The Complete Idiot's Guide to Personal Finance in Your 20s and 30s

by Fisher, Sarah Young; Shelly, Susan

• ISBN13: 9780028624150
• ISBN10: 0028624157
• Format: Paperback
• Copyright: 1999-03-19
• Publisher: DK Publishing, Inc.

Summary

You're no idiot, of course. You're financially independent: You pay rent, utilities, and loans all out of your own paycheck. You realize that your parents had to cut the cord sooner or later, and you're proud of how well you've adjusted. But when it comes to saving money for the long haul, you feel like an astronaut whose oxygen cord has been cut. Don't drift into a financial black hole yet! The Complete Idiot's Guide to Personal Finance in Your 20s and 30s gives you an edge so you can get through financial hardships now, invest for the future, and even afford a luxury item once in a while. In this Complete Idiot's Guide, you get:

Author Biography

Sarah Young Fisher is owner of Fisher Advisers, a financial consulting firm in Lancaster, Pennsylvania. She is a certified financial planner, a chartered financial consultant, and a certified financial services counselor. Ms. Fisher is author of 1,001 Questions about Money Answered and Handle Your Money The Lazy Way. Susan Shelly, a freelance writer, is coauthor of The Complete Idiot's Guide to Learning Sign Language. She lives in Shillington, Pennsylvania.

Table of Contents

The Real World	p. 1
Personal Finance: The Stuff They Didn't Teach You in College	p. 3
Exactly What Is Personal Finance?	p. 3
Why Don't I Already Know This Stuff?	p. 5
Whatever Happened to Personal Finance 101?	p. 6
But I Don't Think I'll Be Able to Understand It	p. 7
Somebody's Got to Mind the Store	p. 8
Money's Not a Dirty Word	p. 8
Personal Finance Is for My Parents	p. 9
How Hard Is This Gonna Be?	p. 11
Let's Get Started	p. 12
You're Out Here--Now What Are You Gonna Do?	p. 15
Hey! Nobody Told Me It Was Gonna Be Like This!	p. 16
Mom and Dad, Where Are You?	p. 16
It's a Big, Cold World Out Here	p. 17
A Look at Where You Are	p. 18
A Look at Where You're Going	p. 19
A Personal Finance Test	p. 21
Your Personal Finance Knowledge Assessment Quiz	p. 21
Answers	p. 23
Taking a Look at Your Bank Accounts	p. 27
Do You Have the Accounts You Need?	p. 28
Checking Accounts	p. 28
Savings Accounts	p. 32
Other Useful Accounts	p. 33
All Banks Are Not Created Equal	p. 34
Commercial Banks	p. 34
Credit Unions	p. 35
Thrifts	p. 36
So, What's a Percentage Point or Two Among Friends?	p. 36
Another New Bank Fee?	p. 37
Nickel and Diming	p. 37
The Great Interest Versus Bank Fee Dilemma	p. 37
Stop at the ATM, I Need More Cash	p. 38
Automatic Teller Machines or Automatic Theft Machines?	p. 38
Tips to Cut ATM Fees	p. 38
Credit Cards and Debt	p. 41
Everybody Wants a Credit--Card Until They Have One	p. 42
Getting a Card If You Don't Have One	p. 43
Co-signers and Secured Cards	p. 44
How Many Credit Cards Does One Person Need?	p. 45
Keep It (Your Credit Card) in Your Pants	p. 46
Knowing When to Use Your Credit Card	p. 47
Sometimes Cash Is King	p. 47
Finding a Better Deal on Your Credit Cards	p. 48
Annual Fees	p. 48
Interest Rates	p. 48
Fees and More Fees	p. 50
Timeliness Is Next to Godliness: Paying Off Your Debt	p. 51
Finding a Place with the Right Zip Code	p. 53
Doing the Apartment Thing	p. 54
Scouting Locations	p. 54
Signing Your Life Away	p. 56
Up-Front Costs	p. 57
Three's Company--or a Crowd	p. 58
Renter's Insurance	p. 60
Full House	p. 60
What Am I Gonna Sleep On?	p. 62
Furnishing Your Place Without Spending a Fortune	p. 63
Quality Is Key	p. 63
I Gotta Pay for That, Too?	p. 64
Electricity	p. 64
Phone	p. 64
I Want My MTV	p. 65
Road Rules	p. 67
Cruising the Auto Industry Landscape	p. 68
Planes, Trains, and Automobiles	p. 69
Not Everybody Needs a Car	p. 70
Renting a Car When You Need One	p. 70
The Great Debate: Buying or Leasing	p. 71
Financing Your Car	p. 71
Leasing	p. 73
New or Used, Big or Small?	p. 77
Your Car Costs You More Than You Think	p. 78
Maintenance	p. 79
Insurance	p. 79
The Total Cost	p. 79
On Your Own and Loving It	p. 81
What Do You Have?	p. 83
That's My Salary? You've Gotta Be Kidding!	p. 84
Asking for a Raise	p. 85
Looking for Another Job	p. 86
Sticking It Out	p. 89
There's More to a Job Than the Money	p. 89
Contacts	p. 89
Experience	p. 90
Benefits	p. 90
Assessing Your Assets	p. 91
Your Secret Stash	p. 94
Accounts	p. 94
Mutual Funds	p. 94
Stocks (Equities)	p. 95
Bonds	p. 95
Emergency Money	p. 95
What Do You Need?	p. 97
Your Financial Lifestyle	p. 98
Evaluating Your Expectations	p. 99
Looking at What You Need and What You Don't	p. 100
The Bare Necessities	p. 101
Niceties or Necessities?	p. 103
The B Word: Budgets	p. 107
Why Budgets Have Such a Bad Rep	p. 107
Everybody Needs a Budget	p. 108
What Your Budget Should Include	p. 109
Non-Routine Expenses	p. 111
Routine Expenses	p. 112
Trimming the Fat: Analyzing Your Expenses	p. 114
Spending Ratios	p. 116
One Job, Two Jobs, Three Jobs, Four	p. 116
Sticking with It	p. 118
Software and Web Sites for Budgeting	p. 119
Getting Into the Swing of Savings	p. 121
Are You a Saver or a Spender?	p. 122
Evaluating Your Financial Personality	p. 123
Savers Have It Made (Almost)	p. 125
Spenders Have to Work a Little Harder	p. 125
A Penny Saved Is More Than a Penny Earned	p. 126
Getting Into a Savings Mindset	p. 128
Tips for Saving Money on Almost Everything	p. 130
Food	p. 131
Eating in Restaurants	p. 132
Clothes	p. 133
Fitness	p. 134
Grooming	p. 134
Vacations	p. 134
Household Expenses	p. 135
Every Little Bit Counts	p. 136
Your Credit: Use It, Don't Abuse It	p. 137
Building a Credit History	p. 138
Knowing When Enough Is Enough	p. 139
Oops! I Think I'm in Trouble	p. 139
Recognizing Credit Trouble	p. 140
Knowing When to Get Help	p. 140
Repairing the Damage	p. 142
Your Credit Report	p. 144
How to Get a Copy of Your Credit Report	p. 145
Coasting Along	p. 149
Movin' On Up	p. 151
Emergency Funds	p. 152
Finding Another Car	p. 153
Knowing When to Trade It In	p. 153
Knowing When to Keep It	p. 156
Back to School	p. 156
Life Is Better in the Tropics	p. 157
Aren't These Computers Cool?	p. 159
Getting Your Own Place	p. 159
What's All This Talk About Investments?	p. 163
Starting Small	p. 164
How Much Do You Have to Invest?	p. 165
What's Out There?	p. 166
Mutual Funds	p. 166
Money Markets	p. 169
CDs--We're Not Talking Compact Discs	p. 170
401 (k)s	p. 172
Vesting	p. 175
A Taxing Topic	p. 177
What's Your Taxable Income?	p. 178
How to Make Less of Your Income Taxable	p. 180
Standard Deductions	p. 181
Itemized Deductions	p. 181
Fitting In: Tax Brackets	p. 185
Preparing Your Tax Returns	p. 186
I Can Do That!	p. 186
Help! I Need Somebody (Not Just Anybody)	p. 187
Web Sites and Software That Can Help You Prepare Your Taxes	p. 188
Looking Out for What You Have	p. 191
Welcome to the Insurance Jungle	p. 192
Insurance 101	p. 193
Sometimes You Need It, Sometimes You Don't	p. 194
Health Insurance	p. 195
Auto Insurance	p. 196
Property Insurance	p. 198
Disability Insurance	p. 200
Life Insurance	p. 202
You Just Don't Need It	p. 203
My Mama Told Me: You Better Shop Around	p. 204
What Do You Mean I'm Not Covered?	p. 204
To Everything There Is a Season	p. 207
The Game of Life	p. 209
Footloose and Fancy-Free	p. 210
She (Gulp!) Wants Me to Move in with Her!	p. 212
Financial Advantages	p. 212
Financial Disadvantages	p. 213
Breaking Up Is Hard to Do	p. 213
Will You Marry Me, Bill?	p. 214
Uh, Could You Sign Here, Please?	p. 215
Goin' to the Chapel and We're Gonna Get Married	p. 216
With This Ring	p. 216
Ouch! Here Comes the Bill	p. 217
Uncle Sam Has a Little Wedding Present for You	p. 220
Not Your Father's Pension Plan: Retirement Funds in the Modern World	p. 221
Is Retirement Planning Your Top Priority? It Should Be	p. 222
What's Out There?	p. 225
Individual Retirement Accounts (IRAs)	p. 226
Roth IRAs	p. 227
Doing It on Your Own	p. 228
SEP-IRAs	p. 229
Keoghs	p. 229
Annuities	p. 230
So Where Should My Retirement Money Go?	p. 231
Early Withdrawal Penalties	p. 232
Investing Beyond Retirement Accounts	p. 235
When Is the Best Time to Start Investing?	p. 236
What Kind of Investor Do You Want to Be?	p. 236
High-Risk Investors	p. 237
Moderate-Risk Investors	p. 238
Conservative Investors	p. 238
Your Timetable Is Important, Too	p. 239
You Can't Tax That! Can You?	p. 239
Show Me the Way to the Investment Store	p. 242
Buying Mutual Funds	p. 242
Buying Stocks or Bonds	p. 243
Where to Learn About Investments	p. 244
Books	p. 244
Web Sites	p. 245
Newspapers and Magazines	p. 245
TV Shows	p. 246
Investment Options	p. 247
How Does the Stock Market Work?	p. 248
When You Own	p. 249
When You Loan	p. 252
Mutual Funds	p. 254
Understanding the Risks	p. 256
Where to Invest Your Money	p. 258
Safe, but Not Too Exciting	p. 258
Exciting, but Just How Safe?	p. 259
Is Investing in Beanie Babies a Good Idea?	p. 260
We All Need Somebody to Lean On	p. 263
Know Thy Finances, Know Thy Advisor	p. 264
Do I Need a Financial Advisor?	p. 265
The Who's Who of Financial Advisors	p. 266
Financial Planners	p. 266
Certified Financial Planners	p. 266
Financial Consultants	p. 267
Bank Customer Service Representatives	p. 267
Certified Public Accountants/Personal Financial Specialists	p. 267
Insurance Agents	p. 268
Money Managers	p. 268
Finding a Reputable Financial Advisor	p. 268
How Long Have You Been in This Business?	p. 269
How Have You Prepared for This Job?	p. 269
What Was Your Job Before You Became a Financial Advisor?	p. 270
Can You Give Me the Names of Some Other Clients, Please?	p. 270
Go with the Gut	p. 270
Places and People to Avoid	p. 271
Too-High Fees	p. 271
Conflicts of Interest	p. 272
I Know What You Did Last Summer	p. 272
The Sleaze Factor	p. 273
Things Your Investment Advisor Should Never Do	p. 273
Misrepresentation	p. 273
Churning and Burning	p. 274
Ignoring Your Wishes or Neglecting to Keep You Informed	p. 274
So You're Thinking of Buying a House	p. 277
There's No Place Like Home	p. 279
It's the American Dream--But Is It Right for Everyone?	p. 280
Quiz	p. 281
How Much House Can You Afford?	p. 282
How Much Do You Make?	p. 283
Your Expenses	p. 283
Your Monthly Mortgage Payment	p. 284
The All-Important Down Payment	p. 285
Choosing the Right Real Estate Agent	p. 287
The Great House Hunt Begins	p. 289
Single, Double, Townhouse, Duplex, or Condo?	p. 289
There Goes the Neighborhood	p. 290
Don't Forget to Check Out the Schools	p. 291
Pier One, Here We Come	p. 291
We'd Like to Borrow Some Money, Please	p. 293
Just What Exactly Is a Mortgage?	p. 294
Getting the Mortgage That's Best for You	p. 295
Fixed-Rate Mortgages	p. 296
Adjustable-Rate Mortgages	p. 296
Which Is Better: Fixed-Rate or Adjustable?	p. 297
Other Types of Mortgages	p. 299
Thirty-Year Versus Fifteen-Year Mortgages	p. 301
Points	p. 301
Alternative Types of Mortgages	p. 302
Federal Housing Administration Loans	p. 302
Veteran's Administration Loans	p. 302
Community Home Buyer's Program	p. 303
Fannie Neighbors	p. 303
Where to Go to Get Your Mortgage	p. 303
Getting Your Mortgage Approved Faster	p. 304
What Happens at Settlement?	p. 305
Paying It Off, Little by Little	p. 307
How Quickly Should You Pay Your Mortgage?	p. 308
How Much Extra Do I Have to Pay?	p. 310
What About Biweekly Payments?	p. 312
Put Your Money Where Your Mortgage Is	p. 313
What If I Can't Make a Payment?	p. 314
Late Penalties	p. 315
Mortgage Insurance	p. 316
Putting Money in an Escrow Account	p. 317
How Owning a Home Affects Your Taxes	p. 321
Tax Benefits of Owning a Home	p. 322
Deductions, Deductions	p. 322
Capital Gains Exclusion	p. 326
You Wanna Play House? You Gotta Pay Taxes	p. 327
Home Equity Loans and Lines of Credit	p. 328
Weighing the Tax Advantages Against the Disadvantages	p. 329
Homeowner's Insurance	p. 331
Nobody Should Be Without Homeowner's Insurance	p. 332
How Much Homeowner's Insurance Do You Need?	p. 333
Look for a Guaranteed Replacement Provision	p. 334
Personal Property Coverage	p. 335
Exactly What Should You Insure?	p. 336
Make Sure You Know What You Have	p. 336
Liability Insurance	p. 337
Insuring Against Natural Disasters	p. 338
We Don't Have Earthquakes Here!	p. 338
The Government Will Take Care of Us	p. 339
The Best Places to Buy Homeowner's Insurance	p. 340
Additional Resources	p. 343
Show Me the Money Glossary	p. 347
Index	p. 363
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