photo:  DucDigital

Have you been dinged with an ATM fee recently? You’re certainly not alone — and by the looks of it, you’ll be in growing company going forward.

Bank fees have risen to record numbers, according to a 2010 study by Bankrate.com.

The latest culprit? JP Morgan Chase (JPM) is now testing a $5 (yes, that’s likely more than your daily latte) ATM fee for non-customers who use its ATMs — and that’s not including the ATM fee your own bank may charge you. In all, you could end up spending as much as $7 or $8 just for the sake of convenience.

This is only the latest example in a steady upward trend for ATM fees in the past couple of years. According to Bankrate, ATM fees have increased by 5% since 2009, to an average $2.33 — an all-time high. Out-of-network ATM fees have increased even more, by 7%, to $1.41.

Overdraft fees, meanwhile, have increased to a new record of $30.47, while monthly fees for not maintaining a minimum balance on non-interest checking accounts now average $2.49, while those for interest-bearing checking accounts average $13.04.

That enough numbers for you? There’s more: The number of banks and thrifts that offer free checking accounts with no minimum balance requirements is down to 65% of institutions, from 76% last year. And those minimum balances required to avoid monthly charges are up 34%, from an average $185.75 to $249.50. The average minimum balance requirement for interest checking accounts, meanwhile, jumped 15%, from $3,372 to $3,883.

The study also indicated the average fees associated with using and maintaining interest bearing accounts. These fees included bounced check fees, ATM surcharges, and monthly service fees with overdraft fees increasing three percent to a new record of $30.47.

In all, if they’re not careful, consumers could be spending a hefty $620 annually on checking account fees, according to Greg McBride, a senior financial analyst at Bankrate.com.

Why are fees on the rise? Most likely, banks are feeling the pressure of federal regulation that earlier this year changed the overdraft protection game, making it harder – if not impossible – to charge overdraft fees for consumers who have not actively opted into the bank’s overdraft program. Since overdraft fees had been a source of high revenue to banks, banks are trying to resort to other sources of income and are passing fees onto customers in numerous other ways.

However, these fees are avoidable. You can stay ahead of the game by following these tips.

1. Confine your ATM withdrawals to your own bank’s ATM network. If you need cash, get to an “in-network” or bank ATM. Otherwise you’ll be charged two fees: one from the ATM and one from your bank.

2. Plan ahead. If you’re planning to travel, check on your bank’s branch and/ or ATM availability at your destination. If no ATMs are available, load up on cash so that you’re not forced to use another bank’s ATM. Or follow our next tip…

3. Get cash back at the point-of-sale when using a debit card. Go to a grocery store, drug store or any other retailer that would give you cash back. Buy a small snack if you don’t need to buy anything else.

4. Choose a bank that reimburses ATM fees. Some banks, particularly online-only ones like Ally Bank and Schwab, actually reimburse a certain number of ATM fees charged by other banks’ ATMs.

5. Bank online. As we mentioned, online banks are more likely to reimburse ATM fees than their brick-and-mortar competitors. And in general, online banks charge fewer fees, simply because they have lower overhead costs. They also offer free ATM access through networks such as Allpoint. If you have an ING Direct checking account, for example, you get free access to the network’s 35,000 ATMs throughout the country. (The bank even has an iPhone app that locates the nearest free ATMs in your area.)

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photo: Pat Durkin

If you’re at all cautious with how you manage your money, getting yourself a new car every year will sound downright crazy. The bottom line — the cost, the rapid depreciation – makes this a pretty silly decision… to put it mildly.

Yet, according to LeaseTrader.com, an online car leasing marketplace that matches car shoppers with those looking to escape their auto lease, a segment of the driving population does just that.

LeaseTrader’s Loyalty Program members — customers who have transferred or taken over a minimum of four vehicles — take over car leases with an average 13.6 months left on the lease. Which, simply put, means that they drive a car for a little over a year before moving on to the next.

Granted, we’re not talking about staggeringly high numbers: John Sternal, vice president at LeaseTrader.com, says its Loyalty Program has roughly 2,500 members, or 4.5% of its marketplace. But there is an interesting trend among these drivers: just three years ago, the average remaining term of taken-over leases was longer, 15.7 months.

“More Loyalty Program members today are getting cars with a shorter amount of time left on the contract,” Sternal says. (Or, from another point of view, more people are eager to get out of their leases, even with as little as a year left on their contract.)

For consumers looking to lease a vehicle, taking over a contract from somebody else rather than signing a new one could be beneficial in a couple of ways. First, they would avoid a down payment: an instant savings of thousands of dollars, depending on the vehicle, according to Sternal. And second, instead of signing a three- or even a five-year contract, they take over a lease with only a year to go. When that year is over, they are free to look for their new set of wheels — and repeat, if desired.

Leasing doesn’t fit with everyone’s financial values and lifestyle, of course. “In a lease, you always have a monthly payment,” says Phil Reed, the Senior Consumer Advice Editor at car information website Edmunds.com. If you like the idea of not having to worry about a car payment somewhere down the road – after three, five or however many years it takes you to pay off a car loan – then buying a car is probably the road you want to take.

That said, what are the financial ramifications of driving off the lot in a new set of wheels every year or so? Here’s some food for thought for those interested in leasing, as well as buying:

Leasing: Are Lease Swaps the Key a Perpetual New-Car Smell?

One of the benefits of leasing is that you get to drive a car without having to worry about depreciation: when the lease is up, you turn in the keys and walk away.

And thanks to websites like Leasetrader.com and Swapalease.com, you could change cars even more frequently than the typical two to four years: conceivably, you could change cars every year.

But leasing isn’t without risks. “You have to read the contract and understand it,” says Sternal. Most leases also have a limit on how many miles you can drive: when exceeded, each mile over will cost you extra. Kind of like exceeding your monthly cell phone minutes.

This is one of the most important issues to review if you’re planning to take over a lease, as well: if the original driver has already exceeded the mileage limit (or close to it), you will be the one to pay up for the overage.

And you have to maintain the car meticulously. “You have to understand that, first and foremost, you don’t own the car,” Sternal says. “The bank owns the car. You are just making payments.”

Buying: With the hit on car value, forget it

If you buy (or finance) a car, on the other hand, you’re probably fully aware that new cars depreciate – or lose their value — fastest in the first three years of ownership. In fact, they lose 20% of their value the minute you drive off the dealership, says S.E. Day, a former auto-dealership owner who is now a consumer advocate and the host of a talk format radio show The Legally Steal Show.

Assuming you purchased the car with a loan, it would take an average of 3.5 years before you actually own any equity in your car: before that, it will be worth less than you owe the bank. So by trading it in for a new one after just 13 months, you will have to add that negative equity to the new car’s purchase price.

Repeat this for several years (if you can even find someone willing to finance an ever-increasing amount) and you’ll only find yourself deeper and deeper in debt.

In fact, Day says, you will be so far “upside down” on your loan after only the second trade, that the finance company will require a major down payment before allowing you to buy yet another new vehicle.

To state the obvious: If you’re the type of person who prefers to own cars rather than lease, driving your car until its wheels fall off would be the most prudent financial decision in most circumstances. “Sticking to one’s car is the most inexpensive way to proceed,” Reed says.

photo: faster panda kill kill

Home offices have become common in recent years. For those of us who don’t want to spend too much or simply can’t afford to, there are ways to set one up on a budget — without raiding your employer’s office supplies cabinet. 

Here is how to score great deals and even freebies for some of the most-used home office items, and where to look for additional deals.

Download free calendars and planners

Instead of spending money planners or calendars for yourself and the rest of the family, print them for free from Vertex42.com or OrganizedHome.com.

In addition to calendars and planners, Vertex42 also offers free spreadsheet templates for Microsoft® Excel®, OpenOffice.org, and Google Docs.

Cut your printing costs

Try changing your printing habits, says Denise Winston, a money and time saving expert, speaker and blogger at Moneystarthere.com.  One easy way to do that? Change your font type. “Choosing a different font could yield more pages per ink cartridge,” she says.

When you run out of ink, refill your existing ink cartridge rather than buying a new one.  “You can buy ink by the litre which is probably the biggest savings you can get, reducing your printing costs by up to 90%,” says John Scott, CEO of IQComputers.net. If you have an inkjet printer, do print a couple things out every few weeks to keep the nozzles wet. Otherwise you may need to replace the cartridge which is an unnecessary expense.

Other common ways to save ink include printing in draft mode or in gray scale or black ink only. Printing double sided, on the other hand, will help you save printer paper.

Explore garage sales

They’re a great place to find cheap supplies, says Francine DiFilippo Kent from Arcadia, Fla. She recently bought several packages of paper, file folders, a box of staples, an electric stapler, two boxes of ball point pens, highlighters, fine point mirco pens and a desk tray. Her total tab? $10.

Garage sales are also a great place to look for office furniture: why spend a fortune on a new desk or office chair when you could probably find one in great condition at a fraction of the price?

Buy in bulk and buy early

If you don’t want to take a chance with second-hand office supplies bought off a garage sale, head to a warehouse club like Costco or Sam’s Club. Better yet, if the item you picked up at the store is damaged in any way, ask for a discount. (Make sure that the damage has not deemed the item useless, of course.)

Also, check out your local dollar store: they tend to have great prices on pens, pencils and notebooks. And if you go to Target (TGT) in June or July, you will get great prices on school supplies that you can use for your home office. Staplers, whiteout and notebooks all start going on sale during this time.

“End of year clearance sales are ideal as well,” says Mike Allen. He is the President & “Chief Executive Shopper” of ShoppingBargains.com, a coupon and deal site for some 2,000 online retailers and eBoss123.com, which focuses on coupons and deals for business products and services. “A lot of office supply retailers are competing for our tax deductions before we close out a tax year. Don’t forget to sign up for Staples Rewards and take advantage of their bonus specials and rewards check benefits,” he says.

Use technology

“There are many things we purchase for the office that have been replaced by technology if we just get in the habit of using them,” says Scott. Take the good old sticky notes, for example. Why spend money on those bright-colored office regulars when there are “literally hundreds of different digital sticky notes for your computer,” Scott says. You will clear up paper from your physical desktop and make sure you never again lose a sticky note, only to find it months after you needed it.

Don’t use the fax machine

You will easily cut your monthly business telephone line costs, says Scott. “We dropped our fax line and have yet to find a business that couldn’t email us what they wanted to fax. It saves us $780 annually in phone line, plus additional savings in paper, toner and the interruption to physically get to the fax machine,” he says.

If you absolutely must have a fax, consider adding a “smart ring” to an existing line, it costs about $5 per month. Also, use a computer modem to receive faxes so they come straight into your computer, avoiding the usage of paper.

Or use a fax service suggests Allen. “I use RingCentral Fax and get a toll-free fax number and 500 fax pages for just $7.99 per month (I buy the cheaper annual plan). He says he doesn’t have to pay for long distance and can fax from any of his desktop applications, and receive faxes via email when he travels. Other fax providers like RapidFAX and eFax offer similar services.

Track expenses for free

Mint.com offers free expense and income tracking features in addition to helpful graphs, mobile apps and tracking investment tools. Use this free software to get your office expenditures — and overall finances — in order.

Buy offsite

Don’t shop for office equipment solely at office equipment retailers. You could actually score better deals at other stores, including Amazon.com, Buy.com or Overstock.com, Allen says. “I find that unless I need the cutting-edge model, I can usually save a lot of money by buying an older or closeout model,” he says. Don’t be afraid to purchase refurbished items, either. For discount computer equipment, Allen recommends Geeks.com.

There is a lot of competition for businesses that need printing services for business cards, letterhead, rack cards, brochures, stock imagery for ads, flyers, and promotional materials, so entrepreneurs are bound to find a deal. “I find that iStockphoto offers a huge assortment of very high quality, yet inexpensive imagery (sometimes less than $2 for web use). OvernightPrints.com is quick and produces high quality products,” Allen says.

photo: edenpictures

Banks seem to have a bad reputation don’t they? They charge you for every type of service imaginable. Labeled as profit mongers who invent outrageous fees and give mediocre customer service, banks have not made a good impression on consumers. As a result, many of us end up looking for alternatives.

One option: a credit union.

What is a credit union?

Credit unions are not-for-profit cooperative financial institutions that are owned and controlled by their members. A credit union is democratically governed, each member has one vote, members elect the board of directors and the union is volunteer-based. Unlike a bank where customers are just that, customers – in a credit union, members are also owners.

The average cost to purchase a credit union share is $5 – $10 and typically just a few shares are required for you to open an account. (Those shares are then deposited in your savings account. If a credit union requires you to purchase at least five shares at $5 each to become a member, that means you need to make an initial $25 deposit that will then remain in your account as long as you are a member.)

The profits credit unions make are passed onto members in the form of dividends or lower fees. That is why credit unions typically offer higher rates on savings, lower fees and lower rates on loans than banks. They also offer online banking, ATM’s with no surcharge and overdraft protection, but credit unions offer financial education and counseling without giving potential customers a hard sell on their products.They focus more on service and less on profitability.

A little bit of history

According to the National Credit Union Administration, credit unions first appeared in Germany in the mid 1800’s in the form of financial cooperatives. German farmers, devastated by the crop failure and famine of 1846, decided to organize a cooperatively-owned mill and bakery that sold bread to its members at a discount.This idea developed into addressing the credit needs of farmers. In 1850, the first cooperative credit society, known as the “people’s bank” was initiated.

In the 1920’s credit unions became popular, especially with the working class. Commercial banks and savings institutions were not providing consumer credit, creating a growing interest in the affordable credit unions. Credit unions provided a much-needed source for inexpensive credit. Fast forward to today, credit unions have become increasingly popular throughout the United States. According to NCUA, currently there are about 7, 950 active federally insured credit unions with almost 90 million members and $679 billion in deposits.

Membership

One big difference between banks and credit unions is that while pretty much anyone could become a bank’s customer, you actually need to qualify for membership in a credit union. Credit unions use a variety of criteria to determine eligibility. Employers who sponsor their own credit unions allow employees to join, for example. If you are a member of a church group, school, labor union, or homeowners association, you might also be able to participate in a credit union. Credit unions also serve people who live in certain geographic locations.

Several credit unions are not exclusive at all. Consumers Credit Union (CCU) is open to everyone; it is one of the largest credit unions in Illinois. CCU offers checking accounts, debit and credit cards, vehicle loans, consumer loans, savings, money market accounts, certificates of deposit and mortgage products plus regular, jumbo and IRA plus vehicle loans.

Insurance

Banks have the FDIC to insure consumer’s deposits; Credit unions have the National Credit Union Share Insurance Fund. The National Credit Union Share Insurance Fund (NCUSIF), which is managed by NCUA, is a government-backed insurance fund. Deposits are insured by the NCUSIF up to $250,000 per depositor and backed by the full faith and credit of the United States Government.

Compare before you sign up

When comparing credit unions to banks, follow the steps below to find the institution that best fits your financial needs:

* Find out what products and services each institution offers. Generally, banks offer a more varied selection of financial products and services than credit unions.

* How important is customer service to you? Credit unions are often smaller, have less employees and less customers, so the customer service experience at a CU might be different than the one you get at a large bank with millions of customers and a call center overseas. At the same time, if having access to a branch in multiple locations is your priority, you may be better off at a large bank.

* Do you need to borrow? Loan rates tend to be lower at credit unions, so if you are in the market for a loan, a credit union loan might be your best bet.

* Find out how much interest you will gain on your savings account, or deposit accounts as some credit unions call them. Both banks and credit unions offer checking accounts, savings accounts and CD’s, though you could expect to find higher rates at credit unions.

* What fees and penalties, if any, can the credit union charge? How do these compare to the bank’s?

Still can’t decide? Don’t fret: you can have both. There’s nothing wrong with spreading yourself out to get the most for your money!

photo:  Joshua Davis

On August 15, new overdraft rules went into effect, preventing banks from imposing overdraft fees on debit and ATM card transactions unless the customer actively opts in to have that feature.

The new rules have been largely hailed as consumer-friendly, with one caveat: they did not address the practice of reordering how multiple debit-card and check transactions post to one’s bank account. Many banks post transactions not in the order in which they were made, but from largest to smallest in terms of dollar amount. That practice, according to consumer advocates, effectively causes many people to overdraw their accounts sooner – and more often.

Consider this example: you only have $100 in your account and in one day you charge $5 at the coffee shop, $25 at a bookstore and an $80 at the supermarket. If the bank debited those transactions in the order you made them, you would overdraw your account just once and be charged one overdraft fee. But if it reordered those transactions from largest to smallest, you would overdraw your account twice and be charged two overdraft fees.

Now, a federal judge in California has taken issue with that practice. Last week, just as the media was getting busy reminding consumers of the new overdraft rules, Wells Fargo (WFC) was ordered to pay more than $203 million in compensation to customers who were charged overdraft fees thanks to reordering transactions in this way.

Wells Fargo collected nearly $1.8 billion in overdraft fees in California from 2005 to 2007. The bank plans to appeal the court decision.

If the decision is upheld, consumers have a lot to win, says Ed Mierzwinski, Consumer Program Director for the U.S. Public Interest Research Group. “Reordering checks is a gimmick banks use to increase overdraft fee revenue,” he says.

Even if the ruling is overturned, however, Mierzwinski expects that new Consumer Financial Protection Bureau that starts in 2011 will ban the practice.

In the meantime, consumers should set up low-balance email or text-message alerts from their bank, Mierzwinski suggests, and link their checking accounts to a credit line or a savings account, so that if they do withdraw their account the bank would make a transfer for a much lower fee.

The bigger question is, of course, how this court decision may affect the industry. With this practice now in the limelight, could other big banks take the lead and abandon it preemptively?

Greg McBride, a senior financial analyst at Bankrate.com, says he doesn’t think that’ll happen. Consumers have actually expressed preference that their largest payments are honored first because they are typically more important. “It’s cheaper for them to pay a $35 overdraft fee than pay a late fee on their mortgage payment,” he says “What they don’t want is to pay a $35 fee on a $3 transaction for a bagel and coffee and it’s important consumers are given that choice.”

Still, McBride adds, the frequency with which consumers encounter this practice will go down as a result of the new overdraft rules.

Jim Sinegal, associate director of equity research at Morningstar says this court decision will at the very least cause more people to focus on the fairness of overdraft fees.

“It just doesn’t make sense to charge a $35 fee for a potentially $1 dollar loan,” he says. “I think we are going to see a lot more pressure on those fees.”

As a result of the new overdraft rules – and, potentially, of this latest development with reordering transactions — banks might not be able to charge as much in overdraft fees. But, as usual, they will find other ways to make money. “Banks will find a way to pass some of these costs to their customers in different ways,” Sinegal says. 

Many of us harbor a somewhat romantic idea of being an entrepreneur. Yes, you work hard and possibly around the clock, but the gratification of being your own boss is something few people get at their 9-to-5 jobs. And, of course, if your business makes it big, you could rake in the millions, retire early, become an angel investor… or pursue any other of your life’s dreams. Right?

Not necessarily. There are many common misconceptions to what we believe an entrepreneur’s life is like, how they come to be, or even where the United States stands in the world of entrepreneurship.

In his book, The Illusions of Entrepreneurship, economist Scott A. Shane addresses these misconceptions and identifies the realities of starting one’s own business.

Here are some of his main points:

The United States is Not  # 1 in Self-Employment Rates

Contrary to popular belief, the United States has fewer self-employed workers than many other countries. In 2008, we placed 35th out of 36 countries ranked by self-employment rates as a percentage of total employment in the Organization for Economics Cooperation and Development’s (OECD) 2010 Factbook. Turkey, Greece and Mexico had the highest self-employment rates as a percentage of total employment.

In a survey on entrepreneurship activity in 54 countries published in its GEM 2009 Global Report, the Global Entrepreneurship Monitor, a nonprofit academic research group, found that the new business ownership rate is much lower in the United States than that in countries like Guatemala, Greece and Argentina. The established business ownership rate is also lower in the United States than that in the Republic of Korea, Finland and Colombia.

The survey also found that each country has different economic and social conditions affecting the rate of entrepreneurial activity. In Saudi Arabia for example, few Saudis engage in starting their own business because of the country’s high reliance on income from oil extraction. On the other hand, countries in Latin America have a higher rate of business ownership because they have to be more self sufficient in order to make money.

Why are there such variations in self-employment rates? “It really depends on the opportunity cost,” says Shane. Consider this example: let’s say the medium annual income in the U.S. is $30,000 and your business idea will bring in $2,000 per year, at least in the beginning. Unless you have a comfortable nest egg to dip in while your business is in start-up mode, you will probably choose to work for someone else for $30,000 rathan than starve with $2,000, right? “However, if you are in a country like Peru where the per-capita income is probably a couple of thousand dollars and the idea you have will bring in a couple of thousand, then that idea will be easier to generate,” Shane says.

Another factor is choice. In many of the countries with high entrepreneurship rates, there are typically not enough jobs or anyone hiring. Unemployed people there typically have no choice but to start their own business.

More Hours, More Stress

We tend to believe that working for ourselves will make us happy — and that is generally the main reason why entrepreneurs opt to work for themselves, writes Shane.

The typical entrepreneur, however, works more hours than a person who works for someone else. And contrary to popular belief, he or she isn’t happy about it.  According to Shane, entrepreneurs often work more hours because they have to, not necessarily because they want to or because it makes them happier.

According to a 2009 Gallup survey, almost half of self-employed Americans (49%) report working more than 44 hours in a typical work week, compared to 39% of American workers overall. A typical work week for a wage employed American ranges between 35 and 44 hours.

It’s important to understand the realities and responsibilities that come with entrepreneurship. Handling them well is not impossible: just look at the long list of entrepreneurs who have made it. But it’s important to know what you are up against.

During this recession, we have witnessed a rise in entrepreneurship — but not necessarily in the numbers of successful entrepreneurs. “The number of people that are transitioning into self-employment has been higher in 2008 and 2009 than in 2007,” Shane says.  “But at the same time, people who are working for themselves are finding it harder to find customers, sell products, finance their business and keep going. The number of people that have been exiting their business has gone way up.”

The U.S. Small Business Administration says that 50% of small businesses fail within five years — but look on the bright side: your business could be in the 50% that succeed.

Draw up a business plan and approach self-employment with caution and preparedness.  Work hard and aim to succeed — but always have a plan B, just in case.

Finding the right person to entrust with your hard-earned cash can be stressful. And the economic turmoil of the past few years has only dampened consumers’ trust of financial experts further.

The best way to minimize those jitters: do a lot of research before you choose.

When searching for a financial advisor, one of the first things to consider is how they make their money: by selling investment products or by giving financial advice (i.e. charging a flat fee)? If what you are looking for is orientation on how to handle your money, stay away from advisors who work on commission, as they may focus on selling you the investments that line their pockets — not necessarily yours.

To begin your search, look into self-regulatory organizations and government agencies. The Certified Financial Planners Board of Standards is a nationally recognized organization that grants the CFP designation to advisors who have undergone rigorous learning and testing in various financial planning fields, including insurance and risk management, employee benefits, investment planning, income tax- planning and retirement and estate planning. You also search for a CFP and any information on complaints or disciplinary actions within their website.

Check out the Better Business Bureau, too: here you can find information about an advisor’s history, specifically whether any complaints have been filed against them.

Another place to search is the National Association of Insurance Commissioners (NAIC), an organization of insurance regulators. Here you can check for qualified advisors who sell insurance products.

Investment advisors, meanwhile, must be registered with the Securities and Exchange Commission (SEC) and other state regulators. The SEC regulates investment advisors and all securities dealers. In addition, the Financial Industry Regulatory Authority (FINRA), the largest independent regulator for securities firms in the United States, has a tool called Broker Check that enables you to check the background of your investment professional.

Fees

Financial advisors work with different fee structures depending on the type of service they provide. For example, a financial planner could earns commissions from selling investment or insurance products.

A fee-based financial planner, on the other hand, charges an upfront fee for providing financial advice, but also charges a commission on security trades or insurance purchases.

A fee-offset financial planner charges an annual or hourly fee, but if the client purchases a financial product from the advisor, the annual or hourly fee is reduced.

A fee-only planner earns no commission; they charge a specific fee, which could either be an hourly or a percentage of the client’s assets under management (typically 1%). Since they do not work on commission, these types of financial advisors are not incentivised to recommend financial products only because of their high commissions.

Important as they are, fees should not be the only consideration in your search for a financial advisor. Here’s what else you should look for:

Personality

Will you get along with this person in a business setting? If the advisor seems aloof and not in tune with your needs, you might want to reconsider. You need to make sure the person you select will listen to you and understand your needs.

Availability

Are they available to answer your questions? Does this person have hundreds of clients? Do they seem overwhelmed? How much time will they be able to dedicate to reviewing your portfolio and answering your questions or concerns? How many times a year will they meet with you to go over changes or modifications in your portfolio?

Who will be handling your portfolio?

Will an associate be evaluating your plan or will the person you are interviewing be doing this job? It’s better to talk directly to the person who will be handling your account.

Credentials and Experience

How much work and client interaction experience do they have? Ask what type of formal training and education they have and how many years of experience they’ve accrued. Do they have investment or life insurance broker licenses?  Are you allowed to see examples or representations of financial plans? This way you have a better idea of how detailed the plan is and how effective it can be.

When looking for a planner, you can also look at some of these professional organizations:

The Chartered Financial Consultant (ChFC)

(PFS) Personal Financial Specialist

Accredited Financial Counselor (AFC)

photo: haglundc

Many economists predicted that once the $8,000 home buyer tax credit expires on April 30, the real estate market would not be able to hold on to its earlier gains. And judging from the 27% decline in mortgage applications reported by the Mortgage Bankers Association Wednesday, they were probably right.

That’s hardly the type of news mortgage lenders, developers and real estate brokers like to hear. The huge inventory of unsold homes is still crippling the market — so some industry players are launching their own temporary incentives in hopes of keeping up the momentum of the government’s program.

On May 1, for example, real estate brokerage Coldwell Banker launched a “Buyer Bonus” program through which buyers will be refunded 3% of a home’s final purchase price, up to $8,000, at closing. The program will end July 31.

There are no eligibility or qualification restrictions. The incentive is meant to enable more people to purchase homes, but is also a nice marketing gimmick tactic to increase Coldwell Banker’s completive edge by helping its clients’ properties stand out from and sell more quickly. Jim Gillespie, CEO of Coldwell Banker told CNBC that sellers who participate receive additional marketing support, including television ads and mentions on social media outlets such as Facebook and Twitter.

Incentives Abound

Incentives can vary greatly depending on where you live. In Minooka, Ill., for example, the town and its homebuilders have paired up to give new home buyers 1% cash back following their purchase. In the New York Tri-State area, developer Sterling Properties is offering a price reduction on most of their select inventory, including a $9,000 refund on apartments in its new development, The Avenue at South Orange in New Jersey.

iNest, the real estate broker specializing in newly constructed homes and a subsidiary of LendingTree, allows qualified buyers to earn 1% cash back on their new home purchases. Depending on the price of the home, the discount could be substantial. Buyers receive their rebate four to six weeks after closing.

The Plaza at Tenafly, a new condominium community in Tenafly, NJ, now offers financing incentives like a seller-paid permanent buy-down of the interest rate. (In other words, the seller will pay what are often called mortgage points on behalf of the buyer, which would reduce their interest rate for the life of the loan.) Other incentives include covering maintenance costs, but the interest rate buy-down has so far been most effective, according to Andrea Sterancsak, the director of sales at The Plaza at Tenafly. “Utilizing this tool makes owning cheaper than renting in most cases,” she says .

“Everyone is coming up with incentives,” says Guy D. Cecala, the publisher of Inside Mortgage Finance, an industry trade publication. “The good news is the market is adjusting, there is a strong demand for non-distressed homes.” It is mostly buyers in the market for a non-distressed home who can take the most advantage of incentives, Cecala says. Incentives are rarely found on foreclosed properties.

Here is what buyers can do to make the most of the incentives available today:

Negotiate

The best approach to negotiating incentivs is knowing how much sellers are willing to pay and, if this is new construction, what the builders are offering, says Cecala. Often, builders are willing to work with buyers on things like customizations and property upgrades.  If you want them to build a driveway, do landscaping, install granite countertops, include appliances, make some other change or addition to the home you are buying, ask. They might not decrease the purchase price of the home but they may be more willing to make another consensus.

Ask around

Talk to at least two or three lenders to see who will give you the best offer, Cecala says. Since real estate is very localized, the best way to find out about deals is to talk to people in your area of interest. In addition, if a friend or family member recently bought a home, find out what incentives were offered to them. Realtors are another great source of information. 

Do your homework

Try to keep abreast of real estate market news. The National Association of Realtors’ website, Realtor.org, and the National Association of Home Builders are good places to start. If you really want to purchase a home now and have already saved up for a down payment, ask many questions and keep digging for that bargain before you jump in. More than likely, you will get a good response from the lender, realtor or builder. Sometimes all you have to do is ask — what have you got to lose?

photo: d i a n a*

Up until a couple of years ago, being financially literate was a skill needed for “later in life.” Nowadays, things have drastically changed. The number of financial literacy classes is multiplying and money management classes are taught to students as early as grammar school.

“It’s never too early to learn about money” seems to be the consensus. An early start to understanding how to manage your assets means an early start towards a financially successful life.

Mint recently conducted an online survey aimed at better understanding what users’ approach was to money as kids and how they are teaching their own children. Nearly half of the survey respondents stated that they earned money before or in elementary school. Mowing lawns and babysitting were the most frequently held jobs and almost nine in 10 respondents had paying jobs in high school. High school jobs were mainly in retail stores, baby-sitting, restaurants and, again, mowing lawns. The survey indicated that earnings in high school were mostly used for entertainment, eating out or car related expenses. 

Most importantly, however, the majority of survey respondents said they were not very prepared to manage money after high school.

Despite that fact, most users indicated that they were responsible for paying their way through college: a large majority contributed 50% or more towards college expenses.

Less than half of users said that they felt they were very prepared to manage money or to save after college, and one in three users ran into early credit card problems.

That is probably what is encouraging more open conversations about money in these families now. Over half of users with children between the ages of four and 18 indicated that they talk a lot about the value of money, living within their means, saving to buy toys and helping those who are less fortunate. Yet, the majority of users said they felt schools do a better job teaching about anti-drug programs than about financial responsibility.   

Realizing that children need to become educated about money, more schools are implementing programs of study through the school curriculum and after-school programs.

Also, many organizations are developing online games that focus on money management. Online games have become one of the best ways to get kids interested in managing their money. The Great Piggy Bank Adventure, offered by the investment firm T. Rowe Price and Disney, is an online virtual board game that introduces kids ages eight to 14 to financial concepts and topics such as saving and spending wisely and how to use different investment strategies for growing assets. The game also teaches kids how to achieve goals. There is also a theme park dedicated to helping kids and families learn about financial planning. T. Rowe Price sponsors the Great Piggy Bank Adventure at Innoventions at Walt Disney World® Resort’s Epcot theme park. It combines physical and virtual elements to create engaging learning challenges for families. 
 
The United States government has also taken a stance on financial literacy. In 2002, the Treasury established the Office of Financial Education in an effort to promote access to tools that help Americans make educated choices in personal finance topics such as saving, credit management, home ownership and retirement planning. Among the programs initiated by the Department is the National Financial Capability Challenge, a non-monetary award designed to increase the financial knowledge and capability of high-school aged youth across the United States. The idea behind this program is to teach children how to take control of their financial future as part of a school’s curriculum. Within the program, students learn about personal finance topics and take a voluntary online exam to demonstrate what they’ve learned. The top scoring students receive awards and the outstanding schools and educators are recognized. To learn more about the program, visit the National Financial Capability Challenge website.

The Washington Department of Financial Institutions also has a list of games that help teach kids about money, from a variety of sources including the North American Securities Administrators Association (NASAA), the U.S. Mint, the Department of Treasury, the Federal Reserve Bank and the National Council of Economic Education.

If you want your children to grow up to be financially responsible adults, the key is to start their education early on and make learning a fun, engaging activity. Their school, after-school programs and online games can help you do that, but ultimately, nothing is more important than making open money conversations a regular part of their upbringing.

photo: A.M. Kuchling

Buying or selling a home can be stressful. Unless you have the time and expertise to promote your property yourself or look for a new one, you will probably turn to a real estate broker for help. That extra expense could be well worth it: A good realtor can make all the difference on how profitable your business transaction turns out or how happy you are with the purchase of your new home.

Here are three factors to consider when selecting a realtor:

Listing Agents Vs Buying Agents

To start with, you should know the difference between a listing agent (selling agent) and a buyers’ agent. A listing agent works for the seller: they advertise the property, show it to prospective buyers and assist in negotiations. They get paid when the home is sold and their commission is a percentage of the sale price.

A buying agent works for the buyer. When buying, it’s better if you get your own a buyer’s agent rather than let the seller’s broker call the shots. The selling agent will be loyal to the seller might convey information about you to the seller that can work against you.  For example, say you make an offer to pay $300,000 for a home but innocently convey to the seller’s agent that you are willing to pay up to $350,000. That agent is bound to the seller and will not hesitate to pass along this information. With it at hand, the seller might change their mind and counter with a higher price or decide to hold out. The National Association of Realtors has information on buyer and seller agents.

Qualities to Seek

Attention

Selling a home these days is a far cry from the go-go days of the real estate boom when all you needed to spark a bidding war was a house with four walls and a roof. To successfully sell your home now, you need an agent who is attentive and proactive.

During the first couple of months of your business relationship (yes, selling a property will probably take at least several months), the realtor should demonstrate that they are on your side and actively promoting your home. They should call or email you frequently with updates. They should make suggestions on the property’s listing price and give you advice on how to improve your home to make it more desirable.  If the only contact you had with the realtor was when you signed the contract and you haven’t heard from them for several weeks, start thinking about finding someone else.

Expertise

Obviously, the realtor you choose must have knowledge about the specific area where you are planning to buy or sell. The last thing you want is a realtor who tells you, “I’m not really sure what the crime rate is in this area,” or “I’m not sure what the property values are in this area.”  Of course, realtors often focus on many areas and we should not expect them to know every single detail of a certain location. But they should at least offer to research the facts for you. If they don’t, look elsewhere. An unknowledgeable agent can ruin your business transaction or not market your home properly.

Credentials

According to the National Association of Realtors, all realtors selling homes must be licensed by the state they work in either as an agent/ salesperson or as a broker. Look into your state’s governing agency to find out if your agent has an active real estate license in good standing. Also, find out what other designations the agent holds. The better trained they are, the better equipped they may be to help you close on a profitable deal.

Personality

Chances are, you’ll be working with this person for months. Make sure you “click” — you like talking to them (and, hopefully, vice versa) and feel like they understand your wants and needs.

Questions to Ask

How will the agent sell your home? Where will the home be listed? With online listings, will these be high traffic websites? Will the home appear in print ads in newspapers or magazines? Will there be an open house? These questions will help you determine whether your home will be marketed effectively.

Also, if you are buying, will the agent represent you, the seller or both? While there is nothing wrong with dealing with an agent who represents both the seller and the buyer, it’s in your best interest to have an agent who only works for you.   

Buying or selling your home isn’t easy, but with some research and good questions you can end up with a great agent and an even better deal.