Survival Strategies: Recession-proof Your Life

 

Falling home values, rising unemployment, declining confidence among consumers and businesses and, lately, a swooning stock market. We may or may not be entering an official recession (defined as two consecutive quarters of shrinking economic activity), but either way 2008 has gotten off to a scarier start than most anyone predicted.

 

To lower your anxiety level and devise your own coping strategies - all without resorting to prescription medications - read this special report.

 

You'll not only learn how the economy and markets might perform if we're in a real downturn (Breathe. Remember that knowledge is the key to overcoming fear.), you'll also get timely advice on what to do about your finances, investments, job and home. The economy and the markets will bring what they bring. Keep reading and learn how to take it all in stride.

 

Go here to read the full report.

 

Let us hear from you.  Use the comment link below to tell us if there is a question you have or a topic you'd like to see us cover here.  We look forward to your comment or question.

 

 

 

Beware of Bad Advice About Foreclosure

 

A very disturbing and potentially damaging trend seems to be emerging in several real estate markets across the country.  Especially those markets with flat or even declining values.

 

The trend?  Well, it seems that some very less than scrupulous folks have resorted to promoting foreclosure to people wishing to move and having trouble selling their current homes.

 

As a result of the slow market and people reluctant to hold two mortgages, a few "rogue" agents hungry for a commission are instructing people to move and just forget about their old house should it not sell in a reasonable time.  Just walk away and don't worry about it, some say.

 

Beware of that Very Bad Advice!

 

Here's what may happen if you go into foreclosure:

1. You lose all equity you've built in your home
2. Your foreclosure will stay on your credit report for 7 - 10 years and may damage your credit
3. You may not be able to get another mortgage until your credit is repaired
4. You may have trouble getting other loans, such as automobile and even student loans
5. You may still be held accountable for the debt of the foreclosure, including income tax obligations
6. Even when you do again finally qualify for mortgages and other loans, you will probably pay a higher rate and therefore have a higher payment than someone with undamaged credit
7. It's not worth it. Foreclosure is a terrible thing for you, your community, the mortgage company, and the economy in general. Advice to voluntarily go into foreclosure should be taken with a big grain of salt. Well, make that a truck of salt

 

 

Let's all hope this greedy practice of giving people really bad financial advice stops soon or people may be paying a high price for that bad advice - for years to come.

 

 

 

Remodeling Your Insurance After Remodeling Your Home

 

The benefits of renovating your home make the expense an intelligent investment, but protecting that investment is paramount.  That’s why you should consider remodeling your homeowners insurance as well.

 

Renovations often result in homeowners insurance coverage shortfalls in two areas: dwelling protection—which involves structural improvements to your home—and personal property protection.  Built-in enhancements such as new windows, doors, custom cabinets, granite countertops, bars, islands, and flooring need to be brought to the attention of your insurance agent.  You also should discuss any major personal property purchases, including appliances, furnishings, and decorator curtains and blinds.

 

When insuring personal property—especially appliances and electronics—check to see that your policy covers replacement value of your property, rather than the actual cash value.  The actual cash value consists of the replacement cost of an item less the amount it may have depreciated.  Appliances and electronics depreciate quickly.  The amount your homeowners insurance will pay for a depreciated item usually is not enough to replace it with a new one.  Unless you enjoy cruising the thrift stores, you should opt for replacement value.  That way you can shop at Circuit City instead of the Salvation Army.

 

Keeping your homeowners insurance agent in the loop is a good practice in general, but a major remodel should prompt an immediate conversation.  If something happens tomorrow, you want to make sure your homeowner’s insurance will replace what you have today—not what you had yesterday.

 

 

 

Investing vs Paying Off Debt

 

If you carry a balance on one or more credit cards, you're not alone.  According to the Federal Reserve, nearly half of American families do. 

 

And nearly half of American families also have some sort of bank savings accounts.  If you have savings, should you use that money to pay off your credit cards?

 

Money Talks editor Stacy Johnson explains (video runs 1:15)

 

 

We'd love to get your comments on this video.  Just use the "comment" link below.  Don't worry, your privacy is protected.. we never publish email addresses of our readers when they leave us comments.

 

 

 

Time to Think About Tax Help

 

We're smack in the middle of tax season again.  Many people fill out the short form, mail it in, and are done with it.  Good for you.  Lots of us have more complicated financial lives.  In many cases, those complications will be handled by a hired tax professional.  But some people really like to do their own taxes.  For you, there's plenty of help online.

 

When you're ready to file your federal taxes, you can do it online.  The IRS wants more taxpayers to file electronically, so it has teamed up with tax preparation software companies such as TaxCut, TaxAct, and TurboTax.

 

Together, they offer free e-filing services.  You must meet certain requirements to qualify for free filing.

 

First, your adjusted gross income must be $54,000 or less.  There are also age and residency requirements, and other criteria may apply.

 

Start at www.IRS.gov.  Type this address in your browser.  It is the only way to ensure you'll go to the IRS's official site.

 

Once there, you'll get help choosing software that suits your needs.  Then, you'll be directed to the software company's site.

 

The software walks you through doing your taxes.  Forget about finding the correct forms.  All you need are your financial papers.  The software performs the calculations for you.  So you're less likely to make math mistakes.

 

Don't qualify for free filing?  You can still find tax filing software at the IRS's site.  You just have to pay for it, along with e-filing fees.

 

Don't forget your state taxes!  You may be able to file those with your federal taxes.  Some companies offer free state filing.  But, in many cases, you'll be charged to file your state return.

 

Make sure your computer's security software is current before preparing your taxes and scan your computer for spyware and other threats.

 

Remember, criminals love tax season.  Watch for phony e-mail messages purporting to come from the IRS.  Just delete the messages.  Don't click links or call numbers in e-mail.  The IRS will never contact you via e-mail.

 

Finally, if your taxes are complicated, consult an expert.  Paying for professional help is better than facing an audit!