it’s dry-clean-only, don’t deviate. That could be a big mistake.

14. Rotate your wardrobe

If you wear the same shirt every week, it’s naturally going to wear out sooner than other clothes in your closet. To prevent this, start a clothing rotation. After you wash your most recently worn clothes, move them to the back of the line in your rotation.

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Gloom After the Great Recession

Ross Kenneth Urken — Mon, 06 May 2013 11:05:46 -0400

NEW YORK (MainStreet) —Down the Up Escalator author Barbara Garson dropped by MainStreet to talk about chronicling the 99% amid the pessimism of post-Great Recession life. Garson is noted for her '60s satirical play "MacBird!" and takes a dramatist's approach in presenting the true-life characters and their nuanced response to the economic challenges--from "feral derivatives workers" to laid-off friends who form "the Pink Slip Club." Watch the interview below:

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Your Annual Investing Checkup--In 5 Painless Steps

LearnVest — Mon, 06 May 2013 09:57:14 -0400

Allison Kade

NEW YORK (Learnvest) —There are certain things that we just need to do every so often: Car tune-ups. Cleaning out the gutters come spring. Regular visits to the doctor. And, you guessed it, investment portfolio check-ins.

LearnVest certified financial planner™ Ellen Derrick likes the metaphor of a trip to the pediatrician as a kid: Rather than view your investments as a grueling task that requires tackling, think of it as a friendly checkup instead. You’ll get in and out—and if you’re especially good, maybe you’ll even get a lollipop.

In the same way that a physician would take you step-by-step through a yearly physical, we asked Derrick to walk us through the basics of an annual investing checkup.

1. Look at the Big Picture

One of the first things that your doctor will do is assess your basic health, including your blood pressure, temperature and weight. “In investing terms,” Derrick says, “this would be the equivalent of taking a snapshot of your overall picture. Has your income or job changed? Has your family grown or shrunken?”

The first step in your investing checkup is to think about how your situation and goals have changed—and what that means for your portfolio.For example, Derrick says, “If you’re now making more money than you were last year, perhaps you should increase your monthly retirement savings accordingly.”

2. Address Lingering Problems

Next, your doctor will probably ask about specific health concerns. You can do the same for your portfolio by looking for investment red flags. “If you invested in a fund or a stock that hasn’t performed well,” Derrick says, “ask yourself whether it’s a symptom of a bigger problem or just a temporary flare-up.” If you had money to invest today, would you consider buying the same investment? If the answer is no, she says, then perhaps you should consider taking the loss and moving on to something else.

Of course, that’s not to say that you should rush to sell everything in your portfolio that’s decreased over the past year. It’s perfectly normal for investments to have ups and downs, which is why you shouldn’t buy and sell all of the time—it just encourages emotional trading. Instead, aim to give your investments a serious look once a year or so, giving you the right amount of distance to make rational decisions rather than in-the-moment ones.

3. Consider “Generic” Options

“In the same way that your doctor might review your current meds to see if generic, less-expensive options are available, you can do the same with investments,” says Derrick. For example, you may own shares of a mutual fund with a 1.5% expense ratio (the fee that the fund charges for administration, management and advertising). At that rate, if you invested $1000, you’d have approximately $15 in fees deducted from your return. But if you invested your money in a fund with an expense ratio of 0.2%, you’d only have $2 in fees deducted from your return. Over the long term, all of these little fees can seriously add up.

Another way to save? Most brokerages charge a transaction fee each time that you buy or sell an investment, but many also offer “no-transaction-fee” mutual funds. You should choose funds based on what’s best for your needs, but aim for those with no transaction fees whenever possible. Case in point: If your brokerage charges $17 whenever you make a mutual fund trade, you could easily save more than $100 a year by choosing no-transaction-fee funds. You can usually search for such funds through your brokerage’s online mutual fund screening tool.

If you’re in the market for a new fund, you’ll want to compare apples to apples. For example, if you have a fund that invests in large-cap stocks, you should look for a replacement that invests similarly. Just remember that if you’re investing in a taxable brokerage account, you could face steeper capital gains taxes if you sell an investment after holding it for less than a year.

4. Maintain an Optimal Weight

“Your doctor usually gives you a speech about improving your health,” Derrick says, “and that often involves paying attention to your weight—exercising more, eating better, etc.” Similarly, you should “make some overall adjustments to get your portfolio back to its optimal weight” by rebalancing your portfolio once a year.

When you start investing, you should have a game plan that’s tailored to your specific goals, appetite for risk and how much time you have before you’ll need your money back. Maybe your original plan was to allocate half of your money in stocks and half in bonds, but after a year your stock investments have grown, so you’re out of whack—60/40 instead of 50/50. If your goals are the same, and your plan hasn’t changed, you may want to consider selling some stocks to get yourself back to that 50/50 game plan.

Now we know that this can be hard psychologically. After all, if your stocks are killing it, why sell now? We talk about how the emotional burden can be even harder when the stock market is way up or down, but Derrick points out that this is an important lesson: “Rebalancing is all about buying low and selling high. We mentally don’t like to sell part of an investment that has done well and add more money to an investment that hasn’t performed.”

She adds that you should avoid the temptation to say, “Maybe I should just change my plan and leave things the way they are since they’re doing so well!” You need to remind yourself that you made that plan when you were being rational and considering your long-term goals, so don’t change it now over emotional reasons. “It’s like cutting back on chocolate cake and eating more lentils,” Derrick says. It might not be fun, she notes, “but it’s better for you overall.”

5. Feel Good About Yourself

When you were a kid, the pediatrician may have given you stickers or toys if you were good. Rebalancing your portfolio shouldn’t feel like drudgery, so if you need to give yourself a reason to get excited, follow the same model.

Maybe this means sharing your accomplishments by joining a supportive money club or giving yourself a little splurge. (Here’s how to splurge the right way.) Did you save a few bucks on transaction fees by switching mutual funds? Perhaps you can use part of those savings to treat yourself to a nice bottle of wine or flowers. Or you could always ask one of your friends to give you a gold star sticker.

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Tips From 100-Year-Olds on Living Longer

Brian O'Connell — Mon, 06 May 2013 07:30:00 -0400

NEW YORK (MainStreet) — Americans are living longer — a lot longer — and evidently loving it.

According to the US. Census Bureau, there are 53,364 U.S. citizens age 100 and older. There are also 330 “super-centenarians” — Americans alive and kicking over the age of 110. Members of the century club are predominantly white (82%) and female (80%)

Americans are definitely living longer; the Census Bureau recorded only 32,000 100-year-olds-or-older in 1980, compared with 53,000 in 2010. The bureau says that more than 600,000 centenarians will be around by 2050.

Ever wonder what the secret is to making to the century club?

For starters, don’t look back on your life with regret, says a survey from Minnetonka, Minn.-based United Healthcare.

The health care firm asked 100 U.S. 100-year-olds what they would change about the way they lived their lives, and 50% said “nothing at all.”

Contrast that with 60- to 65-year-olds; only 29% say they would change nothing about their lives. That positive attitude among centenarians goes a long way in explaining why they’re living longer.

“The centenarians in this year’s 100@100 survey show that maintaining a positive outlook isn’t all about focusing on what the future holds,” says Dr. Rhonda Randall, chief medical officer at United Healthcare. “Reflecting fondly and confidently on the choices they’ve made throughout their lives helps the longest-living Americans maintain a sense of satisfaction and well-being that’s vital to healthy aging.”

Consider some other takeaways from the study:

33% of 100-year-olds say they wished they’d spent more time with their loved ones, while 13% expressed a desire for “better health.” Just 6% wanted “more money” in their life.
29% of 100-year-olds say they “expected” to live until the century mark. Only 21% of baby boomers expect to live to 100.
A whopping 98% of centenarians say “keeping their mind active” is a huge key to a long, healthy life, a theme echoed by 100% of 60- to 65-year-olds.
96% of 100-year-olds say keeping fit physically is a big reason they lived so long, and 98% of baby boomers agree with the principle. More than 50% of centenarians walk or hike on a weekly basis, while 33% engage in some form on strength-training on a weekly basis.
Only 31% of 100-year-olds say maintaining a healthy sex life is a key to a longer life, but 80% of boomers say a vibrant sex life is necessary for “healthy aging.”
86% of centenarians say eating nutritionally was a big factor in their making it to age 100, while 66% say getting regular sleep is a big factor in living longer.

Most people who make it to the century club say they look forward to every day and try to engage in at least one social activity daily.

The United Healthcare study is required reading for Americans looking for the keys to a longer, healthier life. Find it here.

5 Ways to Negotiate Your Rent

Scott Gamm — Mon, 06 May 2013 07:27:35 -0400

NEW YORK (MainStreet) —With the rental market heating up in many areas across the country, if your lease is up for renewal, expect the landlord to ask for more money.

Rents are constantly fluctuating and the state of the market at the time you signed your lease likely looks completely different at the time it expires.

Also see: 5 Ways to Prepare for Your First Home Closing

If you’re hoping to stay in your current place, but your landlord is demanding a higher rent, you have a few options: pay the new rent, pack your bags and move or negotiate a better deal. While those negotiations require careful strategy and research, here are a few ways to give yourself an edge.

1. Know the market

In negotiation, facts and proof speak louder than words.

“Write a letter to the landlord and state the comparable apartments in the area and the rents they are asking (pick the ones that are asking lower rents),” says Vik Kukar, senior vice president and licensed real estate agent at Rutenberg Realty.

Ultimately, you need to show the landlord that the price they’re asking is unreasonable and how you’re willing to move unless you get the right deal.

2. Point out the costs

Even in a booming rental market, any layover between tenants will cost the landlord money. Not only could it take a few weeks for a new tenant to move, but there are costs involved when prepping rental spaces, which include cleaning and painting.

“In a letter, include estimates of the vacancy time and costs, so the landlord can see the financial impact of finding a new tenant,” Kukar adds.

Also see: How to Master a 401(k) and Roth IRA at the Same Time

3. The value of “you”

Landlords know what it’s like to have a tenant who pays late and causes damage to the property. If you’re the opposite, there’s value in that, and it’s important to emphasize these qualities when negotiating.

There’s also plenty of risk when signing a new tenant. The landlord has no idea whether he'll pay on time, regardless of credit history.

4. It’s not just about the rent

If you’re not getting anywhere in your negotiations, but are still committed to staying in the current space, ask for some freebies.

“I recently negotiated my rent down by $50, after the landlord was trying to increase it by $150," says communications director Stephanie Coggin. "While I was able to score a small reduction, I also negotiated for a new refrigerator and for the apartment to be painted.”

5. Think long-term

It’s anyone’s guess how the rental market will look in a year. If you sign a one-year renewal, the landlord may demand an even higher rent next year. Signing a two-year lease can be a safer option, as you’ll have certainty in the rent levels.

To cover even more downside with a two-year lease, ask the landlord to include a clause in the contract that gives you the option to exit the lease after one year, without any penalties or fees. This way, if the market crashes in a year, you can move into a cheaper place. Or if you happen to lose your job and can’t afford the lease, now you have the flexibility to cut your living expenses.

Scott Gamm is founder of HelpSaveMyDollars.com and author of the new book MORE MONEY, PLEASE.

Also see: How to Spot Credit Report Errors Before It's Too Late

10 Ways to Afford Life After College (Without Moving Back Home)

Naomi Mannino — Mon, 06 May 2013 06:55:41 -0400

NEW YORK (MainStreet) —My college daughter lives a very nice life indeed, afforded by the monthly spending money I put in her account plus the money she earns from a part time job. And, we agreed that neither of us would take on college debt, so while she earns academic money and a big athletic scholarship every year, I work hard to pay whatever is left over. But I also still pay for the iPhone plan and she spends all her extra money every month on eating out and designer clothes and accessories which has me worried about how she will afford things on her own once she graduates. She says other college kids around her live even better with nice new cars and seemingly unlimited funds for shopping, travel and activities.

So what’s a recent college grad to do? Faced with the fear of the job market and launching out on their own, lots of college grads simply stay in school and get a graduate degree, and others move back home with Mom and Dad to save money or avoid the situation altogether. But there’s a trend afoot to get out of Mom and Dad’s house. According to a new survey of over 1,000 teens aged 14-18 from Junior Achievement USA and The Allstate Foundation, the percentage of teens who say they will be able to support themselves without parental assistance between the ages of 25 and 27 has doubled over the last two years, from 12% to 25%. But the percentage who said the time span between age 18 and 24 was when they would be able to support themselves dropped from 75% to 59%. So more teens say they can do it on their own if they just take a few more years to do it. What about you?

Also see: BuzzFeed's Comedic Secret: The Moola Files

How to get out of Mom and Dad's house

If you really want out of your childhood bedroom sooner rather than later, you’ll have to make some hard financial choices, especially if you also have student loan debt. “Entry level assistants who support themselves really don’t wear Prada shoes every day unless daddy bought it or it’s in a movie,” says Ellie Kay, parent of seven college and post-college age kids, author and family finance expert.

“Maybe you never thought about the cost of your basic living expenses in the manner you have become accustomed including rent, utilities, insurance, gas, your car, your expensive smartphone plan and designer clothing, electronics and unlimited activities, because they were paid by Bank ‘O Dad or worse, during college, paid by your student loans,” says Kay. She explains that your parent’s standard of living you are enjoying took 20 or more years to build, but it’s not your starting point and you might be in for a shock when you want to get an apartment of your own.

Don’t want to hear adult preaching? Rachel Ramsey Cruze, 24, agrees on the rude awakening after graduating from college, especially because she had to follow her dad’s advice and get through college with no debt and stick to her monthly cash budget. Her tough financial love dad is outspoken personal finance expert and author Dave Ramsey. “Once I realized that if I overspend or I don’t go to work that I can’t eat or pay rent, it was a whiplash of a reality check,” Cruze said. “If you’re still 25 living at home with Mom and Dad cooking, cleaning and paying for you, then you’re not living as an adult. Parents who allow it beyond a specified amount of time do not help their kids become adults.”

She used her communications degree to earn a position as a speaker and writer for the Dave Ramsey organization, and this year she has given presentations on affording life after college to college students at University of Wyoming, North Georgia College, State University of Georgia and Missouri State College among others. She says that while parents can still help with large expenses to start you out, being out on your own, no matter how hard it is, gives you a level of self respect.

Andrea Woroch, savings expert at Kinoli Inc. recently presented a “Money Matters” seminar focused on the real costs of living during and after college and advocated for moderation.

Also see: Can the Student Debt Crisis Outshine the Housing Bubble?

Follow our expert advice on ditching excess costs and you will see that affording your life on your own just got a whole lot more realistic:

1. Get some roommates: Renting an apartment requires an up-front cash payment of the first month’s rent, the last month’s rent plus a “security” deposit (to cover any repairs) which can total a few thousand dollars, which you may or may not already have saved. On entry-level or minimum wage earnings, you may need two, three or even four roommates to afford that plus the regular monthly rent, says Kay.
2. Ditch the nails, the iPhone and the tanning. Cruze learned the difference between needs (food, shelter, electricity and transportation to work) and wants (new car, iPhone, designer clothes, nails, tanning and cable TV) by writing all her expenses into a budget and seeing what extras don’t fit in. Kay advises budgeting some small amount of “fun money” for a monthly splurge to keep things fun.
3. Buy a used car for cash. “Car payments are a big budget-buster," Woroch says. "Plus, used cars are valued less and without loans, insurance is cheaper. Get a vehicle with good gas mileage, too.
4. Switch up the cable or satellite TV service. “The one-time cost of the network antenna and much lower monthly Netflix or Hulu Plus fees can save you anywhere from $30 to $150 a month,” says Woroch.
5. Switch up your Xbox. Sell your Xbox (graphics shmaphics) on Craigslist.org and buy a PS3 to avoid the Xbox live fees. The PS3 game console doubles as a blue-ray DVD player and Netflix/Hulu streaming device.
6. Use friends for fitness and food. Forego the gym membership in favor of group hobbies like DIY boot camps, bike riding, hiking, running or free yoga classes you can do with friends (or to make more friends). Woroch advises ditching the take-out food in favor of YouTube tutorials and recipes. "Cooking at home with friends chipping in is so much fun and could save you nearly 40 percent on food overall,” says Woroch.
7. Ditch the digital phone. “Don’t ‘bundle’ with services that you don’t need,” cautions Woroch. “You can use Skype or other free voice calling services at home and consider lowering your monthly smartphone calling plan, too.”
8. Never pay full price. Kay advises you learn to haggle and find savings. “Always ask for a sales person’s best price and tell him you’re thinking of switching service to a cheaper plan when it comes to internet, wireless and insurance.” Before shopping for anything, use your smartphone to search social media, apps and online for savings. "Every retailer is vying for your dollars by offering discounts and if you don’t use them, you’re just paying more," she adds. Shop the off-price retailers such as Marshall’s, Ross and T.J. Maxx and even thrift shops. “Consignment and second hand shops sell designer items, many times with tags still on them, and you’ll pay just 10 to 20% of the mall price,” adds Woroch.
9. Just say “no” to credit cards. Cruze carries cash and uses her Dad’s “envelope system” for categories where she tends to overspend, such as clothes shopping. Once the cash in the envelope is gone, the spending stops. “Things ultimately cost more on a credit card and debt steals your future income from you. It’s a smart choice not to use a credit card and I had to learn to say ‘No’ to myself,” says Cruze.
10. Start a student loan debt snowball. Following Dave Ramsey’s general debt snowball advice means paying as much as possible beyond the minimum to the lowest balance loan and getting rid of it as fast as possible. Then apply that same amount plus what you were paying to the next smallest balance until those loans are paid. Getting rid of student loan debt means you can start adding back in little luxuries and building emergency savings.

“I’m a natural spender and I admit that all this money stuff is tough," Cruze says. "I’ve had to adjust my behavior to learn and apply it to life on my own. I have a tiny cubicle just like everyone else and I’ve had to tell myself ‘If you can pay for it, you can have it,’ so I know how it feels. But nothing compares to the feeling of being in control of my own life.”

Also see: Rural Areas Give Incentives to those with Student Loan Debt