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What the Fluff? The Truth to Prioritizing your Budget

From our readers’ corner:

Lately I’ve receive a lot of questions from readers, as well as my clients, trying to decide what percentage they should be spending in a particular category of expenses in order to maintain more proactive and empowered financial behaviors.  This is an excellent question and glad that all of you readers realize the importance of “owning” your money!

While it can seem interesting or even fun to see how much you’re spending in a category vs. your neighbors, these percentages are NOT the Holy Grail you should be focusing on.  It only has meaning if you’re comparing yourself to others!  In other words the percentages are a ‘relative’ measure and only have meaning when compared to someone else’s results.  While I agree that it makes cute  and easy to understand pie charts, in terms of how to end up with more money for saving and investing, this is not where to focus your attention.

Do the New Credit Card Rules Affect You? (Hint: Yes, They Do!)

As many of you have heard by now, the Federal Reserve Board approved several new rules providing credit card protection from high and often unreasonable late and penalty fees. The new rules, which will go info effect on August 22, 2010, are meant to ensure that these fees are less costly and more fair for consumers.

The new rules are an amendment of Regulation Z, which implemented the older consumer credit protections established in the Truth of Lending Act of 1968. Since these rules are over 40 years old, the rights they provided are much more limited in comparison to the new amendments.

For example under Regulation Z a late fee payment would be the same amount for a $30 minimum payment as it would be for a much higher payment such as a $70 minimum payment. Under the new rules; however, credit card companies can charge a maximum late fee of $25 with only a few exceptions. 

Here is a breakdown of the rules that you will want to know about: 

The Five Most Common TRICK Investment Proposals

Investment proposals often seem like they are simply too good to be true, and unfortunately they usually are. We created five of the most common investment sales tactics purposely used to trick you into making a shaky investment. Here are FIVE quick and easy phrases that everyone needs to beware of:

What Your 401K Means Today

In September of 2008, I wrote an article discussing why putting a halt on your 401K contributions during the recession is not a "smart money" decision. According to a survey from The Investment Company Institute, people have been following my advice (Thank you!)

A study following 3,000 households found that 90% of those households had a favorable view of their 401K system and 73% are confident that their plan will help them achieve their retirement goals. Another survey reported that six out of ten Vanguard 401K participants through the third quarter of 2009 had a balance in their accounts that was similar to or larger

5 Tips to Increase Your Children's Financial Savvy- Without Them Losing Interest

5 Important Things to Consider when Introducing Your Kids To Money

Whenever I'm interviewed, I typically mention one of my cardinal rules about the importance of teaching children about money. Invariably the next question I hear is:  "At what age should you begin?" 

Based on my experience and personal believes, this question is no different than asking at what age should we begin teaching our kids about other important values we want to instill in them.  When is it too early to learn about honesty, respect, manners, ethics, etc? There's no hard and fast rule, other than: If you don't actively teach them, they will simply mimic your behaviors ... good or bad. With money, the sooner you begin the better- especially if your money habits aren't ones you want your kids to model after!

Lessons Learned from the Experts (Wall Street and Warren Buffet)

While I was visiting with a friend of mine the other day, the topic turned to the recent financial uncertainties plaguing Wall Street. My friend and her husband left Russia to come to the US over 20 years ago.  They felt  compelled them to leave their homeland because of the our freedoms, rights, and opportunities afforded by the presence of capitalism in the United States.