Basics of personal finance

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Personal Finance: Organize, Manage, Research, and Invest Online

The Internet can streamline your ongoing personal finance tasks and keep you informed about changes and opportunities in the financial world that may affect you. There are tools for learning the basics, doing your banking online, and managing your budget, credit, and loans.

Basics of personal finance

Money makes the world go round, but leaves many of us in the dark. Understanding the nuances of personal finance can help you to make good short- and long-term decisions. And whether you're a novice or financial sophisticate, there's plenty of information available in terms you'll understand.

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  • If you're interested pursuing a financial education beyond the basics, check out the findingDulcinea Education Guide for information on undergraduate, graduate, and independent business courses.

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Financial news sources

The market changes every day. To stay up-to-date on global and private economic conditions, read the financial sections of news outlets. Reading news online makes it easier to read several sources every day. Most print magazines have an online version and may offer extra content exclusively on the Web.

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  • In addition to reading papers online, many publications have e-mail newsletters that "push" information to you.
  • Blogs are another useful way to gather information about the financial world. Although these are not official news sources, they are often written by qualified financial professionals sharing knowledge gathered during their careers and from personal experience.

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Online banking tips and tools

It's possible to conduct all your normal bank business from your own computer, 24 hours a day. Online banking allows you to pay all your bills electronically-and securely-with just a few mouse clicks. Before you begin banking online, do some research so you understand the process. Then, once you feel comfortable, explore all the online banking options.

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  • So many banks currently offer services online that you can begin online banking by going to your own bank's Web site and registering for an online account that will link to your existing bank accounts. Your bank's site probably provides FAQs and tutorials to familiarize you with their online services.
  • Because Internet-only banks have low or no overhead, they are able to offer savings accounts with higher interest rates than most real-world banks. For similar reasons, some regular banks offer Internet-only savings accounts with higher interest rates than their standard accounts. Even if you're not comfortable doing serious banking online, you may want consider setting up one of these higher-interest savings account on the Internet.
  • Make sure that any Internet bank you join is a member of the FDIC.
  • Anyone who does online banking, or makes any financial transactions online should be aware of "phishing" schemes. Phishing is a type of e-mail scam where third parties attempt to fraudulently acquire private information from Web users, such as credit card details, social security numbers, and account numbers. Generally you'll receive an e-mail telling you that your bank account (or eBay or PayPal account) has been suspended and/or needs updating. Provided in the email is a link to a login page where you can access and fix your account. After clicking this link, the page you're directed to, although cunningly designed to approximate the real thing, is fake. So by entering your username and password, you're not logging on, but actually providing the phishers with your account information, and putting them in a position to access your account and steal your information. The FTC has more information on phishing, including how to avoid it. If an e-mail seems fishy (no pun intended), always close the browser window and log into an account directly. Just because the URL looks right doesn't mean it is.

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Personal budgeting

Since your allowance days, you've been on a budget. Then, you had to make tough choices like ... movies or candy? These days, things are a little more complicated. However, planning and sticking to a budget doesn't have to be difficult. If you do it right, you'll find you can get your finances running more smoothly than ever. In fact, with the right information and tools, the process can be simple and rewarding.

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  • You can make your own budget easily using any offline spreadsheet program, such as Microsoft Excel. Excel has tools that allow you input formulas into cells, get the sum of rows and columns automatically, and even make charts of your spending.
  • Many credit card companies will provide you with an end-of-year (or -month) summary of what categories you spent money on: groceries, clothing, furniture, electronics, restaurants, etc. Having information about where you've spent money in the past will help you to determine a reasonable plan for the future.
  • Personal budgeting software can be customized based on your unique expenditures. For information on online budgeting, check out PersonalBudgetingSoftware.com, where you'll find articles like this one, which discusses why (and how) to get an "Online Budget Makeover."
  • Some budgeting software programs ask that you enter your account information. Always make sure a site is secure before you input any personal information. If you feel skeptical, choose a software program that is less invasive. For more tips on protecting yourself online and spotting suspicious sites, consult the findingDulcinea Internet Security Guide.
  • "Open source" is Internet language for free software. Some budgeting programs are free, and to download them, you'll be redirected to another Web site that hosts open source material; for example, sourceforge.net.

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Help calculating and filing your taxes

Nobody likes paying taxes, but being prepared and efficient can save you time, money, and prevent a lot of irritation. Not only can you use the Internet to get yourself up-to-date on policy and procedure, you can also file your taxes online.

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  • If you file your taxes online and provide your bank information, the money you owe will be deducted automatically from your account. Remember to keep track of the payments you authorize so you don't have any nasty surprises.
  • Although you can file your taxes for free online, if you're feeling confused or uncertain about any part of the process, it might be worth spending the few extra dollars for assistance.

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Getting a mortgage or student loan

Sometimes life costs more than you have in the bank. When the time comes to buy a house or car or pay for college, taking out a loan might be a necessary step. Before you apply for a loan, you will want to research all your options and understand the responsibilities and benefits involved. Not only can the Web supply useful information and help you compare statistics, but you can also apply for a loan online.

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  • Many Web sites help you find loans and rates. These sites can be useful, but unless you actually plan to apply for a loan, be sure not to enter any confidential information such as credit card details or your social security number.
  • As with online banks accounts, online loans are often available at better rates than you'd find at bricks-and-mortar banks thanks to the very low overhead of such institutions.
  • Most of the sites for home loans also provide information and rates on car loans and other types of loans.
  • Disclosed fee mortgage brokers are an alternative to the standard mortgage broker that's worth considering. A typical mortgage broker has a financial incentive to squeeze as much money out of a client as possible, by tacking on fees and inflating others where possible. Using a disclosed-fee mortgage broker means you pay one fixed sum, so you can proceed with the peace of mind that comes from knowing you aren't being scammed. For more information about mortgages, see our findingDulcinea Mortgages Web Guide.
  • Even if you don't intend to get your car loan online, you can use the Web to research the current rates before you negotiate with a dealer. Armed with a good idea of what a fair rate is, you'll be able to negotiate more effectively.

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Credit and debt

Credit cards and loans are a great convenience, but you need to manage debt carefully. Staying attuned to your own financial situation and knowing the facts about credit can keep you on the right track. The Web offers many tools that will help you ensure that your credit never becomes a problem.

However, if you do find yourself in a difficult situation, help is available if you know where to look. For example, debt consolidation can lower payments significantly, and there are organizations devoted to helping people get out of debt. Research your options on the Internet and find out what you can do to change your current situation.

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  • Find out your credit score before you try to improve it. You can order a free copy of your credit report online.
  • Even if you have good credit, you can still improve it. Scour your credit report for inaccuracies or credit accounts that you can close.
  • Sometimes all it takes is a phone call to your credit card company to persuade them to lower your interest rate by a point or two. Calling to cancel a card almost always results in an incentive offer to keep the account open.
  • In addition to Web sites devoted to debt, reading online financial newspapers is a useful to way to get tips.
  • More information about loans and debt can be found in the section of this guide entitled, "How do I get a mortgage or loan?"
  • Many Web sites that offer home loans and refinancing also offer debt consolidation loans.

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Planning for retirement

With the variability of social security a constant topic of discussion, everyone should be aware of their own retirement needs. Still, the idea of extensive, long-term financial planning can be quite daunting. You have to begin somewhere, and the Internet provides many resources for understanding and preparing a retirement plan.

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  • Once you've started to think about retirement, you can begin executing your plan online. Many banks and brokerage houses will let you open an IRA online.
  • Rather than go it alone, you may decide to hire a financial planner. Finding one who is trustworthy and unbiased is not always easy, but the Web sites described below can help by offering advice or directing you to prescreened professionals.
  • Check with your bank or investment firm-it most likely offers retirement planning services.
  • In addition to your own research and investments, signing up for your employer's 401(k) plan is often one of the easiest and most cost-effective ways to save for retirement.
  • In addition to sites devoted entirely to estate planning, most financial magazine Web sites and bank Web sites have sections devoted to estate planning.
  • Part of planning your retirement may be deciding how you distribute your wealth to your heirs. Estate planning is an emotional and technical ordeal, but the Internet can be a good source of information and guidance. Of course, when you're ready to finalize arrangements, you're best off turning off the computer and talking to a lawyer.

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