| Chapter 1: The Importance of Personal Finance
Inflation: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1percent in December, 2006, before seasonal adjustment. The annual increase since the previous December was 2.5 percent. Thus, inflation for 2006 as a whole was below historical averages.
Interest Rates: The Federal Reserve Board decided to maintain its target for the federal funds rate at 5 1/4 percent.
Economic Statistics: This regularly updated web page provides a synopsis of basic statistics on the economy including the consumer price index, unemployment rate and average hourly earnings.
Index of Leading Economic Indicators: The ILEI increased 0.3 in December, 2006 but was down 0.1 percent since December, 2005.
College Students and Finances: Many college students graduate with high levels of debt.
College Grads and Finances: A list of things that college students can do to avoid the problems outlined in the article above.
Chapter 2: Financial Planning
Consumer Expenditures: Consumer Expenditures increased 6.9 percent in 2005. http://www.bls.gov/news.release/cesa n. nr0.htm
Real Earnings: Real average weekly earnings of Americans decreased 0.1 percentage points from November to December, 2006. A 0.5 percent increase in earnings was more than offset by a 0.6 percent increase in prices for urban wage earners and clerical workers. A verage weekly earnings were $578.00 in December, 2006, compared with $551.67 a year earlier.http://www.bls.gov/news.release/realer.nr0.htm
Chapter 3: Budgeting and Cash-flow Management
Childrearing Costs: The cost of raising a child from birth by a middle-income, two-parent household in a major metropolitan area in the Midwest is $490,000. To complete an estimate for other geographical areas, family structures and income levels go to this web site.
Chapter 4: Taxes
Tax Filing Deadline Moved Back: The Federal income tax filing deadline for 2006 tax year has been moved back to April 17, 2007 because April 15 falls on a Sunday and Monday, April 16 is a Federal holiday in Washington , DC .
New Tax Year Begins: With the beginning of the new tax year, new thresholds for tax exemptions, deductions and the break points for the six marginal tax rates have changed. The new exemption amount for 2007 is $3,400; up $100 from 2006. The standard deduction is $10,700 for joint returns and $5,350 for individuals and married persons filing separately. Head of households have a standard deduction of $7,850. Additional up-dated figures can be found at http://www.irs.gov/formspubs/article/0,,id=109876,00.html
Tax Returns: 70 million e-file tax returns were submitted by April 15, 2006 for 2005 tax-year returns. http://www.irs.gov/newsroom/article/0,,id=156378,00.html
Starting out: Freelancers meet Schedule C. Reviews many key ways that a sideline business can reduce one's income tax liability (Kiplinger.com).
College credits (and deductions). Comprehensive and detailed review of the available tax credits and deductions associated with college (Kiplinger.com).
Student Loan Interest Deduction: Frequently Asked Questions (and Answers)
Chapter 5: Management of Monetary Assets
Bounce Protection: It may not be such a good idea.
Certificates of Deposit: CD rates have been inching up in recent months and now 6 percent rates can be found at many institutions.
Checking Accounts: "Check 21" refers to a new Federal law that speeds up the processing time for payments made by check. The effect is to reduce the time period, known as the "float", that it takes a check to clear the system and be subtracted from your account.
Savings bonds may offer investors a lousy deal. Treasury Department is now selling Series EE bonds with a fixed interest rate instead variable, and this disadvantages bond buyers in rising interest markets.
Money market comparison chart. Updated weekly, chart shows rates over time.
Chapter 6: Credit Card Use and Credit Cards
Credit Card Minimum Payments: Credit card account minimum payments will be increasing soon to reflect new federal regulations. Most cards will require a minimum payment of 1% on top of whatever periodic (monthly interest rate that is applied. This will mean a pay-back rate of up to 4% of the balance on the card.
Credit Card Interest Rates: The average fixed-rate and variable-rate credit card APRs held steady in mid-January, 2007 to reflect the unchanged federal funds rate set by the Federal Reserve Board. Standard fixed rate cards average 13.33 and variable rate cards averaged 14.72.
Credit Card Fees: Credit card fees are getting tougher with the average late fee now approaching $40.
Identity Theft: Insurance against it may not be a bargain.
Chapter 7: Installment Credit
Student Loans: How are you going to pay off your student loans? Here are the nuts and bolts of student loan repayment plans.
Student Loans: Stafford loan rates for disbursements after July 1, 2006 will be fixed at 6.8% rates for earlier disbursements may be higher.
Bankruptcy: Congress passed a new bankruptcy law in Spring, 2005. Credit counseling will be mandatory and Chapter 13 bankruptcy will be required of more filers.
Chapter 8: Automobiles and Other Major Purchases
Transportation Costs: The average household spends 10% of total expenditures on transportation.
Vehicle Leasing: Leasing has increased in popularity in recent years after declines in the late 1990’s.
Chapter 9: The Housing Expenditure
Mortgage Rates: Thirty-year fixed rate mortgages averaged 6.26% in mid-January, 2007.
Home Sales: Increases in the prices of existing home prices rebounded in late 2006 although were lower than at the end of 2005.
Mortgage Loans: Mortgage loan delinquencies increased slightly during the third quarter of 2006 but foreclosures were up significantly for so-called “exotic” mortgages.
Housing Affordability: The National Association of Realtor’s housing affordability index showed that at the end of November, 2006 a median income household had 110.5% of the income necessary to buy an existing home. A first-time buyer with a median family income had only 68.3% of the income necessary to buy an existing home.
Low-Down Payment Mortgages: Increasing numbers of buyers, especially first-time buyers are obtaining mortgages with low down payments. This trend is seen as risky for both the buyer and the lender.
Interest Only Mortgages: Interest-only mortgages are very popular currently. But they carry high risk and hidden costs.
Chapter 10: Risk Management and Property/Liability Insurance
Insurance and Credit Scoring: The use of credit histories to develop insurance scores to judge insurance applicants (much like what is done with credit scoring) is increasingly a factor in the insurance market.
Homeowners Insurance: Most people have wind protection but most do not have flood protection. What if wind caused the flood? Insurance companies claim there is no coverage. The debate rages and will be solved in court.
Here is the result of one such case.
Insurance at College: Theft is the number one risk on college campuses.
Auto Insurance Costs: The rate of increases in the cost of auto insurance will slow in 2007 to about $847 per vehicle down $4 from last year.
Chapter 11: Health Care Planning
Health Insurance: In 2006, only about 2/3 of the nation's health care expenditures were covered by private health insurance. Another 46% was paid by government programs and 13% represented out-of-pocket expenditures by households.
Health Savings Accounts: Public information on health savings accounts has recently been updated including higher maximum on HSA deposits.
Chapter 12: Life Insurance
Life insurance for children? Clear discussion of the pros and cons, and the importance of saving for a child's college education.http://money.cnn.com/2005/04/05/pf/expert/ask_expert/index.htm
Life Insurance Costs: Life insurance rates continue to decline.
Chapter 13: Investment Fundamentals
How to invest with $500 or less. Ideas for small dollar investments and key prerequisites to investing (Kiplinger.com).
Picking the Money 70: The magazines top fund picks for 2007. However, more important are the criteria to used to select a good portfolio of mutual funds to meet your investment goals.
Here is to dividends. Reasons why dividends should be important to today's investors.
Chapter 14: Investing in Stocks and Bonds
Stock Tracking Services. Recent revisions in Internet-based resources (e.g., markets, researching, tracking) to help novice and the expert ivestors.
Chapter 15: Investing Through Mutual Funds
Today’s Hot Mutual Funds: Kiplinger's updated analysis of the best mutual fund managers.
Mutual Fund Fees: 12b-1 fees while historically used to pay for marketing and advertising costs of funds are increasingly being to compensate financial advisors for providing shareholder advice.
Chapter 16: Buying and Selling Securities
8 simple sell rules: Suggestions on when to sell securities (Investor's Business Daily).
Know when to sell, not just to buy. Concise suggestions on when to buy stocks, bonds and mutual funds; links to 20 more recommendations on buying(Investor's Business Daily).
Chapter 17: Real Estate and Speculative Investments
Why rent matters: Rental prices hint whether a housing market is riding on fundamentals or speculation. The rental prices relative to mortgage payments on a similar property offer investors a way to help determine when to sell or buy real estate (MoneyCnn.com).
Rate-lock anxiety rises with mortgage rates. Understand the basics of how to correctly lock in a mortgage rate or you might find you really do not have an agreed-upon rate (Bankrate.com).
Chapter 18: Retirement Planning
Pension Reform: President Bush signed into the law the Pension Protection Act of 2006 recently passed by Congress. Among other things it will allow companies with 401(k) plans and employers with 403(b) plans to automatically sign-up their workers into the plans.
Social Security: The Social Security (FICA) Tax will be applied to incomes up to $97,500 in 2006; up $94,200 from 2006. The Medicare Tax continues to be applied to all earned income.
Retirement: Workers overconfident: New survey finds workers behind on savings but motivated by matches and automated investing. The majority of workers admit that they do not have a clear idea of how much it will take for them to retire and that they are behind on saving.
The baby boomers are coming: Will killing Social Security kill the markets as well? Analysis of whether or not the anticipated selling of stocks by retiring baby boomers will depress prices in the securities markets.
Pension tension: What to expect if your retirement plan is terminated. While 401(k) plans may be largely unaffected, benefits from defined benefit plans are likely to be substantially reduced.
Target date funds: Retirement planning made easy. How to match your projected retirement date to mutual funds that invests in a changing portfolio of cash, bonds and stock over time (rebalancing) that becomes more conservative as the investor nears retirement age.
Individual Retirement Accounts: IRAs turned 30 in 2005. Here is a synopsis of the history of this type of retirement account.
Chapter 19: Estate Planning
Asset Ownership and Transfer: Transfer-on-death designation avoids hassles. Overview of the importance and correct use of transfer-on-death designations to transfer assets to another (Kiplinger.com).
Estate Taxes: Under current law federal gift and estate taxes will phase out by 2010 and then return in 2011 unless Congress acts to make the phase out permanent. Here is the schedule for the phase out under current law.
The Probate Process: Probate is nothing to fear (maybe). The in's and out's of probate and how to avoid it (Kiplinger.com).