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The Complete Idiot’s Guide® To: Personal Finance in Your 20s & 30s, Fourth Edition

Book Description

Whether you’re a recent college graduate or have several years of “real world” experience, The Complete Idiot’s Guide® to Personal Finance in Your 20s and 30s, Fourth Edition, helps you build and manage your money--even during tough economic times. This book provides valuable tips on how to develop the savings habit--even if you’re a die-hard spender, explains the truth about credit cards, gives you a complete look at housing choices from renting to home ownership, and offers a thorough explanation of 401(k) plans, individual retirement accounts (IRAs), and other investments.

Table of Contents

  1. Copyright
  2. Foreword
  3. Introduction
    1. What You’ll Find in This Book
    2. More Bang for Your Buck
    3. Acknowledgments
    4. Trademarks
  4. 1. The Real World
    1. 1. Personal Finance: They Didn’t Teach This in College
      1. Exactly What Is Personal Finance?
      2. Why Don’t I Already Know This Stuff?
        1. Whatever Happened to Personal Finance 101?
        2. What You Know Versus What You Need to Know
      3. Money Is a Fact of Life
      4. Personal Finance Is for Everyone
        1. The Least You Need to Know
    2. 2. You’re Out There on Your Own ... Now What?
      1. Nobody Told Me It Was Gonna Be Like This!
        1. Mom and Dad, Where Are You?
        2. It’s a Big, Cold World
      2. A Look at Where You Are
      3. A Look at Where You’re Going
        1. The Least You Need to Know
    3. 3. Taking a Look at Your Bank Accounts
      1. Do You Have the Accounts You Need?
        1. Checking Accounts
        2. Savings Accounts
        3. Money-Market Accounts and CDs
      2. All Banks Are Not Created Equal
      3. Another New Bank Fee?
      4. Avoiding High Costs of ATMs
        1. ATMs: Automated Theft Machines?
        2. Tips to Cut ATM Fees
        3. The Least You Need to Know
    4. 4. Credit Cards and Debt
      1. A Credit Card in Every Pocket
        1. Getting a Card
        2. Co-Signers and Secured Cards
      2. How Many Cards?
      3. Keep It (Your Credit Card) in Your Pants
        1. Knowing When to Use Your Credit Card
        2. Sometimes Cash Is King
      4. Debit or Prepaid Credit Card Advantages
      5. Safety First
      6. Getting the Best Deal
        1. Annual Fees
        2. Interest Rates
        3. Fees and More Fees
      7. Paying Off Your Debt
        1. The Least You Need to Know
    5. 5. Moving Out
      1. Figuring Out the Right Time to Go
      2. Doing the Apartment Thing
        1. Scouting Locations
        2. Signing Your Life Away
        3. What Can You Spend?
        4. Up-Front Costs
        5. Three’s Company—or a Crowd
      3. Full House
      4. Renter’s Insurance
      5. What Am I Gonna Sleep On?
      6. I Gotta Pay for That, Too?
        1. Utilities
        2. What Phone Plan Makes Sense for You?
        3. Cable, Internet, and Other Monthly Fees
        4. The Least You Need to Know
    6. 6. Getting Around
      1. What Are You Driving, Man?
      2. Changing Attitudes Toward Driving
        1. Not Everybody Needs a Car
        2. Renting a Car
        3. Sharing a Car
      3. Owning a Car Costs More Than You Think
      4. The Great Debate: Buying or Leasing
        1. Financing Your Car
        2. Leasing
        3. Pros of Leasing
        4. Cons of Leasing
      5. New or Used?
      6. A Look at Hybrid Cars
      7. Safety Counts
      8. Best Places—Online and Off—to Shop for a Car
        1. The Least You Need to Know
  5. 2. On Your Own and Loving It
    1. 7. What Do You Have?
      1. Living With the Job You’ve Got
      2. Looking at Your Options
        1. Asking for a Raise
        2. Looking for Another Job
        3. Finding Job-Hunting Help
        4. Sticking It Out
      3. There’s More to a Job Than the Money
      4. Assessing Your Assets
      5. Your Secret Stash
        1. The Least You Need to Know
    2. 8. What Do You Need?
      1. Your Financial Lifestyle
      2. Evaluating Your Expectations
      3. What You Need ... and What You Don’t Need
        1. The Bare Necessities
        2. Niceties or Necessities?
        3. The Least You Need to Know
    3. 9. The B Word: Budgets
      1. Why Budgets Have Such a Bad Rep
      2. Everybody Needs a Budget
      3. What Your Budget Should Include
        1. Nonroutine Expenses
        2. Routine Expenses
      4. Trimming the Fat: Analyzing Your Expenses
        1. Fixed Versus Variable Expenses
        2. Nondiscretionary Versus Discretionary Expenses
        3. Spending Ratios
      5. One Job, Two Jobs, Three Jobs, Four ...
      6. Sticking With It
      7. Budgeting Software and Websites
        1. The Least You Need to Know
    4. 10. Getting Into the Swing of Savings
      1. Are You a Saver or a Spender?
        1. Evaluating Your Financial Personality
        2. Savers Have It Made (Almost)
        3. Spenders Have to Work a Little Harder
      2. A Penny Saved Is More Than a Penny Earned
        1. The Incidentals Add Up
        2. That’s Interest-ing
      3. Getting Into a Savings Mind-Set
      4. Saving Money on Almost Everything
        1. The Least You Need to Know
    5. 11. Your Credit: Use It, Don’t Abuse It
      1. Building a Credit History
      2. Knowing When Enough Is Enough
      3. Oops! I Think I’m in Trouble
        1. Knowing When to Get Help
        2. Repairing the Damage
        3. Reputable and Not-So-Reputable Sources of Help
      4. Identity Theft
        1. Protecting Yourself from Identity Theft
        2. Getting Back Your Identity
      5. Your Credit Report and Credit Score
      6. The All-Important FICO Score
        1. How Your FICO Score Is Determined
        2. Getting a Copy of Your Credit Report
        3. The Least You Need to Know
  6. 3. Coasting Along
    1. 12. Movin’ On Up
      1. In-Case-of-Emergency Funds
      2. Finding Another Car
      3. Back to School
        1. M.B.A.s, Ph.D.s, M.C.P.s, M.Arch.s, and Sc.D.s
        2. Online Degrees—Education for the Twenty-First Century?
        3. Finding Loans to Help Finance Your Education
      4. Life Is Better in the Tropics
      5. Meet My New Hi-Def, LCD TV
      6. Getting Your Own Place
        1. The Least You Need to Know
    2. 13. What’s All This Talk About Investments?
      1. Starting Small
        1. How Much Do You Have to Invest?
        2. What’s Out There?
      2. Understanding Mutual Funds
        1. Fees Associated with Mutual Funds
        2. Advantages of Mutual Funds
      3. Exchange Traded Funds
      4. Dollar Cost Averaging
      5. Money-Market Funds
      6. Certificates of Deposit
      7. 401(k)s and Pension Plans
        1. A Match Made in Heaven
        2. Investing in Your 401(k)
        3. When to Adjust Your Contributions
        4. Retirement Year Funds
        5. Tax Advantages of 401(k) Plans
        6. Getting Money Early from Your 401(k)
        7. Vesting
      8. Money Purchase and Cash Balance Plans
        1. The Least You Need to Know
    3. 14. A Taxing Topic
      1. Understanding Taxes
      2. Finding Adjustments
      3. Making Deductions
        1. Standard Deductions
        2. Itemized Deductions
      4. Where You Fit In: Tax Brackets
      5. Preparing Your Tax Return
        1. I Can Do That!
        2. Help!
      6. Tax Preparation Websites and Software
      7. Paying Your Taxes Online
        1. The Least You Need to Know
    4. 15. Looking Out for What You Have
      1. Welcome to the Insurance Jungle
      2. Insurance 101
      3. Insurance Must-Haves
        1. Health Insurance
        2. Auto Insurance
        3. Property Insurance
        4. Disability Insurance
        5. Life Insurance
      4. You Just Don’t Need It
      5. Shop Around and Save
      6. What Do You Mean, I’m Not Covered?
        1. The Least You Need to Know
  7. 4. To Everything There Is a Season
    1. 16. Working from Home
      1. Can More Than 20 Million Americans Be Wrong?
      2. Working at Home for Somebody Else
      3. Going It Alone from Home
      4. Setting Up a Home Office
        1. Zoning and Other Legal Issues
        2. Finding the Right Space
        3. Getting the Equipment You Need
        4. Financing the Stuff You’ll Need
      5. Challenges and Opportunities for the Self-Employed
        1. Taxes
        2. Deductions
        3. Insurance
        4. The Least You Need to Know
    2. 17. The Game of Life
      1. Footloose and Fancy-Free
      2. Moving In Together
        1. Financial Pros of Living Together
        2. Financial Cons of Living Together
        3. Breaking Up Is Hard to Do
      3. Will You Marry Me?
        1. Talking About Prenups
        2. Endless Wedding Plans (and Costs)
        3. With This Ring ...
        4. Here Comes the Bride, er, Bill
        5. Filing Jointly or Separately?
      4. And Baby Makes Three
      5. Divorce and Financial Issues
        1. The Least You Need to Know
    3. 18. Retirement Funds for the Twenty-First Century
      1. Retirement Planning: Make It Your Top Priority
        1. It Pays to Start Early
        2. Little Savings Can Mean a Lot
      2. What’s Out There?
        1. Individual Retirement Accounts (IRAs)
        2. Roth IRAs
        3. Timing Your IRA Contributions
      3. Doing It on Your Own
        1. SEP-IRAs
        2. Keoghs
        3. SIMPLE IRAs
        4. Annuities
      4. So Where Should My Retirement Money Go?
      5. Early Withdrawal Penalties
        1. The Least You Need to Know
    4. 19. Investing Beyond Retirement Accounts
      1. When Is the Best Time to Start Investing?
      2. What Are You Investing For?
      3. What Kind of Investor Do You Want to Be?
        1. High-Risk Investors
        2. Moderate-Risk Investors
        3. Conservative Investors
        4. Your Timetable Is Important
      4. You Can’t Tax That ... Can You?
      5. Show Me the Way to the Investment Store
        1. Buying Mutual Funds
        2. Understanding Index Funds
        3. Buying Stocks or Bonds
        4. The Least You Need to Know
    5. 20. Investment Options
      1. How Does the Stock Market Work?
        1. When You Own
        2. When You Loan
      2. A Closer Look at Mutual Funds
      3. Know the Risks
      4. Understanding Asset Allocation
      5. Where to Invest Your Money
        1. Safe, but Not Too Exciting
        2. Exciting, but Just How Safe?
        3. Is Investing in Baseball Cards a Good Idea?
        4. The Least You Need to Know
    6. 21. Getting Help When You Need It
      1. Know Thy Finances, Know Thy Adviser
      2. Do I Need a Financial Adviser?
      3. Understanding Fiduciary Responsibility
      4. The Who’s Who of Financial Advisers
        1. Financial Planners
        2. Certified Financial Planners
        3. Financial Consultants
        4. Bank Customer Service Representatives
        5. Certified Public Accountants/Personal Financial Specialists
        6. Insurance Agents
        7. Money Managers
      5. Finding a Reputable Financial Adviser
        1. Meeting with Potentials
        2. Finding an Adviser Online
        3. Go With Your Gut
      6. Just Say “No”
        1. Avoid Too-High Fees
        2. Watch Out for Conflicts of Interest
        3. Check for Past Bad Behavior
      7. Financial Adviser Don’ts
        1. Beware of Misrepresentation
        2. Who Has Custody of Your Money?
        3. “May I Borrow a Few Bucks?”
        4. Ignoring You or Keeping You Out of the Loop
        5. The Least You Need to Know
  8. 5. So You’re Thinking of Buying a House
    1. 22. There’s No Place Like Home
      1. It’s the American Dream, but Is It Right for You?
      2. The Changed Face of the Housing Market
      3. Gauging Current Market Conditions
      4. How Much House Can You Afford?
        1. How Much Do You Make?
        2. What Are Your Expenses?
        3. Calculating Your Monthly Mortgage Payment
      5. The All-Important Down Payment
      6. Choosing the Right Real Estate Agent
      7. The Great House Hunt Begins
        1. Building a House Versus Buying a House
        2. How About a Fixer-Upper?
        3. Single, Double, Townhouse, Duplex, or Condo?
        4. There Goes the Neighborhood ...
        5. How Are the Schools?
      8. Time to Shop for Furniture!
        1. The Least You Need to Know
    2. 23. “I’d Like to Borrow Some Money, Please”
      1. What Exactly Is a Mortgage?
      2. The Advantages of Mortgage Preapproval
      3. Getting the Best Mortgage for You
        1. Fixed-Rate Mortgages
        2. Adjustable-Rate Mortgages
        3. Which Is Better: Fixed or Adjustable?
        4. Other Types of Mortgages
        5. Thirty- Versus Fifteen-Year Mortgages
        6. What’s This About Points?
      4. Alternative Types of Mortgages
        1. Federal Housing Administration Loans
        2. Veterans Administration Loans
        3. Community Home Buyer’s Program
        4. Fannie Neighbors
      5. Where to Get Your Mortgage
      6. Online Mortgage Lenders
      7. Getting Approved Faster
      8. What Happens at Settlement?
      9. Knowing When to Refinance
        1. The Least You Need to Know
    3. 24. Paying It Off, Little by Little
      1. How Quickly Should You Pay Your Mortgage?
        1. How Much Extra Do I Have to Pay?
        2. What About Biweekly Payments?
      2. Put Your Money Where Your Mortgage Is
      3. What If I Can’t Make a Payment?
        1. Late Penalties
        2. Private Mortgage Insurance
      4. Putting Money in an Escrow Account
        1. The Least You Need to Know
    4. 25. How Owning a Home Affects Your Taxes
      1. The Tax Benefits of Owning a Home
        1. Deductions, Deductions
        2. Capital Gains Exclusion
      2. You Wanna Play House? You Gotta Pay Taxes
      3. Home-Equity Loans and Lines of Credit
        1. The Least You Need to Know
    5. 26. Homeowner’s Insurance
      1. Nobody Should Be Without Homeowner’s Insurance
        1. How Much Do You Need?
        2. Guaranteed Replacement
      2. Personal Property Coverage
        1. What Should You Insure?
        2. Know What You Have
      3. Liability Insurance
      4. Insuring Against Natural Disasters
      5. The Best Places to Buy Homeowner’s Insurance
        1. The Least You Need to Know
  9. A. Glossary
  10. B. Additional Resources