Tax-protected retirement accounts, including 401(k)’s and Roth IRA’s, should be just one of three parts of a retirement plan. Personal savings and Social Security represent the other two elements of a good retirement plan. A survey from ING Direct found that one in five Americans are relying exclusively on Social Security, while the national savings rate has been negative for many years.

For better or worse, the economic recession has been a day of reckoning for many Americans. The national savings rate has increased sharply as spending has pulled back, but many continue to pull money out of the stock market at a time when prices are low. Combined, this is bad news for the retirement prospects for many Americans.

A recent study showed that consumers cut their spending for a sixth month in a row, while the personal savings rate rose to its highest level in the last six years. This is good news considering that 401(k) contributions may now be at risk. Another survey found that 29% of employers intend to reduce or eliminate 401(k)/matches, and another 12% plan to do so in the next 12 months.

In the end, conscientious consumers may want to continue their savings habits well after the recession lists and wages increase. With many employers cutting 401(k) plans at a very inopportune time, they may find that savings is one of the best ways to save for retirement.

Americans may not be happy with many insurance companies on Wall Street, but consumers are now taking matters into their own hands in an ironic twist of fate. The Wall Street Journal reported that more and more vehicles are being burned, “stolen”, and ditched in apparent schemes by owners to get insurance payouts and avoid hurting their credit ratings.

Authorities are reporting a growing number of cars dumped in the Great Lakes, burned along remote New Jersey roads, and driven into canals in California. However, the trend is most apparent in areas like Las Vegas, where thousands of workers are unemployed after a sharp decline in tourism and construction. One detective in the city reported four cars burned or wrecked in just 24-hours.

What are the alternatives? A good start is to call up your auto loan provider and try and work out an agreement to make lower payments. Often times, lenders will be very willing to negotiate lower payments if they feel that their loan is at risk of default. Another alternative may be to try and refinance the loan with a lower interest rate from a credit union or other financial institution.

In the end, consumers that turn to fraud to get ahead in life only complicate their problems. Instead of simply facing financial problems, they risk facing legal problems as well. Losing money is one thing, but losing freedom can be much worse…

College towns have always been known for their low unemployment figures thanks to large university systems providing droves of students and infrastructure. The picture is the same these days as a greater number of Americans turn to higher education as an alternative when out of work. In fact, of the six metropolitan areas with unemployment below 4%, three of them are college towns!

Many economists believe that highly skilled labor is to thank for low unemployment figures in college towns. One Harvard economics professor found that as the share of an adult population with college degrees increases 10%, wages for the population tend to rise by about 7.8%. As a result, this so-called “human capital” may be to thank for the success of many college towns.

Small businesses also find it very beneficial to operate in college towns as cheap talent can be found in student populations. In fact, a lot of labor can be obtained for free via unpaid internships that are required in many college classes. These lower payroll costs and overhead expenses can help college town businesses increase their output substantially.

However, while these cities have been known to be recession-proof for some time, the big question is whether they can outlast the largest recession in at least a quarter century. Student populations may be rising, but many universities are seeing lower endowments and less state funding. As a result, one of the largest employers in these towns (the colleges) are not hiring as much as they were able to earlier.

The spreads between saving and lending has created a substantial profit margin for many banks. These banks are looking to draw in more savings and checking account holders to take advantage of this spread and increase their profits. As a result, many are paying above-average interest rates on not only savings accounts, but also checking accounts! This article will take a look at some of the best deals around.

The first step for consumers may be to check out web sites like CheckingFinder.com, which offer consumers a way to locate and sign-up for high yield free checking accounts. Often times, these checking accounts do not charge any fees or have any minimum for opening. However, some may require you to use your debit card at least ten times, have direct deposits setup, or access online banking at least once.

Increasingly, these high yield checking accounts are being used by local community banks to help beat out larger national competition. In 2007, just 350 banks and credit unions were offering these types of accounts. Now, that number has jumped to 526 institutions with 912,000 accounts and around $9 billion in deposits, according to an article on Yahoo! Finance.

The interest rates being paid are substantial too – rates in the author’s area vary from 4.10% to 5.15% APY. That’s not bad for a free checking account…

There is an old standard set in the United States called the 28/36 rule, and many financial advisors are recommending it for their clients. The rule states that households should spend no more than 28% of their gross income on housing costs – including mortgage, property taxes and insurance – and less than 36% on all debt – including car payments, student loans, credit cards, and medical debt.

The idea behind the 28/36 rule is to encourage people to take things more slowly and reform their lives now before their problems get too large. According to the Census Bureau, many people are spending much more than that with 38% of homeowners spending more than 30% of their monthly gross income on housing costs. Worse, about 12% of homeowners spent more than half of their income on housing.

Such huge spending on housing and debt servicing costs leave little room for food, gas, transportation, utilities, child care, and other expenses that can affect households. The advice may seem elementary to some people, but many people have strayed far from the basics and the lessons may be necessary to embrace before things get much worse down the road.

Many Americans may find their tax bill excessively large this year given the sharp reduction in their net worth. As a result, many may want to get on a payment plan in order to ration the money that they have while still making payments on their tax bill. Luckily, the IRS offers payment plans and installment agreements that can make this process relatively easy for individuals.

The first thing to remember is that tax extensions are not the same thing as payment plans! Extensions allow individuals more time to file their returns, but still require individuals to make payments on the returns on time. As a result, those looking for payment plans to ease their financial burdens must follow a different process that we've outlined below.

Individuals have two options depending on how much money they owe the government. The first option is the Online Payment Agreement (OPA) for those that owe less than $25,000 in combined tax, penalties, and interest. Individuals can either complete the agreement online or fill-in a Request for Installment Agreement (or Form 9465, in IRS-speak), which is also available online.

Individuals with more than $25,000 in combined tax, penalties, and interest may still qualify for an installment agreement, but a Collection Information Statement (or Form 433F) may need to be completed first. Individuals will receive a written notification telling them whether the terms of the installment agreement have been accepted or if they need to be modified.

The Federal Reserve cut rates last year in an effort to reduce consumer interest rates on mortgages and loans. The result was lower rates for most loan and savings products, but there appears to be one exception to the rule. Credit card rates continue to increase as credit card issuers take any actions they can to recoup losses that they face from delinquent accounts.

Low-rate credit cards now average 11.62% while balance-transfer cards are at 13.15% and cash-back cards are at 13.82%. In November, Citigroup raised rates for 20%of its accountholders by an average of 3% (around the same time that it received $300 billion in government funding). Worse, these rate hikes are taking place across the board regardless of credit score. Most of these accounts carried low rates for years, which caused many consumers to be caught off-guard.

According to many experts, raising rates during these tough times could be a double-edged sword for companies. Raising rates may help their bottom-line in the short-term, but long-term the higher rates may cause an increase in defaults, where the credit card issuers get nothing. Higher rates can even push the most financially-stable consumers closer to financial ruin as many small businesses use credit cards for working capital loans.

Millions of Americans failed to qualify for Obama’s program to help troubled homeowners, despite the fact that many of them are in a substantial amount of trouble with their mortgage. Many no longer have enough income to pay their loans while others can only afford the payments but don’t qualify for refinancing because the value of their home is far below the balance of the loan.

Many Americans are now questioning the wisdom of making monthly payments on a loan that may take 10 to 15 years to get back to the value it had just a year or two ago. While many people have a fear of giving up on a contract, it isn’t as disastrous as it sounds these days. It is almost always preferable to negotiate a better deal on an existing mortgage, but lenders are not likely to sue if you walk away.

One option for many Americans is a short sale – that is, the process of selling a home for less than its worth with the lender’s permission. Other lenders are more forgiving and will let you hand over the deed for your house in exchange for an agreement not to start foreclosure proceedings. And as a final option, foreclosure is a last option or homeowners unable to make their payments.

Other implications of abandoning a mortgage include a higher tax burden (since the abandoned debt is taxed as income) and a lower credit score that could stay with you for a few years. However, the benefit of not massively overpaying on an asset could make it worthwhile in the long-run.

Print newspapers and magazines rely heavily on advertising fees in addition to subscription fees to subsidize the cost of printing and distributing the news each day and week. Unfortunately, the economic slowdown has virtually stopped advertising and forced many newspapers and magazines to shut down their operations after hundreds of years of business.

The Seattle P-I is one of these newspapers that may experience this fate. The 148-year-old newspaper will switch to an online only format and reduce its staff to just 40 employees - 20 reporters and 20 salesmen. However, many are skeptical that an online newspaper can generate enough revenues to support a building and staff of that magnitude.

The failure of Seattle P-I follows that of several other newspapers. Even large publications have sustained huge losses, such as the New York Times. The times has seen its stock price drop from around $25 per share in the middle of 2006 to nearly $4.00 per share in recent days. Eventually, these large newspaper operations are hoping that advertising will pick up once more and sustain them.

Most of the United States has been hit hard by an economic recession and jobs can be difficult to come across. However, there are a few pockets where jobs are expected to pick up strongly. Here are a few places to consider living before you give up on finding any employment in the United States:

1. Yakima, Washington – Yakima is known for its apples and hops for beer, and last year’s harvest created a huge demand for workers. Packing and juicing companies employed people year round and the city is expected to see its net employment jump 21% during the year.
2. Kennewick, Washington – Kennewick may be one of the smartest cities in the United States with the most Ph.D.’s per capita, but the region’s farmland has also provided 19% more jobs this year growing potatoes, corn, asparagus and wheat.
3. Amarillo, Texas – Those looking for a more exciting job may want to check out Amarillo, where employment will growth 15% in 2009. Pantex is the largest employer there, with more than 3,000 people refurbishing nuclear warheads. There are also many jobs in the medical services and food processing industries.
   

Americans are saving more money than ever before as the economic crisis continues to weigh on households. The average household saved 5% of their disposable income in January, which pushed the personal savings rate to a 14-year high. Many experts consider this a healthy change for a nation that has traditionally seen a negative savings rate over the past several years.

The move to save is good news for banks, who are using consumer deposits to bolster their balance sheets. Remember, banks make money via the interest rate spread between what it pays depositors and charges those who take out loans. Right now, loans happen to be very expensive, so many banks can afford to dole out more cash to depositors to attract them for the long-term.

Many banks are now offering cash sign-up bonuses of up to $100 and attractive rates that surpass the current record-low federal funds rate of 0% to 0.25%. In fact, some banks are offering interest rates that can exceed 6% APY! Southern Missouri Bank, Kansas State Bank, Rocky Mountain Bank, and First Robinson Savings Bank are all offering these attractive yields.

Meanwhile, cash bonuses are increasingly being paid to consumers just for opening an account. Compass Bank is offering $100 while others like Citigroup and HSBC are offering $25 or more to setup an account at their banks. Even highly-accessible online-only banks are offering relatively high rates of 2.55% to 2.65% on many accounts. Combined, these are great deals for consumers!

The average cell phone bill may be around $50, but the average consumer is paying $3 per minute because they’re only using a fraction of their minutes each month. The Times reported the number based on the average number of minutes charged in more than 700 San Diego telecom bills and dividing by the average number of actual minutes used.

The Consumerist.com believes that these numbers are skewed by the small amount of people that pay for a large amount of minutes and only use a few. However, even with those people removed, the Consumerist still believes that the average cost per minute is between $0.50 to $1 per minute. This is contradictory to the common belief that cellular costs are coming down.

Consumers that want to make sure that they’re on the plan with the best value may want to check out online services like BillShrink.com and MyValidas.com. These services can help find cell phone plans that fit with the actual number of minutes used each month.

Credit cards have minimum payments and, if consumers do not meet those minimum payments, the creditors may start calling. Most credit card agreements require payment of the minimum amount due on a monthly basis. So, consumers that make below-minimum payments are subject to negative actions from the bank. These can include card cancellation, creditor calls, and reports to the credit bureaus.

The largest concern for consumers making below-minimum payments are the fines. Many credit card companies charge a $29 to $39 monthly fine for not paying the minimum on time, and this amount can be more than the consumer’s below-minimum payment! This means that each monthly balance could move higher and higher with no end in sight – something called negative amortization.

The best solution is to rework monthly budgets to come up with enough money to pay more than the minimum. If this is not possible, it may be wise to call up the credit card company and see if the will negotiate at all on the amount due or rate. And finally, if none of this works, it could be wise to seek help with a debt settlement company if the amount is high enough to justify it.

President Obama’s tax plan is set to increase the tax bill for the wealthy, but it could end up hurting many middle class citizens living in richer areas of the United States. Many people living in the $200,000 to $400,000 per year income range live in high-cost areas of New York or California and are stretched to afford their homes when real estate prices were higher. These people certainly are not rich, but they are worried that the president’s plan could push them over the edge.

The reality is that many of these people are already subject to higher taxes because they are paying the alternative minimum tax. Even with the new tax hikes, the amount of taxes these people owe may not change that much because what they owe under the regular income tax may not push them out of the alternative minimum tax territory. But higher income people in states with lower income or property taxes are more likely to pay bigger sums.

The other big concern for investors is the capital gains tax rate, which would change depending on income. People in the top two tax brackets would see their capital gains tax rise to 20 percent from 15 percent while middle income families would still pay the same amount. This may deter many people from investing in the stock market as the price has gotten much higher…

Food is one of the biggest portions of our daily budget and consumers have traditionally turned to newspapers to get the coupons they need to save. However, there are also many web sites with coupons that can be printed and used on your weekly shopping trips. Here are our top three sources for grocery store coupons online:

1. CouponMom.com
2. GroceryCoupons.com
3. Coupons.com
   

Checking these web sites before your next grocery trip can help put more money in your pocket during these tough economics times.

Consumers have been cutting back on many things during the recession, but there are some things that shouldn’t be cut at all. Here’s our list of the top three things consumers should spend money on:

1. Expert Advice – Experts can help you save more money than they cost. Tax experts can help you find great deductions; lawyers can help you save on legal judgments; and financial advisors can help you save money in key areas like retirement planning and college saving.
2. Debt Repayment – It is very important to keep on top of your bills as much as possible to save on future interest charges. Also, a lower credit rating can make future borrowing extremely expensive, particularly when purchasing a house or car at a higher interest rate!
3. Little Things – Spending a small amount on personal indulgencies may seem counterintuitive, but satisfying your cravings can help avoid a binge later on. After all, you can only live so long on nothing before you raid the refrigerator and binge spend.
   

Home equity lines were a reliable source for borrowing over the past decade, but things are quickly changing as the housing market turns south. Here’s how you can evaluate your home equity line of credit and determine just how much you can expect…

1. Find the Value. The true value of your home will tell you how much equity is available to borrow against. So, the first step to evaluating your home equity line is finding out exactly how much your home is worth and subtract out the amount of debt left on the house.
2. Pay Down Debt. Banks look at your debt-to-income ratio to determine your credit-worthiness. Paying down debt or increasing income are the only two ways to improve these ratios, and given the economy, the latter may be the easiest to do for now.
3. Get Approved Now. If you have a home equity line of credit expiring over the next few months, don’t wait until the last minute to get it extended. Start at least two or three months in advance in order to deal with the paperwork and being proactive can get you pre-approved.