Master Your Money - Page 3 of 6

Master Your Money

By keeping my money, I’m going to keep my family financially safe.”

If you’re behind on a savings plan, there are things you can do to catch up. If your company offers a 401(k) match, contribute at least up to that percentage, because it’s basically free money. Ideally, go beyond that and max out, to the 2008 ceiling of $15,500. If you’re over 50, you can make an additional catch-up contribution of $5,000. Outside of your 401(k) or 403(b), you can contribute up to $5,000 annually (or $6,000 for those 50 and over) to an IRA.

“Earn more, spend less, save more,” quips Lanta Evans-Motte, a financial adviser with Raymond James in Calverton, Maryland, and president of the Association of African-American Financial

Advisors. “The government is making it easier to save for retirement, and there are many advantages to using a combination of savings vehicles if you’re trying to catch up.”

For tools and guidance in managing your 401(k) visit

How can I avoid foreclosure?
Millions of Americans signed up for adjustable-rate mortgages with low teaser interest rates that were scheduled to spike in a few years, often resulting in unmanageable monthly payments. The crisis has reached such proportions that the federal government and major lenders have hammered out an agreement to freeze interest rates for some borrowers. The plan will halt rate increases for five years for subprime borrowers who took out ARM loans between Jan. 1, 2005, and July 31, 2007, and whose monthly payments are slated to rise more than 10% this year. The loans can’t be more than 30 days late, and you have to have a credit score of less than 660.

Discussions are continuing over whether the freeze will be extended to more borrowers. But for those who don’t qualify under those terms, all is not lost. The Federal Housing Administration’s FHASecure program (800-CALL-FHA; fhasecure), set up last August to
help borrowers refinance into more affordable loans, has already helped 53,000 families. You can also contact the Hope Now Alliance (888-995-HOPE;, a coalition of lenders and counselors who might be able to suggest additional options.

Remember that a foreclosure is also financially painful for the bank, so it’s in everyone’s interest to keep you in your home.

For a wide range of information on how to avoid foreclosure, visit the Website of the U.S. Department of Housing and Urban Development,

Does online banking put me at risk?
If online banking had a salesman, it would be William Richardson. The 47-year-old Tucson, Arizona-based OB/GYN loves having his bank at his fingertips. “I don’t even like going into regular banks, period,” says Richardson. “Going online is so convenient, and it’s real-time, so I don’t have to wait for transactions to be processed by hand.”

In fact, 48 million American households did some online banking in 2007, protected by “Pentagon-grade encryption technology and intricate firewalls,” according to the American Bankers Association. Bank regulators have also recently mandated major security upgrades. Nonetheless, personal records do occasionally get compromised. So whether your financial transactions are on paper