: personal finance in your 20s & 30s

Contents iii
	Part 1: Your Financial Foundation 1
		1 Your Financial Base 3
			Understanding Personal Finance 4
			Evaluating Where You Are 4
			Determining Your Net Worth 5
			Looking for Hidden Financial Assets 9
				Accounts 9
				Mutual Funds 9
				Stocks (Equities) 10
				Bonds 10
				Emergency Money 10
			Protecting Your Financial Base 10
				401(k) Plans 11
				Compound Interest 11
				Lower Interest Rates 11
				The Best Possible Bank Accounts 11
				A Budget 12
				Learning Opportunities 12
		2 Choosing the Right Bank Accounts 15
			Do You Have the Accounts You Need? 16
				Checking Accounts 16
				Savings Accounts 20
				Money Market Accounts 21
				Certificates of Deposit 21
			All Banks Are Not Created Equal 22
				Commercial Banks 22
				Credit Unions 22
				Thrifts 23
			Banking Online Versus Online Banking 23
			Beware of Bank Fees 25
				Overdraft Fees 25
				ATM Fees 25
		3 Budgeting Your Living Costs 27
			Why Budgets Have Such a Bad Rep 28
			Everybody Needs a Budget 29
			What Your Budget Should Include 29
				Nonroutine Expenses 33
				Routine Expenses 33
			Trimming the Fat: Analyzing Your Expenses 35
				Fixed Versus Variable Expenses 36
				Nondiscretionary Versus Discretionary Expenses 36
				Spending Ratios 37
			One Job, Two Jobs, Three Jobs, Four … 38
			Sticking with It 39
			Budgeting Websites 40
			Budgeting Apps 40
	Part 2: Building Your Credit 43
		4 Your Credit History, Report, and Score 45
			Building Your Credit History 46
				When Enough Is Enough 47
				When to Get Help 47
			Your All-Important Credit Score 48
				Why Your Score Matters 48
				How Your FICO Score Is Determined 49
				Getting a Copy of Your Credit Report 52
		5 Finding the Best Credit Cards 55
			The Invention of Credit Cards 56
			Getting a Card 56
			Cosigners and Secured Cards 57
			How Many Cards Should You Have? 59
			Types of Cards 59
				Charge Cards 59
				Fixed-Rate Cards 59
				Variable-Rate Cards 60
				Elite Cards 60
				Rewards Cards 60
				Prepaid Cards 61
			Understanding Annual Fees 61
			Other Fees to Watch For 62
				Late Fees 62
				Cash Advance Fees 62
				Discretionary Fees 62
				Credit Limit Increase Fees 63
				Copy Fees 63
				Account Reopening Fees 63
				One-Time Processing Fees 63
			Making Sense of Interest 63
			Paying Down Your Balance 65
		6 The Truth About Credit Card Debt 67
			Resisting the Urge to Spend, Spend, Spend 68
				Knowing When to Use Your Card 68
				Sometimes Cash (or Debit) Is King 68
			Understanding Credit Card Debt 70
			Getting to a $0 Balance 70
			Credit Counseling, Debt Settlement, and Bankruptcy 71
				Credit Counseling 71
				Debt Settlement 72
				Bankruptcy 73
			Credit Card Safety 74
				Safety Tips 74
				Electronic Safety Tips 75
	Part 3: Paying Off Your Student Loans and Debt 79
		7 Student Loan Debt and Costs of Education 81
			Types of Student Loans 82
			Determining How Much You Owe 83
			Paying Off Your Student Loans 84
			Does a Graduate Degree Makes Sense for You? 86
		8 Debt Consolidation and Payback Options 89
			How Much Debt Do You Have? 90
			Paying Off Bills, One at a Time 90
			Transferring Credit Card Balances 91
			Alternatives to Balance Transfers 92
			Refinancing Loans 93
			Considering Debt Consolidation 93
	Part 4: Your Money and Your Career 97
		9 Employed, Unemployed, Underemployed 99
			The Ups and Downs of the Job Market 100
			Are You Employed, Unemployed, or Underemployed? 101
			Exploring Your Options 102
				Asking for a Raise 103
				Looking for Another Job 103
				Staying Where You Are 104
		10 Employer-Sponsored Benefits 107
			What Are Employer-Sponsored Benefits? 108
			The Real Cost of Hiring You 108
			Employer-Provided Health Plans 110
			Employer-Sponsored Retirement Plans 111
			Other Retirement Plan Options 111
		11 Surviving on Unemployment 113
			The History of Unemployment Compensation 114
			Accessing Unemployment Compensation 114
			If You’re Denied Benefits or Your Benefits End 116
			Stretching Your Compensation Dollars 117
			Staying in the Game While You’re Unemployed 118
			Finding Job-Hunting Help 120
	Part 5: Your Savings 123
		12 Cutting Costs 125
			Spending in America 126
			Housing Costs 127
				Utilities 127
				TV, Internet, and Phone 128
				Insurance and Taxes 128
				Refinancing Your Mortgage 129
			Transportation Costs 129
			Food Costs 130
			Personal Insurance and Pension Costs 130
			Health-Care Costs 131
			Entertainment Costs 131
			Clothing Costs 132
			Charitable Contributions 132
		13 Your Savings Options 135
			Where to Save Your Money 136
				Savings Accounts 136
				Money Market Accounts 138
				Money Market Funds 138
				Certificates of Deposit 139
				Treasury Bills and Treasury Notes 140
			The Magic of Interest 141
		14 Your Investing Options 143
			When to Start Investing 144
			Your Investment Goals Matter 144
			What Kind of Risk Are You Willing to Take? 145
				High-Risk Investors 146
				Moderate-Risk Investors 146
				Conservative Investors 147
			Mutual Funds 147
				Types of Mutual Funds 148
				Advantages of Mutual Funds 148
			Exchange Traded Funds 150
			The Stock Market 150
				The Major U S Stock Exchanges 151
				Knowing What Stocks to Buy 152
				Enlisting the Help of a Broker 153
				Understanding the Risks of the Stock Market 154
			Bonds 155
	Part 6: Big-Ticket Purchases 159
		15 Buying Versus Leasing a Car 161
			Car, Truck, or Something Else? 162
				Renting a Car 163
				Sharing a Car 163
			Owning a Car Costs More Than You Think 163
			Buying a Car 164
				Financing Your Car 164
				Cash Back Versus 0 Percent Financing 166
			Leasing a Car 167
				Pros of Leasing 168
				Cons of Leasing 168
				Before You Lease 169
			New or Used? 170
			Safety Counts 171
			Best Places—Online and Off—to Shop for a Car 172
				At a Dealership 172
				Online 172
				Helpful Apps 173
		16 Owning Versus Renting a Home 175
			The Mystique of Owning a Home 176
			Advantages of Renting 176
			Advantages of Buying 177
			The Downside to Taxes 179
			Enlisting Help 180
			Qualifying for a Mortgage 181
				The Down Payment 182
				Your Income and Expenses 183
			Getting the Right Mortgage 184
				Fixed-Rate Mortgages 184
				Adjustable-Rate Mortgages 185
			Finding Your Dream Home 186
				Types of Homes 186
				Location, Location, Location 187
			Protecting Your Investment 187
		17 Insuring Yourself and Your Property 189
			Insurance 101 190
			Insurance Must-Haves 192
				Types of Policies You Might Need 192
				Health Insurance 193
				Auto Insurance 196
				Property Insurance 197
				Disability Insurance 198
			Insurance You Don’t Need 199
				Dental Insurance 199
				Flight Insurance 199
				Credit Life and Disability Insurance 200
				Life Insurance for Your Kids 200
			Shop Around and Save 200
			When You’re Not Covered 201
				Document Your Losses 201
				Don’t Give Up 201
				Prepare Your Claim Carefully 202
				Get Help 202
	Part 7: Relationships and Money 203
		18 Life, Love, and Money 205
			Footloose and Fancy-Free 206
			Living Together 206
				Financial Pros of Living Together 207
				Financial Cons of Living Together 208
			Getting Married 209
				What About Prenups? 210
				Filing Jointly or Separately? 211
			And Baby Makes Three 212
			Divorce and Financial Issues 213
			Borrowing Money from Family or Friends 214
		19 Choosing Life Insurance 217
			Nearly Everybody Needs Life Insurance 218
			Term Life Insurance Versus Cash Value 218
			Which Type Makes Sense for You? 219
			How Much Life Insurance Do You Need? 220
			Shopping for Life Insurance 221
		20 Wills, Powers of Attorney, and Health-Care Directives 225
			Everyone Should Have a Will 226
			The Advantages to Having a Will 227
			Creating Your Will 227
			Powers of Attorney 228
			Advance Health-Care Directive 228
				Living Will 229
				Health-Care Proxy 229
	Part 8: Looking to Your Future 231
		21 401(k)s and IRAs 233
			Why Every Year Counts 234
			401(k) Plans 235
				Participation in 401(k)s 235
				Taking Advantage of an Employer Match 236
				Investing in Your 401(k) 237
				When to Adjust Your Contributions 238
				Tax Advantages of 401(k) Plans 238
				Managing Your 401(k) When Changing Jobs 239
				Understanding Vesting 240
				Getting Money Early from Your 401(k) 241
			Individual Retirement Accounts (IRAs) 242
				Contributing to an IRA 242
				Roth IRAs 243
				SEP-IRAs 245
				Timing Your IRA Contributions 245
		22 Working with Professional Financial Advisers 247
			Know Thy Finances, Know Thy Adviser 248
			Do I Need a Financial Adviser? 248
			Understanding Fiduciary Responsibility 249
			The Who’s Who of Financial Advisers 249
				Financial Planners 250
				Certified Financial Planners 250
				Financial Consultants 250
				Bank Customer Service Representatives 251
				Certified Public Accountants/Personal Financial Specialists 251
				Insurance Agents 251
				Money Managers 252
			Finding a Reputable Financial Adviser 252
				Meeting with Potential Advisers 253
				Finding an Adviser Online 254
				Go with Your Gut 255
			Financial Adviser Red Flags 256
				Too-High Fees 256
				Conflicts of Interest 257
				Past Bad Behavior 258
			More Financial Adviser Don’ts 258
				Misrepresentation 259
				Who Has Custody of Your Money? 259
				“May I Borrow a Few Bucks?” 260
				Ignoring You or Keeping You Out of the Loop 260
	A Glossary 263
	B Resources 275
	C Helpful Forms 281
	Index 309