If you are an employee, you are in luck.  There are a ton of laws governing how you are treated that will really work to your advantage.  Look up the laws that govern your area; local laws can be different from place to place.  For example, the federal minimum wage is around $7/hour, the California minimum wage is around $8/hour San Francisco minimum wage is over $9/hour.

1.  Your employer MUST pay you for the hours worked.  They are very strict about this.  If your company goes under, the employees are typically the ones to get the first stab at what is left.

2.  Your employer must inform you of any pay cuts before you work those hours.  You cant be making $15/hour, but then all of the sudden get paid for $13/hour.  Its just plain illegal.

3.  Know your break rights.  From what I remember, you must take a 30 minute break for every 6 hours worked, and you have the legal right to take a 30 minute break if you work a 5 hour shift.  I remember an old college job where we were forced to waive our rights to the break.  I didn’t mind since it meant more clock time, but I am sure it was still somewhat illegal.

4.  You can never be forced to do something illegal or unsafe.  If you get fired for refusing to do something like that, your employer can get in HUGE trouble.

5.  Harrassment and sexual harrasment laws are extremly strict.  You would be shocked at how easy it is to label things as harassment.

If you think you are treated unfairly at your job, research labor laws online, or talk to an attorney.  The government has taken a lot of steps to prevent a lassie-fare sort of economic system.  Legislation in this department is very strict to help look out for the little guy.

Here is a list of a few things to avoid if you are trying to save up some money:

1. Do not get a DUI.  It will end up costing you thousands at the very best.  It will also cost you your license, and even worse, could cost peoples’ lives.
2. Drop Starbucks.  Get a coffee machine and brew your own cup of joe.  If you like the fancy drinks, buy an espresso machine and be your own barista.
3. Don’t blow your wallet at the bars.  You can easily rack up a few hundred in a night of drinking.  By being a little thrifty, that same night can cost you under twenty bucks.
4. Don’t leave the lights on.  Turn your computer, lights, TV and everything off when you are not using them.  You can really save a big by not wasting electricity.
5. Don’t leave your wallet on empty.  Always carry cash around in case you need to buy something at a place that either doesn’t accept cards or charges you extra for using your card.  One example I have seen in recent times is gas stations.  Seems like gas is a good 10% more expensive if you want to use your card.  Having cash on hand can save you a few bucks at the pump.

One thing that I see constantly ruin people’s finances is buying a car that is way too expensive for them.  All you really need a car for is to get you from point A to point B in a timely, reliable manner with a side of comfort and safety.  How much time to you actually spend in your car?  An hour a day?  How much do you spend in your office chair?  8 hours a day?  Maybe you should spend thousands on a sweet office chair rather than your sweet car that you only use a little each day.

Your need for speed will quickly eat away at your savings.  Faster cars are usually less gas efficient, and your gas bill will simply increase.  You get a few tickets or accidents, and the expenses quickly add up.  You have to pay a few hundred for the ticket itself, take some time off work for traffic school, and also pay more for your insurance for the next three years.  Start buying some more performance parts and you are really starting to hurt.

If one of your hobbies is cars, and you actually have the spare change to lose on your interests, by all means, enjoy yourself.  However, if you are justifying buying a money-pit because you need a car to get to work, consider buying some used sub-compact.

In these difficult financial times, everyone is looking for a way to save a couple bucks.  Here is a list of 10 ways you can cut some costs by doing things yourself:

1. Bottle your own water - Save a couple bucks by just refilling the same water bottle over and over again.  The quality of bottled water isn’t much better than what is coming from the tap.
2. Fire the gardener - Do all the gardening yourself.  You should have plenty of time to spend in your yard when you lose your job.
3. Fire the house cleaner - Same thing.
4. Be a landlord - Make an extra few hundred bucks a month by bringing in a roommate.  Do you have kids?  Well tell them that they get to share a room now!
5. Be your own car salesman - Are you really driving the most economical car you can drive?  Pull some cash out and slow your depreciation by downgrading.
6. Fire your mechanic - Learn a thing or two about your new junker.  Do the repairs yourself to save a few bucks.
7. Be your own contractor - Some old fashion elbow grease always helps you save.  Chances are that a friend knows a thing or two about construction, so give them a call (they are probably out of work anyway).
8. Be your own cook - Buy ingredients in bulk for your favorite meal, and spend all day making a week’s worth of dinners.  Portion them off and store in your freezer.  Each night, just heat one up and serve.
9. Entertain yourself - You don’t have to blow a wad of cash every time you want to have a night out.  Try planning less expensive nights-in, or at least be frugal when you go out - maybe even bring a flask to the bars instead of ordering expensive drinks.
10. Be your own engine - Ride your bike instead of driving to save money on gas and engine repairs.  Exercise will also end up saving you money on doctor bills later on in life.

Follow these guidelines and help save yourself a buck during these iffy economic times.

If you are having a difficult time qualifying for a standard mortgage, FHA loans are a good option.  There are several advantages that an FHA loan has over regular loans, both to the borrower and the lender.  There are also a few drawbacks, but in this market, just getting a loan can be enough to outweigh any of the drawbacks.

1. You can typically qualify for a larger loan with a substantially lower down payment.  You can put as little as 3% down and finance up to 97% of your home value.
2. The requirements to qualify for an FHA loan are typically less stringent than traditional mortgages.  As long as you have a stable job with stable income, you should have no problem finding a mortgage.

The advantages that the lender has are:

1. Government insurance on the loans in case of default.  They are backed up in case you default, so they can loan money with considerably less risk.
2. The lenders can make more loans since they can lend more money to a larger pool of borrowers.  Also, since they are lending at 97% of the value, their mortgages are larger than if they were only lending 20% of the value

There are a few drawbacks to getting an FHA loan:

1. You have to pay the government insurance premium.  This is usually only a half percent of the mortgage, so it really isn’t going to be a deal breaker, especially if you can’t get a mortgage anywhere else.
2. There are limits on how much you can borrow.  You can’t get 97% financing on a million dollar mansion with an FHA loan.
3. You have to occupy the property for at least one year.  You can’t get an FHA loan for an investment property that you plan on renting out.  This won’t be an issue for the average person looking for a new home.

Overall, the FHA market is booming in recent years with the whole financial and lending crisis.  Talk to your lender to get all the details on the FHA loans and regulations in your area.

It is time to move, and one of the largest factors when determining a place to live is the monthly rent.  Location, house or apartment condition and neighbors play a factor, but when all is said and done, you really want to be saving money on rent.  Afterall, housing is usually your most costly expense on your family’s budget.

Sometimes we forget to add other items into consideration, and just look at rent.  Here are a bunch of costs to consider when trying to determine which place to rent:

1. Location.  If you live in a place that is really removed from everything, you have to consider the extra miles you will have to be driving to go to work, get groceries, see a movie, see friends, etc.  Not only should you tally up the extra gas you will be using, but you should also account for wear and tear on your car, and your own time wasted behind the wheel.  I have looked at places which would have ended up costing me hundreds a month extra just in fuel/car costs based on the location.
2. Utilities.  Sometimes all utilities are included in your lease.  Sometimes it might just be water, sewer or trash.  Sometimes nothing is included and you have to pay them all yourself.  Don’t forget to include water, sewer, trash, gas, electricity, cable, internet, phone, cleaning, etc.
3. Heating/Cooling.  An air conditioner might be nice, but will usually end up costing you more rent and will hit you hard on your electricity bill.  Also, consider the climate in which you are considering living: Will you use the heat and air conditioner a lot?  What about the unit size?  If the place is huge, it will cost more to heat and cool than a smaller place.  Finally, how old/efficient is the building?  Crappy windows and old insulation will cost more to heat or cool than a place with nicer windows and newer insulation.
4. Cost of living adjustments.  If you live right in the center of a wealthy city, expect to pay more for pretty much everything.  If you are living outside the city in a much more affordable neighborhood, you should be able to pay less for everyday items such as groceries.

When you are comparing places to live, be sure to tally all the costs together to come up with a monthly total that the apartment or house will be costing you.  Apply the same procedure for all your prospective places and you will be able to do an apples-to-apples comparison of all the places.  The best way to do it is on a spreadsheet on the computer.

No money down, 0% APR, no payments until next year.  These are all phrases that we hear a whole lot these days.  Consumer financing has become available almost anywhere for nearly anything.  It used to be that you could get financing for your house and car, but now you can even get financing for a vacuum, couch or even clothes!

The need for immediate satisfaction is really the driver behind the availability in financing options.  You see that flat screen TV advertised in the newspaper with the “No Money Down” and “No Payments for Two Years”.  After that, it is only a hundred bucks a month for a couple of years.  No problem, I can afford that!  Well… can you?  By financing your TV, you are overpaying by a huge margin because of the cost of interest.  Once you have everything paid off, you ended up paying way more than the sticker price for something that has already lost a ton of value.

Just because you are making installments on something, doesn’t make it any less expensive.  $900 seems like a lot of money, but $30/month for three years sounds like a lot less, even though it ends up being a lot more.  Also, you might not have $900 just lying around to spend on a TV, but can easily commit to $30 a month for the next three years.

Financing something that you can’t afford and can easily live without may make sense in the short run, but it will really end up hurting you in the long run.

Financing an investment is called “leverage” and is usually considered a good thing.  It helps you make more money.  Financing a consumer good is called “consumer debt” and is usually considered a bad thing.  It helps you spend more money.

Just make sure you really need something before you buy it.  One trick I use is the 21 day rule.  If you see something that you want, promise yourself that you won’t buy it for 21 days.  If, at the end of those three weeks, you are still just as excited about it, go ahead and buy it.  If you aren’t, it might mean that you were only caught up in the moment and you really don’t need that item.

If you have a high deductible health plan (HDHP), you may be eligible to create a Health Savings Account. Also known as an HSA, this is basically a special savings account that is used to pay for medical related expenses. The primary benefit of this account is that you can make contributions (or deposits) into your account using pre-tax income. The drawback is that you can only use money in this account for medical-related expenses. The definition of medical related expenses is pretty broad; I have even heard that you can buy diapers with your health savings account.

The tax savings works like this: Say you make $50,000 in one year, and you want to contribute $2,000 to your health savings account (There are yearly contribution limits, make sure you aren’t contributing more than your limit). You deposit the $2,000 in your account and you write the whole $2,000 off on your taxes even if you haven’t spent a dime in medical related expenses that year. Your savings account grows tax free and rolls over from year to year, unlike a flexible spending account. When you need to make medical related expenses (doctor bills, deductible, medicine, etc), just use the money from your health savings account. Piece of cake!

After spending a couple hours reading through my health insurance documentation, I finally figured out how to start my health savings account. The one thing that would have been nice is if my health insurance company told me that I wasn’t setting up the health savings account through them or with them. I could go to any financial institution that I wanted and set the account up there. I did a search on Google for HSA accounts and found plenty of places to sign up. The one credit union I ended up with offered the account with a visa debit card and a 5% interest rate. The only drawback is that they start charging a $1/month fee after the first year. However, all I need in the account is $240 and the interest will cover the monthly fee the entire time.

My health savings account ended up being really easy to get started. I just filled out some forms online, clicked the “I agree” button, sent them a couple bucks to start the account off, and now everything is set up. I didn’t have to do anything through my Health Insurance to get the account set up. After setting up your health savings account, just be sure to get itemized receipts for every single purchase that you make with your account. Save these receipts in case you need to show that all your purchases were health related. I will have to research exactly what expenses are included in “medical related expenses” so that I can take maximum advantage of all the tax savings. It will be great knowing that I can pay for cough drops tax-free!

What happens if you lose your job? There is a good chance you could be facing unemployment in this slowing economy. Here are some tips if you do end up getting your pink slip.

• Don’t panic! Stay calm and don’t get too down on yourself. Most lay-offs occur when big executives decide that they want to spend less money. Don’t take it personally. Heck, you didn’t even like that job anyway!
• Be sure to keep your health insurance coverage. If I remember correctly, you are allowed to keep the same medical coverage after being laid off for a number of months. The only catch is that you have to now pay for it, but you are paying the group rates instead of the individual retail rates. The group rates tend to be a whole lot cheaper.
• Collect unemployment. You should absolutely take advantage of the opportunity to collect unemployment. After all, you were indirectly paying for it all these years! Unemployment usually lasts up to six months and doesn’t have to be paid back. Your unemployment paycheck is based off what you were making, but is usually far less. But, when you lose your job, every penny counts!
• Start looking for a new job as soon as possible. Don’t let your emotions prevent you from getting yourself back on track. Start searching for a new job the day you get laid off.
• Use this opportunity to change careers or go back to school. Since unemployment levels are so high, you may find it difficult to get another job. Now is your chance to get a degree and pursue that career you have always wanted. Education is easier and more affordable than you think. Check out some of the opportunities in our STUDENT section.

As long as you don’t have a major melt down, losing your job won’t be the end of the world. Just remain positive and things will start falling into place.

We hear it all the time, recession this, depression that. If you are the average hard-working Joe, you don’t have too much to worry about unless you get laid off. If you do get laid off, I’ll be making a future post about what to do if you get laid off.  As long as you have enough income to cover yourself in the meantime, everything should eventually work itself out.

• What about my retirement or investment accounts? Those are at an all-time low! As long as you weren’t planning on cashing in on all your investments right now, you should be just fine. If you are investing for retirement, and you don’t plan to retire for another twenty years, you have plenty of time to let your investments recover before liquidating them.
  • What if I am about to retire? Typically you don’t empty your entire retirement account in one day. You make withdrawals from it while the balance continues to run with the market
• What if my kids are about to go to college and the fund is at an all-time low? Just like your retirement account, you won’t be liquidating your child’s entire college account at once. If you are worried that there won’t be enough to make it through the next four (or five… or six…) years, have them take out a student loan. This will help them build credit so they can qualify for a mortgage once they graduate and pay off the loan.
• My house has lost so much value that I now owe more than I own! This is called being “Upside-down” - the value of your home is less than the remaining balance of your mortgage. As long as you stay put and continue making the mortgage payments, your home value should recover and eventually you will start building equity. Here is where you could run into trouble:
  • If you need to move. – If you absolutely must sell your home to relocate for work, talk to your lender about what your options are. They may be open to negotiations. In most cases, they are only entitled to your house, so they are usually willing to talk to you so they won’t have to foreclose.
  • If you are in an adjustable-rate or negative amortization loan. If your monthly payments are set to skyrocket soon, take a look to see if you can easily afford them. If you can’t, you risk letting your house fall into foreclosure. If you know you won’t be able to make the payments, see if you can refinance or negotiate with your lender so they don’t end up foreclosing.

Just hang in there and the economy should work itself out. Unless you are an investment banker with all your money on the market, just continue working, paying the bills and things will work themselves out.