Thursday’s need-to-know money news

imagesToday’s top story: How to tame your student loans. Also in the news: Why you shouldn’t skimp on insurance, critical personal finance tips for your first years after college, and three bills to pay off before you retire.

How to Tame Your Student Loans (Told in Under 350 Words)
Wrangling your student debt.

Don’t Skimp on Your Insurance
Pay now or pay more later.

4 Critical Personal Finance Tips for Your First Years After College
It’s a whole new world.

3 bills to pay off before you retire
Smoother sailing.

Wednesday’s need-to-know money news

wall_street_zombie_moneyToday’s top story: How to handle “expired” debt. Also in the news: Ways to avoid a disclosure catastrophe after closing on your new home, why your small business should have its own credit score, and why you should skip the extended warranty and save the money instead.

How to Handle Time-Barred Debt
Beware of “zobmie debt.”

5 Ways to Avoid a Disclosure Catastrophe After Closing
Pay close attention to the listing language.

Your Small Business Should Have Its Own Credit Score
Protecting your personal credit.

Skip the Extended Warranty and Save the Money Instead
Build a repair savings account instead.

Tuesday’s need-to-know money news

money-under-mattress-istock-630x434Today’s top story: The high cost of being unbanked. Also in the news: What you need to ask when choosing a mortgage broker, how getting a car loan can affect your credit, and how your Facebook account can ruin your finances.

The Cost of Being Unbanked: Hundreds of Dollars a Year, Always One Step Behind
No more stuffing your money under your mattress.

4 Must-Ask Questions When Choosing a Mortgage Broker
Getting the important answers.

How Getting a Car Loan Can Affect Your Credit
For good or for bad.

How your Facebook account can slowly destroy your finances
The modern day Keeping Up with the Joneses.

Money Lessons That Actually Stick

Efforts to make us smarter about money don’t seem to be working.

A Harvard Business School study found personal finance classes taught in high school had no effect on “financial outcomes,” such as how much people saved or how likely they were to miss payments on debt. A report for Management Science found that even intensive instruction had “negligible effects” on people’s behavior. That’s led some critics to say financial literacy education doesn’t work.

But other research has found methods that show promise. If you want to improve your relationship with money or teach your children about personal finance, these findings may help you do just that.

In my latest for the Associated Press, how to best improve your relationship with money and pass that knowledge to your children.

Q&A: How to avoid hiring a Madoff-like financial advisor

Dear Liz: What is the best way to pick a financial advisor to make sure they don’t make off with all your retirement money? I don’t want Bernie Madoff handling my retirement savings.

Answer: Even if you turn over day-to-day investment decisions to an advisor, you should make sure your money is invested at an independent custodian such as a nationally known brokerage or mutual fund company. That won’t immunize you from fraud, but Ponzi schemes are a lot harder to pull off when there’s third-party oversight.

Returns that are too good to be true, investments that you don’t understand or pressure from an advisor to invest are other red flags for fraud.

Protecting yourself from fraud is important, but so is protecting yourself from bad or conflicted advice. You need to check out any advisor thoroughly. Ask about experience, credentials and other qualifications. Find out how they get paid. Fee-only advisors are compensated only by the fees their clients pay and don’t accept any commissions for recommending products. Fee-based advisors, by contrast, may accept fees and commissions.

Your advisor should be willing to sign a fiduciary oath to put your interests first. That’s not currently required. Advisors can put you in expensive or underperforming investments just because those options pay them higher commissions and there’s little legal recourse for investors unless they can prove that the investments were clearly unsuitable for their situation.

Starting next year, advisors will be held to a fiduciary standard when counseling clients about retirement funds. There’s no reason you should wait for that rule to kick in, though. You can download a copy of a fiduciary oath for your advisor to sign at www.thefiduciarystandard.org.

Q&A: Guaranteed income in retirement

Dear Liz: Is there such a thing as guaranteed income in retirement? Private pensions are gone and public pensions aren’t far behind. There are calls for pension reform and I’m not sure if anything is guaranteed anymore. As far as annuities are concerned, insurance companies are on shaky ground and the U.S. government had to bail out AIG. My kids, in their 20s, have told me they aren’t expecting Social Security to be there when they retire. The term “guaranteed income” has lost its meaning.

Answer: I wouldn’t rely on your twenty-something offspring to be oracles of financial wisdom. The reality is that Social Security will collect enough in taxes to pay about three-quarters of promised benefits even if Congress never gets its act together to improve the system’s financial situation. As bad as Americans can be at math, most of us can understand that “75%” is not the same as “0%.” Social Security is an immensely popular government program that millions rely on for most or all of their retirement income, so the odds are pretty good that the system will be there when your kids need it.

Pensions are another common source of retirement income. Private pensions are on the wane but millions of people still have them. If a plan can’t pay promised benefits, the Pension Benefit Guaranty Corp. takes over. The PBGC has a maximum limit for payouts, which may trim the pensions of highly paid employees, but the vast majority of workers get what they were promised.

Public pensions, meanwhile, aren’t impossible to cut, but it’s tough to do, and most government agencies prefer to defer the pain by trimming benefits for younger employees rather than older ones.

Finally, it’s not true that insurers are on shaky ground — the vast majority survived the financial crisis without a bailout. You still should check into an insurer’s financial strength before you buy an annuity, of course, and many financial planners recommend buying only from top-rated companies. If an insurer does fail, many annuities are covered by state guaranty associations up to certain limits (typically $250,000).

Q&A: Using two-factor authentication

Dear Liz: In a recent column, you discussed the importance of setting up two-factor authentication to protect financial accounts. My concern about using this method is that if my cellphone is lost or not working, I won’t be able to access my accounts when necessary. What do you think about this?

Answer: Two-factor authentication typically combines the use of a password with a code texted to your phone. Most providers have backup options, including one-time-use codes and toll-free numbers to call if you run into trouble.

Friday’s need-to-know money news

budgetToday’s top story: Mapping your financial journey. Also in the news: What Wells Fargo’s settlement might mean for you, six unusual ways to get out of debt, and surprising Social Security benefits for divorced spouses.

Mapping Your Financial Journey
Building a roadmap to success.

What Wells Fargo’s $185 Million Settlement May Mean for You
The Wells Fargo wagon has rolled into some big trouble.

6 Unusual Ways to Get Out of Debt
You don’t have to deliver pizzas.

2 surprising Social Security benefits some divorced spouses can get
All is not lost.

Thursday’s need-to-know money news

FICO-score-calculation-300x281Today’s top story: Applying for the wrong credit cards can make bad credit worse. Also in the news: Store reward programs worthwhileness, preschoolers and personal finance, and the #1 cause of financial stress in your state.

Applying for the Wrong Credit Cards Can Just Make Bad Credit Worse
Be selective.

Are Store Rewards Programs Worthwhile?
Only if you’ll actually use the benefits.

Should Preschoolers Be Taught Personal Finance?
It’s never too early to start.

This is the No. 1 cause of financial stress in your state
Odds are pretty good your state is worried about debt.