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2 Personal Finance in Your 20s and 30s by Sarah Young Fisher and Susan Shelly alpha books A Penson Eeuenton Company Copyright © 1999 by Sarah Young Fisher and Susan Shelly All ight reserved No post of thi book salle seprec ocd, store in we reral System, s-teanemited by ay wifaes,e setronte, mechanical, photocopying, recording, rolhecwis, without writtes pelrisson fom tke publisher, Ko yaten! abil s ‘ssimed sth respect to the use of he informatlan contained xvi. Alt)ough every prettulion has ter taken fu ce prepa-alcon of ths 90k, the poblisber am author Essume no respon for eer ox bmissons. Nefther i any iubity assumed for Alsutages esuling fri the we vf nformatian camtaled hervn, kor bfortnlton, iaddies Alpha Books, 201 West 1030 S.see, Thdlanapots IN 462, THE COMPLETE TDIOTS GUIDE LO & Design ate reste trenpaeht engon Faucation, oc ‘leunatonal Sandra Boole Mme UD2-84815-7 Libra of Covagtess Catalog Card Numnbet 99-6134 ws a9 luleprelaion of the printing cous: the dghtmost murder af thu est series of numers fs lin pea of Ihe book's printings te ightmaet umber af the secu sees um bers is Ihe numer of ae book’ riutng, For example, a printing cue af 49-1 shows, That dhe fre. arnting aces i 19 rine the Drea Sass ot Americ. Note; this pubtcatioa contains the opinions and ideas ofits ator. eis intened ca piu helplul and iormative austeil an Mh subject cettr cover sad wth tie unerianting thatthe autor us! publi are noe engaged iu seuleing poses _Sonid services tn the boos IF the reer reqcbes personal assistance or advioe, & omapelent professional should be vse ‘he authat and publishes specifically dlislaio any responsibilty for any abil, loss brtish, geromal or athcrvze, wads isineuried a a consequence, dint 0” fevlly uf he use and application of any of fhe sontent af ts boo. Alpha Development Team Publisher Kathy Nebortas Editorial Director Garp ad, Keats “Managing Editor "Bon Shae Markeling Bruel Manager ellos Pract Acqaisiuons Editor Pessieu Reto Development Lditors PI itched Any Zivatts Assistant Editor George Ble Production Team Development Editor "ete aoa Production Eeitor Michal Thonnas Copy Eaitor Hetthr Soar Cover Desiguer ‘Sake estan Photo Eaivor Richa fo: Mlustrator sehen Meter Book Designers Seat Cook an Arn dans of Design Indexer Tn Meg Layout Proofreading ame er tngea Caet Wet cue sy fre se epee Contents at a Glance Part Part. Park. 1: The Real World 1 Peseomat Bruaee: ke Sturt They bine eae Yon ig College pers Rregnce a oh tn yor schoo, dow horn ts Chaper val 2 Yo Daa 2 You's Ou Here—Now What Are You Ciera Do? Sting ut ot furor cree Sa, so yr eed ome France seen 2 Takdag 9 Tonk at Your Bank Accounts Thee sore te banking Ou hee te ese, ad how: poe rare fteam hase 3 eet on our pckelbock, 4 Gyull Cats ard Debt "Thee tts cd ces fo use set cars, ead tes ton places forget a eve) Ba OMe Binding « Pave wth the Kight Zip Goa: ‘wes Sth ving eangete aes We ees Sse Farris aad pote Pee. oad Kules t P Transprition & expensive tt 1°5 cost weft wake Jor ght. Maybe tates cheaper Hay 1082 2 On Your Own and Loving It What Do You lLere? Leen tae a delete your ne wrth Tino yr tind 8 What Dn You Need? our exprcations might be ranter at this post than your pecteok penis. 9 The B Word: Badges uate tae Dede, Bie hey ve necessary revert. 6 ani be more 10 Getting maw the Seng af Swings Saving mimey Sn? the hard, aa he pave for sore es ort ty sac igh vor, 11 Your Creat Use , Bont Aas fe Gri nb lnpens, Bet are are ways aot and tof tedees 5: Coasting Along 12 Mein On Up Fj , gs are king up ne ee ready end some ‘an Rabe cla tg eng 1 liat’s AN This Vall, About Lavestments? Vou tn’ haved be ih, or Ou, br Sant grow a pontin, 4 7 107 a 1a 199 ast 168 V4 A Taxing Topic raters you aves can save jon mney, aad keep oni edb wi te 1 15 Looking Out for Wha You Have 191 Barun eles you Sarat WR yo he, bu me nal are anoncesoin. Part 4: To Everything Thera Is a Season 207 16 “Ihe Gace ot ite 208 Hie cues et yee aces ae dc ate cen rake, even if poe’ ve mt axaywhier? rear veremnend age. 2 teallgassoupoty pin o4 2s Part 5: So, You'ra Thinking of Buying a House a 24 There's No Fue Bike Home 2a Le he gt me 0 ia Hore and ea do frome vind he ed Lis to Rorrove Some Money, Vlense 2 Aone ae right ind of engage fase un be ricky nites, So vente pot 9 kane hats xe Mae, 78. Paying WOE Lite hy tte 207 ‘Trews thre ton oe ay to pay of 2 mente, 28 usw Ovming Tome fc You sae me Cmte home give ou so go in ertotage, fa Labo rates ye eps an ese tans 25 Lexucensner’s Tasmrance aa our hare poe Digest nytt yt hae, and you've go te be fare te adaguael protected Appendices Appenlix A: Additional 2esquices a Appeals Br Shox Ve the Money Glossary aT Index 368 Contents Part 1: The Real World 1 Personal Finance: The Stuff They Didn't Teach You in College fxaetly What Is Personal Fmance? Why Dan't LAkeady Know This Stull Whlever Happened fo Personal Faunce 101? ful T Don't Think 17 Be Abe to Enderstana I. Somelady’s Gat fo Min? the Sore Money's Nota Dirty Word Persortal Finance Is for My Parents How Tard Ts This Gonna Be? Lets Get Started... 2. You're Out Here-Now What Ara You Gonna Do? Hey! Nobody Told Me it Way Ginn Be Tike This! Mon and Dad, Where are Yaw? Wes a Bly, Cold World Out Nene 4 lank al Where You Srv 4 lonk al Where You're Gui ‘A Porsonal Finance Test. Your Personal Finamce. eda ‘Fesatsnnene Chie Answers 3 Taking a Look at Your Bank Accounts Te You Have the Accounts You Need? Checking Accounts o Savings te Other Usefet Accor : and Banks Are Not Crested Fqual Comeevial Beek. Crate Unions. Thifts.. So, What's a Percentage Point or Two simone Fri? Another News Bank Rec? sn Nickel aund Deering 7 The Great interes! Vosus Bank Foe Dilemma Slop at the ATM, | Nead Mare Cash. lstonnatic teller Machives ne Autoonat Th ‘acim ‘Tips to Cut Ati Pees ve cats 4 Credit Cards and Debt a Everybody Wants a Credit—Card Until They lave One... 42 Getting u Cae If You Don't Trave One ae Covsignors ara Seciaod Curis B How Mimy Credit. Cards Toes One Person Need? ~ 35 ‘Keep It (Vensr Credit Card} in Vour Pants 46 “Kivowing When w the Vor Credit Card ia Sometimes Cash Ts Ky. a Hinding a Wetter Deal on Your Credit Cards 48 “Anrmaat Pees 48 interest Gases 8 “Fees and Moré Fees 50 “smacliness Ts Next fy Goaliness: Paying OfF Your Debt 31 5. Finding a Place with the Right Zip Code 53 Doing the Apartment Thing. 54 Seunting !vcations 3 Signing Your 18% Ava" 36 Upton Ces 7 “Three's Compary i a Cond. 38 Renter's Imserance 60 boll Howse 60 What Amn 1 Gonna Slocp On? 82 Frmishing Your Mace Without Sponliag Portne 63 Quality 1s Key 63 1 Getty by jor th Fo? a Electricity 6a Phone 68 IWant hip Pe 65 © Road Rules or Cruising the Auto industry Landscape 68 Planes, ‘Tyains, and Automobiles «. . 6 ‘Not bveryboals Neats a Car : 70 Renting a Gar When You Need Ore. 70 ihe Great Debate: ying or Lewin al Financing Your OF es al Leasin 23 nev ox Used, Big or Small? IF ‘Your Car Costs You Moze'Than Yaw Tink. 78 ‘Miniatenance. 79 “insure 79 ‘The Yotal Cost. 79 ‘he Complete Mbt's Cube m Pesreal 8 1m Vr 205 end 305 Part 2: On Your Qun and Loving It 7 What Do You Have? ‘That's My Salary? You've Gutta Be Kidding! ASRIIG AB @ RAISE wn Faking for amather Job Seickdng Fe Gut Tat Nose afob Than the Blyney Contacts Tapericuce Tenens Assessing Wour Assets Your Secret Stash, scouts “Mutual Paints Stocks (Equities) Bonds Biegeniy Morey & What Do You Need? ‘Yous Financial Lifestyle Evaluating Your Expectations TLaoklng at What You Novd andiWhal Fou b Don't, "The Bare Necessities ‘Nlcotis or Necessities? 9 The B Word: Budgets 107 Why Budgets Ilave Such a Bad Rep 107 Everybody Newds a Budget "108 ‘What Your Budget Shuukd fsciude 109 ‘Nam-Reretive Expeoes. mt Ronaine Expenses m2 ‘Telmnming the Fut: Aualy.ieg Your Expenses 4 Speratins Katies 116 ‘Ome Job, Tino Jubs, Three jobs, Four 6 Sticking with & 8 Software anid Wadi Siies for Budgeting ne 10 Getting Inte the Swing of Savings 121 Are You a Saver or a Spendet? 122 ‘Eualuating Vou Fluancial Porspiity Rt Savers Rave H Made (AbH0St) Rs Spenders Heeve lo Werk a Liete Hare BS A Tenmny Saved Is More'Than a Merny Rarned Geating Tato a Savings Mindset. ‘Ts far Saving Money on Almost Rverything Fated ar os Ray in Restoran Clathes Fines. Groening Yacations Finuschokd Expenses Fury Lite Bie Cove 11 Your Cradits Use, Don't Abuse It building a Credit History Reatelng When Enough 1s Etough (opel | Think I'a.in ‘Nouble Recognizing Credit Treble. Kanwing Wher t Get Help Repairing the Damage, Youur Cvedit Report. How ta Get at Capy of Yone Creat Report Part 3: Coasting Along 12 Movin’ Gn Up Emesgency Funds Reding Another Car ‘Rurawing When fo Troe wowing When to Keep tt Baek to Scho un Lfe Is Better in the Tropics Sten’l These Competers Cool? Gettlag Your Own Pace 13. What's All This Talk About Investments? Starting SMa soso “How Mach Do Von Have te beast Wheat’ Out There? 2 Mutual Funds ... Moriey Mackets. Ds_We'le Rot Halling Compact ies OLK)S Vesting. onsets ix, “he Coane iis iden Paso Bence in Your 205 nt 305 14 AToxing Topic WT What's Your Taxable Income? sou . 178 Haw to Make Less of Your Income Taxable 180 Sndend Deductions CUI pat stemized Deductions. 181 tiiting In: fax Brackets 18s, Preparing You Tax Retuins 16 Tun Do Tha 186 “Help! 1 Need Sonncbony it Just Anpbod)) 157 Web Stes and Soevate Thal Can Betp You Fepare Your Taxes 188 15 Looking Out for What You Have 191 ‘Welcome to the Insurance jangle 192 INSANE TOL semen “asa Sometimes You Need iy Sometinies You Don't. 194 ‘Health nstratce ss SN 9s ‘ho Disree e 96 Proper insxoaice 493 Disabil istwasce. “200 Lifetnsvance 202 You hist Dont ied i 208 My Mama Told Me: You Better Shop Acouni 204 What Do You Mean Im Not Covered? 208 Part 4: To Everything There Is a Season 207 16 The Gome of Li 209 Rootloose and Famey Bee un . 210 She (Gulp)} Wants Me to have in with Hie! 22 nancial Advanta 22 Hinancial Disadvantages 218 Direking Up is Berd 0 10 vr Bas Wil Fone Mary Me, BI? mere Uns Could Yeu Sign Hee, Hesse? 218 Goiw’ to the Chapel andl We'ze Gonna Gel Kianed 1 216 WOR TBS Ring oa - 216 Ouch! 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