Then, I started writing about personal finance. I decided that it was time to start getting a grip on what the stock market was all about. I’m not going to lie, its not exactly the simplest thing to get a grasp on. But it’s not so crazy that the average person couldn’t learn at least a little bit about it. Today, we’re going to look at a few of the basic things that every ordinary person should at least understand about the stock market.

Long story short, the stock market is basically a place to trade company stocks and such at set prices. Stock is how much is invested into a company by original capital or by investors.  Basically people who buy stock are paying for part of the investment; you’re getting a piece of paper saying you “own” part of the company. This is why the stockholders have such a big say in what happens to a company; they literally own a “piece of the pie,” so to speak. The stock market is a compilation of all these various stocks (or shares, depending on who you ask the terms are used interchangeably).

Some people believe that the stock market is based on companies. While this is true, the stock market primarily fluctuates with people’s actions. People called brokers are buying and selling for people constantly. If people get nervous (like during the Great Depression), it affects everyone. If stock is not in high demand, the cost goes down, and that hurts the companies involved. This is why the market crashed in 1920’s; people panicked, pulled out their money, and then everything went downhill. If we aren’t educated about how markets work, we may make the same error again.

There are two terms that you may hear when looking at the stock market: bull markets and bear markets. A bull market is a market that is going up; a bear market is one that is coming down. Bulls and Bears came into stock market lingo in the 1800’s, and there is no certainty as to the origin. The most common explanation is that is based on the way each animal attacks; bears maul you and knock you to the ground, bulls charge into you and toss you in the air.

What other things would you like to know about the stock market? Is it something of interest to you, or is it something you just kind of ignore? Leave some thoughts in the comments, have a great day, and we’ll see you here next Tuesday on Money Walks.

There are a lot of things that some renters, especially college kids, overlook when they are considering a rental. And it is the time of year for college kids to be looking for those fall rentals if they desire them. So, here are 5 quick tips for renting an apartment or house.

1. Don’t check out an apartment alone! Whether you have a roommate or not, some apartment hunters look at stuff with rose-colored glasses. Make sure you take a buddy you trust with you, or, if you’re in a roommate situation, take your roommate. It will help you see what you’re looking at a little more clearly and make the process a little more entertaining as well.

2. Check out the rental prices in the area.  See what average prices are, there are plenty of websites to help you do this. See what’s usually included, and then see if the rentals you are looking at are a fair price based on that. Consider neighborhood, utilities included, and distance from your place of employment or college when looking at that price.

3. Read the lease carefully. I can’t emphasize this enough. Make sure you know what any lease says. What are you responsible for? What is your landlord responsible for? Keep a copy so you can check later and hold your landlord accountable if he or she don’t hold up their end of the bargain.

4. Take pictures upon moving in and out. I can’t emphasize this enough. My second apartment (same renter, different place than my first) left my roommate and I with 50 bucks each from our $700 security deposit. Why? Because we didn’t take pictures, and the counter “needed to be replaced” (it had like 5 knife marks on it). My roommate and I weren’t pleased, but there was nothing we could do because we had no proof. So please, don’t get taken advantage of like we did.

5. Get renter’s insurance. I am in the process of getting this. In case something happens, your stuff can be replaced or you can get the money to do so if you have renter’s insurance. It doesn’t protect the building (that’s your landlord’s responsibility), but it protects your stuff.

What other tips do you have for people looking for rentals? What else have you learned from renting? Leave some thoughts in the comments, have a great week, and we’ll see you back here next week.

1. Baby, it’s cold outside. Not really. Finally, it’s getting to the point that it feels like summer in the Northeast, where I live. I’m considering finally putting that air conditioning unit in the window. But, for those days that it’s kind of chilly outside, why in the world would you waste electricity to keep the house at 68 degrees? Check the weather outside and adjust your temperature a little bit so you don’t waste precious dollars.

2. Use natural lighting. I have incredibly inexpensive electric. My first month living in this apartment, my electric bill was $13. It’s a little bit higher now that I have a computer that takes a lot of power to run, but generally my bill is not over $30. How did I do this? Well, because I take advantage of the sun. I open my blinds and use the sun to light my house. The only place I can’t do that is my bathroom, only because there are no windows in there. Oh well. Open those windows wide and let the sun light your home!

3. Pay for multiple months.  This is about everyone’s favorite bill: the car insurance bill. Did you know you can save hundreds of dollars a year just by lumping your insurance into 6 month increments? For example, I pay $300 every six months. If I didn’t do that, I would pay $400 in that six month period of time. That saves me $100 a year. Huge savings! Progressive (http://www.progressive.com) allows you to compare different car insurance companies to get your best cost, and if you fill out the quote sheet, you can see the huge difference between paying monthly and paying bi-annually.

4. Consider cutting the cable. I haven’t had cable in 2 years. I was never a huge TV watcher, I only used it for background noise. So, I got a radio and use that instead. First, that’s anywhere from $20 to $100 I’m saving a month by not using cable. I share a Netflix account with friends, and I use Hulu on my computer, so if I really want to watch something, I absolutely can! Why spend money on something that I can access in other ways and, often times, for much cheaper. Even though this may sound like a foreign concept to you, try it. Really, it could be a welcome change to your family. Another perk to this? My electric costs are even lower because I’m not running a TV all of the time. Sounds like a win-win to me!

What other bill busting tips do you have? Have you tried these before? How have they worked for you? Share your thoughts in the comments and we’ll see you here next week!

We all want to be able to help our friends that are struggling financially. But other than flat out giving them money, what can we do to help them out? Here’s three ways that you can help a friend who’s having financial trouble.

1. Get them things they’ll definitely need. During that time, three of my friends chipped in and got me a laundry basket full of stuff that I would need. Dish detergent, laundry detergent, shampoo, body wash, a loofah, washcloths and towels, and even a gas card were included in the basket. Instead of giving someone money, get them stuff that they’ll actually use during the time of financial difficulty.

2. Offer to help with a necessary utility bill. Another one of my friends came to me, looked me in the eye and said “How much is your electric bill?” As awkward of a question as that was, I couldn’t say nothing. It was a hard question to answer, because I knew what his intention was. Luckily, I live alone, don’t have to pay for heat, and never use overhead lights. Literally, the thing in my house that uses the most power is my desktop computer. So, I told him, and he gave me a check to cover three months of my electric bill. Be like him. If you know a friend is struggling for cash, ask them how much an essential utility is and help them pay for a part or even all of it, if you can. If someone’s in a bad situation, every little bit helps.

3. Make a meal or take them out. As simple as this sounds, it’s probably the least intrusive way to help someone out. I was in my financial pickle around my birthday, so during that time, several of my friends took me out to dinner, using my birthday as an excuse to do so. They all told me later that they knew I was struggling and wanted to take me to eat a good meal, because they knew I wasn’t getting it at home. Take advantage of hang-out time, and offer to take your struggling buddy out to dinner or over to your house for a home-cooked meal. They’ll appreciate it.

What other ideas do you have for helping out people who are struggling financially? What can we do, if we’re not struggling ourselves, in order to take that load off someone else? Share your thoughts in the comments, have a great week, and we’ll see you here next week!

Here are some tips on how to shop for health care.

Research state policies. Different states have different laws as to whether or not someone can be accepted or denied for health insurance. Different health conditions (including kidney stones in California… odd)  can prevent you from getting cheap insurance. Children cannot be denied for these reasons, but adults still can.

Check out specifics. A plan may have a low premium, but does it do what you may need it to? Some plans only provide the minimum. Here are some specifics.

-          Deductable: This is the amount of money that you pay before the insurance begins to kick in. If you’re paying $50 a month, but your deductable is  $10,000, is that really worth the low cost?

-          Co-payments: How much are these? If you have to go to the doctor regularly and your co-pay is $20, it’s totally worth it, but if it’s $75, is it?

-          Annual out-of-pocket cost: Some insurances keep track of how much you spend, including prescriptions and co-pays. They start to cover everything that is covered by the plan, no co-pays, after this point. How high or low is this?

-          What does it cover? Does it cover any doctor you’d have to go to? Emergencies? Dental? How’s the prescription plan? What about surgery? Cancer? All of these are important to check out.

-          Preexisting conditions: Health care laws prevent insurances from denying you for these, but they haven’t stopped companies from charging people a heck of a lot more because of them.

-          Annual Benefits: Some companies cap your benefits at a certain amount a year.

-          Is it short term or long term? Some insurances only last a year or so, whereas others have you renew annually.

Is public health care an option? There are several programs, including COBRA, which you may be eligible for depending on your financial status, your family size, and other criteria depending on the state that you live in. Also, all children under the age of 18 are required to be covered by insurance, so if it’s causing your family a burden to pay for all of your insurances, check your state’s programs out.

Don’t be afraid to ask questions. Be specific in what you need, what you have, and what you want. Sadly, a lot of insurance companies are just out to make a dollar, and if you don’t pry, you may not get the information that you want or need to have until it’s too late.

How’s that health insurance search going for you? Hopefully better than it is for me! Have a great week and we’ll see you here next week!

1. Do not avoid them. Unless you are planning to file bankruptcy or you have nothing to take, it’s stupid to avoid the debt collectors. Most of the time, if you avoid them, the consequences are worse than if you just swallow your pride and return their call. Although collection agencies are there to get the money that is owed to the people they represent, they will often make a mutual agreement that is suitable for both parties involved.  Getting a lawyer involved, especially if it is a substantial amount of debt, is never a bad idea.

2. Ask for their employee ID number and for them to record the call. Even though a lot of collection agencies are reputable, there are some whose employees are not the best, and it’s okay to take measures to protect yourself from harassment.  But, as with anyone, you need to give respect to get respect, and this situation is no different. Being polite and cooperative goes a long way, especially because most of the contacts that these people have are rude and angry.

3. Know your rights. You also have other rights as someone who owes debt. The Fair Debt Collection Practices Act (FDCPA) keeps people who are in debt safe from harassment and annoyance by the collection companies. Some basics of this are the following:

-          They can’t call someone who isn’t on the loan/contract/whatever. Third parties are out.

-          They cannot call you at a certain number if you tell them they cannot.

-          They cannot use abusive, crude, or threatening language.

-          All communication must be private, no public notices.

-          They can only call between 8 AM and 9 PM.

-          They must send you written documentation within 5 days after they first contact you with all of the information necessary to clear the debt and what legal action can be taken.

One of the biggest problems people have with collection agencies is protecting their assets. You need to protect any government funds (Social security, disability, etc), because they are not required to be used toward debt payment. Professionals suggest you may even route these to a separate bank account so that you don’t have to worry about this potentially being a problem. They also suggest that you use a money order instead of a personal check.

4. Find a debt counselor. Make sure that they are accredited by a national organization like the National Federation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. Many states also require that credit counselors are accredited by the state they are practicing in as well. They, and a consumer lawyer, will help you sort through your debt and make things manageable.

I’m the same way with taxes. As soon as I have everything I need, I like to get them all done and over with. Here are some times that you should… and shouldn’t… file early!

-          If you’re a college kid or the parent of a college kid: File early! Getting your FASFA done early is a good thing, because you can get scholarships and other grants that are on a first come, first serve basis.

-          When you have to pay taxes: Wait on it a bit. Just like if you’re getting money back, why should the government collect interest on your payment when you could be getting it in your bank account?

-          If you know that you’re getting money back: File early! Well, yeah! If you know that you’re going to get money back, you should file as quickly as you can! Why should the government get to collect interest on the money that they’ve already “borrowed” from you because you paid too much on your taxes?

-          When you itemize or may have to deal with other complicated circumstances: File early! With these kinds of things, the earlier you start the better. It prevents errors, you can see a professional if you need to, and you can take the time to double and triple check your work.

-          If you think you’ll just rush through them: Take your time! Don’t just get it done. Be diligent; make sure that you are including everything you are entitled to, and take your time.

-          When you think you’re going to forget: Just get them out of the way! This is why I file early. I know if I don’t do it immediately, I will totally and completely forget to do it at all.

-          When you are still waiting on your W2’s: Wait for them! Don’t ever use your last pay stub to do your taxes. Things can change in between your last pay stub and your W2, especially if your employer forgot to take things out or if they discover that they took too much out. Obviously, by now, you should have your W2′s, but the point remains. Wait till they’re in your hands.

-          When you know the post office will be a madhouse: The earlier the better! Yes, as it gets closer to April 15^th, the post office becomes a crazy place. You don’t have to worry about this if you are filing electronically, but if you are planning to use the mail, make sure you do it sooner than later.

Are you done with your taxes? You only have a couple more weeks, but these guidelines can help you figure out the best time to do them next year! Have a great week, we’ll see you here next week!

A home’s equity is the difference between what is owed and what the house’s fair market price. For example, if your home is worth $150,000 and you owe $75,000 on your mortgage, then your home’s equity is $75,000. You can take out all or part of that in the form of a loan or line of credit.

A home equity loan is like any other loan; it provides a certain lump sum of cash all at one time, has monthly payments and accrues a set amount of interest.

The other way to utilize your home’s equity is something called a home equity line of credit, or a HELOC. This allows you to get cash advances and use it as a credit account. Minimum payments are easier to make, the interest is variable, and the payment plans are flexible, but, unlike other lines of credit, it eventually expires.

Home equity loans are sometimes called “home improvement loans.” Giving your home more value should be the primary reason you consider home equity loans.  If you want to put an addition on your home, fix it up somewhat, or do some more expensive wear-and-tear maintenance, a home equity loan is a viable option. If you are doing home improvements, make sure that you compare your home equity rates with home loan rates. If the home loan rates are better, then consider doing that instead.

It is also a good idea to use your home’s equity for other things that are considered good investments, like an education. The other thing is that, if you’re going to risk your house to buy something, it should be an investment. Don’t use it to go on vacation, to buy a car, or anything else that depreciates. Your house is where you live, be wise with what you do with part of its value; you can lose your home if you don’t make payments as you should.

Always talk to a professional before making any type of decision. You need to go through the financial institution that manages your mortgage. Find one of the investment professionals to help you figure out whether you want to have a loan or a HELOC. It usually involves an application process, just like any other loan or line of credit. Make sure that you’ve weighed out all of your options so that you can make the best decision for your family and budget.

Have you considered a home equity loan? What other tips would you have for making the decision? Is it really a great time to do this, or should you just leave your home’s value you alone? Have a great week, and we’ll see you here next week.

The amount of your credit that is currently used: This is the one that many people overlook. At one point, I had several thousand dollars of credit and almost as much debt. This made my credit score plummet quite quickly. When I made this number smaller.

The length of your credit history:  Another thing that totally shot my credit score was that I had such a short history. When it was at its worst, I had only 4 years of credit. Now I have almost 10, and it has increased significantly. As your credit history gets longer, there are longer periods of time to compare to. 4 months of delinquent payments (like I had) looks a lot more terrible when compared to 4 years as opposed to being compared to 10. And, since I plan on it never happening again, it’ll be a mere smudge on 20-plus years of credit.

Your payment history: This is the most obvious. If you forget one, it’s really not a huge deal. But, if you keep skipping or forgetting bills, your credit score will start to drop. Just because it’s not necessarily a form  “credit” does not mean it does not affect your credit score. Remember, the credit score assesses how responsible you are with the credit you possess AND with making payments on that credit. If you can’t make payments on your $25 electric bill, how can a loan company expect you to make payments on a $140,000 loan? Things get even worse when you end up having to go through a collection agency.

The number of inquiries on your credit report: People do NOT realize how significant this is. If you are requesting information on your credit too regularly (most professionals suggest once or twice a year), it makes your credit dip. Why? Because if you are checking it too much, it means that you are obviously overly concerned about it, and that looks suspicious.  Now, there are some banks, credit card companies, and credit unions that will track your FICO score, and they do it monthly without affecting your credit. If you are someone who is concerned about that (like I was, because of killing my credit), then these services can help you significantly; contact your bank and/or credit union and ask. Also, the government requires that you have access to a free credit report every year. This also includes other agencies pulling your credit report; if you’re seeking too much credit, it can mar your credit score significantly after awhile.

Keep an eye on your credit score. There may be things affecting it that you don’t realize. Have a great week, and we’ll see you here next week!

There are three different types of audits that the IRS currently conducts.

- Correspondence Audit. These audits are ones where you just have to send the IRS the documentation that they ask for.  Most audits come in this form.

- Field audit. If there is a need to look at your home or business in order to verify information on your taxes (for example, taking the tax breaks for making your home more energy efficient), then someone will come to your home and check it out.

- Office audit. An office audit is just like a correspondence audit, except that you actually have to go to the office and sit down with the IRS agent with the necessary documentation.

First, contact the IRS and let them know that you received their audit letter. It’s perfectly fine for you to ask why you were selected to be audited; most of them are found by a computer system, but there are other  reasons (relationships to other people who are being audited, different socioeconomic groups, and sometimes the IRS has projects of auditing groups that meet specific criteria). Ask how long you have and  Make sure that you find a qualified tax professional to help you out, it always works better if you’re getting the help of someone who knows the laws better than you do.

H&R block recommends that you keep the following for at least seven years, in case of an audit:

• home mortgage statements
• Forms W-2 and W-2G
• Forms of the 1098 and 1099 series and Schedules K-1
• receipts for employee business expenses
• justification of fair market value for any items donated to charity
• receipts for items donated to charity with value greater than $500
• receipts for charitable contributions (including cash contributions made after 2006)
• receipts for rental property income
• brokerage statements
• receipts for qualified education costs (this includes loan payments, etc).
• 401(k) statements
• IRA contribution records
• receipts for items sold at a gain
• home-office-related receipts
• pay stubs
• copy of the front and back of the check you used to pay your tax balance due, if applicable

(taken from http://www.hrblock.com/taxes/tax_tips/irs/being_audited.html#1)

Now, I know, a lot of you are probably sitting there thinking, “7 years?” I know, it seems like a lot. I only recently started, so I don’t have close to that. . But if you get audited, you don’t want to be found with your pants down. Organization is key. It’s better to be over prepared then not prepared at all. Be ready just in case, and if you ever do get called out for an audit, the situation will be much less stressful than necessary. Have a great week, and we’ll see you here next week!