.:: All about insurance ::.
Introduction ................................................................. 1
Foolish Assumptions ....................................................................................... 2
How This Book Is Organized .......................................................................... 2
Icons Used in This Book ................................................................................. 6
Where to Go from Here ................................................................................... 6
Book I: Taking Charge of Your Finances ......................... 7
Chapter 1: Assessing Where You Are Financially . . . . . . . . . . . . . . . . . .9
Some Preliminary Questions ........................................................................ 10
Your Relationship with Money .................................................................... 10
Checking Out Your Credit Reports .............................................................. 11
Finding Out Your FICO Score ....................................................................... 13
Comparing Spending and Income ................................................................ 14
Assessing Your Spending Habits ................................................................. 19
Cataloging What You Own ............................................................................ 21
Adding Up What You Owe ............................................................................ 23
Chapter 2: Improving Your Relationship with Money . . . . . . . . . . . . . .27
Working with Your Partner to Achieve Financial Goals ........................... 28
Believing in Yourself ..................................................................................... 34
Handling Setbacks ......................................................................................... 36
Asking for Help ............................................................................................... 38
Digging Out of Debt ....................................................................................... 39
Budgeting for the Future ............................................................................... 41
Chapter 3: Building and Sticking to a Budget. . . . . . . . . . . . . . . . . . . . .45
Comparing Monthly Spending and Income ................................................ 46
Tackling a Budget Defi cit .............................................................................. 50
Paying the Important Stuff If You Can't Pay Everything ........................... 53
Examining a Budget Surplus ......................................................................... 55
Finalizing and Sticking to Your Budget ....................................................... 56
Chapter 4: Cutting Spending and Boosting Income . . . . . . . . . . . . . . . .61
Finding Ways to Spend Less ......................................................................... 61
Bringing in More Bucks ................................................................................. 73
xii Managing Your Money All-in-One For Dummies
Chapter 5: Fixing Up Your Credit Report . . . . . . . . . . . . . . . . . . . . . . . . .81
Understanding Why a Credit Report Is Important .................................... 81
What Is a Credit Report, Anyway? ............................................................... 83
Understanding How Bad Stuff Gets in Your Credit Report ...................... 86
Deciphering Your Credit Score .................................................................... 90
Examining Specialized Credit Bureaus ....................................................... 93
Book II: Managing Home and Personal Finances ........... 97
Chapter 1: Running a Money-Smart Household . . . . . . . . . . . . . . . . . . .99
Reaching Out to Touch Someone ................................................................ 99
Saving on Climate Control .......................................................................... 101
Cutting Back on Electricity and Gas Use .................................................. 106
Trash Talk: Controlling Garbage Costs ..................................................... 108
Reducing Television and Cable Expenses ................................................ 110
Cutting Down on Water Use ....................................................................... 110
Keeping a Ceiling on Housing Budgets ..................................................... 111
Cutting Transportation Costs .................................................................... 115
Purchasing Appliances ............................................................................... 120
Chapter 2: Home Ownership and Choosing the Right Mortgage. . . .123
Mortgage Basics ........................................................................................... 124
Assessing Your Financial Situation ........................................................... 125
Is a Fixed-Rate Mortgage in Your Future? ................................................. 130
Adjusting to an Adjustable-Rate Loan ....................................................... 133
Deciding What Loan Is Best for You .......................................................... 136
Chapter 3: Avoiding Foreclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139
Understanding That Mortgages Are a Different Credit Animal .............. 140
Alternatives to Going Down with the Ship ............................................... 147
Dealing with Defi ciencies ............................................................................ 151
Chapter 4: Keeping a Lid on Medical Costs. . . . . . . . . . . . . . . . . . . . . .153
Saving on Medical Expenses ...................................................................... 153
Discovering What Makes a Great Health Insurance Plan ....................... 155
Deciding Between Individual and Group .................................................. 156
Saving Money on Individual Coverage ...................................................... 158
Coping with Health Insurance Problems .................................................. 161
Taking Decisive Action ............................................................................... 172
Chapter 5: Using the Internet to Help Manage Your Finances. . . . . .177
Giving Yourself an Online Financial Makeover ........................................ 178
Using the Internet to Budget ...................................................................... 180
Finding Online Resources to Track Your Income and Expenses ........... 183
Using the Internet to Get Free Financial Advice ...................................... 185
Finding Out What You're Worth ................................................................ 186
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Book III: Dealing with Debt ....................................... 189
Chapter 1: Tackling What You Owe . . . . . . . . . . . . . . . . . . . . . . . . . . . .191
Taking Stock of Your Finances ................................................................... 192
Using a Budget to Get Out of Debt ............................................................ 193
Taking the Right Steps When You Have Too Much Debt ....................... 194
Handling Debt Collectors ............................................................................ 196
Getting a Financial Education .................................................................... 198
Chapter 2: Understanding How Credit Works. . . . . . . . . . . . . . . . . . . .203
Defi ning Credit: Spending Tomorrow's Money Today ............................ 204
Meeting the Cast of Characters in the Credit Story ................................ 206
Understanding the Consequences of Bad Credit .................................... 208
Dealing with a Thin Credit File ................................................................... 211
Identity Theft: The Crime That Turns Good Credit Bad ......................... 213
Chapter 3: Consolidating Your Debts . . . . . . . . . . . . . . . . . . . . . . . . . . .215
Knowing When Debt Consolidation Makes Sense ................................... 215
Considering Your Options .......................................................................... 216
Avoiding Dangerous Debt-Consolidation Possibilities ........................... 226
Chapter 4: Negotiating with Creditors and Getting Help . . . . . . . . . .227
Getting Ready to Negotiate ........................................................................ 228
Getting Down to Business: Contacting Creditors .................................... 232
Making the Agreement Offi cial: Putting It in Writing .............................. 234
Knowing the Deal with Credit Counseling ................................................ 235
Finding a Reputable Credit Counseling Agency ....................................... 236
Working with a Credit Counselor .............................................................. 240
Avoiding Debt Settlement Firms ................................................................ 243
Getting Relief If You Get Ripped Off .......................................................... 244
Chapter 5: Considering Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . .247
Viewing Bankruptcy in a Historical Context ............................................ 248
Debunking Bankruptcy Myths ................................................................... 250
Understanding What You Can Gain Through Bankruptcy ..................... 253
Knowing What You Can Lose in Bankruptcy ........................................... 258
Considering Alternatives to Bankruptcy .................................................. 259
Introducing the Different Types of Personal Bankruptcy ...................... 260
Weighing the Consequences of Not Filing Bankruptcy ........................... 261
Using the Statute of Limitations ................................................................ 263
xiv Managing Your Money All-in-One For Dummies
Book IV: Saving and Investing ................................... 265
Chapter 1: Becoming a Saver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .267
Eliminating Most of the Fat ........................................................................ 268
Lowering Your Debt .................................................................................... 270
Trimming Other Costs ................................................................................ 272
Changing Your Perspective and Watching Your Savings Grow ............. 272
Saving While in Debt ................................................................................... 278
Chapter 2: Investing in Stocks, Bonds, and Mutual Funds . . . . . . . . .281
Stock: Owning a Piece of the Rock ............................................................ 282
Buying Bonds for Fixed Income ................................................................. 286
Mutual Funds: The Power of Many ............................................................ 290
Doing It Your Way Versus Using a Broker ................................................ 293
Five Common Investing Mistakes .............................................................. 296
Chapter 3: Saving for Retirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .301
Setting a Target Date for Retirement ........................................................ 302
Calculating the Size of Your Nest Egg ....................................................... 307
Developing a Retirement Savings Plan ..................................................... 311
Chapter 4: Saving for College. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .319
Doing the Numbers ...................................................................................... 320
Exploring Section 529 Plans ....................................................................... 321
Checking Out Coverdell Accounts ............................................................. 322
But Wait! There's More! .............................................................................. 322
Maximizing Your Savings, Minimizing Your Tax ..................................... 324
Checking Out the Cost of College .............................................................. 325
Looking into the Costs of Various Types of Schools .............................. 329
Chapter 5: Working with an Online Broker . . . . . . . . . . . . . . . . . . . . . .333
Sorting Them Out: Selecting an Online Broker ........................................ 334
Opening Your Online Brokerage Account ................................................ 341
Ready, Set, Go! Making Your First Online Trade ..................................... 342
Knowing When to Hold and When to Fold ............................................... 345
Book V: Protecting Your Money and Assets ................. 347
Chapter 1: Combating Identity Theft . . . . . . . . . . . . . . . . . . . . . . . . . . . .349
Protecting Yourself from Identity Thieves ............................................... 350
Spotting Identify Theft When It Happens ................................................. 357
When Identity Theft Happens to You ....................................................... 360
Accessing Credit after Identity Theft ........................................................ 365
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Chapter 2: Online Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .369
Online and Traditional Banks .................................................................... 369
Accounting for Your Accounts .................................................................. 371
Choosing an Online Bank That's Right for You ....................................... 373
Remote banking and your cell phone ....................................................... 379
Opening Your Online Bank Account ......................................................... 379
Chapter 3: Homeowner's Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . .381
Introducing the Six Parts of a Homeowner's Policy ................................ 381
Choosing the Right Homeowner's Property Coverages ......................... 389
Establishing Property Coverage Limits .................................................... 392
Documenting Your Claim ............................................................................ 397
Chapter 4: Auto Insurance Basics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .401
Managing Your Lawsuit Risks .................................................................... 401
Insuring Your Personal Injuries ................................................................. 407
Dealing with Damage to Your Vehicle ....................................................... 411
Evaluating Road Service and Car Rental Coverages ............................... 416
Chapter 5: Buying Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .417
Assessing the Need ..................................................................................... 417
Determining How Much Coverage You Need ........................................... 419
Speaking the Language ............................................................................... 421
Understanding the Types of Life Insurance ............................................. 423
Understanding the Variations of Permanent Life Insurance .................. 425
Understanding the Variations of Term Life Insurance ........................... 431
Making Your Choice .................................................................................... 435
Evaluating Life Insurance Sources ............................................................. 436
Debunking Myths and Mistakes ................................................................. 440
Chapter 6: Dealing with the Tax Man. . . . . . . . . . . . . . . . . . . . . . . . . . .445
Filing Federal Taxes ..................................................................................... 445
Filing State Taxes ......................................................................................... 447
Coming Up with Deductions ....................................................................... 448
Avoiding Tax Mistakes ................................................................................ 450
Facing the Dreaded Audit ........................................................................... 451
What Can Happen If You Don't Pay on Time ............................................ 454
Coping with Interest and Penalties ........................................................... 463
Dealing with Liens and Levies for Past-Due Taxes .................................. 464
Getting Help .................................................................................................. 469
