Finance Matters

Posts Tagged ‘bank accounts’

Parenting expert and author Andrew Watson has added his voice to those calling for young people to learn money management at an early age.

Mr Watson, who wrote a book for dads-to-be when his wife was expecting their first baby, suggests that allowing young people to make financial mistakes will help prevent them making more serious ones when they are older.

He says it could be beneficial for parents to allow their children to manage their own bank account when they reach the age of 16.

Teaching children to manage money is as important as reading, writing and arithmetic, he said, especially in the current economic climate.

Last month Simon Culhane, chief executive of the Chartered Institute for Securities & Investment (CISI), called for the government to give all 16 year olds a bank account of their choice, when they receive their National Insurance number.

With the use of online payment and transfers growing rapidly, Mr Culhane argues that mandatory bank accounts at the age of 16 would help young people understand personal finance at a much younger age.

His comments follow a debate in the House of Commons on a proposal to make financial education a compulsory part of every school’s curriculum.

The proposal, which was put forward by Conservative MP Justin Tomlinson, was supported by all political parties.

Research suggests that many people lack basic financial knowledge, with only 36 per cent of people understanding that the term APR relates to interest payments.

In the CISI’s magazine, Mr Culhane commented: “Financial education is too important to be tagged on as an also-ran; it should be fully integrated into the maths syllabus and tested”.

Mr Culhane suggested that a lack of financial understanding was contributing to the rapid increase in the number of people taking out payday loans with excessively high interest rates.

The end of 2011 seemed to be all about the end of marriages.

Last week alone, Newt Gingrich had to revisit his first divorce right before the Iowa caucuses, Mel Gibson lost half his $850 million fortune to his ex, Maria Shriver was rumored to be reconsidering her divorce from cheating hubby Arnold Schwarzenegger, and a 99-year-old man in Italy divorced his wife after learning she had an affair – in the 1940s.

When a good friend of mine went through a divorce last year, it didn’t make headlines, but it did make for tough times. She thought she was headed toward an amicable settlement. But as often happens, emotions ran high, and what started out as a seemingly easy split ended up being a financial disaster – one she’s still dealing with today.

There’s no shortage of divorce advice on the Internet and from attorneys. Some is good, some bad. But here’s what worked for my friend – and what she wished she would’ve done sooner. Take these steps to protect your newly single self…

1. Separate your bank accounts

At the beginning of my friend’s divorce, she decided to leave their joint checking account open because she didn’t want to seem spiteful. Unfortunately, her soon-to-be-ex-husband wasn’t too concerned with appearances. He cleaned out the checking account and her linked savings account – which she only found out about after having her debit card denied at a restaurant.

If you asked her now, she’d tell you it’s better to separate the checking accounts and deal with the fallout. Sure, her ex would’ve been angry when it happened, but they could have saved themselves a lot of fighting (privately and in court) had they just separated their money from the beginning. After all, she had to deal with a financial crisis, and her ex ended up having to pay back everything he took anyway.

When you decide to make the split, Kiplinger suggests withdrawing half the money from any joint accounts and placing it in your own checking account. And if you don’t have one already, see our banking page for tips on finding the right checking account.

2. Protect your credit

Those credit scores you spent years building will go kablooey the second your ex decides to go on a shopping spree and ignores the bill. You need to separate your credit and loan accounts quickly.

You may know all of your credit information, but you should still look at an official report. Order a copy of all three credit reports – TransUnion, Experian, and Equifax – and go over them carefully. Highlight the names and numbers of each creditor you share with your spouse.

While it may be the last thing you want to do, discuss credit accounts with your ex. Decide who keeps what and ensure both of you still have an open line of credit in case of an emergency.

Unfortunately, turning joint debts into single debts isn’t easy. You can’t just call the lender and ask to have a name removed. It generally means either paying off the debt, or having one party reapply and refinance it in their name alone. If they can’t qualify, the debt should be paid off, even if it means selling the house, the car or using assets to pay off the credit card.

The dumbest thing you can do is sign over ownership of an asset like a house or car, but leave your name on the mortgage or car loan.

In my friend’s case, she kept any accounts she had pre-marriage and removed herself from any accounts her ex had or they had signed up for together.

3. Check on your insurance coverage

If you’re on your spouse’s insurance plan, you may find yourself suddenly without coverage. Instead of risking it, negotiate a time with your spouse to change the insurance information, and make sure you have your own by that date. You’ll need health, auto, and homeowners (or rental) insurance. Check out our insurance page for tips on providers, coverage, and limits.

It may not seem like your biggest problem during a split, but you never know when you’ll desperately need that coverage – and the insurance company won’t care that you’re going through an emotional crisis and didn’t have time to worry about it. When my friend finally decided to call it quits, her ex moved out and canceled their renter’s policy. She figured she’d deal with it later, but then Hurricane Katrina hit – and suddenly she had a devastating amount of damage to everything she owned with no insurance to protect her. Moral of the story: Don’t go without insurance.

4. Don’t forget the taxes

The year your divorce becomes final is the year your tax status changes to single. You may have new income and deductions to deal with – like alimony.

The first year you file will be the hardest, so start working on it early. You may want to hire a tax professional to help you sort through all the changes, but read 9 Tips to Find a Tax Pro before you do.

In my friend’s case, I’ve heard her say more than a few times how hard it was to do her taxes herself that first year. If you do decide to go with a pro, watch what they do. The more you know, the better chance you’ll have of filing your taxes yourself in the future.

In theory, separating money shouldn’t be the hardest part of a divorce. In practice, everything is hard during a divorce. But you need to do it quickly to avoid bigger problems later on. After all, credit problems will follow you for at least seven years, and you don’t want to start your new life with that weighing you down.

This post originally appeared at Money Talks News.

DON’T MISS: This Man Came Up With 101 Uses For His Ex-Wife’s Wedding Dress >

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I’ve been home for the holidays for about a week now, and made only one trip to the mall, mostly out of curiousity. 

My family’s never been big on the gift-giving thing; usually we just ask for what we need and try to emphasize time spent together over the mad dash for presents.

Anyway, to report from the trenches, what I saw was horrifying: Lots of dazed and confused shoppers, whipping out the plastic for hoardes and hoardes of gifts.

It was basically like the “Walking Dead: Christmas edition.” Not a good look for America’s wallet, and no doubt a safety concern given the sketchy characters I saw patrolling the food court and parking lot.

Many shoppers looked distressed, not only from schlepping around at such a late hour (10 p.m.), but from their inability to indulge their cranky kids.

“No, we’re not getting another Tickle Me Elmo!” I heard more than a few mothers gripe to the Mall Gods as they dug in their purse for change, presumably for the Blue Bell ice cream vending machine nearby.

Who knows what’s happening in their bank accounts—even they probably don’t want to know. It’s easy to notice the stress they’re putting on themselves, their family and everyone around them.

All this rushing around made me think: Wouldn’t it be easier to take off the pressure? You know, indulge in the little things instead? Shouldn’t we be making the most of what little downtime we have and be grateful for those precious moments between the shopping, the driving, and all those long waits in the dressing room?

Here are five free ways you can do just that, no matter how crazy the holidaze gets:

1. Bake some chocolate chip and cherry cookies. Cookies make everything better. In fact, just the act of working with your hands, adding a dash of this and a pinch of that, will do wonders for your sanity come holiday time. Besides nothing’s more thoughtful (or delicious) than receiving a batch of these babies made from scratch. Check out this yummy Texan recipe for ideas.

2. Sip on some seasonal drinks and catch up. Good conversation and drinks go hand in hand. And by drinks, I don’t mean the hard stuff; I’m talking about pumpkin spiced latte, toasted cinnamon coffee and all that other jazz. Those flavored liquid treats come but once a year! Steer clear of the gossip and focus instead on enjoying one another’s company.

3. Hit the pavement for a run or a nostalgic bike ride around town. Whether it’s a power walk or a ride through your old stomping grounds, taking time out for yourself will do your mind and your body good. BI writer Mandi Woodruff calls it “the only form of life insurance I have,” and with hospital bills on the rise, you probably should too. 

4. Indulge in a book or two. A recent Museum of Fine Arts exhibit I saw said French women in the 1700s took up reading as a pasttime to “stay sharp and keep conversation lively.” Take a page from their book and feed your brain. Flavorwire.com recently listed some excellent memoirs that are on my to-read list this season.

5. Host your own Christmas light tour. Why get scammed when you can pack your family and friends into the SUV for a DIY tour of the sights? Some neighborhoods go all out, turning their lawns into true winter wonderlands. All you need is a little gas in the tank (prices are down this month), some of those cookies and a little holiday music to set the mood.

How are you spending the holidays this year? Share your thoughts in the comments below.

Rushing to buy last-minute gifts for your man? See 9 things you need to know before you hit the mall >

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• The Worst Money Advice Friends And Family Could Ever Give You
• 10 Free Apps To Survive The Last-Minute Holiday Shopping Madness
• INFOGRAPHIC: Americans Are Spending A Whopping $704.18 On Gifts This Year

Santander has joined with Moneysupermarket.com to add an extra sweetener to a deal designed to tempt people to switch their bank account.

Anyone who switches their main current account to Santander’s Preferred Current Account via the Moneysupermarket.com price comparison site, could receive £30 in Amazon vouchers as well a £300 cashback reward.

However, customers who are completely new to the bank will only receive a £100 reward, holders of Santander mortgages will receive £200 and only customers who have a mortgage with Santander plus savings of at least £10,000 with the bank, will receive the full £300.

The Amazon vouchers will only be available until December 23 and the cashback deal ends on 8 January.

For the first year, Santander’s Preferred Current Account pays 5 per cent interest on balances up to £2,500, as long £1,000 is deposited in the account each month.

After the first year the interest drops to £1 per cent. A £2 charge will be levied if the monthly deposit drops below £1,000.

Tempting people to switch their bank account isn’t easy, as many people are put off by fears that switching will be difficult and concern that the new bank account will not be suitable.

Santander’s offer is only valid if its dedicated switching service is used to transfer standing orders, bill payments, and direct debits to the new account.

The Independent Commission on Banking, which has recommended a number of reforms to the UK banking sector to promote financial stability and competition, has been criticized for failing to push through a recommendation for ‘portable bank accounts’ which would make switching banks much easier.

This would give each account a universal number which the customer would take with them if they moved to another bank and which would also be linked to direct debits and other transactions.

A client of MF Global, Andrew Abraham of Abraham Investment Management, has sent the below letter to Congress regarding the collapse of the firm, the hundreds of millions of dollars that are apparently missing. He says he, himself, has hundreds of thousands still frozen.

We haven’t independently been able to verify that, so take this all as what it is: Someone who has sent an open letter. We’ve also included his personal intro here.

My name is Andrew Abraham from Abraham Investment Management . I am a commodity trading advisor. I have been investing in commodities for 17 years. I have never seen nor have people in the industry for 30 years plus experienced what has transpired with MF Global.

The idea I want to get across…we are not just a group of speculators… there are hedgers who use the markets to protect their products such as farmers. If client money can be stolen…nothing is safe..No bank account..no stock market account…

——–

Dear Congressman

I am writing to you to ask for your immediate help and intervention to ensure the integrity of the US Financial markets in lieu of the MF Global debacle. The integrity of the markets are at stake as well as the integrity of the USA in the eyes of the financial world.

Segregated client accounts of MF Global are missing upwards of $600 million USD. This money just does not disappear or then according to news reports show up at JP Morgan and then to disappear once again. JP Morgan was a custodial bank for MF Global. JP Morgan had repurchase agreements with MF Global.  Were funds sequestered from MF Global Clients by JP Morgan to make up in short falls?  Does the US Financial system allow stealing of segregated funds at one institution by another?

These segregated accounts are no different than personal or corporate bank accounts or even stock market accounts. These accounts were (possibly) violated and a large amount of assets are missing.

What is worse is the violation of the Commodity Exchange Act, which states that in the event of a FCM bankruptcy client funds are to be handled separately from the firm assets and given priority. It is questionable what transpired, however 50,000 customer accounts have been frozen and hundreds of millions of dollars are unaccounted for. The analogy is very simple. It is as if a bank makes bad loans and then pillages their customer’s accounts to remedy the situation or if a Stock brokerage company makes bad investments and then withdraws monies from their client’s accounts. If this is allowed to continue there will be NO Trust in the markets. Nothing will be safe!

The implications are severe to farmers to hedgers of virtually aspect of our human existence. This is not just a group of commodity trading speculators. This is the basis of the US economy.

The fact is that the regulators were not regulating nor are they acting now in order to protect the integrity of the financial markets. I implore you to take a stand to protect the financial markets. I implore you to

1.Demand that the trustees of the MF Global release at least partial of the frozen cash

2.Open immediately investigations of JP Morgan and how segregated accounts & money supposedly appear and disappear.

3. Open immediately an investigation of the regulators who failed their task in regulating the markets.

This can spin out of control very quickly. Myself and countless others are counting on you to protect the integrity of the US Financial markets. 

Andrew Abraham

Abraham Investment Management

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See Also:

• Report: MF Global Transferred Client Money Following CME Audit Last Week
• MF Global’s CFO Was One Of The Youngest C-Level Execs On Wall Street
• Now MF Global Employees Are Ditching Work