This Week in Your Wallet: March 13, 2012

Posted by Jean

I’m extra excited today. Why? Because my new book, Money Rules, is out… today!

I first got the idea for this book almost a year ago. I realized that, in this complex financial world in which fees are changing, laws are changing and life is changing, sometimes information falls through the cracks. We need simplicity, I thought. We need to look at the money decisions we’re asked to make and have a way to easily say: Yes. Or no.  At the time, I had also just read Michael Pollan’s Food Rules.  I wanted to do for Money what he did for Food – and I think I’ve succeeded.

Over my career in helping real people with their real money problems, I’ve developed a set of Money Rules I follow religiously — and I’m not the only one. Financial advisers, bankers, accountants, and plenty of smart people all have their own Money Rules. This book pulls these rules together.

Don’t worry, it’s not an endless list of do’s and don’ts; this book represents the very best rules I could find. There was an extensive editing process and, believe me, I cut more rules than I held onto. The rules you will read are the ones I truly believe are necessary for life.

And so I hope you find them useful, I hope you find them memorable and, in some cases, I hope you find them a little bit funny. If you’re interested in reading Money Rules, check your local bookstore or order it from Amazon here.

Since this book was all about finding the very best money rules, I want to hear yours. Do you have one money rule that you follow no matter what? Post it to my Facebook wall, email it to me (jean@jeanchatzky.com) or tweet it to me using the hashtag #MoneyRules. My favorites will receive a free copy of the book! They may even show up in a second edition!

And now, here are the other headlines for the week…

More mortgage news

About a month ago, I wrote to you about the new, $26 billion mortgage settlement between the U.S Justice Department and five of our nation’s biggest mortgage providers (Ally, Bank of America, Citi, JPMorgan Chase and Wells Fargo). I wrote that the settlement will only help people with mortgages through these providers, but Fanny Mae and Freddie Mac mortgage-holders can find relief through programs like HARP and HAMP.

“But what about mortgages backed by the FHA?” many of you asked me. “Is there any help for those?” At the time, the answer was no. But on Tuesday of last week, the White House announced a new initiative to help these very homeowners. This initiative will reduce refinancing fees for borrowers with loans that originated on or before May 31, 2009 and will save borrowers about $1000 per year, not including any savings procured through lower interest rates. Not bad, right?

The good mortgage news doesn’t end there, either. Just this Friday, Bank of America announced that underwater homeowners who qualify for part of the settlement with the Justice Department are poised to receive $100,000 each. This figure is much higher than what was originally anticipated, which is great for homeowners in need. B of A has also announced that it will temporarily halt foreclosure sales of homes that could be covered in this settlement, until it has time to notify potential beneficiaries.

Speaking of notification: As I wrote last month, an administrator will be chosen to oversee the settlement, after which homeowners who qualify for the program will be notified by mail. A Facebook friend named Sandra asked me, “How do we know if we are contacted by the legitimate administrators as opposed to the regular junk mail that fills our mailbox once a week saying we should refinance?” This is a great question, especially because the Attorneys General have already received reports of scammers. These scammers have been reaching out by phone, but whether the offer is by phone or by mail, one of the biggest giveaways that it is fake is if there is an offer to speed your settlement relief for a fee. Neither the banks nor your state’s Attorney General will charge you a fee to rush your settlement delivery.

If you have more questions about determining your eligibility for the settlement and legitimacy of any offers you receive, I recommend looking at this page on NationalMortgageSettlement.com — it provides additional information on scammers as well as resources for contacting your state’s Attorney General.

Social Security strategizing

One of the questions I get most frequently is this: “Should I take Social Security at age 62, or wait until I’m 66?”

I’m sure some of you are thinking, “Absolutely, age 62 — that’s four extra years of income!” However, this SmartMoney article ran the numbers, and you might be surprised at the results. The author ran several scenarios, so it’s worth reading the whole article for full details. However, bearing in mind that you get an eight percent bump in benefits for each year you delay collecting, I think this example really says the most:

If Joe starts claiming $1,500 a month at age 62 and lives until he’s 92, he will net $540,000. If identical twin John starts claiming $2,460 at age 70 and also lives until age 92, his lifetime total will be $696,960 — almost $157,000 more than his brother.

Tracking bank fees

We talk a lot about bank fees here, so I wanted to alert you to NerdWallet’s Bank Fee Monitor, a new index of all the changes in checking account fees — fees that are both publicly announced and quietly slid through. I highly recommend taking a look, and then bookmarking it for future reference.

Have a great week!

Jean