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Money Tips for All AgesYour Finances at Different Stages of LifeMoney Tips for All AgesYour Finances at Different Stages of Life

F E D E R A L D E P O S I T I N S U R A N C E C O R P O R A T I O N

Ideas forAny Age or Stage

Teens

Young Adults

Newlyweds

People at Midlife

Teaching Our Kids

Before You Retire

After You Retire

Financial Caregivers

Coping After Changes

SPECIAL EDITION


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2Spring 2008FDICConsumer News

The Federal Deposit InsuranceCorporation was created byCongress in 1933 to protectdepositors and ensure the safetyand soundness of the U.S.banking system. Since that time,the FDIC has remained true toits mission to be a source ofconfidence and stability for the

American people. In fact, becauseof the FDIC, no depositor haslost a single cent of insured fundsas a result of a bank failure.

The FDIC is celebrating our75th anniversary in numerousways, including the publishingof Money Tips for All Ages,this special edition ofFDICConsumer News. We inviteyou to learn more about whatwe do to serve and protectconsumers and what you can

do to better manage your money.Start by visiting our home pageat www.fdic.gov. You also cancall or write the FDIC for helpregarding deposit insurance andbanking. See the back page forinformation on how to contact us.

No matter how old or young you are,there are some basic things you cando to better manage and protect yourmoney. Here are recommendationsfromFDIC Consumer News.

Comparison shop for financialservices. Just as you would do forany major purchase, look at what isbeing offered by your bank and a fewcompetitors, then try to find the bestdeal to meet your needs. For instance,with a mortgage, credit card or otherloan, you may be able to negotiate theinterest rate and other terms. This cansave hundreds or thousands of dollarsover several years.

Start by comparing the AnnualPercentage Rate (APR) on a loanor credit card. The APR is the costof credit expressed as a yearly rate,including interest and certain fees.Many people looking for a loanonly focus on the dollars theyd payeach month instead of the APR and,because of that, they dont realizehow much the loan will cost and theycould pay too much, said Rae-AnnMiller, special advisor on consumerissues in the FDICs research division.For example, she said, payday loans(unsecured loans that borrowerspromise to repay out of their nextpaycheck or regular income payment)and car-title loans (secured by theborrowers car) may be quick and easysources of cash, but they also have anAPR as high as 300 to 400 percent.

Also, for a mortgage, consider afixed-rate loan even if adjustable-ratemortgages (ARMs) carry a lowerinitial interest rate or lower monthlypayments at the start. If you arethinking about an ARM, before youcommit to one, make sure you knowhow much the monthly paymentscould go up and be comfortable withthose higher payments, cautionedJanet Kincaid, Chief of the FDICs

Practical Advice for Everyone on

How to Save and Manage Money

Consumer Response Center. Dont leta low teaser rate lure you in; you maybe surprised later.

When you consider opening checkingand savings accounts, compare theAnnual Percentage Yield (APY) offeredby several financial institutions. TheAPY expresses the annual interest rateyou will earn on a deposit account,depending on the frequency ofcompounding. However, keep in mindthat fees such as those for ATM

withdrawals, account maintenance andchecks returned because of insufficientfunds arent factored into the APY.Fees can make a big difference in howmuch you actually earn from moneyyou have on deposit.

Get a free copy of your creditreports.These reports are preparedby companies called credit bureaus.They summarize your history of payingloans, credit cards and other bills.If you apply for a loan, insurance ora job, or you want to rent an

apartment, chances are your creditreport will be reviewed.

One reason you should be monitoringyour credit reports is to correct errorsor omissions that can leave bad markson your credit history. Inaccuraciesin your credit report can needlesslyreduce your credit score and, in turn,may cost you hundreds of dollars eachyear due to higher interest rates on a

loan or credit card. Another reason toreview your credit reports is to protectagainst identity theft (see Page 4).

Under federal law, you are entitledto one free credit report every year

from each of the nations three majorcredit bureaus. To order your freereports or for more information, go towww.AnnualCreditReport.com or calltoll-free 1-877-322-8228.

Try to save more and spend less.First, if you dont already have amonthly budget, consider preparingone to get a better handle on yourincome and expenses for necessities,

For Any Age or Stage


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such as housing, utilities, food andtransportation. You can also decidewhat is appropriate for non-essentialexpenses, such as entertainment, eatingout and the latest electronics. This ishow a budget can help you commit to

saving a little money every month andsplurging a little less, said Kincaid.

She also said that a budget doesnthave to be complicated or scary,and that while there are budgets youcan easily create on a computer, anotebook and a pencil can be enoughto get you started.

Keep banking costs down. Withplanning, you can sidestep some ofthe more costly fees and penalties.Examples:

With credit cards, try to pay thecard balance in full each month toavoid interest charges. If you cantpay in full every month, send in asmuch as possible to keep interestcosts to a minimum. Think twicebefore accepting an offer from yourcredit card issuer to skip a payment,said Luke W. Reynolds, Chief of theFDICs Community Affairs OutreachSection. Its likely that interest willstill be charged, so youll actually bepaying morein interest because youllcarry a higher balance on your card fora longer period of time.

In addition, pay your credit card billon time. One reason is to avoid latefees. Another is that late payments candamage your credit record. If repeated,they could even trigger interest rateincreases on your credit cards andloans.

With your checking account, avoidfees for insufficient funds and bouncedchecks. Record every deposit andwithdrawal in your checkbook

especially remember your debit cardpurchases and ATM withdrawals, saidReynolds. It is important to know howmuch money you have in your accountso you wont overdraw your balance.

Your bank may offer various overdraftprotection services for your checkingaccount, but be aware that these comewith their own costs. Reynolds addedthat one of the least expensive options

could be to ask your bank to coverinsufficient funds by automaticallytransferring money from your savingsaccount.

At the ATM, limit or avoidsurcharges (access fees) by using yourown banks machines or those ownedby institutions that dont charge feesto non-customers. If you definitelyneed cash when youre out of town orotherwise not near an ATM owned byyour bank, consider getting cash backwhen you use a debit card to make apurchase at a supermarket or anothermerchant.

Dont be afraid to ask for a break.Bounce a check or send in a latepayment for the first time ever? Thinkthe fees for your mortgage applicationare a bit steep? Depending on thecircumstances, your bank might bewilling to reduce or waive a fee orpenalty, especially if youve been agood customer and dont have a historyas a repeat offender.

For more ideas on how to cut bankingcosts, see previous issues ofFDICConsumer News at www.fdic.gov/consumernews, including our Summer2007 special edition called 51 Ways toSave Hundreds on Loans and CreditCards and the Summer 2005 featureA Shoppers Guide to Bank Productsand Services.

Understand your FDIC insurancecoverage so you can be fullyprotected if your bank fails. If you(or your family) have $100,000 or lessin all of your deposit accounts at thesame insured bank, you dont need toworry about your insurance coverage.Your deposits are fully protected underfederal law because the basic insurancecoverage is $100,000 per depositor perinsured institution.

You also may qualify for morethan $100,000 in coverage at oneinsured bank. For example, themoney you have in your individuallyowned accounts (not including yourretirement accounts) is insured up to$100,000 separately from your shareof any joint accounts at the same bank.Deposits designated to pass to named

beneficiaries upon the death of theowner, such as in payable-on-deathaccounts, also can be insured formore than $100,000 under certaincircumstances. And, some retirementaccounts (notably Individual

Retirement Accounts) are insured upto $250,000.

For guidance about your FDICinsurance, including how to makesure that all your funds are protected,go to www.fdic.gov/deposit/deposits/index.html to find FDIC brochures,videos and an interactive insurancecalculator. Or, you can call the FDICor write or e-mail questions to us(see the back page).

Remember that investments

can lose value. Investmentproducts include stocks, bonds andmutual funds. Over the long term,investments might produce higherreturns than bank deposits. However,investments are not deposits, theyare not FDIC-insured not eventhe ones sold through FDIC-insuredinstitutions and they can lose value.Because of the risks associated withany investment, always deal with areputable, licensed salesperson andresearch the product before makinga purchase. See Page 12 for securities

and insurance regulators that can help.

Certain annuities are a type ofinvestment. In general, an annuityis a contract with an insurancecompany. The consumer makes oneor more payments to the insurer, as aninvestment, and the insurer agrees tomake a series of income payments tothe consumer as long as he or she lives.

continued on next page

MONEY TIPS FOR ALL AGES

Understand your FDIC

insurance so you can be fully

protected if your bank fails. The

basic coverage is $100,000 per

depositor per institution, but

you may qualify for more FDIC

insurance depending on the

circumstances.


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Be particularly careful before investingin variable annuities (see Page 12),which frequently come with high feesand penalties if you withdraw moneyearly.

Especially troubling have been reportsof marketers steering people intoannuities that are unsuitable for them.The National Association of InsuranceCommissioners has published aconsumer alert to help consumers,especially seniors, better understandannuities and recognize questionablesales practices. Read it online atwww.naic.org/documents/consumer_alert_annuities_senior_citizens.htm.

There also have been reports ofmarketers making false statementsabout the FDIC such as claims thatthe FDIC doesnt have the financialresources to protect insured depositaccounts as a way to sell investmentsor annuities to consumers. Again, forinformation about the FDIC or FDICinsurance, be sure to contact us.

Be cautious when borrowing againstthe equity in your home. If youhave property valued at $300,000 andyou owe $100,000 on your mortgage,your equity is $200,000. Home equityloans and lines of credit are ways thathomeowners can borrow money usingtheir homes value as collateral andgradually pay it back.

Home equity products are relativelylow-cost ways to borrow money, butthey must be repaid like any other loan.Especially important to remember isthat if you cannot pay a home equityloan, you risk losing your home.

Prepare for the unexpected. Haveadequate insurance, especially for life,health, disability, personal liability,and coverage of property. Review your

coverage annually to ensure that it isup to date.

Consult an attorney or another trustedadvisor about having a will and/orestablishing a formal trust to specifyhow your bank accounts, property andother assets should be distributed uponyour death. Periodically review yourlife insurance policies and retirement

accounts especially after a birth,death, divorce or other major lifeevent to ensure that the namedbeneficiaries are correct.

Also build an emergency savingsfund, preferably of about three to sixmonths of living expenses, so you haveready resources you can tap to payyour mortgage, insurance or costlyhome repairs or medical bills. Thesafest place for emergency savings is afederally insured deposit account.

Simplify your financial life.Haveyour pay and benefit checks depositeddirectly into your bank account.Arrange to automatically pay forrecurring expenses, such as a mortgageloan, insurance premium or utility bill.Banking and bill paying online or byphone also can be good options.

These and other ideas can help yousave time, reduce stress, eliminateclutter, lower the fees you pay, andmaybe help you earn a little extra onyour savings and investments.

Protect against fraud. Here are basicprecautions against identity theft,check fraud and other financial scams:

Be wary of requests to update orconfirm personal information especially your Social Security number,bank account numbers, credit cardnumbers (including security codes),personal identification numbers(PINs), your date of birth or yourmothers maiden name in responseto an advertisement or an unsolicitedcall, letter or e-mail. Your bank wontcall or e-mail you to confirm accountnumbers or passwords it already has.

If you want to nd out if a companyis legitimate, look it up using a reliablesource. Dont rely on the contactinformation that was provided to youon a Web site or in an unsolicitedcall or e-mail. For information aboutbanks, you can use Bank Find, theFDICs online directory of insuredbanking institutions, at www2.fdic.gov/idasp/main_bankfind.asp. Or, call theFDICs toll-free consumer assistanceline at 1-877-ASK-FDIC, which is1-877-275-3342.

Assume that any offer that soundstoo good to be true especiallyone from a stranger or an unfamiliarcompany is probably a fraud.Example: You receive a call or letterannouncing youve won a lottery

or other prize you dont remembersigning up for, and you are told to paytaxes or fees before you can claimyour (nonexistent) prize.

Beware of transactions in whichanother party sends you a check formore than you are due and then asksyou to wire back the difference. If thecheck is fraudulent, you could lose alot of money, said Michael Benardo,manager of the FDICs financial crimessection.

Look at your bank statements andcredit card bills as soon as they arriveand report any discrepancy or anythingsuspicious, such as an unauthorizedwithdrawal or charge.

Keep bank and credit cardstatements, tax returns, credit and debitcards and blank checks out of sight,even at home. Also shred sensitivedocuments before discarding them.Why? Because dishonest relatives,neighbors, workers around the houseand other people could use these itemsto commit identity theft or othercrimes.

Periodically review your creditreports to make sure an identity thiefhasnt obtained a credit card or loanin your name. Experts suggest that, tomaximize your protection, you requestcopies from all three credit bureausbut spread out the requests during thecourse of the year.

To learn more about common financialfrauds and how to protect yourself,see back issues ofFDIC Consumer

News (online at www.fdic.gov/consumernews) and our multimediapresentation Dont Be an OnlineVictim (at www.fdic.gov/consumers/consumer/guard/index.html).

For more help or information atany age or stage: Keep reading thisspecial edition for tips and strategiesfor different times of your life. Q



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How to Ace Your First Test Managing

Real Money in the Real WorldAs a teen, youre beginning to makesome grown-up decisions about howto save and spend your money. Thatswhy learning the right ways to managemoneyright from the startisimportant. Here are suggestions.

Save some money before youretempted to spend it.When you getcash for your birthday or from a job,automatically put a portion of it atleast 10 percent, but possibly more into a savings or investment account.

This strategy is what financial advisorscall paying yourself first. Making thisa habit can gradually turn small sumsof money into big amounts that canhelp pay for reallyimportant purchasesin the future.

Also put your spare change to use.When you empty your pockets at theend of the day, consider putting someof that loose change into a jar or anyother container, and then about oncea month put that money into a savingsaccount at the bank.

Spare change can add up quickly,said Luke W. Reynolds, Chief of theFDICs Community Affairs OutreachSection. But dont let that money sitaround your house month after month,earning no interest and at risk of beinglost or stolen.

If you need some help sorting andcounting your change, he said, find outif your bank has a coin machine youcan use for free. If not, the bank maygive you coin wrappers.

Some supermarkets and othernon-banking companies haveself-service machines that quicklyturn coins into cash, but expect topay a significant fee for the service,often close to 10 cents for every dollarcounted, plus you still have to take thecash to the bank to deposit it into yoursavings account.

Keep track of your spending. A goodway to take control of your money is todecide on maximum amounts you aimto spend each week or each month forcertain expenses, such as entertainmentand snack food. This task is commonlyknown as budgeting your money ordeveloping a spending plan. And tohelp manage your money, its worthkeeping a list of your expenses forabout a month, so you have a betteridea of where your dollars and centsare going.

If you find youre spending morethan you intended, you may need toreduce your spending or increase yourincome, Reynolds added. Its allabout setting goals for yourself and

then making the right choices withyour money to help you achieve thosegoals.

Consider a part-time or summerjob. Whether its babysitting, lawnmowing or a job in a real business,working outside of your home canprovide you with income, new skillsand references that can be usefulafter high school or college. Beforeaccepting any job, ask your parents fortheir permission and advice.

Think before you buy. Many teensmake quick and costly decisions to buythe latest clothes or electronics withoutconsidering whether they are getting agood value.

A $200 pair of shoes hawked by

a celebrity gets you to the samedestination at the same speed as a $50pair, said Reynolds. Before you buysomething, especially a big purchase,ask yourself if you really need or justwant the item, if youve done enoughresearch and comparison-shopping,and if you can truly afford the purchasewithout having to cut back on spendingfor something else.

Be careful with cards. Under moststate laws, you must be at least 18 yearsold to obtain your own credit card and

be held responsible for repaying thedebt. If youre under 18, though, youmay be able to qualify for a credit cardas long as a parent or other adult agreesto repay your debts if you fail to do so.

An alternative to a credit card isa debit card, which automaticallydeducts purchases from your savingsor checking account. Credit cards anddebit cards offer convenience, but theyalso come with costs and risks thatmust be taken seriously.

Protect yourself from crooks whotarget teens. Even if youre too youngto have a checking account or creditcard, a criminal who learns your name,address and Social Security numbermay be able to obtain a new credit cardusingyourname to make purchases.

One of the most important things youcan do to protect against identity theft

For Teens




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is to be very suspicious of requests foryour name, Social Security number,passwords or bank or credit cardinformation that come to you in ane-mail or an Internet advertisement, nomatter how legitimate they may seem.

Teens are very comfortable usinge-mail and the Internet, but theyneed to be aware that criminals canbe hiding at the other end of the

computer screen, said MichaelBenardo, manager of the FDICsfinancial crimes section. These types offraudulent requests can also come byphone, text message or in the mail.

For more guidance on how to guardyour personal information, see Page 4.

Be smart about college. If youreplanning to go to college, learn aboutyour options for saving or borrowingmoney for what could be a majorexpense from tuition to books,

fees and housing. Also consider thecosts when you search for a school.Otherwise, when you graduate, yourcollege debts could be high and maylimit your options when it comes to acareer path or where you can affordto live.

For more information on savingand borrowing for college, visitwww.students.gov, a Web site withinformation from the U.S. governmentand other sources.

For more help or information for

teens:Read Start Smart: MoneyManagement for Teens, a specialedition ofFDIC Consumer Newsfromthe Summer of 2006 with informationto help teens (and many pre-teens)learn how to make good decisionsabout their money. Find it online atwww.fdic.gov/consumers/consumer/news/cnsum06. Also see our tips foranyone at any age starting on Page 2. Q

Twenty-somethings may not realizeit, but every time they enter a newphase of their life as young adults perhaps starting college, a career or afamily theyre also venturing intoa new world of money management.Here are ways to be prepared.

Save money that could make yourfuture dreams a reality. Its importantto put money aside for purchases youexpect to make in the next few monthsor years. But even at this stage of

your adult life, its smart to save forlong-term goals, perhaps buying ahome, owning a business or saving forretirement (even though that may be40 or 50 years away).

To help you stay focused on savingmoney and controlling your spending,think about creating a formal orinformal budget. The important thingis to understand how much you earneach month, how much you pay foressentials like rent or transportation,and how much is left over for

everything else, said Janet Kincaid,Chief of the FDICs ConsumerResponse Center. Its how you spendwhat is in the everything elsecategory that is critical to successfulmoney management, Kincaid added.

Also, to make saving easy and painless,consider arranging with your bankor employer to automatically transfera certain amount each month to asavings or investment account.

Build a good credit record. As youbecome responsible for paying yourown debts for credit card purchases,rent, car loans or student loans, andother obligations you are buildinga credit record. Companies calledcredit bureaus are authorized by lawto collect information on each personshistory of paying debts, which is thenused to prepare credit reports andsummary credit scores. In general,

What to Know Before DeclaringYour Financial Independence

the better your credit history andcredit score, the better your chancesare of getting a loan, including a creditcard, with an attractive interest rate.Credit reports and scores also can beconsidered when you apply for a job,an insurance policy or an apartment.

One of the best ways to build andmaintain a good credit record is to payyour credit card bill and other debtson time to show you are a reliablemoney manager.

What else can you do to improve yourcredit score? Try to charge on yourcredit card only what you can affordto pay off immediately or within areasonable time frame, said RobertMooney, FDIC Deputy Director forConsumer Protection and CommunityAffairs. Whenever possible, pay yourcredit card bill in full each month, butif you cant do that, pay as much as youcan over the minimum amount due.

If you need to get a car, considerthe best way to pay for it. For manyyoung adults, their first big purchaseand ongoing expense is their vehicle.Often, the first question is whetherto buy (which may involve taking outa loan) or lease (which is similar torenting a car but for a few years).

There are different pros and consto buying or leasing, said Kincaid.For example, monthly lease paymentsare usually lower than monthly loanpayments, but at the end of the leaseyou dont own the car youve beenpaying for and you may owe a sizeablesum of money. If you buy, you do havea vehicle you can sell or trade in.

The Federal Reserve Board haspublished a guide to the differencesbetween buying and leasing a car.Keys to Vehicle Leasing is online atwww.federalreserve.gov/pubs/leasing.If youre thinking about buying a carand borrowing money to pay for it, see

For Young Adults


Save some money before youre

tempted to spend it. When you

get cash for your birthday or

from a job, automatically put aportion of it into savings.


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the Summer 2007FDIC ConsumerNews(www.fdic.gov/consumers/consumer/news/cnsum07/auto.html)for tips that can help you save time andmoney, perhaps hundreds of dollars.

If youre renting a house orapartment, consider if its time tobuy. Once you start earning a good,steady income, youll most likely facethe decision about when is the righttime to own your first home. Realestate can be an excellent investment.But home ownership is a big financialcommitment, and home valuessometimes can go down. Theres alot to consider before making that bigleap into home ownership, and whatworks for one person isnt always thebest fit for someone else, said Lee

Bowman, FDIC National Coordinatorfor Community Affairs.

First look at the costs of renting versuspaying a mortgage. When buying ahome, the most important thing tolook at is what you can reasonablyafford, added Kincaid. Rememberyoull be paying real estate taxes andinsurance, mortgage interest payments,and the costs of maintenance andimprovements. But also rememberthe upsides of buying a home, suchas tax benefits, the potential for your

home to appreciate in value, and thesatisfaction of having a place to callyour own.

Other factors to consider include howlong you plan to stay in the house, howmuch money you have for the downpayment, and how good your creditrecord is. If your credit record is lessthan stellar, you may only be offereda mortgage at a high interest rate,Kincaid said.

To learn more about renting vs.

buying a home and paying amortgage, go to www.mymoney.gov/homeownership.shtml, a federal Website for information from a variety ofsources, and www.hud.gov, the U.S.Department of Housing and UrbanDevelopment.

For more help or information foryoung adults:Turn to our financialtips for consumers of all ages starting

on Page 2 and those for newlywedsabove. Also see our Spring 2005FDICConsumer Newsspecial issue foryoung adults entitled Taking Control

of Your Finances, which is online atwww.fdic.gov/consumers/consumer/news/cnspr05. Q


Starting a Household on Solid Ground Financially

For Newlyweds

For newlyweds, the first big financialdecisions go beyond how to pay for thehoneymoon and how to invest all thosechecks. They also involve startinga new household on solid groundfinancially. Financial incompatibilityis a primary reason for a significantnumber of failed marriages, saidLee Bowman, National Coordinatorfor Community Affairs. Achievingharmony regarding financial mattersbefore marriage, or as early in themarriage as possible, is critical tosustaining the relationship and

preventing conflicts.

Before exchanging wedding vows,have a candid discussion aboutyour finances. Be open and honestabout matters that could be a sourceof friction in the future, such as majoroutstanding debts from student loansor credit cards.

Some experts suggest that both of youorder your latest credit reports andthen, together, sit down and reviewthem to avoid major surprises. Credit

reports include information on debtsoutstanding and, for example, whethersomeone has filed for bankruptcy.By federal law, you can receive onefree copy of your credit report every12 months from each of the threenationwide credit reporting companies(www.AnnualCreditReport.com or calltoll-free 1-877-322-8228).

Set short-term and long-termfinancial goals. Figure out how muchmoney each of you should be able tospend for fun and how much you

should set aside for important goals,perhaps to buy a home. Financialadvisors suggest that young couplesconsider preparing and following amonthly budget (see Page 6).

Understand the risks andresponsibilities of jointly heldaccounts.If a husband and wife areco-owners of a credit card and oneof them goes on a spending spree,the other spouse may be heldresponsible for paying the bill.Likewise, irresponsible use of ajointly owned credit card by onespouse would be reported onbothoftheir credit histories, and that coulddamage the innocent partners

chances of getting a good loan or creditcard in the future. And when twopeople use the same checking account,they should share one checkbookand record all transactions, becauseotherwise they risk losing track oftheir balance and paying charges forinsufficient funds.

For more help or information fornewlyweds:See the Spring 2005special issue ofFDIC Consumer News,which is devoted to helping youngadults, including those just beginning

a family, to learn the right ways tosave and manage money. It is online atwww.fdic.gov/consumers/consumer/news/cnspr05. Also see our basic tipsfor consumers starting on Page 2. Q


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Multi-Tasking In Your 30s, 40s or 50sManaging for today and saving for tomorrow, including

a childs college expenses and your retirement

If youre living in the middle ages youre 35 to 55 (or thereabouts),the years between young adulthoodand senior status youve got alot to think about when it comes tomanaging money.

Among the issues you face: how tomaximize your income during yourremaining work years so youre betterpositioned to retire when, whereand how you want. Here are some

suggestions for minimizing stress andmaximizing results.

Save as much as you can for yourretirement.Tax-advantaged savingsvehicles, such as Individual RetirementAccounts (IRAs) and 401(k)s, are solidchoices. And once you reach age 50,you can also make catch-up (extra)contributions to these retirementsavings accounts.

Consider speaking with a financialplanner or other personal advisor

about a recommended investmentstrategy for your age and stage oflife especially the mix of stocks,bonds, mutual funds and lower-riskalternatives such as U.S. Savings Bondsand bank deposits.

Explore tax-preferred ways to savemoney for a child.State-sponsored529-plan savings accounts andCoverdell educational savings accountscarry tax advantages and help familiesand individuals save for highereducation expenses.

Also, many families may be able toqualify for a tax break on earningsfrom certain U.S. Savings Bonds usedfor educational purposes.

Do your homework if you need aloan to pay for a childs education.Among the many options aregovernment-guaranteed loan programs

for parents and students, and loansfrom private financial institutions.There often are big differencesbetween government and private loans,though, and private lenders could offerboth types. So ask questions and fullyunderstand the fees, the interest rate,and when loan payments and interestcharges will begin.

Teenagers are solicited by direct mailfor very large student loans that would

put a heavy debt burden on themwhen they graduate from college,said Deirdre Foley, an FDIC SeniorPolicy Analyst on consumer issues.My recommendations to parentsand students are to shop around atmultiple lenders, read all the fine print,and borrow only what you need forschool-related expenses that are notcovered by grants, scholarships orother sources.

Also be on guard against scams thatbegin with a guarantee or promise

of scholarships, grants or fantasticfinancial aid packages. For details, seea Federal Trade Commission warningabout fraudulent scholarship offers atwww.ftc.gov/bcp/menus/consumer/education/scholarships.shtm.

Make the best use of a financialwindfall.Many people receivea large sum of money from aninheritance, a home sale or aninsurance payment, and they arentsure how to use or protect it. Considerasking a financial or tax advisor about

the best options, which may includestarting or adding to a rainy-day fundfor emergency expenses or puttingmoney into your retirement accounts.

If you deposit a large amount of moneyin a bank account, make sure it is fullyprotected by FDIC insurance (seePage 3).

Also consider paying off high-interestdebt, such as the outstanding balanceson your credit cards.

Plan a strategy for having a homeand a mortgage.If you dont owna house, consider if it makes senseto buy one, especially if you dontplan to move in two or three years.Homeownership can offer taxadvantages and a stable place to live,but dont take on more of a mortgagethan you can afford to pay each month.

If you do have a mortgage, periodicallycompare your interest rate to currentmarket rates and, if rates havedeclined, calculate whether refinancingmakes sense.

Just because you can get a new

mortgage at a better interest rate thanwhat you already have, youve stillgot to be careful before refinancing,said Luke W. Reynolds, Chief of theFDICs Community Affairs OutreachSection.

First, he added, if you only havea few years left on your mortgage,refinancing doesnt make sense if thecosts to refinance are greater than thecost savings from the lower monthlypayments. Second, remember that ifyou stretch out the number of years

you have to repay the new mortgage,you will pay more in interest over thetotal life of the loan.

So, if you have 15 years left on your30-year mortgage and you want torefinance, in the long run, youreusually better off with a 15-year loaninstead of refinancing into another30-year loan.

For more help or information forpeople at midlife:Find basic tips on avariety of topics starting on Page 2 ofthis special edition as well as online atwww.mymoney.gov, a U.S. governmentWeb site. For parents teaching kidsabout money, see our tips on the nextpage. And for anyone caring for an illor elderly relative, read our article onPage 13. Q

At Midlife



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Teaching Children the Financial Facts of LifeShowing the importance of saving, spending wisely and sharing with others

We try to teach our kids to bestreet-smart and use good manners,but teaching them the financial factsof life can be difficult. To help parents,guardians and even grandparents raiseresponsible money-managers,FDICConsumer Newsoffers the followingsuggestions.

Play show and tell while youmanage your own money.If youexpect your kids to become responsiblewith their money and yours

practice what you preach. Serve as agood example of what it means to save,spend wisely and share with others.Youll make more of an impression onyour children if they can see and hearwhat youre doing to manage yourmoney.

So, take your child along on shoppingtrips and discuss what makes someitems too expensive and othersgood buys.

Also take your child to the bank.

Note the variety of services providedby visiting different departments ofthe bank. Explain basic principles,such as how money deposited ininsured accounts is protected by thegovernment against loss.

Around the house, let your child helpwith simple tasks associated withpreparing deposits or investments,or balancing the checkbook. As youpay your bills, especially the ones foryour credit cards, explain how debtsmust be repaid on time or you can

face additional fees and have troublegetting a good loan in the future.

Also discuss your charitablecontributions and why you aremaking them. Ask your child forinput on which charities to support.He or she also can help you preparecontributions, even if just by stuffingchecks into envelopes.

Help your child start a savings orinvestment account.Young kids willenjoy saving money in piggy banks,but at around age eight, think abouthelping them open a small savingsaccount. That way they also beginlearning what banking is all about.

Many parents reward their childrenfor sticking to a savings plan bymatching or adding to what the childcontributes.

As children get older, discuss the prosand cons of owning investments, suchas stocks, bonds and mutual funds.Investments can produce higherreturns than bank deposits overthe long term, but remember thatinvestments can lose money and theyare not insured by the FDIC.

Give an allowance. If used as ateaching tool and not a giveaway, anallowance can be one of the best waysto teach kids, even as young as five orsix, about money management. It also

allows children to experiment withmoney management and learn fromtheir mistakes without losing too muchin the process.

Encourage them to decide in advancehow much should go into savings(which reinforces the concept ofpay yourself first), how much shouldgo into the spending pile (for their useas pocket money) and how muchshould be set aside to share withothers for charity or birthday orholiday gifts. Giving an allowance in

small bills or coins also allows themto easily set aside the portions for thedifferent purposes.

Consider gifts that encouragesaving. Examples include U.S. SavingsBonds and books that reinforcefinancial responsibility.

Encourage older children to getwork experience. Summer orpart-time jobs can teach young peoplegood business skills and how to beresponsible. They also may enjoyearning and saving money.

For more help or informationfor parents:The FDIC has a newfinancial education program for youthsbetween the ages of 12 and 20 that isprimarily for use by teachers but alsocan help parents explain the basics ofgood money-management to theirchildren. You can order a free CD ofthe FDICs Money Smart for YoungAdults at www.fdic.gov/consumers/consumer/moneysmart/young.html.

Find other resources on moneymanagement for youths from theJump$tart Coalition for PersonalFinancial Literacy, which consistsof more than 180 national partners,including the FDIC (go towww.jumpstart.org), and the moneypages at www.kids.gov, a federalgovernment Web site for children andeducators. Q

For Parents



10/16


more conservative investment strategy

than in the past so you can avoid lossesto principal that could mean havingto postpone retirement or strugglefinancially.

For additional guidance, see HelpingYour Money Last...After Your LastPaycheck in the Fall 2005

FDIC Consumer News, online atwww.fdic.gov/consumers/consumer/news/cnfall05/helpingPG2.html#q1.

For more help or informationfor people nearing retirement:

Read our tips for consumers of allages starting on Page 2, includingthose regarding annuities, which areinvestments commonly marketedto people in or near retirement.Also see our suggestions regardingreverse mortgages and variableannuities in the article starting onthe next page, and our guidance forfinancial caregivers on Page 13. Formore information about retirementplanning, see www.mymoney.gov/retirement.shtml. Q

Getting Your Finances Ready for Your Golden YearsIf youre seriously considering

retirement, you also should beseriously thinking about how toensure that your financial life is ascomfortable and stress-free as possible.Here are a few tips.

Make the most of your remainingpaychecks to save for retirement.How much money youll need to setaside for retirement which for manypeople could last 30 years or more will depend on a variety of factors.Among them: When do you expectto quit working? Will you continue

to earn some income part-time? Howmuch money do you have in savingsand pensions? And, what kinds ofexpenses will you incur for housingand health care?

Because the future is uncertain, itmakes sense, while youre stillworking, to put as much money aspossible 10 to 20 percent of yourannual income, if not more intosavings for your golden years. Alsomake use of employer-sponsoredretirement plans (especially if youll

receive matching contributions) andtax-advantaged Individual RetirementAccounts (IRAs).

Try to reduce or eliminate debt.Another way to save more moneynow for a more enjoyable retirementlater is to cut back on unnecessaryexpenses, especially if you will need togo into debt to pay for them, said LukeW. Reynolds, Chief of the FDICsCommunity Affairs Outreach Section.He said to try to pay off most or allof your credit card balances and other

loans to save on interest charges andavoid being burdened with repaymentduring your retirement years.

Develop a plan to stretch yourmoney through a long retirement.The idea is to determine whereyour money will come from duringretirement, so you wont have to livein fear of running out of money, said

Susan Boenau, Chief of the FDICs

Consumer Affairs Section.

For example, consult with theSocial Security Administration(call 1-800-772-1213 or go towww.socialsecurity.gov) or youraccountant to learn how much SocialSecurity and pension income youd geteach month if you retire early anytime between 62 and your normalretirement age and how much moreyou would receive if you hold off onretirement. The penalty for starting tocollect Social Security payments early

can be substantial.

Discuss with a financial advisor howand when to withdraw money fromyour tax-deferred retirement accounts,such as employer-sponsored retirementplans and traditional IRAs. Alsoperiodically review your retirementportfolio your mix among stocks,mutual funds, CDs (certificates ofdeposit), bonds and so on to besure its well-diversified. And as youget closer to retirement, consider a

Before You Retire



11/16


Managing Your Expenses on a Fixed or Reduced IncomeOnce youve retired, you finally have

the opportunity to work at your dreamjob keepingyourselfhappy. Its yourchance to visit places youve alwayswanted to see, take up a new hobbyand spend more time with your familyand friends. But to be successful at thisnew position, youve got to make themost of your income and investments.Here are suggestions.

Make it easy to manage your moneyand pay the bills.One way is tohave your Social Security benefits,pension payments and other income

automatically deposited into your bankaccount each month. Direct depositisnt just safe and reliable it alsoensures that you dont need to scheduleyour activities around a visit to thebank just to deposit your funds, saidSusan Boenau, Chief of the FDICsConsumer Affairs Section.

Signing up for direct deposit ofSocial Security or other governmentpayments is easy and free. Contactthe U.S. Treasury Departments GoDirect hotline at 1-800-333-1795 or

visit www.GoDirect.org.

Banks also offer quick and easymoney-management and bill-payingservices by telephone or online bycomputer, usually for free or at lowcost. With telephone banking, you canmonitor your account balance, find outif checks or deposits have cleared, ortransfer money between accounts atthe same bank. If you have a personalcomputer with Internet access, you can

do your banking and bill paying online

24 hours a day, seven days a week. Besure you know about any fees.

Look for banking services gearedto older consumers. Find out ifyour bank has special accounts, clubs,discounts, events, publications or otherservices for senior citizens, sometimesincluding people as young as 50.Comparison shop among several banksto get the best package of services tomeet your needs.

Consider a second career or

working part-time.Working longer,even part-time, can allow you toincrease your savings and may boostyour retirement income, addedBoenau. That alone could also enableyou to delay or reduce withdrawalsfrom your savings to cover livingexpenses.

But if you already are collectingSocial Security benefits, find out ifincome from a job could reduce whatyou are entitled to collect from thegovernment. Likewise, understand if

going back to work could reduce anybenefits from an employers retirementor pension plan.

Be careful with credit cards.Youllprobably find that credit cards inretirement are just as necessary as theywere when you were younger. Butbe cautious with your credit cards. Ifyou carry a large balance, youll pay alot of money in interest charges for along time. If you have many accountsand get too deep in debt, your creditrecord could be damaged, which means

you would have a tougher time gettingthe best deal the next time you applyfor a loan, insurance or an apartment.

Another problem with havingnumerous credit cards is that if yourenot closely monitoring your accounts,you can forget to send a payment (andincur late fees and additional financecharges) or you may not notice if a

thief has stolen one of your cards andmade purchases with it.

Understand the pros, cons and costsbefore borrowing money with areverse mortgage.This is a type ofhome equity loan a way to get cashby borrowing money using your homeas collateral (see Page 4). But there aresome important differences between areverse mortgage and the traditionalhome equity loan.

First, a reverse mortgage is available tohomeowners age 62 or older. Second,you dont need an income to obtain areverse mortgage. And third, you dontneed to pay back what you owe untilyou move out of the house, sell theproperty or die.

While there are potential benefits toreverse mortgages, they dont make

sense for everyone. They generally arenot advisable if you plan to stay in yourhome for less than five years or needextra monthly income for relativelysmall expenses. Among the reasons:The fees associated with reversemortgage loans can be high. You stillwill be responsible for maintaining thehouse and paying property taxes. And,

After You Retire



Make it easy to manage yourmoney and pay the bills. One

way is to have your Social

Security benefits, pension

payments and other income

automatically deposited into your

bank account each month.


12/16


your beneficiaries wont inherit the fullvalue of the house. They will have topay off the loan either by refinancingor selling the house.

Also be aware that some unscrupulousindividuals or companies havepromoted reverse mortgages that werenot in the consumers best interestor that involved extra payments forunnecessary services.

For example, there have beenreports of companies attempting tosell questionable home repairs orinvestments in connection with areverse mortgage, or they chargeda fee for information about reversemortgages that is available for freefrom the U.S. Department of Housing

and Urban Development (HUD) orother sources. One problem with usingany loan product to fund an investmentis that you could lose money on theinvestment and still owe on the loan.

How can you protect yourself?As with any loan youre considering,do some research using informationfrom neutral, unbiased sources, suchas HUD. If you later decide that areverse mortgage is right for you,contact several reputable lenders andread and understand all documents and

contracts, perhaps with the help of anattorney you trust, before you agree toanything.

For help or guidance regardingreverse mortgages, go online atwww.hud.gov/buying/rvrsmort.cfmor contact a HUD-approved housingcounselor by calling toll-free1-800-569-4287. Also, to receivea reverse mortgage insured by theFederal Housing Administration(FHA), you must first speak with aHUD-approved counselor, who can

help you determine if the programmeets your needs.

Do your research before purchasingvariable life insurance or avariable annuity.Both products arepart insurance and part securities.

The first is a type of whole lifeinsurance product (also calledpermanent life insurance) for which

the policyholders cash value is investedin one or more portfolios of securities.

The second product is an annuity, forwhich the consumer invests, throughthe insurer, in a variety of investmentoptions, typically mutual funds.

Insurance companies issue bothproducts, and anyone who sellsthem must be registered under stateinsurance laws and state and federalsecurities laws.

Although these products providetax-deferred earnings, you can losemoney investing in them. Income andvalue can move up and down. Thatswhat the variable in the name means.

These products also may carry

relatively high sales commissions,fees and surrender charges if youwithdraw money early, typicallywithin the first five to eight years afterpurchasing the product but sometimesafter a longer period.

So, think of variable annuities aslong-term investments that can tieup your money for many years. Theolder you are, the less likely a variableannuity is suitable for you.

Of special concern is that securitiesand insurance regulators have reported

an increase in unsuitable sales ofvariable products to older investors,who experts say should generally stickto low-risk, low- or no-fee financialproducts instead of those withpotentially high risks and fees.

Before you invest in a variable lifeinsurance or variable annuity product,be sure that you fully understand howthe product works, the risk of loss,and the applicable fees and surrendercharges, said Victoria Pawelski, anFDIC Policy Analyst. Carefully

evaluate whether the product issuitable for you given your investmentobjectives and time frame. Andbeware of high-pressure sales tacticsfrom sales representatives who mayhave an incentive to generate highcommissions and fees.

For more information about insuranceand annuities, the National Association

of Insurance Commissioners has aWeb site (www.insureuonline.org) thatincludes a special alert for seniors onannuities. The NAIC also providesinformation on how to contact yourstate insurance regulator to verify thata company and an individual agent arelicensed to sell in your state.

For additional guidance about variableannuities and what to consider beforebuying, the U.S. Securities andExchange Commission has publishedinvestor tips at www.sec.gov/investor/pubs/varannty.htm.

Also consider going to the Web siteof the Financial Industry Regulatory

Authority (www.finra.org), the largestnon-governmental regulator ofsecurities firms operating in the UnitedStates. It publishes investor alerts andprovides background and disciplinaryinformation about securities firms andbrokers that sell these products.

For more help or information forretirees:See our tips for consumers ofall ages starting on Page 2. Also readFiscal Fitness for Older Americans,the Fall 2005 special issue ofFDICConsumer News, which is a special

guide for seniors and their families. Itis online at www.fdic.gov/consumers/consumer/news/cnfall05/index.html.Also find out about federal governmentresources and information for seniorcitizens at www.usa.gov/Topics/Seniors.shtml. Q


While there are potential benefits

to reverse mortgages, they dont

make sense for everyone. Among

the reasons: The fees can be

high. You still will be responsible

for maintaining the house and

paying property taxes. And, your

beneficiaries wont inherit the

full value of the house.


13/16


Helping Disabled or Elderly Relatives With

Money Management, Even From Far AwayMillions of people serve as financialcaregivers for ill or elderly spouses,parents, children or other loved ones.They perform services that includepaying bills, handling deposits andinvestments, filing insurance claimsand preparing taxes. Because thisrole can be costly and physically andemotionally exhausting, especially for acaregiver who lives far away or has theusual time-demands,FDIC Consumer

News offers some suggestions.

Preventive Measures

Consider taking these steps beforesomeone becomes ill or disabled:

Make sure the family knows whereto find personal and financialdocuments in an emergency.Theseinclude bank, brokerage and credit cardstatements; original wills; insurancepolicies; and Social Security, Medicareand pension records.

Think about the direct deposit ofpay and benefit checks into bankaccounts.Direct deposit is safer andmore convenient than paper checks.There are no delays in getting fundsdeposited, and no checks are lost orstolen in the mail or forgotten at home.

Consider automatic payment ofimportant, recurring bills.You willhave one fewer thing to worry about ifyou can arrange for utility bills as wellas other regular commitments (such asinsurance and the mortgage) to be paidelectronically out of your loved oneschecking account.

Try to make sure your elderlyrelatives are properly insured. If youhave doubts about someones insurancecoverage or ability to pay for long-termcare, get a second opinion from afinancial planner or an insurance agentyou trust.

Consider a durable power ofattorney.This is a legal document

giving one or more people theauthority to handle finances or otherpersonal matters if the individualbecomes mentally or physicallyincapacitated.

Suggest a living will or otherinstructions about future medicalcare.Most people should have a livingwill specifying the type of medicalcare they want or dont want if theybecome terminally ill and are unable tocommunicate their wishes.

Experts also recommend a health carepower of attorney or health careproxy designating a family member orother trusted person to make decisionsabout medical treatment.

Living wills and health care proxiesare intended to ensure that someoneswishes regarding medical care arehonored, but they also can preventunnecessary and costly procedures.

After an Illness or Disability

The following should be on a familyschecklist after a serious health problem:

Get solid financial and legal advicefrom professionals you know andtrust. Contact bankers, lawyers,accountants, insurance agents orfinancial planners your family hasdealt with in the past. Ask how theydrecommend you deal with moneymatters and how they can assist.

Guard against frauds that targetthe vulnerable. Among the saddestand costliest issues facing families isfraud and theft committed against thedisabled or elderly by unscrupulousrelatives, contractors, caregivers,friends, neighbors or other individuals.These sinister acts cover a widerange of lies and deception, includingcashing checks without permissionand changing legal documents to givethis other person rights to conduct

transactions or take ownership of

property.

First, it helps to have a trusted familymember who is in regular contactwith a disabled or elderly relativeand, if necessary, helps review bankand investment account statementsto look for unusual activity, saidLinda Ortega, an FDIC CommunityAffairs Officer. Beyond that, thereare precautions to take, includingarranging for direct deposit of SocialSecurity or government payments, andmaking sure that checkbooks and credit

cards are properly protected.

To learn more about how to avoid orreport elder fraud, contact your statesAdult Protective Services department.

For more help or informationfor financial caregivers:The U.S.Administration on Aging (AoA), part ofthe Department of Health and HumanServices, helps older Americans andtheir caregivers connect with stateand local government agencies andcommunity-based organizations that

can assist with a variety of problems.Call 1-800-677-1116 or go towww.eldercare.gov to use the AoAsEldercare Locator service and obtainvaluable information. Also findresources for caregivers from the U.S.government at www.usa.gov/Citizen/Topics/Health/caregivers.shtml. Q

For Financial Caregivers



14/16


Here are suggestions for staying

focused and avoiding costly decisionsduring changing times.

Getting married.Newlyweds shouldsay I do to a plan to manage moneytogether responsibly. Before gettingmarried, a couple should understandeach others attitudes toward savingand spending money. And to avoid bigsurprises, they also should know aboutany major outstanding debts held bytheir partner. A husband and wife alsoshould set short-term and long-termfinancial goals. For more specifics, see

the article on Page 7. Buying your first home. For mostpeople, buying a home will be thebiggest expense of their life, startingwith the initial purchase (including adown payment and fees paid to thelender and others) followed by yearsof monthly mortgage payments, realestate taxes, insurance and maintenancecosts. But homeownership often canbe a tremendous (perhaps your best)investment and a source of tax breaksas well as stability. To learn more about

the basics of renting vs. buying a home,see Page 7.

A new child. A new member ofthe family brings extra financialresponsibilities. You can have onefewer thing to interrupt your sleep atnight if you get the family finances inshape. Start by getting spending undercontrol (preferably with a budget,as described on Page 6). Also buildyour savings accounts for short-termexpenses (especially if a spouse willbe leaving a job) and long-term needs

(including college tuition costs). Inaddition, review and update yourinsurance coverage (life, health,disability) and wills (to designate whowill raise the child and handle financesin case of your death).

The death of a family member.Contact the deceased persons attorneyand other financial advisors. Before

Ways to Cope Financially During and After a Big Changecommitting to any funeral costs,

consult with other family members andthe lawyer about any prior instructionsor arrangements.

Locate important documents, such asinsurance policies and the most recentwill (an original, not a copy). Obtainmultiple copies of the death certificate,which will be needed to apply for deathbenefits (such as through life insurancepolicies or Social Security) and toaccess bank and brokerage accounts.

If the familys medical insuranceis through the deceased personsemployer, consider options forcontinuing coverage.

Also, if your family has deposits ofmore than $100,000 at one bank, andone of the depositors or beneficiariesdies, you should review the coverageto determine whether funds exceedthe insurance limits. The FDICs rulesallow a six-month grace period after adepositors death to give survivors orestate planners a chance to restructureaccounts. But if you fail to act withinsix months, you run the risk of, forexample, joint accounts becoming partof the survivors individual accounts,and that could put the funds over the$100,000 limit. Also note that thedeath of an owner or a beneficiarynamed in trust accounts can reduce thedeposit insurance coverage.

For more guidance about depositinsurance coverage, go to the FDICsWeb site or contact us (see the backpage).

A medical emergency.First,

carefully review all doctor and hospitalbills and insurance claim payments/denials, because mistakes do happenand uncorrected errors can be costly.If you are unable to resolve a billingdispute with a doctor, hospital orinsurer, contact your state consumerprotection office or insurance regulatorfor guidance.

Think twice before using credit cardsto pay for large medical expenses,especially if you are already deep indebt or if it will take years to payoff the card balance, in which casethe interest charges could add upsignificantly.

If you cant afford your medical orhospital charges, dont allow the debt tobe turned over to a collection agency,which could damage your credit score.Instead, contact the service providersbilling department to try to negotiate

a reduced bill or a payment plan withmonthly payments. Also ask aboutassistance from a government programor charitable organization.

You can also consider turning to acredit counselor for guidance, butchoose one carefully because someoffer questionable or expensive servicesand others may be scams. For guidanceon choosing a credit counselor, seea Web site from the Federal TradeCommission at www.ftc.gov/bcp/conline/pubs/credit/fiscal.shtm.

If your medical bills are sufficientlyhigh, you could qualify for a federal taxdeduction, so be sure to save bills andcancelled checks or other receipts foryour tax preparer.

A divorce. Consult legal counselbecause uninformed decisions couldcost you. Also consider discussing taxissues with an accountant or other

For Major Life Events



15/16


You cant make your mortgagepayment. Regardless of the cause, ifyoure having difficulty paying yourmortgage, you should contact yourloan servicer and find out if you qualifyfor modified loan terms or other

options to help you keep your homeinstead of losing it to foreclosure.

You may also want to seek help froma trained homeownership counselor.To find a reputable counselor, contactthe Homeowners HOPE Hotlineat the Homeownership PreservationFoundation (1-888-995-4673 orwww.995hope.org) or the U.S.Department of Housing and UrbanDevelopment for a referral to aHUD-approved homeownershipcounseling agency (1-800-569-4287

or www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm).

Youre having problems making creditcard or other loan payments.No matterwhat triggers a personal financial crisis,the important thing is to be proactiveand address the problem as soon aspossible by contacting your lender totry to negotiate a long-term, workablesolution.

And if you need help negotiatingwith a lender or otherwise getting adebt problem under control, considerasking an attorney, accountant oranother trusted advisor to referyou to a reliable credit counselor(see Page 14) who, at little or no cost,can help you develop a recovery plan.If youre facing problems on a loansecured by your home, including ahome equity loan, see the previousbullet point about mortgage payments.

For more help or informationwhen dealing with changing events:See the back page for suggestionsabout government resources you cancontact regarding money matters.One is www.mymoney.gov, a financialeducation Web site from the federalgovernment that includes a page ofinformation about responding to lifeevents. Another is 1-800-FEDINFO(1-800-333-4636), a toll-free hotlineyou can call if youre not sure whichfederal government agency can provideguidance with a problem. Q

advisor because certain decisions, suchas who will claim children on his or hertax return, can affect each parents taxliability. For more information, see IRSpublication 504, Tax Information forDivorced or Separated Individuals,

online at www.irs.gov/pub/irs-pdf/p504.pdf.

You also may be able to reduce somelegal fees by working with a mediatorto resolve issues such as child custody.

Cancel joint credit cards to preventthe other spouse from running up largebills. Start or build your own credithistory independent of the marriage,such as by opening a new credit cardin your name only. Decide who isresponsible for debts incurred duringthe marriage. If you change your lastname, notify the major credit bureaus(www.equifax.com, www.experian.comand www.transunion.com).

Its also important that you update yourwill and the list of beneficiaries youdesignate on life insurance policies,retirement savings accounts and U.S.Savings Bonds, so your money andother assets will go to the right peopleupon your death.

A job loss.Try to keep spendingunder control so you can pay your

bills using existing bank and brokerageaccounts for, say, the next three to sixmonths. If possible, avoid withdrawingor borrowing money from yourretirement savings. If you anticipateproblems paying debts, such as yourmortgage or the minimum due on yourcredit card (see the next two sections),contact your creditors immediately andattempt to work out a payment plan.

One reason to keep loan and creditcard payments current is so that youcan maintain the best possible credit

record. Prospective employers mayreview your credit reports when youapply for a new job.

Also, carefully review your employersseverance benefits, including thetemporary continuation of yoursalary and health insurance, and try tonegotiate a better deal.

FDICConsumer News

Published by the Federal DepositInsurance Corporation

Sheila C. Bair, ChairmanAndrew Gray, Director,Office of Public Affairs (OPA)

Elizabeth Ford,Assistant Director, OPA

Jay Rosenstein, Senior Writer-Editor, OPA

Mitchell Crawley, Graphic Design

FDIC Consumer Newsis producedquarterly by the FDIC Office ofPublic Affairs in cooperation withother Divisions and Offices. It isintended to present information in anontechnical way and is not intended

to be a legal interpretation of FDICor other government regulations andpolicies. Mention of a product, serviceor company does not constitute anendorsement.

This publication may be reprinted inwhole or in part. Please creditFDICConsumer News.

Send your story ideas, comments,and other suggestions orquestions to:Jay Rosenstein, Editor,FDIC Consumer News, 550 17thStreet, NW, Washington, DC 20429

[email protected]

Find current and past issues ofFDIC Consumer Newsat:www.fdic.gov/consumernews. Refer tothat same index to locate issues that arespecially formatted for being reprintedin any quantity.

To receive an e-mail notice abouteach new issue with links to stories,follow instructions posted at:www.fdic.gov/about/subscriptions/index.html.

For More Informationfrom the FDIC

Go to www.fdic.gov or call

toll-free 1-877-ASK-FDIC thats

1-877-275-3342

Monday through Friday

8:00 a.m. to 8:00 p.m.,

Eastern Time.



16/16

The Federal Deposit InsuranceCorporation has staff and otherresources that can answer questionsabout deposit insurance and bankingand can help resolve questions orcomplaints involving an individualinstitution.

Start at www.fdic.gov/quicklinks/consumers.html or call toll-free1-877-ASK-FDIC (1-877-275-3342).FDIC publications, including ourquarterlyFDIC Consumer Newsandarticles referred to in this special guide,are available at that same Web site andtelephone number (select the optionfor FDIC publications).

You can also e-mail us using theCustomer Assistance Form atwww2.fdic.gov/starsmail or senda letter to the FDIC, Division ofSupervision and Consumer Protection,550 17th Street, NW, Washington,DC 20429-9990.

For More Help or Information on Managing Your MoneyOther federal regulators of financialinstitutions publish consumerinformation and have staff, Web sitesand other resources that can helpanswer questions on financial matters.Start at www.mymoney.gov, the federalgovernments central Web site aboutmanaging your money. It is a service ofthe interagency Financial Literacy andEducation Commission, of which theFDIC is a partner.

Other federal, state and localgovernment agencies publishconsumer information, offer financialeducation classes and help answerquestions on money matters.

For more help from the U.S.government, start at www.usa.gov/Citizen/Topics/Money_Taxes.shtmlor call toll-free 1-800-FEDINFO(1-800-333-4636). Also check out thefinancial information and programs

offered by the U.S. Department ofAgriculture in partnership with theCooperative Extension System (go towww.csrees.usda.gov/financialsecurity).One of Cooperative Extensionsprojects is an interactive Web sitefeaturing answers to more than1,100 frequently asked questions onpersonal finance and the opportunityto ask an expert from a university(www.extension.org/personal+finance).

You can also find additionalinformation at your state or localgovernments Web site or by callinga consumer affairs office listed in thegovernment pages of your phone book.

Financial institutions, consumerorganizations and the news mediapublish personal finance tips you canfind by searching the Internet. Q


Documents

Sfaturi Financiare Pentru Toate Categoriile de Varsta