Invest in yourself

Learn how to protect your future and manage your money with expert advice.

Four Basic Ways 401(k) Plans Work
There are four ways money can go into a plan, and only one of them comes out of your pocket! It's free money, in that sense. Take maximum advantage of it.

1.	The employee makes pre-tax contributions.
2.	The employer makes basic contributions.
3.	The employer matches your contributions.
4.	The employer makes a profit-sharing contribution.

Three Great Things About 401(k) Plans

	You pay no taxes on contributions.
	You pay no taxes on profits.
	Employers essentially give you "free money."

Drawbacks of 401(k) Plans
Once you make a contribution, Ric says to kiss that money goodbye until you reach retirement.

	Once you put money into the plan, it must stay there. You cannot make withdrawals.
	Borrowing is bad. If you take any money out prior to retirement, you will be charged taxes as well as a ten percent penalty.
	401(k) plans can be confusing, and employees often don't know what to do with their invested money when they leave a company.

Repair Kit for Damaged Credit

FINANCIAL FREEDOM

By Suze Orman

Your credit score is an incredibly important part of your financial life. All your creditors will look at your score to determine whether you're eligible for credit and, if so, at what interest rate. The higher your credit score, the lower the interest rates you pay on credit cards, car loans and mortgages. Even landlords, cell phone companies and some employers look at your credit score, because if you can't be good with money, you might not be a good tenant or employee. So you want to do everything you can to make sure your score is as high as possible. Some tips:

Pay on Time.
Your track record paying all your bills, not just your credit card, is the single biggest factor in your credit score. It accounts for 35% of your score. So don't be late. If you only send in the minimum amount due on your credit card bill, send it in on time, even if that means you have to pay to overnight it.

Keep Your Balance Low.
The amount you owe on your credit cards as a percentage of your outstanding credit limit—known as your debt to credit limit ratio—accounts for 30% of your score. The best way to keep this percentage low is to make sure you don't run up a big balance. Another option is to call your card company and ask for your credit limit to be raised. For example, if you have a $5,000 balance and a $10,000 limit, you are at the 50% level. But if your credit limit is boosted to $15,000, your ratio is reduced to 33%. Be very careful here, my friends, and don't ever use that extra credit.

Build a Strong History.
How long you have had an account determines 15% of your score. The longer the history, the more confident a lender can be about your financial behavior. For this reason, don't cancel any unused cards, because their history will be wiped from your record. So, let's say you no longer use a card you took out 10 years ago, because you got a better deal elsewhere. That's fine; just stick the card somewhere safe and sound, but don't cancel it outright. Even though you aren't using the card, you still want to use the history.

Don't Be a Credit–holic.
Potential lenders hate to see you applying for a lot of credit; it makes them think you're going to get in way over your head with debt. Your pattern of opening new accounts, or applying for new accounts, determines 10% of your grade. One important caveat: If you confine your mortgage shopping to a two-week period, all those applications (and lender requests for your credit score) will be bundled together and count as only one request on your record.

Watch Your Mix.
You don't want to have a ton of open credit lines or loans. Your mix of credit cards, retail cards and installment loans accounts for the final 10% of your score.

FINANCIAL FREEDOM

FINANCIAL FREEDOM
Play Your Cards Right
by Suze Orman

Thanks to recent congressional pressure, some credit card issuers have become a little more consumer-friendly. Citigroup, the world's largest card company, has quit using "universal default," which permitted it to raise users' interest rates even if they slipped up on payments to other creditors. Chase has decided to stop using "two-cycle billing," a practice that enabled the company to charge interest even for periods in which cardholders didn't carry a balance. But don't think for a minute that creditors have become altruistic. They can still make plenty of money off your account if you aren't paying attention. Here's how a little effort can help:

Request a lower interest rate. If you've been a reliable client with a solid credit profile, there's no reason to settle for a card with a rate of 15 percent or more. Call customer service and be polite but firm: "Given my strong credit history and the fact that I pay my bills on time, I think the interest rate on my card should be reduced to 8 percent. If you can't do that, I intend to take my business to a lower-rate card and cancel this account." (You can shop for a better deal at Bankrate.com, but don't actually cancel the card. It's best to get the balance down to zero by transferring it to a new card or paying it off. Then don't use the card again.)

Pay on time. According to a study by the Government Accountability Office, 35 percent of cardholders paid at least one late fee in 2005 and the average cost was $34, compared with $13 a decade earlier. This is too expensive a slipup to make. Even if you can't cover the bill in full, send in the minimum payment by the due date.

Eliminate your highest-rate balance first. To deal with multiple credit card balances, always pay the minimum due on each, and add more than the minimum onto the one with the highest interest rate. Concentrate on getting rid of the debt on that card, then move on to the card with the next highest interest rate, and so on, until you're in the clear.

THE MOST IMPORTANT ADVICE WE HAVE GIVEN IN 20 YEARS

Learn to profit in the new era of petro-fascism … what lies ahead for crude oil, gold, silver, stocks, and bonds.

First: BUY OIL – ABSOLUTELY ... BUT WITH CAUTION!

A few of years ago when oil was trading at $16.00 to $20.00 a barrel, I pointed out the ground floor investment opportunity developing in oil. We openly recommended Enerplus Resources (ERF-NYSE) in our publications. It was trading at $17.00 or less then and was paying a dividend of about 1.25% - MONTHLY. That amounted to 15% a year.

However, new events, perpetuated by the world’s turn toward petro-fascism, have necessitated an important change in investment strategy. We recently took our profit on Enerplus, which amounted to a healthy 136%, not counting all of those wonderful dividends. It was difficult to give up the dividends; but when times change, you must adjust.

Last Halloween, the Canadian government, motivated by greed over reason, moved to confiscate energy trust profits by introducing legislation to tax the trusts. This squarely broke a promise that the conservatives had made to not do so when they were elected barely a year before. Not to be outdone, U.S. Congressman Richard Neal from Massachusetts recently proposed legislation that would revoke the existing special tax treatment on dividends from certain foreign entities such as income trusts.

The barbarians are at the gate, and it is time for you to make an important change in your investment strategy. Learn how you can still exploit the rising prices of crude and natural gas while defending your wealth from further confiscatory actions on the part of our government and others. It is explained in a special study that we have just published called “A New Path To Profits During An Era Of Petro-fascism.”

Petro-fascism is already subtly creeping into your lives and your pocketbook more so as the decade passes. As governments, including our own, move to control the globe’s dwindling energy resources, they will find it convenient to limit your freedoms and ability to protect your financial lifestyle. Control of energy and other precious resources is imperative to holding on to power, and the government grab is on in the name of the common good. You need to learn to work within this changing environment now.

Crude oil has just completed a major correction, but our strongest technical tools are issuing significant long-term buy signals. Crude typically puts in its seasonal low early in the year as well. Bottom line, the worst is behind us as far as lower crude and natural gas prices are concerned. It is time to review your holdings and re-align your portfolio for the dawning of a new era.

Opportunity #1 – Let the government have the oil. The best investments are in the fuzz.

Let me tell you what I mean by investing in the fuzz. There is no substitute for crude oil, and political entities are going to directly and indirectly take greater control of crude oil and natural gas. However, the best profit opportunities are often not from putting on the show, but selling the T-shirts. Tennis balls are pretty basic, but the guy making the real money is selling the fuzz that goes on the ball, not the balls themselves. The space program in the 70’s was another example of how the easy money was made by the companies that sold the fasteners that held the rockets together - not the rockets.

The fuzz in energy is transportation, drilling, and service. I will show you my favorite oil companies. There are a few, including a couple of Canadian trusts, that are worth holding for now. I will tell you exactly what is worth holding, what is worth buying, and when to sell.

Nevertheless, in the future, supplementary energy investments promise to avoid capture, and they generate massive profits. As crude oil makes its way back to $80.00 and then on to $100.00, you can reap huge rewards, but being in the right stocks will be vital. It is all in our report, “A New Path To Profits During An Era Of Petro-fascism,” which you will receive free with your subscription. Why not give yourself Professional Timing right now?

Despite the recent price decline, oil and natural gas are on their way to significantly higher levels in 2007. Nothing has changed concerning the fundamentals for crude and natural gas.

** Geopolitical instability will continue to get worse in the Middle East as the Bush administration continues to confront our oil-producing enemies with his “stay the course” strategy. The Democrats will let the GOP self-destruct with their confrontational foreign policy, setting the stage for the 2008 elections.

** Oil production will continue to decline in major oil fields in Saudi Arabia, Kuwait, Mexico, and the North Sea .

** Iran’s nuclear ambitions will eventually be confronted with more severe sanctions, setting the stage for military intervention.

** Oil supplies will shrink more than any unlikely drop in global demand during 2007. Asian economies are shifting from being export driven to being driven by internal domestic demand. Any slowdown in American demand will be offset by increasing demand from Asia ’s exploding consumer class.

** The U.S. dollar appears to have broken its year long up move, and it is headed significantly lower. Since most oil transactions are in U.S. dollars, the lower the value of the dollar, the higher the price of crude oil.

** You will see more oil-producing countries opting for payment in euros this year. Since that means fewer dollars will have to be “purchased,” further pressure will be added to the dollar’s decline. Oil in euros will provide further incentive for the U.S. to use their military power to control global energy supplies and lanes of transportation - all under the guise of the common good, homeland security, and nationalism.

There are many reasons to invest now in oil and gas, but you can no longer invest willy-nilly. There are big changes afoot.

Each subscriber will receive our newest report, “A New Path To Profits During An Era Of Petro-fascism.” This report outlines our outlook for the energy market, and the outlook from here for the Canadian trusts. You will learn what to hold, what to fold, and what you should do now and beyond 2011. It discusses our current buying strategy. It addresses what alternatives you should consider, including non-Canadian, income-generating opportunities.

The most recent addition to our income recommendations is a Norwegian company that provides a decent regular dividend of 7.5% as well as occasional quarterly special dividends. Last quarter, they paid us $2.05 in cash and a spin off of stock worth another 95 cents a share. As their business gets better, you will share their good fortune. This is a wonderful company that is actually protected - not threatened by the new era of petro-fascism.

What about alternative energy? There simply isn't time for solar, hydrogen, windmills, hybrid cars, etc. to come to the rescue of peaking energy reserves and constant increases in global demand. There is no substitute for oil, but there is profit potential in some alternate energy companies.

Nuclear energy is an exception, and the potential at this point is in uranium. Our original uranium play is a little company for which we paid only $4.50. It is selling now for $15.00. It’s still a good buy at the right price, but we are researching several new uranium companies which will be presented in Professional Timing Service over the next few months.

The oil bears are counting on a major recession in China to dampen world demand for crude oil. This just isn't going to happen. The best that we can look forward to is for their economy to cool from white hot to red hot. China has just announced that they will be holding $650 billion of their stash of $1 trillion in currency reserves “at the ready.” They are going to invest the other $350 billion, along with an additional $200 billion to $250 billion a year that they expect to take in.

What will they spend the money on? They will buy technology, both commercial and military. They will spend some on influence. They will spend the lion’s share on raw materials and other commodities. This is a big event. This money will fuel the next leg of the commodity bull market. They must do this. Their middle class is exploding, and the forecast is that they will reach 600 million souls by the end of this decade (compared to a total population in the U.S. of about 290 million). Consequently, their energy appetite will expand exponentially. In September 2006, they imported 24% more oil than they did in September 2005. China ’s energy appetite may be close to insatiable.

Why not give yourself Professional Timing today? With your subscription to Professional Timing Service, you will have access to our latest special report on oil and the Canadian trusts: "A New Path To Profits During An Era Of Petro-fascism." You'll discover what changes you need to make now in your approach to energy investments and also just what an extraordinary opportunity is at hand. You will learn about my three favorite energy stocks for the balance of the decade. Subscribe today and find out where the best opportunities lie before the next big move begins.

Opportunity #2 - Don't invest in bonds.

What sort of opportunity is that, you say? It is an opportunity to save yourself from losses and find yourself with money invested that is paying sub par returns and is falling in value. If you want liquidity, put it in 3-month T-bills at 5.00%. Compare that with the yield on the 30-year Treasury bond of 4.50%. The risk is not worth the difference in yield. The risk of a long-term commitment is simply not worth it.

Subscribe now and you will receive a special report on buying T-bills. You will learn how to buy T-bills and other U.S. Treasuries in the world’s most secure investment account and pay absolutely no fees or commissions with a minimum account of $1,000.

Fixed income investors tell us that this report alone is worth the price of their subscription.

Opportunity #3 - Get the heck out of the stock market.

This may seem like a negative opportunity, but it's no less important than the advice to stay out of bonds.

With the exception of a few select resource-advantaged issues (which we will point out), it is time to take profits in stocks and other financial assets. The stock market's prospects are downright ugly.

Evidence? Consider that after the discount rate has been raised to 6%, 6 of the last 7 bear markets have followed. The average decline was -41% … and they say no one rings a bell.

You can learn more about the stock market's long-term prospects. Subscribe today and you will get our recent study entitled "Cashing In On The Next Stock Market Collapse." This report will orient you to where the stock market is currently in its long cycle, as well as where it is going over the next several years. You will learn about the irreversible causes of the next stock market debacle that are in effect right now, as well as several technical indicators that will signal the beginning of the next decline. Don’t get caught by the bear.

Being in the right sector is 85% of investment success, and we are currently recommending stocks and specific mutual funds that you can hold and profit from, even in a bear market. The updated special report "A New Path To Profits During An Era Of Petro-fascism," which you will receive with your subscription, includes three energy stocks poised to explode on the up side. There is also specific advice on Canadian energy trusts and exactly how you should be approaching this important sector.

The future will be one of higher (much higher) commodity prices, including crude oil, natural gas, uranium, coal, gold and silver. However, the profit potential and cash flow from oil and gas production has not been overlooked by the powers that be. Tyrants learned long ago that petro-wealth can buy a lot of power, and they expectedly confiscate energy production and typically keep the rich proceeds “in order to provide for the common good.” We are seeing free society governments moving to confiscate and control energy affluence as well - always “in the name of the common good.” The difference is that in a free society, we can choose how we use our investment money.

"Glad to renew. Of all my newsletters, yours has been the most accurate. Good job. I always enjoy your comments."
--Dr. R.B. 6/6/06

The 4th investment opportunity is gold...and even better yet, silver.

The correction from the May high in gold at $740 gave us an extraordinary opportunity last summer and fall to accumulate mining shares that were truly undervalued. However, gold and silver investments remain undiscovered by the mainstream investment community.

The most underbelieved asset class today is precious metals, but they are beginning to gain serious investor attention again. The next major move is just beginning. Once the current rally gains momentum, gold and silver will again be popular cocktail conversation - just like in 1979 after prices broke out of a similar “enchanted triangle” formation (as it did this past November).

This March, we received a rare buy signal from our favorite long term gold model “Simplicity.” The last time Simplicity gave a buy signal was in May 2005 when gold was $440. The average annualized gain after Simplicity buy signals is 89.6%. And they say no one rings a bell. The time is ripe for precious metals.

As is detailed in our new gold study, “Timing Gold With Simplicity” which you will receive with your subscription, You will learn how to keep this easy indicator in less than a minute a day.

We have several junior gold stocks on our buy-and-hold list. Their appreciation potential rivals our recommendation to buy Yamana (AUY-AMEX) when it was only $2.90 in April 2005. Yes, Yamana at $15.00 is still a buy, but only at our specified buy price. Paying the right price is important in order to manage risk.

Fundamentally, gold and silver couldn’t be more bullish. The U.S. dollar is weak; and as the dollar falls, gold will rise. That is cast in stone.

China (as I mentioned) is on a buying spree. To come up to speed with the rest of the central banking world, it is estimated they will need to purchase 2,000 to 3,000 tons of gold. The price of gold is dependent on several factors discussed in our classic booklet "The Great Asset Shift To Tangibles,” which all subscribers receive.

Although the mainstream has not warmed up to the metals yet, they are in the early stages of the third great gold bull market of the last 100 years. The first was from 1929 to 1932 where we saw the price of the average mining stock increase 650%. In the second, from 1969 to 1980, the typical mining stock appreciated by 1,000%.

The third secular bull market in gold is under way (it's far from over), yet the Philadelphia Gold and Silver Index (XAU) has but barely begun to perform. You will likely see the XAU appreciate another 400% by 2008.

We are constantly reviewing which precious metal stocks offer the best reward potential, and we are discussing them in the Professional Timing newsletters.

I tell subscribers exactly what they should pay for each stock I recommend. Paying attention to purchase price is a major factor in managing risk. The junior mining stocks beat buying call options 100 to 1 for both safety and profit potential, and I have just added another to our list that sells for 50 cents. This is not fly-by-night, I assure you. With your subscription to Professional Timing Service, you will learn how to exploit the new paradigm of commodity-related investments.

Subscribe now and you will receive my highly acclaimed report "Timing Gold With Simplicity.” Learn why crude oil selling at $60 a barrel virtually guarantees $960/oz. gold.

This report also discusses the phenomenon of the “enchanted triangle,” a technical formation that was completed only this past November and that forecasts a dynamic doubling of the price of gold. The report discusses four of my favorite mining stocks, as well as seasonal times when gold and silver tend to top and bottom.

Most important, you will learn to use and keep “Simplicity,” a powerful indicator that will tell you when to buy and when to sell precious mining stocks. This simple, but effective, indicator last issued a buy for gold stocks in March 2007. We will alert subscribers when it issues its next sell; but in 30 seconds a day, you can keep this simple and powerful model on your own.

This booklet also includes another model that you can follow as infrequently as monthly and only requires ten seconds on your calculator. With this simple technique, you will learn how to determine whether you should stay in commodity or commodity-driven assets, or if it is time to sell out. These simple techniques will put you one step closer to being your own adviser.

Subscribe now and read "Timing Gold With Simplicity" FREE to subscribers.

“Even though some may profess to be long term investors, I find that few have developed the talent for properly allowing the winners to run and selling the losers in a timely fashion. I have been subscribing to ProTiming for several years and have found your blend of fundamental and technical analysis to be far superior than most. Your work is short and direct, and I look forward to each issue.”
--M.K. 2/5/07

OIL AND GOLD: ARE YOU READY FOR THE NEXT MOVE?

We are not on the ground floor any longer, but the recent corrections in crude oil, natural gas, coal, silver, and gold have served up a rare, second-floor opportunity to establish sound investment positions in anticipation of the next bull leg in metals and energy.

Why not take this opportunity to give yourself Professional Timing?

"My hat is off to you. I don't believe there is another analyst existing that has a handle on gold bullion and the stocks like you do. You have achieved all the downside buy targets
that I hold (8 gold stocks), and the action of the bullion is just about perfect."
--M.D. 4/13/04

"I like several letters that I take, but what is unique about yours is that you tell us not only what to expect in the future, but what to do right now."
--D.B. 5/28/05

“Recent Hulbert Digest (January ‘07 Performance Rating) highly rated your letter for gold stocks and bond trading. Congratulations!!!”
--G.K 3/24/07

What you will receive with your subscription to Professional Timing Service:

• Monthly newsletter and mid-monthly updates.
• E-mailed mid-weekly updates on Tuesday and Thursday.
• Exclusive access to our “Special Reports” folder to keep you up to date as market conditions change.
• Objective, buy and sell signals for individual stocks.
• Signals telling you when to be in and out of gold funds, including the Rydex Precious Metal Fund.
• Income-producing energy investments that put the dollar to work for you rather than against you.
• Sane and sensible information that will assist you in managing your financial future.

Every subscriber will have access absolutely free to "The Great Asset Shift To Tangibles." You will learn why tangible assets, including oil and precious metals, offer the best reward potential over the next several years and how you can exploit this change in the investment climate.

Each monthly letter includes our updated list of what stocks to buy now and what price you should pay for them.

Subscribe today and you can immediately gain access to all of the ProTiming Special Reports including “Buying Treasuries In The World’s Most Secure Investment Account,” " Cashing In On The Next Stock Market Collapse,” as well as "Successful Investing In An Era Of Petro-fascism.” You will discover how to exploit the rising energy prices for generous income and capital gains. "Timing Gold with Simplicity" will give you a firm grip on the gold market. As well as discovering our projections for gold and silver through the balance of this year, you will find out how to keep a simple indicator, taking less than 30 seconds a day, to time your purchases and sales of gold shares.

Investing For $100 Oil

Most of the insanity in the market this month was brought on by over-leveraged hedge fund managers blindly liquidating positions in a fit of emotion to meet margin calls. As the margin liquidation process starts, one margin call ignites another and the selling spirals out of control.Too much leverage in the stock market provides the fuel for meltdowns. You simply have to remain rational and let the fire burn out.

The Fed stepped in and provided a drizzle to quench the fire storm in the form of a discount rate cut of 50 basis points. The market has responded favorably so far. The discount rate cut was welcome, but it’s not enough. They will certainly cut the federal funds rate at the October FOMC meeting, if not before. The timing will be controlled by future circumstances.

I would not rule out the possibility that they could cut the fed funds rate in a surprise announcement between meetings. It is rare, but it has happened in the past--especially if they see an immediate need to avert further calamity.

Special Offer: Curt Hesler recommended Enerplus at $17. It now trades at $40 and still yields almost 12%. Click here for all of Hesler's recommended gold and energy stocks in Professional Timing Service.

I think we are already in a recession. I expect it to be powerful, but I don’t see it affecting the global demand for raw materials. Domestic demand for energy will continue to increase, regardless of a recession. The EIA reported global oil consumption increased 1.4 millions of barrels per day during the second quarter of 2007 compared with levels a year ago. Meanwhile, production is falling in Venezuela, Iraq, Iran, Indonesia, Libya, Nigeria, Kuwait, Mexico and Russia. Saudi Arabia is pushing on a string to maintain production at current levels.

Also, new production that is brought on line to replace mature light crude is predominantly “difficult to refine” sour crude. Prices do not run linearly. They zig-zag. Crude moved to $78 recently, which was essentially the old 2006 high, and everyone turned bullish. We forecast a technical correction back to $69.

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Due to the opportunity handed to us by the mindless liquidation over the last couple of weeks, it really doesn’t matter at this point. You need to be investing now for $100 oil in the future. How do you invest for $100 oil? The best avenue is to seek those situations that make money as a consequence of $100 oil, not necessarily those that produce it. The exception is Apache . It fell as low as $72.65 recently, and purchases up to $78 are recommended. Apache is the one major that should be in your portfolio.

Balance your portfolio with Frontier Oiland Valero. These refiners are unique in that they can process sour crude, and they are selling close to our downside buy prices. Both deserve a place in a diversified energy portfolio. If you are hungry for yield, Blackrock Global Energy is still selling just below our downside buy price. Buy BGR up to $28 for a yield of about 5.4%. You can get nearly 6.8% with KinderMorgan, but go easy with this one. I am still a little nervous about where Congress might go in their desire to tax partnerships.

You will see some of your dividends sheltered from taxes, but there is also a bit of extra accounting you will have to do on your tax forms due to the fact that this is a partnership and not a corporation. Perhaps the best returns are in shipping crude. The two shippers on our list look great here. Nordic American yields about 12.8% at this price, and Frontline yields about 14.3%. The caveat is that these dividends are not consistent quarter to quarter. They fluctuate. Nevertheless, you should have a few shares of each of these in your energy portfolio.

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Frontline has promised $0.625 as a regular quarterly dividend. They have also been paying an extra dividend (reflected in the 14.3%). The board has left the decision up to the directors on a quarter-to-quarter basis as to whether to use excess cash for an extra dividend or for another purpose like stock buybacks.
Transocean also deserves a central place in your positioning for $100 oil. I have raised our buy price to $100 for RIG. Don’t be put off by the $100 per share price. Investing is a matter of percentages. If you buy 100 shares of a $25.00 stock or 25 shares of a $100.00 stock, the investment is the same. If either doubles, you will have doubled you money, regardless of how many shares you buy.

What is Direct Deposit?

Direct deposit is a banking option that allows for the transfer of funds without the hassle associated with paper checks. Direct deposit is very common in the United States. In fact, research that over 145 million Americans use direct deposit on a regular basis. Many businesses offer their employees the option of using direct deposit to receive their paychecks. The IRS allows taxpayers to receive refunds via direct deposit. Social Security, unemployment compensation, and other government benefits may also be available with the direct deposit option.

There are many advantages to using direct deposit for your banking needs. Direct deposits typically are processed faster than paper checks, allowing you quicker access to your money. If you don’t live near your bank or your schedule makes it difficult to run errands during the day, direct deposit is a convenient alternative to traditional banking. If you are trying to become more disciplined about saving money, you can arrange to have your direct deposit automatically divided between your checking account and savings account. If you’re concerned about the environment, you can rest easy knowing that direct deposits reduce the amount of paper required to process financial transactions.

The process for setting up a direct deposit can vary. Many employers will ask you to fill out a form that explains their payment schedule and gives them permission to access your bank account information in order to deposit your paycheck. A voided check that shows your bank account’s routing number may also be required. If you want to arrange for direct deposit of federal government benefits, however, you’ll need to call a customer service representative from the appropriate agency and provide your banking information over the phone.

Another variation of direct deposit is the direct payment option, sometimes referred to as automatic bill payment, electronic bill payment, automatic debit, or direct debit. This banking method allows you to arrange for the automatic payment of your monthly bills. Direct payments can be used to pay your mortgage, utility bills, credit card, or car loan. Some people even use direct payments to pay for magazine and newspaper subscriptions or charitable donations. If you have a tendency to forget to pay your bills on time, direct payment is a convenient way to manage your finances and prevent missed payments from damaging your credit rating. To arrange for direct payments, you’ll need to contact the companies that issue your monthly bills.

What is Investment Banking

Investment banking is a field of banking that aids companies in acquiring funds. In addition to the acquisition of new funds, investment banking also offers advice for a wide range of transactions a company might engage in.

Traditionally, banks either engaged in commercial banking or investment banking. In commercial banking, the institution collects deposits from clients and gives direct loans to businesses and individuals. In the United States, it was illegal for a bank to have both commercial and investment banking until 1999, when the Gramm-Leach-Bliley Act legalized it.

Through investment banking, an institution generates funds in two different ways. They may draw on public funds through the capital market by selling stock in their company, and they may also seek out venture capital or private equity in exchange for a stake in their company.

An investment banking firm also does a large amount of consulting. Investment bankers give companies advice on mergers and acquisitions, for example. They also track the market in order to give advice on when to make public offerings and how best to manage the business' public assets. Some of the consultative activities investment banking firms engage in overlap with those of a private brokerage, as they will often give buy-and-sell advice to the companies they represent.

The line between investment banking and other forms of banking has blurred in recent years, as deregulation allows banking institutions to take on more and more sectors. With the advent of mega-banks which operate at a number of levels, many of the services often associated with investment banking are being made available to clients who would otherwise be too small to make their business profitable.

Careers in investment banking are lucrative and one of the most sought after positions in the money-market world. A career in investment banking involves extensive traveling, grueling hours and an often cut-throat lifestyle. While highly competitive and time intensive, investment banking also offers an exciting lifestyle with huge financial incentives that are a draw to many people.

U.S. stocks edge up on rate cut speculation

NEW YORK (Reuters) - The broader U.S. stock market rose on Tuesday while government bond prices gained on safe-haven buying as investors speculated the U.S. Federal Reserve may cut interest rates sooner rather than later to temper recent global credit turmoil.

Investors are increasingly convinced the Federal Reserve will cut the key federal funds rate after it lowered the discount rate it charges banks for direct loans in a surprise move last Friday

"Everyone is waiting for some sort of movement from the Fed," said Stephen Massoca, co-chief executive of San Francisco-based investment bank Pacific Growth Equities.

Many global credit markets have essentially dried up in recent weeks as a crisis that started in high-risk U.S. subprime mortgages spread to other markets, leading to a drastic pullback in lending.

That has driven investors to shun any asset associated with risk, including stocks, high-yielding corporate bonds, and even gold and other commodities, for the perceived safety of government securities -- particularly those of the shortest duration.

In currency markets on Tuesday, the yen rose as persistent jitters about global credit conditions led investors to shed risky assets funded by borrowing in the Japanese currency.

Rate cut speculation was fanned on Tuesday by comments from U.S. Sen. Christopher Dodd after a meeting with Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson.

The Connecticut Democrat, chairman of the Senate Banking Committee and a contender for the White House, said Bernanke told him that the Fed chief was "absolutely" willing to use all available tools to quell tumultuous financial markets.

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Hurricane Dean races through Mexico's oil-rich Gulf

VERACRUZ, Mexico (Reuters) - Hurricane Dean raced through Mexico's southern Gulf on Wednesday, whipping up wild winds and roaring seas around oil platforms that produce crude for export to the United States. Dean hammered Mexico's Caribbean resort of Tulum and swallowed sand from the famous beach at Cancun before crossing the Yucatan Peninsula out into the Gulf of Mexico where state oil company Pemex has several hundred wells and other installations. Mexico evacuated over 18,000 Pemex staff and shut down 80 percent of its crude production ahead of the arrival of Dean, which was a potentially catastrophic Category 5 hurricane when it first hit land in Mexico's Caribbean coast.

There was no early word on whether oil platforms were damaged as Dean weakened to a Category 1 and ploughed through Gulf waters in the Campeche Sound. "Pemex is waiting for the hurricane to pass through the Campeche Sound," spokeswoman Martha Avelar said on Tuesday.

The price of oil tumbled more than 2 percent on Tuesday as Dean weakened over the Yucatan, easing concerns the powerful storm would disrupt Mexican and U.S. oil operations. Mexico, one of the top three suppliers of U.S. crude imports, has shut down 2.65 million barrels per day of production -- slightly more than Venezuela's total output -- and closed ports as a precaution. Dean forced tens of thousands of people, including many tourists, into shelters on the Yucatan Peninsula but there were no reports of deaths or serious damage in Mexico.

Types of insurance coverage

Shopping for auto insurance involves more than simply calling an agent and asking for a quote. To get the most out of your insurance requires that you first fully understand what risk you want to protect against and how best to shift that risk using the various types of insurance coverage.

Here are some major types of insurance coverage you should be familiar with. This section is intended as a general description of the definitions typically used in a personal auto policy. For specific definitions and coverages, you should always refer to your current policy or the policy that you are considering.

• Collision: The portion of the policy that pays for the damage to your car caused by a crash, regardless of responsibility. If another party is responsible for the damage to your car, the insurance carrier will pursue the other party on your behalf and collect payment for the repairs from the other party's insurance carrier or the party directly. The maximum amount of collision protection is usually limited by the depreciated value of your car (which is not the same as the replacement cost). Collision insurance is usually required by a lending institution if the vehicle is financed or leased.

• Comprehensive: The portion of the policy that pays for damage to the vehicle caused by non-crash events such as theft, vandalism, acts of God, striking an animal, storms, etc.

• Medical: This coverage pays the initial medical bills for you, members of your family and passengers in your car. If the cost of medical treatment exceeds the medical coverage limit, non-family passengers in your car can obtain compensation from your liability coverage, but you or your family members would not be covered by your own liability coverage. You or family members could look to other medical insurance for additional coverage. It also covers you and those in your household if you're a passenger in a car involved in a crash, or if you're a pedestrian struck by a car.

• Liability: This coverage pays for bodily injury or property damage that you become legally responsible for as a result of driving your vehicle. Family members living with you who are listed with the insurance company as drivers on your policy and anyone driving your car with your permission will be covered by the liability coverage for injuries or property damage that you or they become legally responsible for while driving your vehicle. Your liability coverage will not pay for injuries to your own family members in the car, which will be covered by medical coverage described above.

• Uninsured motorist: This covers your property damage and personal injury in the event you're hit by an uninsured motorist. It also covers hit-and-run crashes and is required by many states.

• Underinsured motorist: This covers your property damage and personal injury caused by another party, when the amount of damage exceeds the other party's liability limits. This coverage will pick up after the other party's liability limit is exhausted.

• Umbrella: If you also have homeowner's liability coverage, you may want to consider a personal liability umbrella. The umbrella will pick up bodily injury or property damage amounts that you become legally responsible for, above the policy limit of the underlying personal auto policy, up to the umbrella limit. The premium for this additional coverage is typically only a fraction of the cost of the personal auto policy and also provides additional liability coverage above the liability limits of the underlying homeowner's policy.

• Gap insurance: This coverage provides for the difference between the amount paid under collision or comprehensive coverage to cover a total loss and the amount to pay off the lease or finance contract balance on the vehicle. Many lease or finance contracts include this coverage, but if yours does not you should consider including the coverage on your auto policy. If the payoff amount on the vehicle is more than the payout under your comprehensive or collision coverage and you don't have gap coverage, you will be responsible for the difference.

• Other optional coverage: This can include emergency towing or repairs while on the road and rental car reimbursement when your car is being repaired.

No-fault insurance

A number of states have no-fault insurance provisions. In no-fault states, the insurance company covers a client's personal injury claims regardless of who was at fault in the crash. However, victims can still sue the other party under certain conditions.

No-fault programs are intended to reduce the costs of auto insurance by reducing claims and litigation.

High-risk insurers

Not everyone has a squeaky clean driving record. A history of too many tickets, crashes, or insurance claims can make it difficult to obtain coverage. In some cases, major carriers may actually refuse coverage, having determined that such drivers represent too great an insurance risk.

However, this does not mean coverage is not available. On the contrary, most states require personal liability coverage, so high-risk drivers are actually guaranteed coverage. Even if a larger carrier may refuse them coverage, select high-risk insurers must accept them.

When obtaining your insurance through a non-standard insurer, look into factors such as customer service, time to process claims and payment of claims. Just because you're a high-risk client doesn't mean you should accept poor service.

Is Your Insurance Policy Good Enough?

After a crash is too late to find out if your insurance policy is good enough. Here's how to buy the right coverage now.

Savvy shopping for insurance requires a little more effort than many people tend to give it. Too many consumers simply grab the first price they come across or accept routine rate increases without digging further for a better deal. It is important to compare not only the price but the coverage and exclusions among carriers.

You don't want to find out after you file a claim that the new policy you purchased with the excellent premium does not include a type of coverage that you had with your previous carrier. "It really pays to shop around," Dick Luedke, spokesperson for State Farm Insurance, told MSN Autos. "Premiums for exactly the same coverage can vary substantially from carrier to carrier."

Studies performed by Progressive Insurance between 1999 and 2004 reveal that six-month auto insurance rates vary significantly between companies, from an average low of $481 to an average high of $586 across the country. This means the same driver could receive a quote of $1,256 for a six-month auto insurance policy from one company and a quote of $775 for the identical policy from another company. Another Progressive study reveals that only 20% of survey respondents said they had shopped around for better insurance rates in the last six months. "Call around a lot," suggested Scot McCartney, "Don't always grab the first quote you get. Make several calls, ask the same questions and be sure to get quotes on exactly the same coverage from each carrier."

It pays to mix it up

Call a couple of the larger carriers (State Farm, Allstate, Nationwide, SAFECO, etc.) and then check with a couple independent agents and phone-based carriers, such as GEICO or Amica, just to make sure you've covered your bases.

If you prefer to shop on the Internet, a number of services offer online price quotes. Web sites give you quick access to a number of quotes without ever picking up the phone. However, as convenient as they are, it's still advisable to consult other more traditional sources as well.

What to look for

When buying auto insurance, it's important to consider not only the price, but also the carrier and the coverage. As with any product, the value of a low price is quickly forgotten when you find out that the service or the quality of the product is not what you expected. The old saying, "It's too good to be true" applies for insurance premiums as well. If the premium seems too low, be sure that you are getting all the coverage you need. Check out the agent you'll be working with, advises the California Department of Insurance. Do you know and trust them? Also look into the insurance carrier itself. Is it a well-known and established company? Does it have the financial strength to pay its claims? You can obtain background and financial information on an insurance carrier from your state's department of insurance. When talking with insurance agents, don't hesitate to ask a lot of questions. In addition to learning what coverage is offered and how much it costs, also ask about how claims are processed. Too often, people don't learn about the process until they have to make a claim. Knowing beforehand ensures you choose a carrier whose claim process is most convenient and appealing to you.

Don't forget to ask friends, neighbors and family who they are insured with and whether or not they like the service they receive. Often, they can provide personal examples of what went wrong and what went well when they had to file a claim.

Factors influencing rates

If your current rates seem particularly high (or low), you might want to know why. Indeed, if your rates (or quotes) are high, altering your lifestyle or vehicle choice can have a big effect on the rates you pay.

While criteria may vary slightly from carrier to carrier, according to State Farm's Luedke, the major determining factors fall into four basic areas:

• You. Your age, gender, marital status, driving record and record of prior claims play a major role in determining your risk level and therefore the premium you will pay. Traditionally, males under 25 years of age represent the highest risk, while married, middle-aged, non-smoking mothers represent the lowest.

• Where you live. Living in an urban area typically triggers higher rates due to increased incidence of theft and accident claims -- both of which are statistically higher in and around cities.

• Your vehicle. The type of vehicle you drive greatly affects the rates you pay. Vehicles that have a high frequency of claims (sports cars) or are expensive to repair (luxury cars, SUVs) are prone to higher premiums. However, larger vehicles tend to be safer in collisions, which sometimes offsets costs.

• How you use your vehicle. Statistically, the more miles you drive, the greater chance you have of being involved in a crash. High annual mileage will result in higher premiums.

Another way to reduce your premium is to increase the amount you self-insure by increasing the deductible amounts on the property damage coverage for your own vehicle. These deductible amounts on your comprehensive and collision coverages may be limited if you have the vehicle leased or financed, so check your financing contract before raising your deductibles too high.

Deciphering the code

Once you've begun researching insurance coverage, it won't be long before you come across liability limits displayed in an X/Y/Z form. These are the maximum limits of coverage for bodily injury or property damage that you become legally responsible for.

For example, 100/300/50 means you're covered for a maximum of $100,000 bodily injury per person, $300,000 bodily injury per incident and $50,000 property damage per incident.

You may also see the liability limit stated as a single amount, called a combined single limit. This limit is the total amount available for a single occurrence, without per person or property damage sub-limits. The advantage of a combined single limit is that if there are only minor injuries but considerable property damage, the total liability limit, not just the sub-limit amount, is available to satisfy a property damage claim. Conversely, if one person is injured severely, the entire liability limit is available to satisfy a claim by that one person, rather than just the per-person limit.

When setting your limits, make sure to set them high enough to protect yourself against possible lawsuits. The more assets and income you have, or the more earning potential you have, the higher liability limits you should consider. If you become legally responsible for bodily injuries or property damage in excess of the liability limits of your policy, your personal assets or future earnings may be required to satisfy your obligation.

Investing For Success

The section offers a variety of tools to invest for success.

What is Investing?
Investing involves taking varying levels of risk and focuses on increasing one’s net worth (total assets – total liabilities) in order to accomplish mid and long-term financial goals. An example of an investment can include: stocks, bonds, and mutual funds. View Investing: A Route to Long-Run Financial Fitness for more information on investing basics.

* Worksheet 1: How Time Affects the Value of Money
* Worksheet 2: Understanding Your Personal Risk Tolerance
* Worksheet 3: How Much of a Risk Taker Are You?
* Worksheet 4: What's Your Investment Concept IQ?

What is the difference between risk and return?
Risk is the amount of chance you are taking when you invest in the market.
Return is the amount of profit or loss on your investment.

What is a mutual fund?
Mutual funds are a portfolio of stocks, bonds, or other securities that is collectively owned by people and managed by a professional company. View Mutual Funds and Investing Options to find out more information in regards to mutual funds and other investing options.

* Worksheet 1: What's Your Investment IQ?
* Worksheet 2: Comparing Mutual Funds
* Worksheet 3: What's Your Mutual Fund IQ?
* Worksheet 4: Stock and Mutual Fund Newspaper Listings
* Worksheet 5: Life Cycle Investing Profiles

What is the difference between “load”, “front load”, and “back load”?
* Load - A sales charge added to the purchase and/or sale price of some mutual funds and annuities.
* Front Load- A sales charge paid when an individual buys an investment.
* Back Load- A sales charge or commission paid when an individual sells an investment.

What is diversification and why do I want to do it when I invest?
Diversification is when you combine a variety of stocks/bonds in a mutual fund to reduce the risk of your investments.

Tax-Advantaged Investing
What is the difference between tax deferred, tax exempt, and tax deductible?
* Tax Deferred - Taxes are postponed until the investment is sold or withdrawn.
* Tax Exempt- Taxes may not be due on investment contributions or earnings.
* Tax Deductible- Investment contributions are deducted from your income before taxes are calculated.

What is a Roth IRA?
A new type of IRA, established in the Taxpayer Relief Act of 1997, which allows taxpayers, subject to certain income limits, to save for retirement while allowing the savings to grow tax-free.

To find out more detailed information, please see the Money 2000 Bulletin Tax-Advantaged Investing.

* Worksheet 1: How Much $$ Can YOU Save by Making Tax-deductible Contributions?
* Worksheet 2a: IRAs at a Gance
* Worksheet 2b: A Traditional Roth IRA: Which is Best for You?
* Worksheet 3: "529" College Savings Plans Comparison Sheet
* Worksheet 4: How's Your Tax-Advantaged Terminology?

What is a 529 Plan?

A state-sponsored program designed to help parents finance education expenses

Michigan Education Savings Program - Offered through the Michigan Department of Treasury, Michigan Education Savings Program provides families a smart, flexible way to save for their children's future.

Michigan Education Trust - The Michigan Education Trust (MET) program allows parents, grandparents and others to pre-purchase undergraduate tuition.

Resources
To learn more about investing, check out some of these resources…

Investing on a Shoestring (Book) – by Barbara O’Neill, Ph.D, CFP

National Association of Investors Corporation - The National Association of Investors Corporation (NAIC) teaches individuals how to become successful strategic long-term investors.

For information regarding curriculum to teach investing topic, please click on the Curriculum listing to the left.

Budget Basics

This section is devoted to assisting individuals with basic budgeting information. It provides answers to frequently asked questions on budgeting basics.

What is a budget?
A budget is a step-by-step plan that will assist in paying all your bills for any given length of time.

How do you put a budget together?
A budget is made up of a few key items. Those two key items includ income and expenses.
Income: The amount of money that you expect to make/take in, in a given amount of time.
Expenses: The amount of money that you expect to spend in a given amount of time.

The following links assist individuals in putting a budget together:
The Managing Your Money Guide is an easy-to-follow how to guide to developing a budget, spending and savings plan to help families achieve financial goals and manage their financial resources. To purchase this $.75 eight-page guide, please contact the MSU Extension Bulletin office.
The Managing Your Money Worksheet, is a 6-page, free electronic worksheet from the Michigan State University Extension office that helps individuals determine family income, debt, major expenses, and fixed and controllable expenses. Fixed expenses are your expenses that constantly stay the same every month. An example of a fixed expense is housing costs. Controllable expenses are your expenses that are always fluctuating in and out of your budget. An example of a controllable expense is your food bill.

Why should I use a budget?
Budgets assist individuals with obtaining control of their financial future. When individuals put a budget together, they begin to get a clearer picture of their current financial situation as well as preparing for future financial decisions.

Why are clarifying values and setting goals important in defining when I am putting a budget together? Defining Your Financial Directions: Clarifying Values and Setting Goals:
When you are trying to put a budget together, one of the main things that impact budgets is an individual’s needs and wants. A need describes things that you have to have to survive while a want describes items that you don’t have to have, but greatly wish to obtain. Everyone’s needs and wants may be different, but clarifying these can help you to define your financial direction. The Defining Your Financial Directions bulletin assists with these important decisions.

* Worksheet 1a: Money and You... What's Your Style?
* Worksheet 1b: Money and You... Answer Key
* Worksheet 2: Your Financial Dreamsheet
* Worksheet 3a: Net Worth Statement
* Worksheet 3b: Sources of Information to Develop a Net Worth Statement
* Worksheet 4: Smart Goal Worksheet
* Worksheet 5a-b: Setting Financial Goals

How do you track your income and expenses and develop a spending plan?
Tracking Income/Expenses and Developing a Spending Plan:
There are a variety of ways to track your income and expenses and develop a spending plan. This fact sheet will describe those various ways as well as provide you with background information on this process.

* Worksheet 1a: Spending Plan Worksheets... Monthly Income
* Worksheet 1b: Spending Plan Worksheets... Fixed Monthly Expenses
* Worksheet 1c: Spending Plan Worksheets... Controllable Monthly Expenses
* Worksheet 1d: Spending Plan Worksheets... Periodic Expenses for the Year
* Worksheet 1e: Spending Plan Worksheets... Monthly Summary
* Worksheet 2: Spending Plan Adjustments
* Worksheet 3a-b: Tracking Options for Expenses
* Worksheet 4a: Spending Plan Worksheet... Controllable Expense Log
* Worksheet 4b: Spending Plan Worksheet... Controlable Expense Log, pg 2
* Worksheet 5: Monthly Calendar for Making Payments or Tracking Expenses

Additional Budgeting fact sheets from project Furthering Families
Income Loss: How to address the stress and prioritize needs - When income loss occurs in the family, how do you address stress and prioritize needs financially? This fact sheet addresses both the financial and family stress issues associated with income loss. It specifically examines need prioritization as well as techniques to move forward following loss.

How to Change Personal Resources into Income
How to Change Personal Resources into Income provides ideas and guidelines for families to create a larger amount of discretionary income in their life. In addition, it describes how families can utilize their personal assets and resources and adapt those resources into a source of income.

What To Do When Bills Pile Up: Sharpening your Survival Skills
Through sharpening your survival skills, this bulletin provides tips and resources to assist families in making the most with the resources and income that they have. It helps families look at how to efficiently manage situations when the bills pile up and assists in sharpening the survival skills of families.
Frequently asked questions:
Have you ever wondered what the current costs are of raising a child?
Expenditures on Children by Families provides you with current information to assist you with this question.

For information regarding curriculum on budgeting resources, please click on the Curriculum listing at the top of this page.

Smart Savings

This section assists families and individuals with smart saving strategies and opportunities.

What is saving and why is saving important?

Saving can be defined as a way to accumulate money for a future need. Savings provide funds for emergencies and purchases in the relatively near future. The primary goal of savings is to store funds and keep them safe. The Savings Basics Bulletin will provide you with a more comprehensive guide to the basics of savings.

Pay Yourself First

Pay Yourself First is a term that is often used when discussing saving money. This term simply means that when you get a paycheck, you need to put away the money that you want to save for some future goal. The benefits to this approach would be you may be able to increase your savings, save money for a future goal, or this can be an avenue to begin to manage your money more effectively.

What are some keys to saving?

One of the ways to assist with saving money is through the use of saving calculators. Saving Calculators assist individuals in helping them visualize what they can accomplish through the use of saving money.

Saving Calculators

The University of Illinois Extension offers an array of financial calculators to assist families in a variety of savings opportunities.

* Glossary of Savings Terms
* What will it take to become a millionaire?
* How much will my savings be worth?
* Saving for a car, home, etc.?
* Saving for a college education?
* How will taxes and inflation affect my savings?
* How much difference will the rate make?
* What's it worth to reduce my spending?
* How much, at what rate, when?
* Which is better: cash or payments?

Other keys to saving may include:

* Utilizing direct deposit for your checks
* Paying your bills on time and avoiding late fees
* Budgeting your finances and sticking to that budget to avoid unnecessary expenses
* Avoiding check cashing outlets and/or rent to own facilities. Many times these types of establishments can charge high interest rates.

Saving Mechanisms

How Can I Save Money for College?

Michigan has a few state college savings plans that can assist families and individuals when planning for their children’s higher education. Here are a few of the options available.

Michigan Education Savings Program - Offered through the Michigan Department of Treasury, Michigan Education Savings Program provides families a smart, flexible way to save for their children's future.

Michigan Education Trust - The Michigan Education Trust (MET) program allows parents, grandparents and others to pre-purchase undergraduate tuition.

Matched Savings Programs

Individual Development Accounts - Individual Development Accounts are a financial and economic development tool designed to help low-income families to save and accumulate financial assets. There are many different forms of IDA programs. Usually, individuals can save for one of the three following categories: homes, businesses, and education.

Savings Bonds

What are savings bonds?
A bond is a piece of paper that shows a person has agreed to loan money to the U.S. Government. The government uses the money to help pay its bills.

Savings Bond Rates and Options - This site offers a wide array of information on the world of Savings Bonds.

Savings Bond Calculators Find out how much your savings bonds are currently worth.

For information regarding curriculum on budgeting resources, please click on the Curriculum listing at the top of this page.

What is Insurance?

Insurance overview
From the mundane (household contents) to the downright bizarre (pet insurance), TheSite.org uncovers the truth about insurance.

What is it?

In simple terms, insurance allows someone who suffers a loss or accident to be compensated for the effects of their misfortune. It lets you protect yourself against everyday risks to your health, home and financial situation.

There are many different types of insurance:

You are unlikely to need every single one of these, so read around, choose carefully and remember to read the small print.

* Travel: Holidays can be dangerous occasions - especially abroad. If someone falls ill it is much more difficult than it would be at home to cope with the situation. Medical treatment is expensive. More here.
* Household contents and building insurance: Contents insurance covers the contents of a home such as furniture, carpets, clothes, television, refrigerators, jewellery and so on. In other words, what you would take with you if you moved. Buildings insurance protects against damage to the actual structure of the home and to its fixtures and fittings. Contents and buildings policies can be bought separately or together in one package. More here.
* Car insurance: Most people know something about motor insurance. This is because any vehicle driven on public roads must have a certain level of insurance. The Road Traffic Act ensures that drivers must meet liabilities they incur should they injure other people or cause damage in an accident. More here.
* Life insurance: A means of providing for your dependents should you die early, but also a way to save cash through endowment policies or similar.
* Private medical insurance: This covers the costs of private medical treatment for curable short-term illness or injury. It means that should you become ill you could be treated immediately privately rather than being put on an NHS waiting list. More here.
* Critical illness insurance: This allows you to insure your income/ health were you to become too ill to work later on in life, and protects any dependents/ loved ones from the financial consequences of such unexpected events. More here.
* Accident, sickness and unemployment cover: According to Moneyextra: "In 1999, 30,000 properties were re-possessed by mortgage lenders... Many lost their homes because they could no longer afford to pay their mortgage payments through an accident, sickness or unemployment." If you are planning on buying a house it may be sensible to think about getting some mortgage payment protection insurance.
* Pet insurance: This basically helps you foot the vet's bills if your pet gets poorly. By paying regularly into an insurance policy it means you have paid for the bill gradually rather than having to find the money for a steep bill when you can least afford it. More here.

Excess charges

Insurance policies often have hidden costs and hard-to-understand small print. Look out for excess charges, as they won't always pay the first £50 or more of an insurance claim.

What do all the words mean?

Don't know your underwriter from your write-off? Visit BBC Watchdog for a quick glossary.

How do I make an insurance claim?

* Keep any evidence: Depending on the situation either get the names and addresses of any witnesses, keep any relevant receipts, or take photographs.
* Contact the broker/ insurer: Give them a ring then follow up with a letter, keeping a copy for yourself. They should send you a claim form, which you should fill out and send back ASAP. Send 2-3 professional estimates for the repairs with the form.
* Help with your claim.

Who can I complain to?

If you aren't happy with the way your insurance company is acting you can contact the financial ombudsman service who offer a free, independent service for resolving disputes with insurance firms.

What is online banking?

Online banking (or Internet banking) is a term used for performing transactions, payments etc. over the Internet through a bank, credit union or building society's secure website. This allows customers to do their banking outside of bank hours and from anywhere where Internet access is available. In most cases a web browser is utilized and any normal Internet connection is suitable. No special software or hardware is usually needed.

Features

Online banking usually offers such features as:

* Bank statements, with the possibility to import data in a personal finance program such as Quicken or Microsoft Money
* Electronic bill payment
* Funds transfer between a customer's own checking and savings accounts, or to another customer's account
* Investment purchase or sale
* Loan applications and transactions, such as repayments
* Account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.

There are a growing number of so-called virtual banks that operate exclusively online. These online banks have low costs compared to traditional banks and so they often offer higher interest rates.

Security
Security token devices
Security token devices

Protection through single password authentication, as is the case in most secure Internet shopping sites, is not considered secure enough for personal online banking applications in some countries. Online banking user interfaces are secure sites (generally employing the https protocol) and traffic of all information - including the password - is encrypted, making it next to impossible for a third party to obtain or modify information after it is sent. However, encryption alone does not rule out the possibility of hackers gaining access to vulnerable home PCs and intercepting the password as it is typed in (keystroke logging). There is also the danger of password cracking and physical theft of passwords written down by careless users.

Many online banking services therefore impose a second layer of security. Strategies vary, but a common method is the use of transaction numbers, or TANs, which are essentially single use passwords. Another strategy is the use of two passwords, only random parts of which are entered at the start of every online banking session. This is however slightly less secure than the TAN alternative and more inconvenient for the user. A third option, used in many European countries and currently being trialled in the UK is providing customers with security token devices capable of generating single use passwords unique to the customer's token (this is called two-factor authentication or 2FA). Another option is using digital certificates, which digitally sign or authenticate the transactions, by linking them to the physical device (e.g. computer, mobile phone, etc). While most online banking in the United States still uses single password protection, the FFIEC issued regulations requiring that banks implement more secure authentication mechanisms by the end of 2006. Most large U.S. banks have responded not with security tokens or digital certificates, but by setting up a combination of controls that recognize a customer's computer, ask additional challenge questions for risky behavior, and monitor for fraudulent behavior.

Banks in many European countries (including the Scandinavian countries, the Netherlands, Austria and Belgium) are offering online banking for e-commerce payments directly from customer to merchants. For instance, see iDEAL.

Fraud

Main article: Internet fraud

Some customers avoid online banking as they perceive it as being too vulnerable to fraud[Who says this?]. The security measures employed by most banks can never be completely safe, but in practice the number of fraud victims due to online banking is very small. This is probably due to the fact that a relatively small number of people use Internet banking compared with the total number of banking customers world wide. Indeed, conventional banking practices may be more prone to abuse by fraudsters than online banking. Credit card fraud, signature forgery and identity theft are far more widespread "offline" crimes than malicious hacking. Bank transactions are generally traceable and criminal penalties for bank fraud are high. Online banking becomes less secure if users are careless, gullible or computer illiterate. An increasingly popular criminal practice to gain access to a user's finances is phishing, whereby the user is in some way persuaded to hand over their password(s) to a fraudster.