Getting Control of Your Budget to Build a Better Financial Future

Many people struggle to maintain good spending habits today.  As the price for housing, consumer goods, and other necessities rises, people find that they must spend more money just to live adequately each month.  Before you know it, your budget might be thrown off track, and you might have significant debts with which to contend.

When you owe more than you earn, it may be time for you to use measures like compromises, settlements, and Debt Consolidation to get your budget back under control.  You may be convinced to use this service by realizing the advantages that it can offer you and your family.

Cessation of Debt Collection Communications

Creditors can be assertive if not outright aggressive when collecting on money owed to them.  They send out letters, make phone calls, and use other means to reach out to you to convince you to pay what you owe.

These communications can be particularly distressing when you have no extra money left over to pay your accounts.  You also may not want to be harassed at home or at work about your bills.

When you use this service, you can look forward to the collection attempts against you ending quickly.  Once the creditors are notified that you are consolidating your debts, they may be compelled by law to leave you alone and to stop making phone calls or sending letters to you.  This perk lets you get back to your regular life with your peace of mind intact.

Distribution of Payments

Another advantage that comes with using these services involves having your monthly payment distributed accordingly among your creditors.  The amount of money that they receive will depend on how much you owe and the amount of interest being charged on the debt.

However, you do not have to worry about figuring out that amount.  The consolidation company will disperse the amount you pay each month fairly among the various creditors.

Creditors by law are required to accept any money that you pay them through this kind of arrangement even if the amount is less than you normally would pay otherwise.  This method of paying allows each debt to be settled progressively over a reasonable amount of time.

Lowered or Eliminated Interest

Consolidating your debts may result in your creditors either lowering the amount of interest that you owe or eliminating the interest altogether.  Depending on the creditor and type of debt, you could have the amount lowered when the interest rate is reduced or taken off the amount that you owe.

Moreover, many creditors will settle the debts for lower amounts if you can pay them off within a set number of weeks or months.  The consolidation company will make it a priority to satisfy the terms of the settlement so that you save money and close out your account sooner.

Restored Credit

Finally, consolidating your debt may help you maintain or raise your credit score.  While your report will reflect the fact that you utilized a third-party company to pay off your debts, your score will still raise as the accounts are settled and closed.

In a matter of months or years, your credit rating may dramatically increase as long as you practice good financial habits.  You may be able to secure financing at lower interest rates and be eligible for loans like mortgages or home equity financing.

Many consolidation companies offer educational resources to help people avoid falling back into old spending habits.  You may use this information to learn what you need to do in the future to take care of your money and to avoid taking on too much debt again.

Uncontrollable debt can take a devastating toll on your budget.  You may spend more on payments than you earn each month.  When you find yourself over your head in debt, it may be time to ask an outside party for help.

The consolidation company can reorganize your debt and distribute payments among your creditors until the accounts are paid in full.  Once they are paid off, you may rebuild your credit and have enough money in your budget to embark on a fresh financial future.

Despite preventative measures, how do financial criminals evade laws?

Despite preventative measures against bankruptcy fraud and money laundering, criminals are finding ways to exploit differing regulations in the United States and Europe. In a recent study, two UT Dallas alumnae examine the frequency and implications of bankruptcy fraud and money laundering. They also assess the degree of cultural and ethical differences between these acts in the United States and Europe, where the crimes are more prevalent.

“The lack of uniformity between the financial systems and their regulations makes a lot of room for criminals to participate in these illegal activities. If somehow the nations of the world were able to create uniformity within their financial systems and the way regulations work, it would eliminate a lot of the crime that is happening right now,” said co-author Brenda Limon.

The study found that while auditors and financial analysts are in the process of reducing bankruptcy fraud and money laundering, completely nullifying these issues may never be possible without a uniform structure of financial regulations.

The researchers analysed Hofstede’s cultural model and how it pertains to financial regulations between the U.S. and Europe.

“It was interesting to see the cultural differences across different nations and how they manifest in the policies and financial regulations,” said co-author Pamela Wong.

She added, “Specifically for the U.S., one of the dimensions is low power distance, which means Americans prefer an equal distribution of power amongst individuals. This is exactly why the U.S. has strong whistleblower protection against retaliation for people who speak out against corporations that commit these types of fraud.”

“We found this tendency to look for short-term results sometimes pushes people in influential positions to commit crimes, either money laundering, bankruptcy fraud or the manipulation of financial statements,” Limon said.

“Because they find themselves under pressure to show stockholders that the company is growing, or has closed a deal, that pressure instigates them to make the mistake of doing whatever it takes to get quick results.

“On the other side of the coin, the United States has been one of the most active in trying to create uniformity in the rules. They’re one of the countries trying to come up with regulations that fit not only their standards, but standards of other countries that are strongly tied to them financially.”

The study is published online in the International Journal of Arts and Sciences.

Speaker has all the rights to call the police if there is a disruption: Dr Subramanian Swamy on Tamil Nadu floor test

Subramanian Swami took to Twitter post the Tamil Nadu Assembly “drama” said that Speaker has all the rights to call the police if there is a disruption. On Saturday MLAs in TN Assembly refused to move out after Speaker declared that Chief Minister from AIADMK, E Palaniswami won the trust votes of 122 MLAs out of 235.

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In the event of MLAs refusing to move out of the assembly, the Speaker had several options including changing the venue for votes. When the proceeding started this morning, it looked like it would be concluded within no time. But soon, massive fight for secret ballot erupted and MK Stalin was forced evicted followed by the other DMK MLAs. Soon it turned out to be a law and order situation. The Speaker said that the disruption was unacceptable. There was even a clash happened between marshalls and DMK MLAs. DMK MLAs even sat on the Speakers chair. This is the second time that a bedlam has happened in TN Assembly. With the assembly adjourned twice once at 12 pm and again at 1 pm.

Swami tweeted, “The biggest losers in this TN drama will be unpatriotic DMK, corrupt Congress and Xtian converters which had a secret understanding with OPS,”

He said, “Imagine the irony of DMK speaking about others corruption. The world mody corrupt and fascist party is DMK.”

He called the act of DMK as goondaism and criticised the media for not projecting it that way. “As usual media anchors clueless. The core of what happened today in TN Assembly is blatant goondaism of anti national DMK,” he wrote.

“Anchors say President’s Rule will come. Idiots. Bommai judgment bars that. Speaker should take voice now. It will be legal,” said Swami.

He also said that in today’s Assembly’s Confidence Resolution those who vote against Palaniswamy would strengthen 2G Spectrum scamsters of DMK.

Debts Management Programs Are Giving New Perspective To Defaulters

The word debt has some grave consequences and most of the time it arouses tension and panic. Now, the people that are stuck in that debt situation, things become overwhelming for them. Also, several other factors like late payments, medical bills, and personal emergencies add up to make situations out of hand. If you are one of that people stuck in massive debt situation and desperately looking for ways to come out of vicious circle then, debts management and consolidation services have answer for you. Though the solution is not going to affect your financial condition overnight, you will be benefitted in the long run.

Looking Through Options

You have to consider and understand several factors while procuring help from professional debt Management Company. There are chances that you might feel confused about options to choose and is best suited for your situation. That is when the professionals come to play. It will help you to address your financial situation and at the same time choose the most viable options amongst many. You will also learn to take important financial decision under guidance of experts fetching you long term benefits like no other programs. While taking a look at the options, there are largely three types of options available to you, debts consolidation, debt settlement and bankruptcy.

Understanding Settlement Process

As suggested by the word, debt settlement is another name for debt negotiation. Here, negotiation will take place between two parties, which is you and creditors. The professionals will talk to creditors on behalf of you and settle on an amount that you can pay. You will have to remember, that even before the settlement process, begin you have to set aside a definite amount to support settlement payment. For that, you will also have to open an account with debt Settlement Company as the fixed amount will get deducted after settlement is processed from your account.

Debt Consolidation Process

There is slight difference between debt consolidation and settlement. You can get more details about it after you click here on official website of company. The consolidation process will make sure that all your debts are combined into one negotiable amount that is easier for you to pay. A financer will be fixed, that will pay the consolidated amount to creditors and settle the loan. On the other hand, now the defaulter will owe financer the negotiable amount on low rate of interest. It becomes easier for defaulter to pay the lower amount as it is held on much less interest rate.

About Management Program

Apart from these, there is also credit counseling program available for defaulters. You will get valuable guidance and advice from credit counselor and advisor when pursuing program. Along with that, professionals will also call your creditor in person and try to negotiate the amount if your financial situation is much worse. Your entire financial task will be taken care of by professional, and you will have to pay lesser amount on outstanding loans. Expert supervision will also help you understand your financial condition in much better way than earlier.

Helpful Tips In Choosing The Right Debt Consolidation Company

One thing you need to keep in mind that, no single way will help you in getting out of from vicious circle of debt in a quick way. At the same time, you also need to be careful in choosing a company that will take care of all your financial responsibilities and fix it simultaneously. Debts situations are various and being an amateur you will be unable to understand under which category your debt falls. Thus, here professional guidance becomes imperative. This will make you well acquainted with all the options that are present there and choose the right one for yourself.

Making A List

You might have already come across quite a few reputable companies as recommendations from friends and family. Try to jot down names of all reputable companies that you think is skilled enough to handle your case. Once you are done with so, turn to online research and do it in details. You will be able to understand the company upfront and services it provides. Their website will also give you the knowledge of years that they are operational in industry. Lastly, do not forget to look through customer testimonials and recommendations it has received.

About Registering Factor

Next thing that you must take into consideration while choosing, is whether the company is registered or not. Companies that deal with complex financial situations must be registered in compliance with industry rules and regulations.  As reputable professional companies are quite concerned about their reputation and rating in the industry, it will complain about set industry rules. Rely most of on those that have a valid registration id. It will give you a sense of satisfaction and reliability for choosing its services. You can think of pursuing the program from such registered companies.

Calling Them Individually

After you are done with that part, now it is time for you call the companies personally and talk about the services that it provides. Although, you have done the necessary research but, it is quite important to confirm about it in person. Make sure that every debt management and consolidation services are provided by them so you get them under one roof. You can also check out for related websites and see whether they provide free consultation to its candidates. Also, do not forget to ask about necessary criteria to pass the eligibility test. You can now shortlist the companies that you think are competent enough to handle your debt situation. Browse net for credit card debt help and you will surely get best results.

About Fees Structure

There is no such rule that debt consolidation service will charge you any upfront fees after you have registered for it. However, you still need to check on this fact from a corresponding executive working in company. Ask that whether there are any enrollment fees valid in program or not and which process they follow to settle different debt condition. Proficient companies will answer each of the questions as they believe in being transparent in professional relationship. Deciding on all these factors will help you will you find right debt Consolidation Company to take care of your debt condition and fix it with expertise.

Debt Settlement Is A One Way Ticket To Get Rid Of Debt

Being in debt is not at all a good phase of your life. You are suffering hard from those irritating phone calls, which are taking the most of your time. Well, there are some valid ways available, which will help you to stay out of trouble and help you further to get rid of credit card debts and other forms of debts, as well. One such is procuring help from non-profit organization, for debt settlement claims. These firms have their own set of rules and personal advisor ready to be your guide while working on debt settlement claims. Now, you are free from tension, as experts are here to help you out.

Main meaning behind settlement policy

Now, you must be wondering the real meaning of debt settlement. Well, it is a simple task. You are drowning in debt, and cannot repay the amount, even if you try hard. However, you might be able to pay a part of it, but not the full. It is during such time, when you have to look for debt settlement experts. They are going to get along with the amount, you can pay, and with certain proof, will have a thorough chat with the creditors on your behalf. This is a time consuming procedure, as no one will agree for an amount, which is less than what he or she deserves.

Working on the right strategies

As you are the debtor, therefore; the creditors will not listen to you. Moreover, you are not well-acquainted with the steps, which a reputed expert would know. Therefore, it is vital to procure help from a reputed expert from non-profit organization to help you out in this session. They are going to work with you first on your proof. Once done, they are going to have a direct chat with the creditors. Remember, that a case like debt settlement is a time-consuming task. Nothing will happen overnight, and you need to give the creditors some time too.

Proof is mandatory over here

Nowadays, proof is mandatory if you want to settle for an amount, lower than what you took. If you fail to do so, then even the renowned personal advisor will not be there to help you. You have to handle the case with ease, as you are dealing with reliable workers over here. When the creditor will understand that at least he might get something from the settlement, he will finally approve your proposal. However, you need to keep the money upfront and pay the amount in full. Further waiting from your side will not be allowed.

Payment after the case resolves

You will get payment, only after the case has been resolved. Before that, the firms are not even going to ask for a single penny from your side. These reliable firms mainly deal with the contingency fee structure. It is vital to know more about the strategies first, even before you plan to take any help. Just be sure to click here, and come to know more about the features, before mingling with any of the debt settlement plans.

Will Having a Mortgage Improve My Credit Score?

Worried woman looking at bills
Until the Fair and Accurate Credit Transactions Act was signed into law in 2003, Americans weren’t entitled to a free copy of their credit reports. And 24 years ago, when I began my career in consumer news, you couldn’t see your credit score at all, at any price.

Consumer access to credit reports and scores is a good thing. After all, if someone’s going to make important decisions about your future based on this stuff, we have both the right and obligation to make sure it’s accurate, as well as understand how to improve things.

While it’s good to be vigilant, however, let’s not become obsessed. Here’s this week’s question:

On my latest credit check, there was a remark about a lower ranking because “I had no mortgage.” I paid my mortgage off by 1996 and don’t understand how that could be counted against me. How can I fix this? -Helen

Here’s your answer, Helen!

Can a lack of debt hurt your credit score?

When it comes to credit scores, by far the most important factor is how good you’ve been at paying your bills on time, every time, for a long time. Do that flawlessly, and you can rest easy.

While a long, on-time history is the main thing, however, it’s not the only thing. Something else lenders like to see is a mix of different types of credit. The two major kinds are revolving credit, like credit cards, and installment credit, like car and mortgage loans.

So what Helen may have seen when she checked her score is a notation that it may be negatively affected by a lack of installment loans.

I can’t blame Helen for being concerned. After all, scores are important and when a notation indicates you may have done something wrong, it’s easy to think it’s a big deal and needs fixing. But in this case, it isn’t and it doesn’t.

What should Helen do?

For starters, take note that only 10 percent of your score is related to your credit mix, according to Fair Isaac, originator of the most widely used score. So having a variety of credit types isn’t hugely significant.

Of course, there’s a quick, albeit ridiculous, solution if Helen wants to try to raise her score by diversifying her credit portfolio. She could take out a mortgage, car loan, signature loan or other type of installment loan.

But unless Helen’s life depends on earning the highest possible credit score, she’d be nuts to take out a loan for the sole purpose of making Fair Isaac happy. If she has a great history of paying her bills on time, the impact on her score of not having an installment loan will be negligible. If her history isn’t so great, she’s much better off simply continuing to make on-time payments rather than taking on new debt.

I found an article on Kiplinger that addressed a similar issue: How paying off a mortgage affects credit scores. From that article:

Craig Watts, a spokesman for Fair Isaac, the firm that created the widely used [FICO] score, says that your credit score will likely be unaffected (by paying off a mortgage.) If your mortgage is your only installment loan, however, your score could suffer a slight ding, although not enough to make you want to change your plans.

Bottom line? While Fair Isaac or potential lenders may want you to have lots of different kinds of credit to earn the highest possible credit score, let’s not get carried away. Paying interest is almost always a waste of money and often a source of stress. Please: Pay off your mortgage, credit cards, car loans and anything else you owe. And when you do, don’t worry about any notations you see and don’t obsess about any potential negative impact it will have, particularly if you aren’t going to be borrowing soon. If you pay your bills on time, both you and your score will be just fine.

Got a question you’d like answered?

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Fed Officials Again Flag December; See Smooth Rates Liftoff

Janet Yellen Speaks At Monetary Policy Implementation Conference
Andrew Harrer/Bloomberg via Getty ImagesFederal Reserve Chair Janet Yellen

NEW YORK — Federal Reserve officials Wednesday continued to flag December as a likely time for interest rates to rise after seven years near zero, with two expressing confidence they will be able to pull off a rate hike smoothly despite fears of an abrupt market reaction.

Investors reacted by increasing the odds for a rate increase next month to 72 percent, from 64 percent Tuesday, based on interest rate futures prices.

Cleveland Fed President Loretta Mester repeated her position that the U.S. economy is now strong enough to absorb a modest policy tightening. Atlanta Fed President Dennis Lockhart, sitting alongside her on a panel in New York, said global financial markets have settled since the August turmoil that caused the U.S. central bank to delay raising rates.

I am now reasonably satisfied the situation has settled down … So I am comfortable with moving off zero soon.

“I am now reasonably satisfied the situation has settled down … So I am comfortable with moving off zero soon, conditioned on no marked deterioration in economic conditions,” Lockhart told a conference of bankers, traders and regulators.

“I believe it will soon be appropriate to begin a new policy phase,” he said, adding he will monitor economic data between now and a meeting on Dec. 15-16, for which he has a vote on policy. Mester regains a vote next year under a rotation.

Sentiment for a December hike took firm hold at the Fed’s October 27-28 policy meeting, according to meeting minutes released Wednesday that showed a solid core of U.S. central bankers poised for liftoff.

The Fed’s October statement helped convince skeptical markets that a rate hike may finally be imminent after several years of near zero rates. But the October session also saw central bankers begin grappling with longer-term issues that may be relevant to the pace of subsequent rate hikes, including whether the U.S. economy’s lower long-term potential means low interest rates will become a permanent norm.

For now, however, Fed officials seem confident that the central bank will meet its twin goals of full employment and stable two percent inflation.

Rob Kaplan, the Fed’s newest policymaker, declined to use his first public appearance as president of the Dallas Fed to comment directly on the timing of a rate hike, but expressed confidence that inflation will rise back to the Fed’s goal over the medium term. The Fed has said it needs exactly that confidence before raising rates.

Once rate hikes start, he said, the Fed will reassess conditions at each meeting and will pause further rate hikes if needed.

The comments were the latest in a string of communications from Fed officials meant to prepare global markets for the first U.S. rate hike in nearly a decade. The policy change is expected to continue pushing the U.S. dollar higher, pulling capital from emerging markets and elsewhere towards rising U.S. rates.

‘Huge Surprise’

New York Fed President William Dudley, whose branch of the central bank will use a handful of new levers to wrench rates up from near zero, told the New York conference he does not expect a “huge surprise” or major market reaction to a hike in part because it has been so loudly telegraphed.

Trillions of dollars of reserves parked at banks and worries that bond markets are less liquid and stable than in the past have added to concerns that deep volatility could greet the Fed rate hike.

Lockhart said he was “very confident” in the new tools and noted that the big focus now was deciding whether to make the policy change next month.

He said that any lingering concerns about U.S. labor market strength have been satisfied for a rate hike. Inflation he said was less clear, but he expects prices to rise as the downward pressure from a strengthening dollar and falling oil prices fades.

“A key point regarding inflation is that conditions have not been deteriorating, just hanging below target,” said Lockhart, seen as a centrist among the Fed’s 17 policymakers. “On balance for me the data have been encouraging and affirm that the economy has been growing at a moderate pace.”

10 Financial Fees You Should Never Pay

Worried Senior Woman Sitting On Sofa Looking At Bills

Fees. Not only can they be unpleasant, sometimes they’re sneaky. The financial industry is awash with fees that come in all shapes and sizes.

Many of them are well-known while a few are so covert that consumers get caught off guard when they realize they’ve been paying thousands of dollars in fees without knowing it. Not all fees are bad, however. After all, financial professionals have to make a living.

But that doesn’t mean they have a right to keep you blissfully unaware of what you’re paying for the services they’re providing. Before you hire a financial adviser, it’s a good idea to learn how they get paid. Ask them directly how they make their dough. If they dance around the question, take your business elsewhere.

There are a few financial fees you should never pay. Many times, these are the sneaky ones that pop up when you least expect them. Avoid these, and you’ll be well on your way to brighter financial future.

1. Mutual Fund Loads. Some mutual funds have loads. For example, class A shares are types of mutual funds that charge an upfront commission. You might pay, say, 3.75 percent of your investment money up front to buy the fund. This is all fine and dandy until you realize that many of these mutual funds also charge an ongoing management fee (called an expense ratio). Add these fees together, and you’re paying quite a hefty amount of money to own some mutual funds.

Miranda Marquit, writing for, explains:

Sometimes, when you buy or sell a mutual fund, you pay a load fee. This can be a real drag on your returns. Paying load fees doesn’t make much sense, either, since you can find plenty of funds and brokers that don’t charge these fees.

Load mutual funds aren’t necessarily a horrible option, but there are certainly better options out there. Ask several financial advisers what they would recommend and compare the differences.

2. 12b-1 Fees. A 12b-1 fee is a marketing or distribution fee that is applied every year. This fee is considered an operational expense, so it is included in the fund’s expense ratio. Take a look at your mutual fund statements and see if you’re being charged 12b-1 fees.

don’t know about you, but I would never want to pay marketing fees. If a mutual fund has to be marketed, it may testify to the possibility that it’s not a good fund in the first place — otherwise the mutual fund would sell itself.

3. Variable Annuity Fees. One day a prospective client walked into my office and told me she had been working with a big brokerage firm that she felt wasn’t being completely honest with her. The adviser had sold her a variable annuity and some mutual funds. She wasn’t really concerned about the mutual funds, but she let me know she wasn’t exactly sure how the variable annuity worked.

Never, never buy a financial product without understanding how it works! Back to the story …

I asked her how much she was paying for her variable annuity and she thought she saw a fee for around $50. That’s not bad, right? Well, later we learned that she paid over $3,500 in variable annuity fees and didn’t even know it. Your jaw should drop right about now. I’m not a fan of variable annuities. The fees are just too high — and many times sneaky, too.

4. Late Fees. Late fees are another type of fee you should never pay. These fees may occur when you’re late paying your bills. The formula you can use to pay your bills on time is pretty straightforward. First, you must have enough cash to pay. It’s a good idea to save up extra cash in your checking account to ensure you have enough for all bills — including the unexpected ones.

Second, you’re going to need to process your mailbox, email, and other inboxes where you receive bills on a regular basis. Keep track of your automated bills and payment methods. Make sure to have a good system in place for remembering to pay your bills on time!

5. Overdraft Fees. Nobody should ever have to pay overdraft fees. The only time you’re going to overdraft on your checking account is if you intentionally do so (don’t do that) or if you aren’t keeping track of your transactions. This is yet another reason to keep a buffer of cash in your checking account.

If you forget about a transaction it will be pulled from your buffer of cash instead of putting your account into the negative which may result in an overdraft fee. If you to spend that extra buffer, then work with your bank or get an online checking account that will automatically draft from a savings account. This way you keep the money out of your regular checking but still have that buffer to cover any mistakes.

6. Foreign Transaction Fees. Credit card companies (and even banks) sometimes charge their customers fees when they use their cards overseas. These foreign transaction fees can be easily avoided by signing up for a card without foreign transaction fees or by using an alternative payment method such as cash.

These foreign transaction fees can be easily avoided by signing up for a credit card without foreign transaction fees or by using an alternative payment method such as cash.

“Would you rather spend an extra 2 to 4 percent of your purchases on credit card fees, or on a nice meal at your destination?” asks Gerri Detweiler, director of credit education at

7. Low Balance Fees. Some banks, credit unions, and wealth management firms charge a fee when balances on certain types of accounts fall under various thresholds. Many times, financial institutions will reward customers in the form of a higher interest rate or other perks for participating in these types of accounts. Brian O’Connell, writing for, explains the joy of avoiding these types of fees:

Saving a few bucks on bank fees is a cathartic experience — it’s a rare chance to pull one over on your bank instead of vice-versa.

You should never pay a low balance fee. If you can’t keep enough money in an account to meet the minimum balance requirement, skip the perked account and opt for a simpler, boring, and fee-less account.

8. ATM Fees. ATM fees are brutal. Many times, customers will use an ATM to get a small amount of cash out of their bank accounts and be charged an exorbitant percentage of the funds they withdrew for the pleasure. For example, say you take out $20. You’re charged a $1.50 fee. That’s effectively a 7.5 percent charge. Forget about it!

Instead, make sure to ask your bank or credit union which ATMs in your area are “surcharge-free” and within their ATM network. Nowadays, you’re sure to find several surcharge-free ATMs where you need them most.

9. Payment Fees. This is perhaps one of the most annoying fees I’ve ever encountered. Imagine being charged a fee for making a payment. Um, no thank you. Some merchants have been known to charge these “convenience” — what I call “payment” — fees when you make a payment over the phone or through a store representative instead of through their automated systems such as store kiosks. Avoid paying to make payments. It just doesn’t make sense.

10. Inactivity Fees. If you don’t need or use an account, why have it? Some banks and credit unions (especially online banks) charge inactivity fees when the account sits idle. These fees can usually be avoided by any kind of account activity like making a purchase or initiating a transfer.

Brokerage firms are starting to do this, too. I’ve noticed this with new clients bringing in their statements and finding “inactivity fees” or “small account” fees on accounts that don’t generate any fees or commissions over a period of time (usually one year).

The Bottom Line

You can avoid these fees (and others) by doing a little homework before you sign up for a product or service. Read the fine print. Ask financial advisers about their fees. Talk with your bank’s or credit union’s branch manager to uncover every fee they might charge. Say goodbye to these nasty fees and hello to better financial accounts!

Why Americans Are So Terrible at Financial Literacy

Worried couple working on personal finances
NEW York — American students spend about 1,000 hours in school each year, and yet very few, if any, of those hours are dedicated to learning about personal finance. It should come as no surprise then that U.S adults perform poorly when quizzed on basic financial concepts like interest rates and inflation. Only 22 percent of women and 38 percent of men aced a three-question test conducted by the Global Financial Literacy Excellence Center. Among people under age 35the numbers are even worse. Only 12 percent of women and 26 percent of men correctly answered all three questions.

“There is substantial evidence that more financially savvy people are more likely to plan, save, invest in stocks, and accumulate more wealth,” according to a report published recently by the Global Financial Literacy Excellence Center. “They also have been shown to be less likely to have credit card debt, and when they do borrow, they manage loans better, paying off the full amount each month rather than just the minimum due.”

When people make poor financial decisions, this can get them into deep financial trouble over their lifetimes.

Clearly, financial education is an important component of developing economic independence. According to the report’s authors, Olivia S. Mitchell and Annamaria Lusardi, “more than one-third of U.S. wealth inequality could be accounted for by differences in financial knowledge.”

That number could be even higher than one-third. According to the Survey of Consumer Finances, 46.7 percent of American households carry credit card debt. A Bankrate study found that a similar proportion of Americans, 48 percent, isn’t investing in the stock market.

“When people make poor financial decisions, this can get them into deep financial trouble over their lifetimes,” the authors write. “In turn, these difficulties can spill over to their families and the rest of the economy.”

Much work remains to be done, but Americans are open to learning more. According to the report, consumers would trade 3 percent of their consumption over the course of their lifetime to gain the financial knowledge needed to improve their overall well-being. They can begin their efforts in three areas:

Understanding How Interest Rates Work

Not all debt is created equal. Interest rates are the most important factor to consider when deciding how to prioritize a debt repayment plan. Many Americans are stressed about student loans, but the majority of interest rates for education debt range from 3 to 8 percent. A borrower who is also carrying credit card debt with an interest rate of 15 percent, should prioritize putting extra cash toward the credit card debt, while making the minimum student loan payment. Over time, this strategy will minimize the total amount of money spent paying off debt.

Overcoming a Fear of Investing

The recent recession has left many people, especially young people, afraid of investing. Historically, the stock market is the best way to ensure account balances grow at a rate that outpaces inflation. For gun-shy investors, choosing a target date mutual fund is a perfectly good place to start. Target date funds rebalance regularly to manage risk and return in relation to age. Not investing at all is likely to result in a retirement funding shortfall that could potentially be debilitating.

Making More to Save More

Wages have been stagnant in recent years, leaving it difficult for many people to save money. Cutting expenses can only go so far. The single best way to have more money is to make more money. According to a study from, 44 percent of American workers never negotiate their salary during performance reviews. This adds up to hundreds of thousands of dollars in lost income during one’s working years. Employees aren’t the only ones suffering from a lack of financial knowledge. Preliminary research from the Global Financial Literacy Excellence Center indicates that there may also be a connection between financial literacy and successful entrepreneurism. Yet another reason to invest in financial education in schools and the workplace.