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Money

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A S u rv i va l Manual for the 2 1 s t Centur y

Kara Livingston, Gerri Winchell Findley & Lisa Chapman

va l A S u rv i M a n u a lt s for the 2 1 y Centur

Money

Matters!

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Contents Introduction.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......... 8 Spending.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......... 9 Budgeting.. . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......... 9 Create a Budget.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......... 9 Savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 10 Dealing with Debt. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Debt Collection.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Debt Relief Services.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Credit Repair. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Advance Fee Loans.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Vehicle Repossession. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Banking.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

ATM / Debit Cards.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Prepaid Cards... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Good News for Gift Cards.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Savings and Checking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Unsolicited Checks and Credit Offers.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Protect Your PIN.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

11 11 12 12 13 14

15 15 16 17 17 18 18

Credit.. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 19 New Consumer Financial Protections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 19 Credit Cards.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Comparing Cards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Credit Card Complaints. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Credit Card Billing Disputes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

CARD Act Protects Consumers.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Credit Reports and Scores.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Your Rights: Credit Reporting.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Tips for Building a Better Credit Score.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Dealing with Debt.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

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20 20 21 21 21

23 23 25 27

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Free Credit Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Lost and Stolen Credit Cards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Be Alert: ‘Credit Repair’ Scams.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Out-of-Control Debt.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Personal Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Debt Management Assistance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Beware: Offers to Skip a Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Beware: Credit Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

27 28 28 28 29 30 30 30

Identity Theft. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

What Is Identity Theft?.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

How Do Thieves Steal an Identity?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

How Can You Find Out If Your Identity Was Stolen?. . . . . . . . . . . . . . . . . . . . .......

What Should You Do If Your Identity Is Stolen?. . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Should You File a Police Report If Your Identity Is Stolen?. . . . . . . . . .......

What Can You Do to Help Fight Identity Theft?.. . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Minimize Your Risk.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Detect: Identify Suspicious Activity.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Defend: Take Action Immediately.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Identity Theft Victims’ Statement of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

31 31 31 32 33 33 34 34 37 39 47

Loans. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Home Equity Loans.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Installment Loans.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Payday and Tax Refund Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

50 50 51

Paying for College. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Student Financial Aid.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Federal Student Aid Information Center.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

College Cost Reduction and Access Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Federal Student Aid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Beware: Scholarship and Financial Aid Scams. . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Diploma Mills. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Housing.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Buying a Home.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Mortgages. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Before Choosing a Lender, Do Your Research.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Types of Mortgages.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Beware of Foreclosure Rescue Scams – Help Is Free!. . . . . . . . . . . . . . . . . .......

50

51 51 52 52 53 53 53

54 54 54 55 55 57

Mortgage Refinancing.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 58 Mortgage and Foreclosure Scams. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 58 Moving Companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 59 Choosing a Reputable Mover.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 59 Red Flags – Spotting a Rogue Mover.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 59

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Read and Understand All Information Provided by the Mover.. . . . ....... 60 Moving Checklist. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 61 Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 62 Natural Disasters and Your Home and Business.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Disaster Recovery Plan for Small Business.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Returning to Your Home After a Natural Disaster.. . . . . . . . . . . . . . . . . . . . . . . . .......

Before You Enter Your Home.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Going Inside Your Home.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Prepare Ahead of Time for a Disaster.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Water.. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Food.. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

First Aid Kit.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Clothing, Bedding and Sanitation Supplies.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Special Items.. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

63 63 64 64 64 65 68 69 69 70 71

Protect Your Property or Business from Disaster.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 72 Don’t Be Scammed After a Disaster. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 74 Home Ownership Issues.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 77 Home Improvement and Repairs.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Select the Right Contractor for the Job. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

The Contract.. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Canceling the Contract.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Lien Waiver.. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

The Payment.. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Renting / Leasing.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Ten Tips for Renters.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Rental Assistance Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

78 78 79 80 80 80 81 82 82

Insurance. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 82 Auto Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 83 Disability Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 84 Homeowners and Renters Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 84 Flood Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Protect Yourself with Flood Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Homeowner Flood Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Business Property Risk.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Flood Preparation and Recovery.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Protect Yourself and Your Home. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

The Road to Recovery – After the Flood. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Filing Your Claim – Dealing with the Aftermath. . . . . . . . . . . . . . . . . . . . . . . . . . . .......

85 85 85 86 87 88 88 89

Life Insurance.. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 90 Long-Term Care Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 90 newfundraiser.com

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Other Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 91 Health Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Basic Information About Individual Health Insurance. . . . . . . . . . . . . . . . . .......

Five Tips When Shopping for Health Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . .......

How Much Will I Pay for the Health Insurance Policy?.. . . . . . . . . . . . . . . .......

What Services Are Covered?.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

Is the Policy “Renewable?”.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

What’s Not Health Insurance?.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......

91 91 92 92 94 96 97

Medicaid.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 98 Medicare.. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 100 What Is Medicare?.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 100 Medicare Part A (Hospital Insurance).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 101 Medicare Part B.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 103 If You Have Other Health Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 106 Children’s Health Insurance Program (CHIP). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 107 The Affordable Care Act.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 108 Pre-Existing Condition Insurance Plan (PCIP).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 109 New Plan Options for PCIP in 2011.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 109 More About PCIP.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 110 Eligibility. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 111 Benefits and Premium Rates.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 112 PCIP Frequently Asked Questions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 112 Beware: Insurance Fraud. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 113 Investing. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 114 Define Your Goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 114 Make a Financial Plan.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 115 Pay Off Credit Card or Other High Interest Debt. . . . . . . . . . . . . . . . . . . . . . . . . . ..... 117 Determine Your Risk Tolerance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 118 Selecting a Financial Professional.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 120 Ask Questions!.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 123 How Should I Monitor My Investments?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 124 How to Avoid Problems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 125 IRAs.. . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 126 Money Market Funds.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 127 Mutual Funds. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 128 Online Trading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 129 Financial Brokers and Advisors.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 129 Investing in Gold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 130 Beware: Investment Fraud. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 130 Retirement Planning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 131

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Start Planning and Saving for Retirement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 132 New Job Entrants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 132 Mid-Career.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 132 In Retirement. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 134 My Employer Offers a Retirement Plan.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 134 My Employer Does Not Offer a Retirement Plan. . . . . . . . . . . . . . . . . . . . . . . . . . ..... 135 I Was Enrolled in a Plan in the Past. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 136 What You Should Know About Your Retirement.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 136 Retirement Plans.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 137 Characteristics of Defined Benefit and Defined Contribution Plans. . . . . . . . . ..... 138 Employer Contributions and / or Matching Contributions.. . . . . . . . . . . . . ..... 138 Employee Contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 139 Managing the Investment.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 139 Amount of Benefits Paid Upon Retirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 139 Type of Retirement Benefit Payments.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 139 Guarantee of Benefits.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 139 Leaving the Company Before Retirement Age. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 139 Earning Retirement Benefits.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 140 Retirement Plan Information to Review.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 143 Information Provided by the Retirement Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 143 Taking Your Retirement Benefit with You. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 145 What to Do If You Have a Problem.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 146 Internal Revenue Service (IRS). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 148 References.. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 148

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Introduction As my niece Jourdan closes in on becoming an adult, one of the promises I made to myself was to be sure that she knew as much as I could share regarding all the ins and outs of adult responsibilities. Becoming money savvy heads up that list of must knows.

Knowing how to handle your money in a responsible manner can be the difference between a life of difficulties and hardship or comfort and ease. No longer are the choices simple, clear cut decisions. You, as the consumer, must navigate through choices in healthcare insurance, selecting the best mortgage, buying the correct insurance for your home or business, options for paying college expenses, obtaining and using credit cards and more.

Every day we tune in the news and hear of another natural disaster. A hurricane, flood or tornado can turn your life upside down in a blink of an eye. Being prepared in advance of a natural disaster will make the task of resettling your family much easier. Knowing how to choose the best contractor for your job and navigate through the reconstruction process will make this extremely stressful time easier for you and your family.

Investing your money wisely will make retirement more comfortable. This manual explores investment product choices, choosing a financial professional, monitoring those investments and choosing the right retirement plan for you.

Money does matter and we hope that this manual guides you to successful money matters. – Kara Livingston

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Spending Spending money is easy. Spending money wisely is another thing altogether.

If you’ve ever heard the advice, “never go to the grocery store without a list or when you’re hungry,” chances are you know why – you’re likely to buy more than you need and spend more, too. Regardless of where you’re shopping and how you pay for your purchases, remember to: • Shop around. A “sale” price isn’t always the “best” price. Some merchants may offer a sale price on the item you want for a limited time; other merchants may offer items at a discount every day. Merchants may offer a deep discount on one item – but only if you agree to spend a minimum that is several hundred dollars more.

• Go online. Check out websites that compare prices. If you decide to buy from an online merchant, pay attention to shipping costs and delivery time.

• Look for price matching policies. Some merchants will match, or even beat, a competitor’s pricing.

• Clip coupons. Coupons are useful when they save you money on what you’re already planning to buy. You can find coupons in the Sunday newspaper or often, at coupon exchanges at your local library. You can download others – full coupons or simply codes – from manufacturer and retailer sites online.

If you are shopping online, you simply enter the code at checkout.

• Use debit and credit cards sparingly. To minimize interest and other charges, try to limit credit card purchases to an amount you can pay in full at the end of the month. If you use a debit card, don’t rely on an overdraft feature to spend money you don’t have. When you leave your house, carry only the card you may need to use rather than all your cards “just in case.”

• Keep track of your spending. Incidental and impulse purchases add up.

Jotting down what you spend after every purchase helps keep you mindful of your limits. At least once a month, use credit card, checking, and other records to review what you’ve bought. Then ask yourself if it makes sense to reallocate some of this spending to an emergency savings account.

Budgeting A budget is a tool to help you plan, prioritize, and manage your income and expenses. Review your budget often and update it when you are experiencing a change in income or expenses.

Create a Budget • Write down your monthly take-home pay, or if you’re in sales – or work on commission – you may have to estimate, since your income may vary from month to month. List income you receive from any source, like a part-time job, a tax refund, gifts, unemployment, public assistance, dividends, and

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alimony or child support. Add the entries to determine your actual income for that month. Keep in mind, some of these amounts may fluctuate.

• List how much you deposit in savings each month from your take-home income, even if it’s only a small amount.

• List your fixed monthly expenses – the predictable, set amounts for the must-have items and services that you pay for each month – like rent or mortgage, car payment, and telephone, cable, or Internet access.

• List your variable expenses – the amounts that change, as well as the expenses you pay weekly, monthly, quarterly, semi-annually, or every year – like groceries, clothing, haircuts, property taxes, auto and homeowners insurance, and gas and electric.

• List estimates for once-in-a-while expenses – like birthday and wedding gifts, or holiday gifts and entertainment.

• Total your fixed and variable expenses and divide by 12 to get a monthly estimate.

• If you still have funds after paying your bills and putting money in savings, you can carry over the balance for the next month or use it for unexpected expenses. If this month’s balance is negative, look for ways to cut back on the variable expenses.

Savings You know it’s important to save money, whether it’s for an emergency fund, your retirement, or to buy something special. But it’s not always easy to stash any spare cash.

Consider yourself a creditor. When you pay your bills, write a check to yourself.

Decide on a realistic amount. Deposit the money into a savings, investment, or retirement account. Then, pay your other bills as usual. If you find that you don’t have enough money to cover all your expenses, write down the amount you are short and look for ways to trim your budget. Borrow books from the library rather than buying new; brew your own coffee rather than buying it; consider raising the deductible on your auto insurance; buy store brands instead of name brands; cancel subscriptions to magazines you don’t read or can find at the library or online.

Once you establish a regular savings plan, consider increasing your monthly deposit if you get a pay raise, or when you pay off a debt. For example, once you pay off your car loan, student loan, or other installment debt, deposit that amount into a savings account. Once your toddler is out of diapers, deposit the amount you spent on diapers into savings. You won’t miss the money if it’s put into savings, but more than likely, you’ll find a way to spend it if it’s in your checking account.

If you need some fast cash, consider selling items around the house you no longer use, either online, a garage sale or a local consignment shop. When you sell online, you may use an auction or classified ad site. Check the sites for policies and procedures. When you agree to consign items to a shop, you’re a consignor.

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You still own your stuff, but you give the shop the right to sell it. The shop becomes the consignee. When the items sell, you get a percentage of the selling price that you agreed to in advance. A typical profit split is 50/50 or 60/40, with the higher percentage going to the shop.

Avoid payday lenders. A payday loan is a cash advance secured by a personal check or paid by electronic transfer. It is very expensive credit. How expensive? Say you need to borrow $100 for two weeks. You write a personal check for $115; $15 is the fee to borrow the money. The check casher agrees to hold your check until your next payday. When that day comes around, either the lender deposits the check and you redeem it by paying the $115 in cash, or you roll-over the loan and are charged $15 more to extend the financing 14 more days. If you agree to electronic payments instead of a check, here’s what would happen on your next payday – the company would debit the full amount of the loan from your checking account electronically, or extend the loan for an additional $15. The cost of the initial $100 loan is a $15 finance charge, which works out to an annual percentage rate of 391%. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Dealing with Debt Debt Collection If you are behind in paying your bills, you can expect to hear from a debt collector.

A debt collector is someone, other than the creditor, who regularly collects debts owed to someone else. Lawyers who collect debts on a regular basis are considered debt collectors, too.

What You Need to Know You have rights. Federal law requires that debt collectors treat you fairly. In short, that means: • A debt collector may contact you in person, by mail, telephone, telegram, or fax, but may not contact you at inconvenient times or places – for example, before 8 am or after 9 pm – unless you agree. A debt collector may not contact you at work if the collector is aware that your employer prohibits it.

• If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people only to find out your address, your phone number, and where you work.

• A debt collector may not harass, oppress, or abuse you or any third parties they contact about you.

• A debt collector may not lie or mislead anyone when collecting a debt.

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Debt Relief Services If you’ve maxed out your credit cards and don’t know how you’re going to pay off your debts, you may think that a company that promises to erase the debt for pennies on the dollar is the answer to your prayers. Not true! Debt negotiation can be risky, and it can have serious, long-term consequences for your credit report and your ability to get credit in the future.

If you get a sales pitch from a debt relief firm, pay attention to the details. Stay away from any company that: • Promises unsecured debts can be paid off for pennies on the dollar. The truth is that there is no guarantee that any creditor will accept partial payment of a legitimate debt. Your best bet always is to contact your creditor directly and as soon as you are having problems making payments.

• Requires substantial monthly service fees and demands payment of a percentage of what they’ve supposedly saved you. The truth is that most debt relief companies charge hefty fees for their services, including a fee to establish the account with the debt negotiator, a monthly service fee, and a final fee – a percentage of the money you’ve supposedly saved.

• Tells you to stop making payments to or communicating with your creditors.

The truth is that if you stop making payments on a credit card, expect late fees and interest to be added to the amount you owe each month. If you exceed your credit limit, expect additional fees and charges to be added.

Your credit score will be hurt by not making payments.

• Claims that creditors never sue people for not paying their unsecured debts. The truth is that creditors may have the right to sue you to recover the money you owe. And sometimes, when creditors win a lawsuit, they have the right to garnish your wages or put a lien on your home.

• Claims that they can remove accurate negative information from your credit report. The truth is that no company or person can remove negative information from your credit report that is accurate and timely. It’s illegal.

Credit Repair Every day, companies target people who have poor credit histories with promises to clean up their credit reports so they can get a car loan, a home mortgage, insurance, or even a job – after paying a fee for the service. Remember no one can remove accurate negative information from your credit report.

What You Need to Know When negative information in your report is accurate, only the passage of time can assure that it will be removed. A consumer reporting company can report most accurate negative information for seven years and can report bankruptcy information for 10 years.

If you get an offer to repair or fix your credit, how can you know if it’s legit? Here

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are some signs that should set off alarms in your head – and make you put the offer in the trash: • The company wants you to pay for credit repair services before they provide any services.

Fact: Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the credit repair services they promised.

• The company doesn’t tell you your rights and what you can do for yourself for free.

Fact: The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. This investigation doesn’t cost any money.

• The company recommends that you don’t contact any of the three major national consumer reporting companies (Equifax, Experian, and TransUnion) directly.

Fact: Under the Fair Credit Reporting Act (FCRA), the consumer reporting company and the information provider (the person, company, or organization that provides information about you to the consumer reporting company) must correct inaccurate or incomplete information in your report.

To take advantage of all your rights under the FCRA, contact the consumer reporting company and the information provider in writing.

• The company tells you they can get rid of most or all the negative credit information in your credit report, even if the information is accurate and current.

Fact: Any credit repair company that claims to be able to legally remove accurate and timely information from your credit report is lying. There’s no easy fix for bad credit. Improving your credit takes time and a conscious effort to pay your debts.

• The company suggests that you apply for an Employer Identification Number to use instead of your Social Security number so you can invent a “new” credit identity – and then, a new credit report.

Fact: If you follow illegal advice like this, you may find yourself in hot water.

It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, or to get an Employer Identification Number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information.

Advance Fee Loans If you’re looking for a loan or credit card but don’t think you’ll qualify – or if you’ve been turned down by a bank because of your credit history – you may be tempted by ads and websites that guarantee loans or credit cards, regardless of your credit history. Should you apply, you’ll likely find out that you have to pay a fee just for

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the promise of the loan. It is best to ignore these ads or sites.

If you have to pay a fee for the promise of a loan or credit card, you’re dealing with a scam artist. More than likely, you’ll get an application for a credit card, a store value or debit card, or a card that has so many strings attached, it’s practically worthless.

Be alert to tricks of the advance fee loan trade so you can avoid them. For example: • A lender who isn’t interested in your credit history is cause for concern. Ads that say “Bad credit? No problem,” “We don’t care about your past. You deserve a loan,” “Get money fast,” or even “No hassle – guaranteed” often indicate a scam.

• If disclosures about fees aren’t clear and prominent, take your business elsewhere. Scam lenders may say you’ve been approved for a loan, then call or email demanding a fee before you can get access to any money.

• If the offer of the loan is made by phone but you have to pay before you get access to any money, it’s illegal. It’s illegal for companies doing business in the U.S. by phone to promise you a loan and ask you to pay for it before they make good on their promise.

• A lender who uses a copy-cat or a ‘wanna-be’ name is a reason for you to be suspicious. Crooks give their companies names that sound like well-known or respected organizations and create fancy-looking websites. Some scam artists pretend to be the Better Business Bureau or another reputable organization, and some produce forged paperwork or pay people who pretend to be references.

• A lender who is not registered in your state is a red flag. Lenders and loan brokers are required to register in the states where they do business. To check registration, call your state Attorney General’s office or your state’s Department of Banking or Financial Regulation.

• A lender who asks you to wire money or pay an individual is questionable at best. Don’t pay a person for a loan or credit card directly; legitimate lenders don’t ask you to do that. In addition, don’t use a wire transfer service or send money orders for the promise of a loan. You have little recourse if there’s a problem with a wire transaction, and legitimate lenders don’t pressure their customers to wire funds or send them by courier.

Vehicle Repossession If you’re like most people, you rely on your vehicle to get you where you need to go – and when you need to go – whether it’s to work, school, the grocery store, or the soccer field. But if you’re late with your car payments, or in some states, if you don’t have adequate auto insurance, your vehicle could be taken away from you.

If you know you’re going to be late with a car payment, contact your creditor right away. It’s easier to try to prevent a vehicle repossession than to dispute it later.

• Many creditors will work with customers they believe will be able to pay, even if a little late.

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14

$ Money

Matters!

Super Important Information You Need to Know

Everyone agrees that times have changed. Our financial lives have become complicated and confusing.

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How to Use Debit and Credit Cards – and Stay Out of Trouble You Can Create Savings – Even Without Getting a Raise Resources for College Financial Aid If You Have Debt, You Also Have Rights! Empower Yourself.

How to Get Your FREE Annual Credit Report Which Loans Work for You and Why How to Avoid Foreclosure Beware of Scams – FREE Help Rental and Lease Tips – Watch Out How to Get the Very Best Insurance for the Very Best Price How to Detect Investment Fraud

A S u rv i va l Manual for the 2 1 s t Centur y

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