Your Seven-Step Midyear Money Checkup

You always remember to change the oil in your car ... when the red warning light comes on. You get diligent about flossing ... when the dentist mails the reminder postcard to make an appointment for your six-month checkup. So consider this article your warning light/postcard to get ready for your midyear money review.

With six months of earning, saving, and spending under your belt, you've got plenty of data to project how 2012 is going to play out. So let's lift the hood on your finances and give everything a good once over.

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Eleven Money-Saving Strategies

by Jessica Naziri

In challenging economic times, people look for different ways to save money and clean up their finances. It pays to educate yourself so that you can make informed decisions about budgeting, investing and other aspects of your finances. While the biggest savings come from limiting your spending to the cash in your wallet, the trick is to set reasonable goals. 

Simple steps, such as paying off your credit card balance each month to increasing your contribution to your retirement account, are attainable and worthwhile goals. A good approach is to start with a few things that are so easy to fix that you'll stick with the program.

Another way to save is to take a second look at big-ticket items, such as insurance. For example, switching from whole life to term will save money and increase cash flow. 

You may be surprised how quickly these changes can add up to real money in your pocket. 

Read on for more money-saving ideas that can improve your financial position in the months and years to come. 

Ten Ways to Save Money by Spending More

by Katie Little

There is a fine line between miser and smart spender. As your accounts grow in size and decimal places, there are several key purchases that may increase your quality of life — and even save you some cash in the process!

A range of experts shared advice for items that savvy investors should buy in order to climb the ladder and accumulate wealth while also increasing day-to-day enjoyment.

Here are 10 thrifty ideas for smart ways to spend more without feeling guilty:

Hire Some Help

Time is money. If your hourly income is more than what you would pay for someone else to clean the house, walk the dog or mow the lawn, then hiring some help makes financial sense.

Jennifer Litwin, an author and consumer reporter, added that grocery delivery can be a big-time saver. Litwin listed “avoiding the new long self-check-out lines; getting fruits and vegetables that are well-wrapped and packed; and shopping from the comfort of your own home and still being able to take advantage of sales” among the service’s advantages.

The time saved from outsourcing some of your daily chores can be used to relax after a long day at work, log in some extra face time at the office, or brainstorm new investing ideas.

Dress for Success

Sloppy outfits are not exactly an express ticket to the C-Suite. While Silicon Valley is known for its casual environment, rocking the hoodie in a typical business landscape may elicit some unwanted attention — even if you’re Facebook CEO Mark Zuckerberg. Fanya Chandler, Nordstrom’s national stylist director, advised investing in core pieces.

This means men can splurge for a high-quality suit while women can spend a little more on the dress, skirt or jacket. Blouses are a spot where women can scale back a little, she said.

Loren Bendele, CEO and co-founder of Savings.com, suggested investing in handbags, well-made jeans and staple children’s clothing also.

“The most expensive item you’ll buy is the one you never wear,” he cautioned.

Why Mortgage Rates Are So Low

by Amy Hoak

Fed policy, concerns about Europe keep rates near record lows.

Glimmers of hope in the housing market suggest a turnaround is near, with statistics showing stabilizing home prices and an increasing number of home sales.

Yet even as housing conditions improve, mortgage interest rates remain near record-low levels.

Rates on a 30-year fixed-rate mortgage averaged 3.71% for the week ending June 21, according to Freddie Mac’s weekly survey of conforming rates. Before that week, rates had broken record lows for six weeks in a row.

It’s a situation that seems to defy supply-and-demand logic: If there’s more demand in the housing market, wouldn’t the cost of borrowing funds to buy a home be on the rise?

Not necessarily.

Mortgage rates are influenced by a number of factors, including policy decisions from the U.S. Federal Reserve and the overall economic picture both in the U.S. and abroad.

The Fed has kept long-term interest rates low, in part through its Operation Twist program, scheduled to end this month, said Frank Nothaft, chief economist at Freddie Mac. Operation Twist involves the Fed buying long-term securities and selling short-term debt. There has been chatter among members of the Federal Open Market Committee about the possibility of extending the program or taking other steps to keep long-term interest rates low, Nothaft said.

The uncertainty in Europe—including continuing worry about whether the euro zone will remain integrated and new concerns about Spain’s economy—also is affecting rates. Out of fear, more investors are moving their money to safe havens, pushing yields on investments such as 10-year Treasury notes downward. The secondary mortgage market uses yields on the 10-year Treasury as a barometer of how to set 30-year fixed-rate interest rates, said Matt Vernon, a mortgage executive at Bank of America Home Loans.

Interview with Michael McDonald co-author of the new book "The Silver Bomb: Beyond the Return of Metal as Money"

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Eleven Dumb Excuses Not To Save Money

by Marcie Geffner

It's easy to come up with reasons not to save money for an emergency, job loss, retirement or other need or goal, but not saving can cause considerable financial pain down the road. That's why it's smart to regularly put money in a savings account where it's available for whatever happens in the future.

"Saving is about mindset," says Bob Morrison, principal at Downing Street Wealth Management LLC, a financial planning firm in Littleton, Colo. "It doesn't matter whether you make minimal dollars or a significant amount, you should save a certain percentage and learn to live within that income because you have a responsibility to provide for yourself and your goals for the future."

With that in mind, here are eleven lame excuses not to save money and why they don't work:

1. I can't afford to save. "People work hard and feel they deserve to live in a certain neighborhood and drive a certain kind of car, but they don't understand that that (spending) comes out of the cost of other things," Morrison says. "If someone has too large a house payment or car payment, it's like a cancer. You want to get rid of it immediately and get on the path to appropriate saving levels."

2. I'll be earning more in the future, so I'll save then. The problem with this thinking is that tomorrow might not be rosier, or tomorrow's expenses might rise to consume any additional income.

A better approach is to put a little now into a savings account and increase the amount if that pay raise comes through next year, Morrison says. "Try to live on last year's income with today's expenses," he says.

3. I'm too old to start saving. It's never too late to save money at any age. "Don't think about the past," Morrison says. "That's not constructive. Instead, change the behavior and worry about tomorrow."

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The Good Faith Estimate (GFE)

Your lender is required by the Federal Real Estate Settlement Procedures Act to provide you with a good faith estimate of the fees due at closing. This document, called the good-faith estimate, or GFE, is supposed to be provided to you within three days of applying for a loan. The requirement is satisfied if the good faith estimate is mailed within three days.

Closing fees, also called settlement costs, cover almost every expense associated with your home loan. Because closing costs typically amount to between 3 percent and 5 percent of the sale price, it is best to wait until you receive the good faith estimate before committing to a loan. Smart shoppers obtain good faith estimates from two or more lenders, compare their costs and ask questions about any large discrepancies.

Here's a list of some of the fees you'll find listed on your good faith estimate:

Origination
- Discount
- Property Appraisal
- Credit Report
- Lender's Inspection
- Mortgage Insurance Application
- Assumption
- Mortgage Broker Fee
- Tax-related Service Fee
- Application
- Commitment
- Rate Lock
- Processing
- Underwriting
- Wire Transfer

Settlement, Closing or Escrow Fee
- Abstract or Title Search
- Title Examination
- Document Preparation
- Notary
- Attorney
- Title Insurance
- Recording
- City/County Tax Stamps
- Transfer Tax
- Survey
- Pest Inspection
- Condominium Application
- Prepaid for Interest, Hazard Insurance, Property Taxes, Mortgage Insurance and Flood Insurance

It's just an estimate

The good faith estimate is just that -- an estimate. The lender directly controls some of the fees, and those are the ones to pay the most attention to when you are comparing offers. Some fees are generated by third parties and usually don't vary much from lender to lender. Other expenses are under your control, and there are taxes and government fees that should be the same, regardless of the lender.

Here’s How To Take Control of Your 401(k)

by Gleen Ruffenach

This may surprise you, but there’s a good chance you can take direct control of your nest egg at work, choosing investments beyond the two dozen or so mutual funds that most employers offer in their savings plans. Doing so can be risky, but here’s why you should consider taking a shot at it.

About one in five employers, according to Plan Sponsor Council of America (PSCA), offers a self-directed brokerage option, in which workers with 401(k)s and related accounts can buy stocks, bonds and other assets. Also, three-quarters of employers—and 86% of those with 5,000 or more plan participants—permit “in-service withdrawals” (typically starting at age 59½), where holdings can be pulled from accounts and rolled into IRAs.

Yes, this is a scary idea: people taking the wheel of their savings plans and, possibly, crashing into crazy investments. Most workers with these options, in fact, take a pass; less than 1% of plan assets are invested through self-directed accounts. Indeed, according to David Wray, president of PSCA, “401(k) participants are not retail investors—picking individual stocks is way out of their thinking.”

But I’m betting that, if you pursue either option, you’re smart enough to do so gingerly. In which case, the potential payoff is that you get a jump on building income for retirement.

More people are recognizing the importance of having investments that generate cash in later life. This way, you aren’t dependent on capital gains to meet expenses. What’s less appreciated, though, is the value in identifying and assembling these investments early—say, five or 10 years before retirement. If you can get a head start on building income at age 55 or 60, said Charles Farrell, chief executive at Northstar Investment Advisors in Denver, the compounding effects can move you closer to the point where you’re living off the returns of your portfolio in retirement, rather than eating into the portfolio itself.

Investor Uncertainty Leads to Lower Retirement Expectations

by Christine Dugas

Despite optimism about the stock market, most investors are still so worried about uncertainty and volatility that they are just lowering their retirement expectations.

"If you go back to pre-2008, you would have heard that when equities go down, it's a good time to buy them," says Frank Porcelli, head of BlackRock's U.S. retail business. "That sentiment has changed dramatically."

Only one out of 10 investors is making any adjustments to their portfolio, according to a Barometer survey released today by BlackRock.

Even growing concerns about not meeting investment goals have not sparked more portfolio changes. In fact, the percentage of investors willing to adjust their portfolios has fallen to 11% today from 21% six months ago, the survey says.

Why investors are stuck in place:

•Not knowing where to invest. Cash balances remain high, with investors keeping an average 26% of their portfolios in cash, says the MFS Investing Sentiment Survey. The reason: uncertainty about where to invest and fear of losing money, BlackRock says.

•Knowledge gaps. It's hard for investors to evaluate alternative investment options. Many still focus on bonds rather than stocks, although 61% realize that they need to improve their understanding of income investing, the survey says.

•Ignoring inflation risk. Investors are not focused on the impact of inflation. "Yet just a 3% inflation rate over 25 years can reduce their purchasing power by half," Porcelli says.

Four Ways To Avoid Your Own Retirement Crisis

by Andrea Coombes

Retirement-savings success is within striking distance for some. Some Americans may be better prepared for retirement than they realize.

About 56% of baby boomers and Generation X (people between about age 38 and 65 now) are saving enough to cover their basic retirement costs, including uninsured medical expenses, according to a recent projection by the Employee Benefit Research Institute, a Washington-based nonprofit think tank.

The bad news is that 44% aren’t saving enough, and some of those people are on the lowest rungs of the income ladder, so they may have little opportunity to ramp up savings as they age.

Still, while some people face a troubling retirement outlook, others in that 44% group can take steps to get their savings on track.

“Some Americans face a retirement crisis, but it isn’t the majority,” said Stephen Utkus, director of Vanguard Group’s Center for Retirement Research.

“For the longest time, studies have always pointed out that about 50% of Americans seem clearly ready for retirement,” he says. But it’s a mistake to assume the other half is in deep trouble.

Instead, Utkus said, people fall along a spectrum of retirement readiness, with 20% to 30% of Americans “partially ready” for retirement.

“A significant number of people can take some steps between now and retirement to move the dial and get to ‘prepared,’” he said.

Here are four ideas to improve your retirement readiness.

Making Sure Money’s Still There When It’s Needed

by John Wasik

In years past, retirement was guided by simple arithmetic. You knew exactly how much Social Security, savings and your defined-benefit pension would pay you, then cut back any unaffordable expenses when you hit 65.

Now that Social Security and Medicare are being eyed for cutbacks and 401(k)’s produce ever-varying lump sums, the retirement planning process requires a more sophisticated strategy.

Hobbled by two recessions and major market downturns in the last dozen years, future retirees are frustrated about their ability to plan ahead. They may not have enough money to maintain a comfortable lifestyle and need to make adjustments.

This new retirement reality is reflected in the fact that only 14 percent of Americans polled in the 2012 Retirement Confidence Survey conducted by the Employee Benefit Research Institute said they were “very confident they will have enough money to live comfortably in retirement.”

Five New Scams You Need to Know About Now

by Christopher Elliott

When it comes to creativity, the scammers have an edge.

No single group of professionals is more inventive than these fraudsters — and I don’t mean that in a good way. Just when you think you’ve got them all figured it out, they change their pitch or presentation. They improve it and live to scam another day.

How to prevent Identity Theft without paying monthly fees

It’s remarkable.

Here are the five hottest new scams out there:

Smishing

Think phishing (fraudulently obtaining your password and other personal info online) plus SMS, or instant messaging — and voila, you have smishing. Popular text messages have come from banks, department stores and lotteries; never mind the fact that none of these institutions would send you a text message. Part of the appeal for scammers is that they can be brief, and the less said, the better. Replies also tend to be short, since text messages can be costly. It’s the perfect scam!

How to spot it: Legit companies don’t text you. Remember that. Also, look for typos and bad grammar. Yes, even on a brief text message.

How to Pump Up Your Credit Score

One prescription for avoiding another real estate bubble is that banks tighten up mortgage requirements. Now, a new Federal Reserve report indicates that lenders have indeed been doing just that.

A majority of banks are less likely to offer loans to people with a FICO credit score of 620 and a 10 percent down payment than they were in 2006, according to the report. Lenders were also less likely to do so even for those with a score of 720.

Such stricter standards have drawn the attention of Ben S. Bernanke, the chairman of the Federal Reserve, who last week told a bankers group that “current standards may be limiting or preventing lending to many creditworthy borrowers.”

How can you boost your credit score by 135 points or more in just 37 days

For those with lower credit scores, the math is stark: A borrower with a credit score of 720 can expect a rate of 3.70 percent on a 30-year, $300,000 fixed-rate mortgage, according to myfico.com, while someone with a score of 620 to 639 can expect a 5.07 percent rate — or an extra $242 per monthly payment.

How to Retire with $1 Million

by Tom Sightings

One weekend a few years ago my brother-in-law was visiting. We sat on our back deck, sipping iced tea and talking about early retirement. He was 60 at the time, and looking forward to retiring from his engineering company at age 62.

"Yeah, we've made our number," said his wife.

"Your number?" I asked. "What's that?"

"The money you need to retire," she explained. "For us it's $1 million."

"Nice," I said. "Well, good for you. Is that $1 million each, or $1 million together?"

"It's $1 million each," she explained. "That's what the experts say you need to retire."

Wow, I thought, you need $2 million to retire? They did come from Massachusetts, which is an expensive place to live, so maybe their number was higher than average. But still, if they withdraw the typical 4 percent a year, they will be pulling in $80,000 annually.

My first reaction was panic. Where do you get a million dollars so you can retire? But then I got to thinking about it, and I realized that $1 million is really a symbol of the resources you need to produce a $40,000 annual income throughout retirement. If you save $2 million it could produce $80,000 in annual income, which might be more appropriate if there are two of you and you want to live in a high-cost state like Massachusetts.

So how do you get $1 million? You pull together a portfolio of resources that altogether make you a millionaire. Here's how to retire with $1 million:

Three Ways to Take Control of Your Retirement

by Geoff Colvin

A prosperous future is well within your reach. Here's how to save smarter, invest better, live more fully and reach your goals.

England's blustery Dorset coast seems an unlikely setting for retirement planning lessons, but actually it's perfect. That's where this summer's Olympic sailboat races will take place, and viewers new to sailing will learn a surprising fact: You can sail into the wind. You need to tack in ways that aren't necessary when the wind is behind you, but do it right and you'll move bracingly fast.

That's retirement planning today. You're feeling virtually all the financial winds right in your face. Strapped governments at every level will be giving you fewer services and taking more from you in taxes and fees. Inflation may be creeping up. Employers will continue the long-term trend of whittling retirement security by freezing or abolishing the few remaining defined-benefit pension plans and reducing company contributions to 401(k) plans. As for your investment portfolio -- forget those reassuring historical stock market returns of around 11% annually and note that recent years have been far grimmer: The S&P 500 is right where it was more than 12 years ago, in January 1999. Warren Buffett assumes Berkshire Hathaway's pension plan will earn a modest 7.1% a year.

One more fact: You'll probably live longer than you expect, a wonderful thing in every way except financially. New research from the Society of Actuaries finds that 57% of pre-retirees underestimate life expectancy from their current age, while only 28% overestimate. Your nest egg may have to last much longer than you thought.

Those are formidable headwinds. Yet as the Olympic sailors will remind us, you're not condemned to being blown backward. The right tactics will propel you ahead even now. Think of your practical next steps in three categories.

A Global Recession? The Warning Signs Are Everywhere

by Larry Kudlow

Is it possible that we are already in a global recession but just don’t know it yet?

And is the U.S. itself—still the epicenter of the world economy—standing on the front edge of another recession?

I sincerely hope I’m wrong. But warning signs are everywhere.

The eurozone economy is flat on its back. Greece may be headed for a political crackup and an exit from the euro and European Union. Deposit runs in Greece and elsewhere are beginning, and a credit freeze throughout the continent is not out of the question. Meanwhile, emerging economies like China, India, and Brazil are slumping. (Learn how to profit from trading FOREX)

Here at home, ex-Clinton strategists James Carville and Stan Greenberg sent a memo to President Obama telling him that his campaign message of slow and steady recovery progress is out of touch with Main Street America. They’re right. Of course, Obama’s “private sector is doing just fine” statement is part and parcel of his disconnect from economic reality. (Financial Survival Guide)

And the reality isn’t good. Whether you’re a Democrat or Republican, take a look at the numbers:

What If the Rich Lost 40% of Their Wealth?

by James Carville

Let's imagine that Wednesday there was a front page story in The New York Times that read the following:

"The recent economic crisis left the top 1% of Americans in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve Monday.

"A hypothetical family richer than the median net worth of the top 1% of the nation's families had a net worth of $77.3 million in 2010, compared with $126.4 million in 2007, the Fed said. The crash of the stock market, in addition to the collapse of housing prices in Greenwich, Connecticut, the Upper East Side of New York City, Beverly Hills, Highland Park in Dallas and the North Shore of Chicago, directly accounted for three-quarters of the loss."

What do you think the reaction would be to that?

The elite would call for the suspension of habeas corpus, the government would call out the National Guard, invade Honduras and the Supreme Court would announce that it is in session 24/7 to take any action deemed necessary to help their friends.

The Wall Street Journal would have a black border on the newspaper. The Financial Times would go from pink to gray. CNBC would play funeral music for nine months. Steve Schwarzman would compare it to the H-word. Cable networks would roadblock all coverage.

Minimum wage laws would be suspended, the 40-hour work week would be thrown out, perhaps they would even do away with child labor laws to get productivity up so profits could increase to make up for lost revenue.

Five Items That You Shouldn't Buy Cheap Alternatives Of

by Amanda Haury

Perceptive consumers know that if you want to get the best bargain or value you need to do your homework before making your purchase. It is wise to compare prices, quality and features before making a final decision on a product. While many products on the market aren't much better than their cheaper alternatives, there are still certain items that are worth spending that extra money on.

Foreclosure Spike Is Positive Sign For Housing

by Diana Olick

After months of declines, the foreclosure numbers are going up again.

Foreclosure starts, the first phase of the process, rose 9 percent in May month-to-month, the first increase in over two years, according to a new report from RealtyTrac. Bad news, right? Only if you are the one losing your home.

For the overall housing market, this is exactly what needs to happen to return to health. For hungry investors, it means more opportunity.

How to make a profit in today's real estate market?

There are still millions of delinquent loans which will never "cure," and the sooner they get processed and sold, the better for home prices and home buyer confidence.

As the so-called, "shadow inventory" of distressed properties (seriously delinquent loans and bank owned homes yet unlisted) drops, down to 1.5 million units in the first three months of this year from 1.8 million a year ago, according to a new report from CoreLogic, the real inventory of potential homes for sale can stabilize and become a more dependable reading for buyers.

How do you believe existing supply numbers if you know there is far more lurking in the pipeline, but you have no idea when it will hit the market? (How to sell your house fast?)

What's 'Goofy' About Low Mortgage Rates?

It sounds like a broken record: The most popular mortgage rate hit a fresh low again this week. But many factors could keep some homeowners and buyers from enjoying the rock-bottom rates.

30 year fixed rate mortgage – 3 month trend

The benchmark 30-year fixed-rate mortgage fell to 3.91 percent from 3.92 percent last week, according to the Bankrate.com national survey of large lenders. The mortgages in this week's survey had an average total of 0.39 discount and origination points. One year ago, the mortgage index stood at 4.66 percent; four weeks ago, it came in at 3.97 percent.

This week's rate marks the lowest level the 30-year fixed has reached in the survey's more than 26-year history. The fixed rate hasn't moved north in the weekly survey since early April, when it was 4.25 percent. The rate has carved out a new low every week since, except one week in May when it didn't budge.
The benchmark 15-year fixed-rate mortgage rose to 3.17 percent from 3.16 percent the previous week, while the benchmark 5/1 adjustable-rate mortgage rose to 3 percent from 2.99 percent.

Thank you, Europe and the Fed

Mortgage rates track the movement of the 10-year Treasury yield, which has fallen to historic lows as the European debt crisis continues unresolved and recent indicators show a shakier economy at home. Investors consider Treasuries a safe haven amid financial uncertainty.

Greece is set to hold elections this weekend, and the results could determine whether the country exits the eurozone. Meanwhile, the $125 billion plan to rescue Spain's struggling banks has left many investors doubtful. Stateside, disappointing jobs numbers in the last two months, along with unemployment creep, have helped fuel the flight to safety.

The Federal Reserve also has a hand in pushing rates low. The central bank's policymaking committee has yet to back away from its pledge to keep a benchmark interest rate near zero until late 2014. And the Fed continues to swap short-term securities for longer-term ones, "keeping rates down at the margin," says Paul Edelstein, director of financial economics at IHS Global Insight, an economic forecasting and analysis company.

Rate confusion

Homeowners looking to cut their mortgage rate may find their new rate is higher than the historic lows making news. Borrowers are often surprised that factors such as credit, home equity and type of refinance program make a difference in their rate, says Pava Leyrer, president of Heritage National Mortgage in Grandville, Mich.

"There are at least a dozen variations in refinance programs out there. I can't give a quote over the phone anymore," she says. "I have to go through a grid system to quote you a rate and a loan program you qualify for."

The same goes for purchases, says John Stearns, a mortgage broker with American Fidelity Mortgage Services in Mequon, Wis. Aside from credit and equity, rates vary depending on the home, whether it's single-family, a condo or a duplex.

"Rates are totally goofy," he says.

Purchases on the rise, anecdotally

Still, more homebuyers are walking through the door. Leyrer noticed a dramatic pickup two months ago.
"I don't see an increase in income, but people are stable in their jobs," she says. "I also see a lot less debt, fewer car payments and credit card debt."

Purchase application volume grew 13 percent last week versus the previous week, according to an index published by the Mortgage Bankers Association. Refinance apps jumped 19 percent. Overall, mortgage applications hit their highest volume in three years last week.

Stearns says three-quarters of his business is purchases now, a reversal from a year ago. Many of his buyers are getting their first homes.

"For first-timers, oh boy, the timing is right," he says. "They're realizing that if prices go down a little bit, but rates go up, they don't win."

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Five Messy Money Mistakes

by Farnoosh Torabi

It happens to the best of us: mysteriously falling short on cash when we could’ve sworn we’d just hit the ATM. Where did all that money go? On any given day, there are a number of ways we leak money - knowingly or not. Here’s a look at how to reclaim some of that money.

Food
One messy money mistake is filling up our grocery carts with way too much. Researchers at Harvard Business School have found that we tend to go overboard on groceries, especially at warehouse clubs, where we think we’re saving money by buying in bulk, but not always, especially considering how much excess food goes straight into the trash. According to the book American Wasteland, families toss out up to 25 percent of their food or roughly $2,200 every year.

To save, map out your meals so that you go to the grocery store knowing exactly what you need for the week and stick to your list, and avoid buying too many perishables in bulk. Also, take advantage of your freezer. It's not just for ice or frozen waffles. Everything from meat to bread to fresh vegetables can stay preserved here for a later time.

Six Secrets About Joint Credit

by Dana Dratch

Occasionally useful, joint accounts have downsides you should know.

Want to be legally joined in life? In most cases, you need a marriage license and a ceremony. If you're lucky, you also have witnesses, music, a cake, some flowers, a few gifts and a nice meal afterward.

Want to be legally joined in debt? Just sign on the dotted line. No dresses, no tuxes and not so much as a cupcake for your trouble.

Before you enter into the world of joint credit, it pays to know a little more about what goes on behind the scenes, from how potential lenders view the debt to who is ultimately responsible for paying it -- and how it impacts your credit score.

As with marriage, a lot depends on who you choose as a partner.

"The most obvious thing is to really be careful about who you open a joint account with," says Anthony Sprauve, spokesman for FICO, the company that pioneered credit scoring.

"If the other person disappears or flakes, you're going to be responsible for that debt," he says.

So before you fill out that next credit application, here are six things you should know about joint credit:

Should You Take a Lump-Sum Pension Payment?

by Emily Brandon

Thousands of General Motors and Ford retirees must soon decide whether to take their pensions as a single lump-sum payment and manage the money themselves or continue with monthly payments for life.

General Motors recently announced that it will end one of its pension plans. The company will offer 42,000 retirees currently receiving monthly pension payments the option to instead receive a single lump-sum payment. Those who don't take the pension buyout will have the option to continue with their current monthly benefit as an annuity paid out by The Prudential Insurance Company of America or select other annuity products from Prudential. These pension changes are expected to save General Motors $26 billion.

Ford announced in April that it will offer 90,000 retirees the option to receive a voluntary lump-sum pension payment instead of monthly payments. An Aon Hewitt survey of more than 500 human resources professionals in October 2011 found that 35 percent plan to offer lump sums to vested pension participants in 2012, and 19 percent say they are likely to add or liberalize a lump-sum option. However, only 6 percent of the companies surveyed plan to transfer pension plan assets and liabilities to another party to reduce risk exposure, as GM plans to. Chrysler representatives say the company has no plans to offer pension buyouts.

Retirees at GM and Ford must decide whether they want to manage their own retirement money or continue to receive steady monthly payments. "It's really giving an additional choice to existing retirees before the plan is terminated and goes to Prudential," says Preston Crabill, director of GM strategic benefit planning. Here's how to decide whether to take a lump-sum pension buyout:

Dos and Don'ts of Working After Retirement

by Cheryl Winokur Munk

Many people today want or need to work part time after they officially retire.


High-interest, low-risk products, which used to provide retirees a nice cushion, are almost nonexistent today, and with people living longer the need for savings intensifies.

The problem is widespread.

Indeed, 60 percent of workers estimated that the total value of their household's savings and investments (excluding their home and defined benefit plans) is less than $25,000, according to the 2012 Retirement Confidence Survey.

"Retirement today is not that of a generation ago. Gone is the day of a company pension, company-paid health care and secure Social Security," says Ted Sarenski, president and chief executive of Blue Ocean Strategic Capital LLC in Syracuse, N.Y.

"Today's retiree is faced with self-sufficiency and, as such, needs to work at least part time 'in retirement' to have enough money to pay the costs of living that were once paid by someone else," he says.

Unfortunately, many people decide to retire without really thinking through the decision, then wind up returning to work, says David A. Littell, a professor at The American College who focuses on the financial issues of affording retirement.

This can have dire consequences for your financial security. If you're considering heading back to the work force or think you might return there eventually, here are five things to consider.

The Old Get Richer, the Young Get Poorer

The old have gotten wealthier, while the young have become poorer. That’s the conclusion of “The Old Prosper Relative to the Young,” a recent report by economists and researchers at the Pew Research Center.

In documenting a rising age gap with regard to economic well-being, the authors compare households headed by adults over age 65 to households headed by adults younger than 35. They examine data over time–particularly from 1967, 1984, 2005, and 2009-2010. (The comparison between 2005 and 2009-2010 illustrates the impact of the Great Recession.)

Why the rich really keep getting richer?

Here are some of their conclusions:

• From 1984 to 2009, the median net worth of older households rose 42%. For younger households, it declined by 68%.

• The gap in wealth between older and younger households widened over time. In 1984, the median net worth of older households was $108,000 higher than that of younger households. But by 2009, the median net worth of older households was $166,832 higher than that of younger households, the “largest (gap) in the 25 years that the government has been collecting this data.” (All figures are expressed in 2010 dollars.)

Save Big on Homeowners Insurance

by Sarah Max

Reviewing your homeowners policy may not rank high on our annual home-maintenance checklist. Yet following the five steps below will save you big bucks now and a lot of grief down the road.

After the recent slew of natural disasters, average annual premiums are expected to surpass $1,000, with some owners likely to see double-digit rate hikes.

Haven't taken a close look at your policy lately? Then dust it off and make insurance your next project.

Step 1. Measure how much coverage you need.

Your No. 1 priority must be the house itself. "Possessions, living expenses and liability should all be secondary," says Amy Bach of United Policyholders, an insurance advocate group.

Don't base your coverage level, though, on the home's appraised value, which includes land costs. Instead, says Kevin McCarty, president of the National Association of Insurance Commissioners, use the recent per-square-foot replacement costs in your area, available from your local homebuilders association. The difference can be sizable. In New York state, land makes up 9% of the average home's value, according to the Lincoln Institute. In Hawaii, it represents more than half.

Is your area prone to natural disasters? Price out extended or guaranteed replacement policies, which protect you from inflated labor and material costs following such catastrophes.

The Spanish Bank Bailout: A Complete Walk Thru From Deutsche Bank

by Tyler Durden

Over the past 24 hours, Zero Hedge covered the various key provisions, and open questions, of the Spanish bank bailout. There is, however, much more when one digs into the details. Below, courtesy of Deutsche Bank's Gilles Moec is a far more nuanced analysis of what just happened, as well as a model looking at the future of the pro forma Spanish debt load with the now-priming ESM debt, which may very well hit 100% quite soon as we predicted earlier. Furthermore, since the following comprehensive walk-thru appeared in the DB literature on Friday, before the formal announcement, it is quite clear that none other than Deutsche Bank, whose "walk-thru" has been adhered to by the Spanish government and Europe to the dot, was instrumental in defining a "rescue" of Spain's banks, which had it contaged, would have impacted the biggest banking edifice in Europe by orders of magnitude: Deutsche Bank itself.


From DB: Spain: the mechanics of “recap only” loans


The guidelines for an EFSF bank recap are quite precise. There will be no conditionality on fiscal policy or structural reforms. The loan will also sit on Spain's balance sheet, meaning the volume of recapitalisation – to be established after a new, independent stress test – will be crucial: it needs to be big enough to convince the market that Spain's banking issue, which has been festering for three years, is addressed in a credible manner, while not being so large as to jeopardize Spain's public debt sustainability. We model possible trajectories for Spanish public debt for various recapitalisation volumes. In an intermediate recap scenario of EUR80bn, Spain could realistically, in our view, keep public debt below 95% of GDP at peak and bring it back below 90% by 2020.


What would Spain need to do to access the "recap only" EU loan?

The "recapitalisation tool" created in July 2011 is normally open to countries "when the origin of the financial distress is strongly anchored in the financial sector and not directly fiscal or structural". In addition, "a beneficiary country will have to demonstrate that it has a sound policy record, such as the respect of its SGP commitments". The first condition would normally be met by Spain: while in-built issues, such as poor fiscal coordination between the regions and the central government, or the extreme rigidities of the labour market, have been revealed and magnified by the current crisis, the point of origin of Spain's difficulties clearly stem from the need to absorb the property boom of the early 2000s and the subsequent need to de-leverage. The second condition may seem more difficult to meet, but the EFSF guidelines make it plain that "countries under excessive deficit procedure would still be eligible (...) provided they fully abide by the various Council decisions and recommendations", which is still the case for Spain after the Council agreed to relax the fiscal targets for 2012. EC Commissioner Olli Rehn's mention of the possibility to give Spain an extra year to reduce its deficit to 3.0% of GDP is another sign that, at least at this stage, there is no open conflict between Madrid and its European peers on fiscal policy.

How We Pay to Get Away: A Visual Guide to How Much Americans Spend on Summer Travel

by Ross Crooks

Summertime…. and the traveling’s easy. But not cheap.

On average, Americans plan on spending $1,180 per person on their summer travels this year. From how much people spend, to how they pay for it, to where they go and how they get there, we explore the various modes and methods of Americans’ travel plans this summer.

Click “READ MORE” below to see how we pay to get away.

READ MORE

A Student-Travel Cheat Sheet

wsj.com - It is almost a rite of passage: As soon as the dorm room is packed up, college students and recent graduates start packing again to head overseas to study, teach English or just travel, sometimes for a year or more.

But with foreign-transaction fees on credit cards, stiff fees on ATM withdrawals and loopholes in health insurance, families ought to consider more than transportation and the weather as they plan.

According to the Institute of International Education, more than 270,000 U.S. students studied abroad in the 2009-10 school year, the latest period for which figures are available. The yearly total has more than tripled over the past two decades and still is growing, despite the sluggish economy.

While Europe remains the most popular destination, more students are heading to places like China, India, Brazil and New Zealand. Others travel to do missionary work, teach or volunteer.

New Rules for Prepaid Debit Cards

by Ben Protess and Jessica Silver-Greenberg

The nation’s consumer financial watchdog is preparing restrictions on prepaid debit cards, a largely unregulated product that is flourishing even amid concerns about high fees and poor disclosures.

On Wednesday, the Consumer Financial Protection Bureau is expected to introduce a preliminary rule for prepaid products — the first of its kind. The bureau, which is expected to complete an overhaul in the next year, will also hold a hearing on Wednesday in Durham, N.C., that will feature testimony from consumer advocates and some of the card industry’s biggest players.

Until now, prepaid cards have escaped the regulations passed after the financial crisis. As new rules have targeted credit cards and traditional debit cards, a number of banks barreled into the prepaid market.

While the consumer bureau’s new effort would not rein in most fees that come with the cards, like a $5 monthly maintenance fee, it would require companies to reimburse consumers for unauthorized charges.

Card providers argue that they offer a competitive price and help consumers control their spending. But some federal regulators and consumer advocates worry that companies are steering low-income consumers into a relatively expensive product rather than plain vanilla checking accounts.

“The people who use prepaid cards are, in many instances, the most vulnerable among us,” Richard Cordray, the consumer bureau’s director, said in a statement, adding that “right now prepaid cards have far fewer regulatory protections” than traditional banking products.

Class of 2012: How We Got Our Jobs After College!

From CNN Money

Many in the Class of 2012 find themselves without work after their college graduation.  But those who landed jobs say internships are key.

Here are their stories:

Katie Williams - University of Tulsa, OK.

Ron Duenas - Central Connecticut State University

Cynitress S. Carter - Alcorn State University, Miss.

Brett Sorenson - Augsburg College, Minn.

Kishen Ratilal - University of Illinois at Urbana-Champaign

Jane Intreri - DePaul University, Ill.

Ryan Jabs - Roger Williams University, RI.

READ MORE

Seven-Step Blueprint for A Happy Marriage, Money-Wise

by Alex Veiga

Newlyweds and couples moving toward marriage, take note: Love, as it turns out, is not all you need. 

Not if your goal is to avoid the No. 1 reason marriages end in divorce: money problems.

Everyone knows, or should know, this. But love and a reluctance to take a hard look at our own financial habits, often keep us from seeing, much less confronting, potential financial troubles in a relationship.

"Mature, responsible conversations about money are a sign of a marriage that's going to be healthy and wonderful and enduring," says Brooke Salvini, a certified financial planner based in San Louis Obispo, Calif. "If you can't talk about money when you are dating, that is a red flag right there."

To get the conversation rolling, here are seven steps experts recommend to steer clear of potential marital money troubles:

Five Secret Habits of Wealthy Americans

by Farnoosh Torabi

When you’re rich, you can cruise through life at a luxurious speed filled with fancy cars, designer clothes and caviar. But beneath the surface, becoming wealthy and staying wealthy involves hard work, an appetite for risk and a certain mindset that’s not always obvious. Here are some of the secret habits of wealthy people.




1. Bank on Your Street Smarts

“Making money has little to do with logic,” says real estate mogul, author and television star Barbara Corcoran. “It has more to do with trusting your gut.”

In an interview at her Upper East Side Manhattan office, Corcoran reflected on her struggling days in the classroom. “Often I think a prerequisite of making a ton of money is not being smart in school. The cutup in the classroom is often the guy with the big idea who makes a truckload of money.” Despite scoring Ds in high school and college, Corcoran utilized her street smarts and ability to connect with and judge those around her to ultimately grow and sell her Manhattan firm for $66 million in 2001. Today, she is the resident real estate contributor to NBC’s Today show and the sole female investor on ABC’s reality hit Shark Tank, now in its third season.“You know what’s great about being a dunce in school? You have six-hour days to sit around and think of all kinds of things,” she says. “You get practice at imagination.” In fact, according to Thomas Stanley’s book The Millionaire Mind, when asked how their high school teachers would have evaluated them, only 11 percent of millionaires said “most intellectually gifted” and just 10 percent  said “highest grade point average.”

History of Father's Day

KKtiandi Family Fun: History of Father's Day: No matter how you choose to celebrate Father's Day, you can thank a woman named Sonora Louise Smart Dodd for the tradition. Fathe...

David Morgan SILVER Economic INTERVIEW @ ‪Cambridge House

Hurry and Cash In on Short-Sale Tax Savings

by Amy Hoak

An increasing number of homeowners who are underwater on their mortgage are selling their homes by short sale, and that could become an even more popular option during the rest of the year.

That’s partly because of a law set to expire at the end of 2012 that offers tax relief for homeowners who sold their home in a short sale or have had some other sort of mortgage debt forgiven or canceled, such as in a foreclosure or modification that included principal reduction. While there are efforts in Washington to extend these tax benefits, it’s hard to guess whether they’ll be renewed.

So those who think they might be able to take advantage have been stepping up, while they still can.

“Everybody [considering a short sale] needs to talk to a CPA and see if now is the time for them to get off the Titanic and in a lifeboat before this law expires,” said Marge Peck, associate broker and co-owner of Discover Arizona Real Estate in Mesa, Ariz. The company specializes in short sales. “I’ve just hired more staff. We’re prepared for the tsunami of people saying ‘I’ve waited long enough, nothing’s going to change.’”

Short sales are transactions in which the borrower owes more than the home is currently worth, and the lender agrees to accept less than the full mortgage payoff at closing.

The current savings for taxpayers is significant.

Refinance Boom Benefits Borrowers and Big Banks

by Diana Olick

Millions of Americans are saving billions of dollars in monthly mortgage payments, thanks to record-low interest rates.

The refinance market is booming, now at 78 percent of residential mortgage activity, according to the latest read from the Mortgage Bankers Association.

Make no mistake, however, the big banks are reaping great rewards as well.

“Mortgage origination profitability is off the charts,” says Paul Miller, head of financial research at FBR. “Refis are surging, and many are loans that just refi-ed 6-12 months ago.”

Given that so many of the refis are of relatively new loans, the banks are taking a loss in the servicing, but Miller says they usually hedge their servicing assets. The hedges, however, are not perfect and values “bounce around” in big refi booms, so the banks will take some write downs in servicing, “but the hedges will cushion the value changes,” Miller adds.

Market Significantly Undervalued

by Mark Hulbert

The stock market is more accurately described as undervalued than overvalued.

That is the comforting conclusion I reached upon analyzing a unique dataset of dividend-paying blue chip stocks back to 1966. My finding suggests that the stock market is poised to produce above-average returns over the next couple of years.

The dataset is the product of an advisory service called Investment Quality Trends, whose current editor is Kelley Wright.

The dataset contains stocks of some of the highest quality and most profitable companies, as defined by criteria such as an S&P quality ranking in the “A” category, 25 years of uninterrupted dividends, and at least five dividend increases over the last dozen years.

Currently, for example, out of more than 7,000 publicly traded stocks in the U.S., just 254 make it into this dataset.

Wright classifies each of the stocks that make the grade into four categories according to how its current dividend yield compares to the historical range of that stock’s yield.

The “Undervalued” category contains those stocks with yields at or close to the high end of their respective ranges, while the “Overvalued” category contains stocks with relatively low yields.

Five Reasons to Buy Stocks Now

by Robert Powell

It would be easy to join the herd investors who, say some, are overreacting to the news of the day by selling stocks and buying bonds. The harder thing to do now, especially in the face of political uncertainty in Europe and economic weakness in the U.S. and elsewhere, would be to buy stocks.

“For investors, the financial environment is both uncertain and stressful,” David Kelly, the chief market strategist at J.P. Morgan Funds wrote in his report this week. “However, given the extraordinarily stretched nature of relative valuations, the best advice should be at a minimum to remain balanced rather than indulging in the now all-too-routine palliative of selling stocks and buying bonds.”

Relative pricing of Treasuries to stocks

According to Kelly, there are several reasons to consider buying stocks now, one of which is the relative pricing of Treasuries and stocks. “As of the close of business on June 1, the 10-year nominal bond yield was 1.47% while the earnings yield on stocks (using a broad-market lagged P/E ratio) was an estimated 8.95%,” he wrote. “By this measure, stocks are cheaper relative to Treasuries than at the end of any quarter in almost 60 years.”

Kelly’s comments got us thinking. Are there other reasons to invest in stocks right now? What case can be made for putting money in risky assets? Well, here’s what some bulls—many of whom we might note say such things for business reasons—had to say:

Another Week, Another Record Low for Fixed-Rate Mortgages

BankRate.com

Homeowners who refinanced their mortgages in recent months seem ready for another round of savings as rates tumble to new record lows.

                    30 year fixed rate mortgage – 3 month trend

The benchmark 30-year fixed-rate mortgage fell to 3.92 percent from 3.94 percent last week, according to the Bankrate.com national survey of large lenders. The mortgages in this week's survey had an average total of 0.42 discount and origination points. One year ago, the mortgage index was 4.65 percent; four weeks ago, it was 4.02 percent.

This week's rate of 3.92 percent is the lowest level the 30-year-fixed has reached since Bankrate started the survey more than 26 years ago. The fixed rate has not increased in the weekly survey since early April when it was 4.25 percent. The rate has reached a new low every week since then, except one week in May when it stayed unchanged.

The benchmark 15-year fixed-rate mortgage rose to 3.16 percent from 3.15 percent the previous week, and the benchmark 5/1 adjustable-rate mortgage fell to 2.99 percent from 3.01 percent.

How Credit Inquiries Impact Your FICO Score

It’s no secret that FICO scores and other credit risk scores consider credit inquiries when calculating your credit scores. A credit inquiry, if you are not familiar with it, is a record of who pulled your credit report and on what date.

When it comes to credit applications, many consumers are worried that by applying for credit they might lower their scores. That is certainly a possibility. Credit inquiries can lower your FICO scores. Notice I used the word “can” and not the word “will.”

The True Impact of an Inquiry
Before you choose to not apply for whatever it is you’re applying for, consider the fact that inquiries have a marginal, at best, impact on your credit scores.

Further, just because an inquiry causes your score to go down it may not cause it to go down enough to change any lender’s mind. Going from FICO 790 to FICO 786 because of new inquiries is likely going to be an irrelevant change when it comes to your credit application.

You’ll also want to keep in mind that the majority of credit applications result in one new inquiry on one of your three credit reports.

Applying for a new credit card doesn’t mean all three of your credit reports are being accessed. Only one is going to be pulled so the new inquiry will only appear on that particular credit report. That means your FICO scores at the other two credit bureaus are not impacted at all.

The only exception to this rule is a mortgage application where the lender or broker will likely pull all three of your credit reports.

How Credit Card Inactivity Impacts Your Credit Scores

It’s strange, but from time to time, I get a small pop in the volume of the same question. It happened to me last week. I was asked four times on the same day about the impact of credit card account inactivity on your credit reports and credit scores.

What this probably means is someone with a much more visible profile made some statement on TV or radio and their answer wasn’t believable enough.

So let’s tackle the question at hand: how does credit card inactivity impact your credit?

The knee-jerk answer is, “it doesn’t”, but that leaves too much meat on the bone. Account inactivity CAN have an impact on your credit, but it would be indirect.

Help Free Your Grad from Debt

by Kim Clark

Forget sheepskin. The way colleges are loading students up with debt, they should start printing diplomas on hankies.

Among 2012 seniors who borrowed for their education, the average debt load will likely hit a record $28,700, projects Mark Kantrowitz, publisher of Finaid.org. That amounts to a $330 standard monthly payment.

To handle that easily, he estimates, one would need a salary of $40,000. Unfortunately, half of all recent grads are either unemployed or underemployed, as an AP analysis found.

So what's a parent of a recent grad to do?

You don't want your offspring to suffer. But you've also got priorities of your own, like saving for retirement and paying back college loans taken out in your name. Experts suggest this three-step plan to help your children without hurting yourself.

Are Low Interest Rates Good?

In a perfectly succinct follow-up to Last Friday's Santelli-Kaminsky CNBC-aberration discussion of the now status quo financial repression (low interest rate/QE environment), this two-and-a-half minute clip asks and answers the seemingly simple question of whether low interest rates are good. 

Borrowing and saving are really about whether to consume more now or later (or more later and less now) and we agree with Professor Antony Davies that these decisions are best left to individuals - and not the nanny-state/Fed. Each person's judgment of what is best for them is replaced by the Federal reserve's judgment and the free market interest has become a thing of the past (for now). Lower rates don't mean more spending; they mean more spending now and less in the future.