What Is a Family Trust and Should You Set One Up?

The concept of a family trust'also known as a revocable living trust'isn't very well understood by many people.

The differences between a trust and a simple will, for instance, are frequently confused.

While it's somewhat more time consuming'and therefore, more expensive'to have a family trust prepared than a will, there are significant benefits of the trust for many individuals.

I have many clients that feel that they 'have to setup a trust'.

I think many want to avoid probate at all costs.

Please keep in mind that probate is NOT a four letter word.

I don't want to discourage you from setting up a family trust, but it's not a requirement in every situation.

How a Family Trust Functions

A family trust is a legally binding document that covers an individual's assets during one's lifetime and specifies the terms of dispersing those assets after one's death or incapacity.  The person establishing the trust'generally referred to as the grantor'transfers all of his/her assets so that the trust itself is the owner, not the individual.

In practical terms, the distinction is a technical one; the grantor will still have full control over and use of all his his/her assets.

A trustee'the person(s) who will carry out the terms'is appointed at the time that the trust is formed, but has no role until the grantor is deceased or incapacitated.  The trustee can be a family member, close family friend or even a financial institution (think bank for brokerage firm).

I've had clients select all the above to be their primary trustee or successor trustee.  Keep in mind that choosing a financial institution as a trustee will be the most costly.  The cost can be justified as these institutions specialize in these matters where a family friend may be burdened with all the responsibilities that trust brings on.

The terms of the trust'and the exact assets included'can be changed at any time.  For example, if a new car is purchased, it can be added to the trust.  This is true with all significant purchases and sales of tangible property (homes, vehicles, etc.) and intangible assets (securities and other financial investments).  Similarly, the identities of the trustee(s) and beneficiaries can be changed by the grantor at any time.

What also can be changed is how the assets are dispersed.   For example, you could setup the family trust to disperse the assets at various ages of your surviving child.  The could get 1/3 of the income at age 45.  The other 1/3 at 55.  And the final disbursement at age 65.    This is just one example of the thousands of possibilities of how a family trust can be setup.

Benefits of a Family Trust

Among the numerous advantages of a family trust are:

• Avoidance of the probate process.  If the grantor dies, the estate can avoid probate court, a substantial benefit over a simple will, where probate is commonplace for any assets not specifically enumerated.
• Avoidance of legal challenges of asset dispersal.  A family trust is essentially air tight legally, another potential advantage over a simple will.
• Limitation of exposure to estate taxes, as part of a proper estate planning process.
• Simplicity and Flexibility.  A family trust is a relatively easy document to prepare and account for, particularly with the help of an estate planning attorney.  Transferring asset ownership to the trust is an easy task.  The ability to amend and adjust the terms at any time makes it a very versatile vehicle.
• Control.  The terms of the trust dictate exactly what will be done with your assets in the event you are incapacitated or deceased.  The trustee must carry out your instructions to the letter, or face civil suits and possibly criminal prosecution.

The Bottom Line ' What a Family Trust Does

A family trust is a relatively simple and inexpensive, but potentially powerful legal vehicle, with many benefits for a wide swath of individuals.  The family trust essentially makes certain that your assets will be allocated as you wish, should something happen to you and makes certain that the beneficiaries that you designate will have access to their inheritance'in the manner you intend'quickly and fully.  The peace of mind in that fact alone may be enough to recommend the process.

Tagged as: family trust, setting up trust

How to Make Sense of Your Credit Card Numbers

When you look at your credit card, chances are that you notice the numbers on the front.

The numbers on the front of the card provide an interesting amount of information ' beyond just an account number attached to your finances.

When you use your credit, the numbers tell a story.

And you can know that story if you understand what the numbers on the front of your credit card mean.

Transparency with cards is important, and you can get a better idea of what to expect when you know what your credit card numbers mean.

Type of Card

When you look at the credit card numbers, you will probably notice that some of your cards start with the same number. This is because the type of credit card you have is identified by the first number, which is always a 3, 4, 5, or 6 for major cards. There are other types of cards, though, depending on what you are trying to accomplish. Here are the corresponding card types:

If you are filling out an online form, and you tell the form that you are swiping a Visa card, but the number starts with a 6, your form of payment will be rejected, because your card number is for a Discover card, not a Visa.

Your Account Number

Interestingly, your account number isn't all of the remaining digits. There are bank identifier numbers following the first number on your card, these are the numbers that indicate the bank, as well as the type of card you have.

With American Express cards, for example, the 3rd and 4th digits indicate whether you are dealing with a business card or a personal card, as well as the currency of the card.

Once you get past the bank identifier, then the account number starts. With Visa, MasterCard, and Discover, the credit card numbers are 16 digits long, and the 7th digit to the 15th digit is the account number. This leaves nine digits for your account number ' providing billions of possible combinations. With American Express, there are only 15 digits to the account number.

In this case, the account number starts with the 5th digit and runs to the 11th digit. There are more digits, 12 ' 14, that share the card number associated with the given account number. So, if you have multiple credit cards on your AmEx account, the 12th, 13th, and 14th digits would be different.

Check Digit

Credit card numbers also have what is known as a 'check' digit. This is the final digit of the card number. This digit is used in order to help decide if the overall card number is legitimate. There is a special algorithm used to help determine whether the card number is real or fake, and that final digit is an essential part of determining that information.

When you enter a credit card number wrong, the algorithm used will indicate that you have done something wrong quite quickly, and you will be asked to re-enter your information.

Sources: How Suff Works, MintLife Blog

4 High Rate of Return Investments to Add to Your Portfolio Today

Before you focus on high return investments, or investing of any kind, you should make sure you are not paying high interest on debts.

If you're paying more in interest on debt you owe than you can earn through investments, you're going to immediately lower your return on investment.

In other words ' the interest you save by reducing debt is higher than what you are likely to earn through investing.

For example, if you're paying 18% interest on credit card balances and will only receive 9% return on your best investment ' it's costing you 9%.

The first step to any investment plan should be to pay off all high interest debts.

If you are debt-free, or have only low-interest debt, you have some options for easy to manage high return investments, including high interest savings accounts, peer to peer lending services, starting a business, and low cost index funds.

Whichever methods you choose, you're best results will come from setting up automatic deposits for both saving and investing, according to a schedule you can comfortably afford.

1. High Yield Savings Accounts or Certificate of Deposits

It's a good idea to have about three to six months of living expenses saved in an emergency fund. You never know what's going to happen, and if you find yourself with reduced income or without a job ' this fund can save you from getting into debt or excessive struggling. (Make sure you track all of your spending with a budgeting tool like Mint.)

Online bank accounts generally offer higher interest rates than your local bank, and you also have the option of saving the money in a Certificate of Deposit although it's not as easy to take it out when you need it.

Yes, I know that this isn't very 'high' at the moment, but it does pay to shop around. I've seen cases where people have been able to get close to 2% with certain bank promotions while others leave it in accounts paying .15%. If you don't have a large sum, then it's not worth it to switch. But if you have a couple hundred thousand, keep your eyes out.

2. Lending Club Investing

Once you have money set aside for emergencies, you can look at peer to peer lending services, like Lending Club. Lending Club advertising a 9.64% average return on investments for people who lend money to other people through their site. Investing in peer-to-peer lending couldn't be easier: you can hand select your loans or just invest into a portfolio of loans.

3. Start a Business

For a successful business owner, a business offers a high return on investment opportunity. If you have skills that allow you to start a business selling products or offering services, you may find becoming a business owner offers the highest return on your investment of any other type of investing you could participate in.

Technology has made it possible for many business owners to start their business for very little financial investment. Chris Guillebaeau's best seller $100 Startup shares countless examples where unsuspecting entrepreneurs were able to make solid income without much capital up front.

Not sure what business to start? Here's a look at the top 13 small business ideas.

4. Invest in Low Cost Index Funds

Many people like to invest in long-term options, to avoid trying to figure out when to buy and sell short term equities.

If you prefer buy and hold investing over the ups and downs of the stock market trading, you might consider a service like Betterment.com which lets people invest in index ETFs for little cost.

The annual management fee of this site is between .3% and .9% of your average balance up to $25,000. You can get started with no minimum balance, no holding periods, no transaction fees and no other expenses.

Another option for the buy and hold investment philosophy is to use a program liked ShareBuilder that allows you to slowly grow your portfolio with consistent investments.

photo credit: scottwills

Tagged as: Ally Bank, Betterment, certificate of deposits, Discover Bank, EverBank, high return investments, high return investments for debt free individual, high yield savings accounts, ING Direct, Lending Club, lending club investing, low cost index funds, mint, Sharebuilder, start a business

The Top 3 Easy Ways to Avoid Overspending

Many people have a tendency to get sucked into paying late fees or other types of expenses that are unnecessary in daily life.

When I was younger and much more irresponsible (with a capital 'I'), I bounced checks, had overdraft fees, paid late charges on credit cards and movie rentals.

I was a mess!

I'm sure if I went back and tallied all the stupid charges I paid, I would probably be sick.

These small expenses can easily add up over the year.

Just think, paying ten dollars a month for a credit card 'fraud' safety program can easily add up to over $100 in a given year. (Yeah, got duped into that one too!)

If you are trying to stick to a budget, then here are some of the ways that you can avoid getting caught up in these expenses and put more money in your pocket.

1. Know What You're Paying For

When people take out credit cards, they often have no idea that certain costs may come attached to the credit card. You may be enrolled in a program that you had no idea you were participating in. Always read over your monthly credit card statements to make sure that you know exactly which programs you are paying for.

You may be enrolled in a fraud program that you do not even need. If you are already part of an identity theft safety program, then you have no need for the additional $10 a month fraud program from a credit card company.

I paid for one of these programs for several months before I finally caught on to what was up.  I immediately called the card company and protested.  I threatened to close my card and I was immediately refunded.

Had I not caught it, who knows how long I would have continued to pay it.

2. Avoid Banking Late Fees

The good news is that if you are caught with fees from you banking institution, you can probably negotiate your way out of the fees. If you had a few overdraft fees for the given month, you can protest the fees and see if they are waived. Otherwise, just try to avoid taking too much money out of your accounts.

Avoid the late fees that you can incur when you do not make timely payments on your credit cards. Your credit card company may actually charge you a certain percentage of the balance that you have as a 'late fee,' so these late fees can quickly become expensive.

3. Read Through Contractual Terms

Always read through the contractual terms when you purchase a major appliance. For home living, you may be able to use a Raleigh storage unit instead of paying more rent for a larger condo space. Make sure that you are not paying for any extended warranties that you do not need.

The biggest hit I took was on a gym membership when I was living on the west coast.  I had signed a 3 (maybe 5) year agreement without thinking twice about it.   It was too tempting because the monthly rate was only $19/month.

When I ended up moving back to the Midwest, they tried to come after me to pay for the remainder of the contract.   Luckily, the closest gym to me was more than 6 hours away and once again I was off the hook.

Lesson learned: Read the fine print.

When you are trying to cut costs in life, it is important to be aware of all of the ways that you can easily save money. Keep these tips in mind, and you will be able to successfully stick to a budget.

Carnival of Personal Finance #376 The #LifeAWARE Edition

Welcome the 376th Carnival of Personal Finance ' the #LifeAWARE edition.

With the life insurance movement taking place last week, it only seemed fitting to keep the movement going.

We had over 145 bloggers take part (see the complete list of #LifeAWARE participants) which shows how incredible the personal finance community is.

Mad hugs to all those took part. 

I thought it only seemed right to bring attention to some of the posts written for the movement.

Which was tough because there are some great articles this week!

Presenting the COPF'..

Editor's Picks

Beating Broke from Beating Broke presents The Life Insurance Movement, and says, 'I used to be on the fence about buying life insurance. But, here's the thing. I buy car insurance to help pay for damages to my car should I get in an accident. I've used that car insurance.'

Jason Price from One Money Design presents Why Is Life Insurance Important for My Family?, and says, 'Years ago something important happened in my life. I got married and it caused me to get serious about my finances. Getting life insurance was one of the top things on my list.'

Peter from Bible Money Matters presents 8 Reasons Why You Should Buy Life Insurance Today (And 2 Why You Shouldn't), and says, 'There are a lot of reasons why you should buy good term life insurance, and not put it off for another day. Let's look at a few of them.'

Robert from The College Investor presents Why Young Families Need Life Insurance More than Anyone, and says, 'Like the title says, young families need life insurance more than anyone else, and here's why, along with a few things to remember!'

Glen from Parenting Family Money presents Should You Buy Life Insurance for Your Child?, and says, 'Most people don't like thinking about life insurance and they are even more hesitant when it comes to a child. Buying life insurance for your child is something to at least think about.

Mike from Do Not Wait presents Should You Invest Your Money Into Life Insurance?, and says, 'We explain the pros and cons of life insurance.'

Best of the Rest

Adam Williams from Rabbit Funds presents Zombie Survival Guide: Are you ready for the pandemic?, and says, 'I decided to compile this emergency preparedness Zombie Survival Guide so that both you and I don't find ourselves being gnawed on by the undead.'

Bret from Hope to Prosper presents The High Cost of Planned Obsolescence, and says, 'Wednesday, I was walking my dogs around town and I noticed a couple of television sets abandoned in front of an apartment building. It got me thinking about how much money we spend on items that quickly become obsolete.'

Ray from Squirrelers presents Self-Insure Against Life's Biggest Risks, and says, 'Insurance can be a great thing, and a vital part of one's financial strategy. That being said, it also helps to 'self-insure', in the way that's shared in this discussion'

TTMK from Tie the Money Knot presents What is a Normal Amount to Spend on a Child's Birthday Party?, and says, 'When budgeting for a birthday party, how much is too much? This post discusses the seemingly runaway costs of kids' birthday parties these days, which goes counter to the notion of frugality!'

James Petzke from This Is Common Cents presents Dividend Paying Stocks: Stable, Profitable Investments, and says, 'Dividend paying stocks are an important piece of a stock portfolio, and their stable returns can be a liveable income with a big enough investment.'

Money Walks from Money Walks presents Getting Lots of Things for Free!, and says, 'Scouring the web for some good deals? Money Walks shares some of her tips for snatching up free goodies. '

D4L from Dividend Growth Stocks presents The Elite Dividend Stocks, and says, 'As investors in Dividend Growth Stocks, we want to limit our purchases to only the very best stocks. Our first step is to look at published lists of dividend companies such as S&P 500 Dividend Aristocrats, US Broad Dividend Achievers' Index and The U.S. Dividend Champions. In 2009, I devised additional criteria to apply to the Stock Ideas list in an effort to eliminate all but the Elite Dividend Stocks. Here is the additional criteria that I came up with, along with the companies that met the criteria''

Jim from Bargaineering presents America's Biggest, Most Expensive Homes, and says, 'We often think that the very rich live differently from the rest of us. And when you look at some of their homes, it seems obvious that they are a world apart. The homes of the super wealthy aren't just homes; they're practically works of art.'

Miss T. from Prairie Eco Thrifter presents How to Avoid Financial Disaster, and says, 'It's a sad and sobering thought, but ' it should be considered that some form of financial disaster is inevitable.

Clint from Accumulating Money presents Renting Versus Buying ' How to Plan Your Future in 2012, and says, 'Our economy is in an odd position. While many are still reeling from the massive 'loss' of equity in their homes as compared to the values in the mid-2000s, there is still be something to be said about the benefits of home ownership.'

Drew from Objective Wealth presents A to Z of Objective Wealth: F is for Free Markets, and says, 'Exploring the relevance of Ayn Rand's views on a free economy, in terms of both individual wealth and the potential success of the Objective Wealth blog. '

Darrow Kirkpatrick from Can I Retire Yet? presents Why Most Retirement Calculators Don't Work, and says, 'Most retirement calculators are broken. It's not that the user interfaces are confusing, or the inputs are rigid and lacking, or that they have bugs ' though many share those failings. No, the problems with most retirement calculators are theoretical, and go much deeper'.'

Justin from Saving Without A Budget presents Tips for Saving Money with Couponing, and says, 'Tips and tricks to save money at the grocery store'

Liana from Card Hub Blog presents Another Mobile Wallet? Are You Kidding?, and says, 'The latest in mobile wallets is a team effort from more than 12 of the nation's largest retailers. But does the new joint company ' Merchant Customer Exchange- have what it takes to climb the mobile wallet mountain and claim the crown as King?

Danielle from Budget SNOB presents Rental Insurance for Your Investment Property, and says, 'Helpful advice if you are considering investing in a rental property.'

Jay from Daily Fuel Economy Tip presents Can Debt Cause Health Issues?, and says, 'Protect your health by controlling your debt.'

Danielle from The New Business Blog presents Why Customer Relationship Management is Important for a Business, and says, 'Learn how to keep your customers happy when doing business. '

Jay from Money Saving Ethics presents The Answer To Your Cash Problems Can Be Helped WIth Personal Finance Control, and says, 'Can money really buy happiness?'

Danielle from Money Mishaps presents Personal Finance Talk That Anyone Can Understand, and says, 'Learn tips on how to save money opposed to mindlessly spending it.'

John from Wallet Blog presents Do You Know Your Mortgage Credit Score?, and says, 'So you're applying for a mortgage? Did you know that there is a special credit score used just for that? You better have a good record for paying your utilities on time.'

Investor Junkie from Investor Junkie presents The Cashflow Quadrant, and says, 'Our tax code is designed to favor investing and large businesses. This perfectly explains Mitt Romney's effective tax rate. It also explains why many high paid salaried employees get screwed with our tax system. It also explains why a company like General Electric (GE) paid only 2.3% in taxes in the last decade.'

Charles Davis from Wallet Hub Blog presents Is it time to Refinance Your Mortgage?, and says, 'We've all heard how mortgage rates are at record lows, but does that necessarily mean you should refinance? Hint: It's not as clear-cut of a decision as you might think.'

Ray @ Financial Highway from Financial Highway presents How to Make Money With Amazon, and says, 'There are dozens of different ways for you to make extra money online, and you don't need to spend any money on an expensive course to teach you how to do it either.'

Joe @ Excess Return from Excess Return presents Indexing with ETF or Mutual Fund?, and says, 'It is hard to argue against a strategy that produces a better return than most investment choices. If you want to invest using an index strategy, you with have two vehicle choices: ETFs or mutual funds. Each has its own set of advantages and disadvantages. How you invest will play a big role on which option is best for you.'

Boomer from Boomer & Echo presents Are You Counting On An Inheritance?, and says, 'Many boomers are not well prepared for their own retirements and are expecting an inheritance windfall to reduce their debts and provide an income.'

Eric from Narrow Bridge Finance presents Moving Past the Emergency Fund: The Liberty Fund, and says, 'In the past, I have written about the importance of an emergency fund many times, and have even given you updates on my progress to save up cash just in case. I have decided that am emergency fund is not good enough for my current situation, and I am saving up for something new I am calling a 'Liberty Fund.''

JLP from AllFinancialMatters.com presents That Keurig Coffee You Buy is Very Expensive, and says, ''

Money Beagle from Money Beagle presents Bigger Sizes Aren't Always Cheaper, and says, 'Don't always think the bigger box gives you the best value for your money.'

J.P. from Novel Investor presents What Are Target Date Funds?, and says, 'Target date funds were created as an easy way to invest for retirement. It's probably one of many options in your retirement account. But is it for you?'

Karl Marrion from WiseStockBuyer presents How to Find The Best Mutual Funds, and says, 'Dividends can be a big part of your portfolio over the long haul. So perhaps they are worth considering?'

Dan Meyers from Your Life Their Life presents 10 tips to stay in debt forever, and says, 'Most people unintentionally stay in debt forever, so here's a plan to do it intentionally!'

Money Thinker from Money Thinking presents Maybe We're Seeing Progress?

PK from Don't Quit Your Day Job' presents Revisiting the Employment-Population Ratio, August 2012 Edition!, and says, 'Coming back to the Employment-Population Ratio, which has been depressed since 2008 (that is, it is near numbers not seen since the 1980s)'

Bethy from Credit Karma Blog presents Why Did My Credit Score Drop?

Adrienne from My Dollar Plan presents How I Spend $0 on Kids Clothes, and says, 'Just in time for 'back to school' shopping time, some great tips for clothes shopping for kids!'

Everything Finance from Everything Finance presents Streamline the Path to Retirement, and says, 'The best way to approach retirement planning is one step at a time. You can do this by following these steps:'

Jacob @ My Personal Finance Journey from My Personal Finance Journey presents Who Manages Your Investments?, and says, 'This post provides the results and detailed analysis of the results of a reader poll on My Personal Finance Journey: Who Manages/Directs Your Investments?'

Andy from Saving to Invest presents 21 Signs You Are an Unmotivated (and Somewhat Unethical) Employee, and says, 'Here are 21 signs, in no particular order, that you are this type of employee.

Jim from Bargaineering presents 5 Summertime Tax Moves

Roshawn Watson from Watson Inc presents Getting Haters Out of Your Wallet, and says, 'It can occasionally hurt to have your budgeting efforts and progress minimized, ignored, or even dissed, particularly if the perpetrator is family or a 'friend.' Here are some key points to remember when people comment on the apparent disconnect between your financial plan and your consumption.'

Nicole from Nicole and Maggie: Grumpy Rumblings presents Personal Assistants and Other Outsourcing, and says, 'Nicole and Maggie discuss the often given advice to high earners to out-source household chores and other things in order to free up time to make more money or to enjoy life. It can be great when it works out, but don't forget to take into account that good help can take a lot of time to find.'

Glen Craig from Free From Broke presents Five Habits That Keep You From Achieving Your Goals, and says, 'We may say we have certain goals we want to achieve but saying it doesn't mean it will happen. See five habits that will keep you from achieving your goals.

Sean Smart from Growing Money presents 5 Essential Financial Tips for 2012.

FMF from Free Money Finance presents My Process for Determining a Suitable Rental Property, and says, 'In a recent post I gave the background on how I've decided to invest into rental real estate. In this article I will detail the process I go through in determining whether or not a property is a suitable fit for me. I've only progressed far down this road a couple times, so my process may change/mature as time goes on.'

CF from The Outlier Model presents Fiverr should be called fourer, and says, 'Fiverr is a great peer to peer marketplace where you can buy and sell goods and services for $5. Sounds great, but as I recently found out, there is a hefty service fee''

Dividend Growth Investor from Dividend Growth Investor presents The Live off Dividends Retirement Plan, and says, 'Dividend stocks provide investors with a stable and dependable stream of income which maintains its purchasing power. In addition, this income source is tax efficient and could last for life and even be available to pass on to future generations. '

Mike from The Financial Blogger presents If You're Willing to Spend Thousands of Dollars on College, Then', and says, 'Are you a hypocrite about money? We look at investments worth spending money on.'

Pierre from Intelligent Speculator presents There Is No Such Thing As A Free Lunch, and says, 'Is there ever a free lunch life? Not really.'

Martin from Studenomics presents Not Sure How to Pay For College? We Have The Answers Here, and says, 'I show you exactly how to pay for college without using student loans.'

The Life Insurance Movement ' Over 145 Bloggers Doing Their Part for #LifeAWARE

Here's a list of all the #LifeAWARE participants. Over 115 and growing!

How do you top a Roth IRA movement that gets tons of the top personal finance bloggers all to write about the same topic on the exact same day?

Duh! You pick a different topic and you do it again.

Or known on Twitter as #LifeAWARE.

For an explanation that includes me breaking it down to Usher, watch the video below.

Can't see video? Click here to watch it.

What Inspired #LifeAWARE?

I've always been passionate in making sure that families have the right amount of life insurance coverage.  Between school plays, soccer games and that little thing called 'life', many families neglect to get the right amount of coverage.  Or worse ' have no coverage at all!

In fact, it's estimated that 35 million households don't have any life insurance.  Did you catch that?

They ain't got nothing!

35 million households are batting .000 on their life insurance.

For those that do have life insurance, it's estimated that 58 million households feel they don't have enough.

Now do you see the point of #LifeAWARE?

I've Seen the Pain of Not Having Enough Life Insurance

In my announcement post of the life insurance movement, I shared the story of two widows.

Both were emotionally drained with losing their life partner prematurely.  Life insurance doesn't bring them back. What life insurance does is help make life more manageable after they are gone.

For one of the ladies, she'll never have to worry about money ever again.  She's financially stable and her finances will be the last thing she'll stress about.

Unfortunately, the other is left scrambling to figure out how she's going to pay the bills, manage her debt, and if she'll ever really be able to retire.  Why the difference?

Her husband was part of the 58 million that did NOT have enough life insurance.

What makes the above story so sad is that it could have and should have been avoided.

2 Common Mistakes to Avoid

There are going to be plenty of awesome posts joining the #LifeAWARE movement that share their personal reasons why life insurance is important to them.   I don't need to inundate you with more of the same.  I did want to leave you with the 2 common mistakes I see when people do buy life insurance.

1. Don't Buy Enough

Face it.  $100k of life insurance is probably not going to be enough life insurance coverage to take care of the house, the cars, the kids, and the debt if something happens to the breadwinner of the family.   I've talked to so many young couples that only have a $50k whole life policy and think they are good.   News flash: you are not.

If you're not sure how much insurance you need to buy, use this nifty calculator to help you figure it out:

2. Buy Insurance Through Work.

This one might be a surprise to many. Why is this a mistake?

Think about it. The average person changes jobs 5-7 times in their career. What happens to your life insurance when you change jobs?

Hint: Just like your old boss, it does not come with you.

That's right. When you change jobs you're at the mercy of your new employer to offer insurance. If they don't, then you'll have to go buy through a third party like an independent insurance agent. Which, you should do from the beginning to avoid this type of situation.

Do you know how many people I've talked to that can't leave their job because they now have some medical condition that prevents them from getting life insurance anywhere else?  Too many.

Go out and buy a 30 year term policy and you've locked in coverage for 3 decades. You can change jobs 15 times in your career and you'll never have to worry about applying for life insurance again.

Review Time

If you haven't reviewed your life insurance in a while, it's time. No more putting off waiting for the 'right time'.

Now is the right time. Your family will thank you for it.

Support the Movement

Are you passionate about making sure others know the importance of having life insurance? If so, we need your help!

Help spread the word and get a chance to win some awesome prizes. Below you'll find a Rafflecopter widget that gives you plenty of ways to bring attention to what #LifeAWARE is all about.

a Rafflecopter giveaway

Life Insurance Erases the Worry

As far as the participation of #LifeAWARE, a blog movement focused around bringing awareness to the importance of life insurance, was a success, it has to be more than that.

Bringing awareness means nothing if the intended audience, the 58,000,000 households, who are under insured do nothing about it.

Then the movement becomes nothing more than just a cool thing that people talk about.

We've all heard the reasoning behind the importance of buying life insurance.

Usually that advice is being pushed down our throats by insurance agents and commercials on TV.

Until you actually hear a personal story of how life insurance made a difference, how life insurance made a huge impact on individuals lives it doesn't really hit home.

Before I share a personal story of someone that contacted me because of the movement I wanted to point out a few of the articles that I've found and also share the personal story.  These stories are not only touching, but they're also a reinforcement of why I did the #LifeAWARE movement.

•  Love of family and home, Life Insurance Movement'.#LifeAware: Sharing a personal story about how life insurance played an intricate role in our family.
•  Tara Newby, Life Insurance is a Gift!: My two little boys and i lost our husband and daddy but we were given the gift of Life insurance!!! Protect your family too!

Both of those are very touching reads.  Please check them out.

And now the touching email that was sent to me.

******

After a year-long battle with cancer, my husband passed away in 1995.

I was 45 years old with 2 children, ages 11 and 16.

I do want to clarify that I am a college graduate and was a high school teacher making a decent salary.

My job meant I had health insurance and security.

However, our life insurance policy gave me more than all that.

Our Life Insurance is so Much More

Our life insurance policy meant that I could have a peace of mind about providing for my children.

Our life insurance policy meant that I could continue to provide the same lifestyle that my children had prior to my husband's death.

Our life insurance policy meant I could put two children through college, so that they could graduate debt free with no student loans.

Our life insurance policy meant that I could buy a car for each child. Our life insurance policy meant that my children could enjoy their lives without financial fretting from their mom.

Our life insurance policy meant they could do the things that my husband and I would've provided had he been alive.

Our life insurance policy allowed my children and me to live our lives, not just survive our lives.

Erasing Worry

Please understand that it was very difficult to raise two children who missed their dad every single day, in addition to my own sense of loss. It is beyond devastating to lose your spouse and for children to lose their father.

But ' having life insurance meant I did NOT have to worry about MONEY.

I canNOT imagine in my wildest dreams the burden this would have been had we not had life insurance.

The Life Insurance Movement ' Over 115 Bloggers Doing Their Part for #LifeAWARE

How do you top a Roth IRA movement that gets tons of the top personal finance bloggers all to write about the same topic on the exact same day?

Duh! You pick a different topic and you do it again.

Or known on Twitter as #LifeAWARE.

For an explanation that includes me breaking it down to Usher, watch the video below.

Can't see video? Click here to watch it.

What Inspired #LifeAWARE?

I've always been passionate in making sure that families have the right amount of life insurance coverage.  Between school plays, soccer games and that little thing called 'life', many families neglect to get the right amount of coverage.  Or worse ' have no coverage at all!

In fact, it's estimated that 35 million households don't have any life insurance.  Did you catch that?

They ain't got nothing!

35 million households are batting .000 on their life insurance.

For those that do have life insurance, it's estimated that 58 million households feel they don't have enough.

Now do you see the point of #LifeAWARE?

I've Seen the Pain of Not Having Enough Life Insurance

In my announcement post of the life insurance movement, I shared the story of two widows.

Both were emotionally drained with losing their life partner prematurely.  Life insurance doesn't bring them back. What life insurance does is help make life more manageable after they are gone.

For one of the ladies, she'll never have to worry about money ever again.  She's financially stable and her finances will be the last thing she'll stress about.

Unfortunately, the other is left scrambling to figure out how she's going to pay the bills, manage her debt, and if she'll ever really be able to retire.  Why the difference?

Her husband was part of the 58 million that did NOT have enough life insurance.

What makes the above story so sad is that it could have and should have been avoided.

2 Common Mistakes to Avoid

There are going to be plenty of awesome posts joining the #LifeAWARE movement that share their personal reasons why life insurance is important to them.   I don't need to inundate you with more of the same.  I did want to leave you with the 2 common mistakes I see when people do buy life insurance.

1. Don't Buy Enough

Face it.  $100k of life insurance is probably not going to be enough life insurance coverage to take care of the house, the cars, the kids, and the debt if something happens to the breadwinner of the family.   I've talked to so many young couples that only have a $50k whole life policy and think they are good.   News flash: you are not.

If you're not sure how much insurance you need to buy, use this nifty calculator to help you figure it out:

2. Buy Insurance Through Work.

This one might be a surprise to many. Why is this a mistake?

Think about it. The average person changes jobs 5-7 times in their career. What happens to your life insurance when you change jobs?

Hint: Just like your old boss, it does not come with you.

That's right. When you change jobs you're at the mercy of your new employer to offer insurance. If they don't, then you'll have to go buy through a third party like an independent insurance agent. Which, you should do from the beginning to avoid this type of situation.

Do you know how many people I've talked to that can't leave their job because they now have some medical condition that prevents them from getting life insurance anywhere else?  Too many.

Go out and buy a 30 year term policy and you've locked in coverage for 3 decades. You can change jobs 15 times in your career and you'll never have to worry about applying for life insurance again.

Review Time

If you haven't reviewed your life insurance in a while, it's time. No more putting off waiting for the 'right time'.

Now is the right time. Your family will thank you for it.

Support the Movement

Are you passionate about making sure others know the importance of having life insurance? If so, we need your help!

Help spread the word and get a chance to win some awesome prizes. Below you'll find a Rafflecopter widget that gives you plenty of ways to bring attention to what #LifeAWARE is all about.

a Rafflecopter giveaway

How Much Life Insurance Do You Need For Stay At Home Mom or Parent?

With the arrival of our second child, my wife and I have revisited how much life insurance we need.

Then we had our third son, and she quit her job, so now we're trying to determine the amount that we need on her to make us comfortable.

We're very fortunate in the sense that her parents live close to us and are willing to watch our kids when we need them.  (Thank you Papa and Gigi!)

Any parent can easily recognize what a great economic benefit that is, in addition to an emotional benefit.  Some parents either need to stay at home to raise their children or they choose to.

For those that do decide to be a stay at home parent, that doesn't mean that life insurance is not needed for them.

Stay at home parents are often multi-taskers who cook, clean, do the laundry, pay the bills, go grocery shopping and more yet they are traditionally undervalued. My wife even helps with my blog and edits my videos! 

Imagine how much money a stay at home parent would make if they were paid for their work.

Stay at Home Mom's Salary

Replacing the contributions of a stay at home parent would be very expensive, especially considering the number of years it takes to raise a family. If we take the $115,432 average annual compensation over 20 years, the economic benefit provided would be $2.3 million. As you can see, this is why it makes sense to consider life insurance for the stay at home spouse.

Life insurance can greatly benefit a family going through the very difficult period of adjustment after the loss of a parent and beyond.

When calculating how much life insurance coverage a family should purchase for a stay at home spouse, look at how much it would cost to pay others to perform functions currently handled by them.

When I think about some of the services that my wife performs they include being a nanny, a chauffeur, cook, house keeper, tutor, nurse, and bookkeeper.

In addition to having to pay for help in these areas, a family that has lost a parent may also have an increase in other expenses.  I know if my wife were not here, I would be destined to eat out more and buy more expensive convenient foods.  That's not including the laundry and cleaning the house.

I, like most other men, would be hurting.

It's likely that most couples haven't thought through the potential repercussions of not covering the stay at home parent with life insurance. But, as you can see, taking life insurance out for the spouse that works at home is equally as important as taking out insurance on the main bread winner.

How Much Life Insurance Do You Need

The amount needed for a stay at home mom will depend greatly on your geographic location, number of children you currently have and expect to have, the breadwinner's salary and job security, and the overall health of that parent.  As a reference, you can check out a recent post I wrote that discusses how much life insurance you need to buy.  As stated in that post, be sure to get several quotes from different carriers and be sure to stick to term life insurance.

Losing a Loved One

We need to realize that losing a parent is difficult enough and adding financial hardships to the mix can make it much more painful. Life insurance coverage can help insure that the surviving parent would not be forced to work long hours or to take a second job to pay the bills.

But instead, put more focus on managing the household and caring for the children during a critical time in their life. By assessing your specific requirements and preparing accordingly, you can help yourself make the proper life insurance decision so that the rest ' so they can rest easy knowing that family financial needs be met well into the future.

photo credit: kylesteed

Tagged as: life insurance amount, life insurance stay at home mom

How to Save Money on Professional Conferences

Deciding whether or not to go to a professional conference can feel like a terrible Catch-22.

On the one hand, the connections and skills you gain through conferences can give you a big leg up on your career.

On the other hand, the price tag for the conference, travel, lodging, food, and other associated costs may be prohibitive, especially for freelancers and other independents who can't ask the boss to foot the bill.

Luckily, it is possible to cut down the costs of attending a conference.

Whether your company has cut the conference budget or you are just starting an independent career, here are some ways to keep conference costs low while still taking advantage of the opportunity to network:

1. Be an early bird.

Many conferences offer discounted prices for those who purchase their tickets within the first few weeks that they are on sale. Just stay on top of your industry news, so you know what conferences are scheduled and when.

Even if you miss the cutoff date for the early bird pricing, you may still be able to get a discount. Many conference organizers will offer discount codes on sites like Mashable and Meetup to help keep the event affordable for 'smaller fry' attendees.

2. Speak at the conference.

Conferences are always in need of speakers and panelists to offer insight and expertise to the attendees, and so speakers not only receive complimentary attendance, in a few cases they will also get paid. If your goal is to increase your visibility in your field, you can't ask for a better opportunity than to speak to your peers.

Editor's note: I can vouch for this! I'm speaking at FINCON and at the Financial Planning Association national conference this year and doing so had landed me a free conference ticket. I was even able to get my airfare and hotel paid for on the latter one. How? I asked.

3. Take advantage of group rates.

If you need to stay at the conference's hotel, make sure you ask about group or discount rates for conference attendees. These events are generally held at fairly large and expensive hotels, so discount rates can save you a bundle. In addition, rooming with other attendees is a good way to lower your lodging costs and possibly make new friends and connections in your field.

4. Don't stay at the hotel.

If staying at the hotel on a discounted rate and with a roommate will still strain your budget, remember that you do not have to lodge there just because it's where the conference is. While staying elsewhere might curtail some of your time to network (or party), it can also save you enough money to make it possible to attend.

Search for local hotels with cheaper rates, or stay with a friend or family member who lives in the area. You could also find a local resident who is willing to let you stay on their couch or in their guest room through such websites as airbnb.com and couchsurfing.com.

Another possibility on hotel savings is to only attend local conferences that you can reach from home. This will not only save you money on lodging, but also on travel and food costs.

5. Take advantage of the meals.

Most conferences will offer lunch, and many will offer breakfast as well. Add in the provided snacks and the free food handed out by exhibitors, and you should be able to eat pretty well while you're there, and even throw a couple of pre-packaged snacks in your briefcase for later in the day. Those will be helpful when hunger hits after hours and you're tempted to order a pizza to your hotel room.

The Bottom Line

Don't lose out on opportunities to grow your career because of the cost of professional conferences. By using savvy money strategies, almost anyone can afford to attend.

This guest post comes from Jason Topp of  One Money Design.

Get to Work

Do you have trouble keeping a job?

If so, I might have found the document series for you.

The Sundance channel is releasing a 8 series documentary titled 'Get to Work' that walks you through a 'boot camp' like training program to get people the skills they need to get a job and keep it.

Filmed in San Diego, the documentary follows a program named 'STRIVE' which is a program designed to train students within four weeks and get them into a paid job as soon as possible.  STRIVE's goal is to extinguish any of the emotional barriers that are preventing you from getting work.

If you could attend a 4 week program that would get you the job you need (and help you keep it!) would you be interested?  Exactly.

What amazed me about the program is that they have the numbers to back it up.   Since its founding in 1984, STRIVE has graduated nearly 50,000 individuals from its core training programs across the country, with over 3,000 graduates and over 2,200 graduates placed into jobs in 2011. Notably, many of the STRIVE instructors are graduates of the program themselves.

What I loved about the documentary is that it reminds me a lot of basic training.  The program seems to test people and push them to their limits.  Most of these people have no jobs, no direction, and seemingly no chance. It's a high-stakes make-or-break moment and, for most of the students, this is their last crack at a real future. But it doesn't come easy: as they push their students to learn workplace skills that will land them a job, the instructors contend with those who have never learned anything other than bad attitudes and bad behavior.

If you've struggled holding a job down, this might be the series you need to watch to get your butt in gear. Check out the Sundance Channel this month for the premiere.

How To Make Money Management Stress Free

For most of us, stress and financial matters seem to go hand in hand.

For the vast majority of people that I speak to, the thought of bank balances and interest rates, limited incomes and mandatory deductions is enough to bring them out in a cold sweat.

And it's hardly surprising when you consider the current economic condition we've been plunged into!

Whilst the pomp of the Olympic Games might be doing something to help us forget about our dwindling finances, the fact remains that personal money pots are shadows of their former selves.

Managing your money has therefore become a prime concern and, as a financial advisor, it is something I routinely offer guidance on.

While I can promote the benefits of choosing the right savings account till I'm blue in the face, what you really want to know is how to make money management stress free.

Well, here's how:

Track payments

The fundamental part of any form of money management is tracking payments and transactions. Despite this basic fact, you would be surprised at the number of people I speak to who fail to keep a record of what their money is doing.

Whilst some may claim 'ignorance is bliss', when it comes to your money nothing could be further from the truth. If you have no clue where your spending your money each month, it will eventually catch up with you.  This means keeping invoices and receipts and marking them off of bank statements each month as well as keeping a track of all monthly outgoings and incomes.

Interest rates should inquired about when possible so that you know exactly how much you're earning on investments or repaying on credit.

Ultimately, knowledge is power and the more you know about your finances the more control, and the less stress, you'll feel.

Budgets are sexy!

Budgets are in, but don't just take J. Money's from Budgets are Sexy's word for it. There has to be some form of monitoring where you're money is going.

Of course, watching what your money is doing is not enough and you need to take proactive steps.

The easiest way to make money management stress free is to budget responsibly ' this means setting an attainable amount of money to live off.

I've lost count of the number of people who have spoken to me about their overly optimistic goals with regards to money.

In an ideal world it would be great to save more than 50% of your wages, the truth is that this will never be a reality. (Please prove me wrong).

It's hard for me to convince people to save at least 20% towards retirement!

To reduce your stress levels, set your sights in reality and alleviate the pressure you've placed upon yourself.

Looking for an easy way to budget that's actually cool?  Take a look at You Need a Budget (YNAB).

Seek advice

Just because you're dealing with personal finances doesn't mean you have to deal with them alone. Seeking advice is highly recommended (well, it is my profession after all) and even I use the expertise of others to ensure I offer the best guidance.

For anything IRA related, my first and only stop is Ed Slott's IRA forums.  I've ventured there with the most complex IRA questions and have always left with the answer I needed.

If I've ever needed greater clarification on credit scores, Phil Tirone from 720CreditScore.com is my go to guy. Period.

If I need an update on the latest insurance market news then Lloyds of London is another great resource.

The point is: don't go at it alone. 

Focus on your strengths and align yourself with the experts or resources that you need to handle the rest.  The result?   A whole lot less stress in your life. 

Do You Need Renter's Insurance?

One of the mistakes that many non-homeowners make is the idea that they don't need some sort of insurance for their dwelling. Many renters neglect to pay money for renter's insurance ' and end up regretting it.

I originally thought that renter's insurance was unnecessary as well. As newlyweds in an apartment, my husband and I didn't even consider renter's insurance. When we asked an insurance-agent friend about auto and life policies, he said that we should get renter's insurance as well.

It seemed a little strange to us, but he explained that renter's insurance was a good choice.

You Have More than You Think

First of all, we discovered that we had more than we thought. We didn't think that, as college students, we had much in our apartment worth insuring. The truth, though, is that we had more than we thought. We had a TV, and a TV nice TV stand. We had a bed. And, of course, we had a computer. There were various other items as well. We were surprised that, even though most of our possessions were fairly modest, it still added up to more than $2,000 to replace everything. And we knew that we would soon be adding baby items to the mix, boosting the cost of replacement.

That amount seems rather modest right now, years later, but at the time, living off wedding present money and student loans and grants, the idea of replacing more than $2,000 worth of stuff was horrifying.

Landlords, of course, have insurance to protect them. But the protection the landlord receives doesn't cover renters. If you want the contents of your apartment to be protected in the event of a disaster, you need to get the coverage yourself. Renter's insurance can be just the thing.

Renter's Insurance Isn't Very Expensive

One of the great things about renter's insurance is that it doesn't cost very much. You can get decent coverage without cheaping out.

For a few dollars a month, you can cover the cost to replace the contents of your rental home or apartment.

It's well worth it, especially if your rental is full of electronic gadgets.

Additionally, in many cases your insurance agent can get you a tri-line discount with the help of renter's insurance. Combine renter's insurance with your auto insurance policy and life insurance policy, and you could get a discount for having multiple policies with one company. That could save you in more premiums, while at the same time providing you with the peace of mind and protection.

Renter's insurance is a must for most people. Add up how much it would cost to replace the items in your rental, and then determine whether or not it would be easy to pay the cost of replacing those things. If you know that you would be overwhelmed with the costs, ask about renter's insurance. It's usually worth the money, and if a catastrophe ruins your rental, you'll be glad that you have the insurance money to help you replace your stuff.

4 Super Easy Ways to Reduce Your Credit Card Debt

Have you struggled with credit card debt and finally had enough?

I can relate. In college I foolishly charged almost $10k on several credit cards and bought a bunch of crap.

It was beyond ridiculous.

Luckily, I meant my soon to be wonderful wife and she helped me to realize the error in my ways.

Together we developed a plan and in a few years, I was completely debt free. Holla!

If you struggle with credit card debt, here are 4 easy ways you can reduce that debt today.

It's Party Time! Retirement Style.

You're invited to a party. And this party is all about retirement! *happy dance*

Ed Slott, known as the 'IRA guru' is hosting a retirement planning education party on his site next Tuesday, August 14th.

For those of that don't know, Ed's IRA Forums are one of the best kept secrets on the web. If you have a complex question regarding anything about an IRA, you'll get your answer in his forums. And the best part'.it's free!

I've used his forums several times to get answers to complex questions situations ranging from Roth IRA conversions to highly appreciated stock in retirement accounts. I've never had a situation that they didn't have the answer to.

Now do you see why you should be excited about the retirement planning education party?

Here's the details

If you're wanting sound, practicable information, be sure to RSVP here.  Here's some more info about the event:

• LIVE chats with an industry media member and an Ed Slott and Company IRA Technical Consultant
• Important IRA information and a video update from Ed Slott
• Discounted Products and a FREE download
• Sweepstakes Winners Announced! Yes, free prizes!!

Be sure to RSVP today!

 

Credit Card Hacking with App O Rama: How to Receive Thousands of Airline Miles and Cash Bonuses

When Kevin first approached me about the idea of writing a post and conducting a personal case study on himself about 'App O Rama', I had no idea what he was talking about. After a brief explanation, I was intrigued'very intrigued.

Why? 'Cause I'm all about hacking certain strengths to achieve real and quantifiable benefits.

I hate credit card debt, but I use a credit card for everything I buy. We pay it off each month, collect our reward points (usually cash) and we're on are happy way.

If you are responsible enough, credit cards are not evil.

To me, App o Rama is taking it to the next level. What's it all about? Read on to find out'.

Fair warning: I'm about to take most things you know and love about your credit score and turn them upside down. Please buckle up, it might be a bumpy ride.

Your credit score is precious.

It is something to be loved, cherished, and above all' protected at all costs. (Or at least' most costs.) We put it into a high security vault and make sure nothing ever touches it. We pay off our debts, set up automatic payments, and do whatever possible to avoid foreclosure and bankruptcy.

Personal finance bloggers, financial planners, and pundits all love to heap praise upon the mighty credit score. Your credit score is the thing that can rescue you from thousands in errant interest payments and help your refinance to lower your costs. It's one of the things people in debt most worry about. That's why you see a ton of articles out there about how to improve your credit score.

And that's great. Most people simply don't understand how much of an impact their credit score can have on their life.

But your credit score has a limited shelf life, right? Once you've got your finances on the right path ' out of credit card debt, saving money to pay cash for your next vehicle, and so on ' and you're into a long term home with a long term mortgage, the value of your score goes down tremendously.

Because if you've got your mortgage locked in and have no need for any other type of loan in the future' what good is your credit score to you?

Keeping it locked up in the vault isn't doing you any good. So let's release the power of your credit score for your own gain.

Today I'm going to show you how to profit from wisely using your credit score after you no longer have a use for it.

Ready?

It's called doing an App-o-Rama.

What is an App-o-Rama?

You've gotten junk mail in the past for credit cards with sign up bonuses in the past, opened them, and promptly shredded them. You have no need for evil credit cards, right?

But you're throwing away potentially hundreds of thousands of airline miles, hotel points, and big cash back bonuses when you do that.

You might be interested in some of the offers, but you know that opening up a new credit card every month will have a detrimental impact on your credit score. (Which it will ' don't do it.)

That's where an App-o-Rama or AOR comes in.

You apply for the cards all on the same day to avoid the credit card companies seeing all of the inquiries from your past applications. (If you waited a few weeks in between, the old inquiries would be on your credit report when you applied for the new cards. This might lead to denials of your application.) It also helps to have all of your inquiries hit on the same day in terms of the impact to your credit score, just like you would apply for a car or home loan on the same day with multiple lenders rather than spacing it out over a 30 day period.

How Does an AOR Work?

You're probably thinking this:

'Wait, so you're telling me you intentionally apply for a ton of credit cards all on the same day?'

Yes.

Absolutely yes.

Here's how it works:

Identify the Best App-o-Rama Credit Cards

First you need to know what cards you want to target. As you can imagine with the amount of junk mail you get, there are a lot of offers to consider.

It is usually easiest to break it down into what you need:

• Some people want 0% balance transfer with no fee (or minimal or fixed fee) to transfer huge balances to
• Others want to rack up as many airline miles as possible so they can travel for practically free
• And others want to get as many cash back bonuses (or points that can then be converted to gift cards) as possible
• Lastly, you can mix all of these together depending on your needs

Have a Plan to Meet the Minimum Requirements

Each of the cards you select will have a spending requirement in order to receive the bonus. Once you know which cards you want to target, tally up what your spending requirements will be in a given period of time. You might have one card that needs you to spend $1,000 in 3 months and another that requires you to spend $3,000 in 4 months.

Know how much you need to spend to hit the minimum requirements in order to get the bonuses. If you have so many cards that you will never be able to meet the requirements there is no pointing in having those cards in your AOR. Save them for a future date so you can get another bonus in the future.

Tally up how much you'll need to spend: let's say it is $5,000 in 4 months (with $1,000 of that being in 3 months). You need to then have a plan on how you're going to meet those requirements without buying stuff you don't need. If your regular spending won't cover everything you might have to find some creative ways to meet credit card minimum requirements. (I'll give you some ideas on this in the future.)

Clear Your Browsing Data

This is really important. Make sure you clear your browsing data ' cookies, history, etc. ' just to make sure there isn't an old cookie in your internet history that ties you to an old credit card offer or bonus. You want to make sure you have the most recent offer available.

Apply for Cards at the Same Time

Once your browsing data is clear, it is time to open up the links to the credit card applications. You will rarely need to wipe your data in between applications, and if that's the case you should know it. (For example, there is one card that is offered both as a Visa and an AMEX where you need to do this.)

Type in all of your information on all of the applications, then verify, verify, verify. If everything looks good, click apply on all of the applications.

Sometimes you receive an immediate response ('You've been approved!') and sometimes your information is sent in for manual underwriting. You may get a 'ding' letter that says you've been denied a few days later; if so, there is a number you can call for reconsideration.

If you've got stellar credit history (and a great credit score to go with it) and kept to the 2 (or 3) card max per issuer, you should be fine.

Receive, Activate, and Set Up Automatic Payment on the Credit Cards

This is another really, really important step. If you get credit cards for the purpose of earning bonus miles, points, or cash you will greatly diminish the value of your efforts by paying interest and fees to the credit card company.

Here's how to avoid that problem.

About a week later you will start receiving your cards in the mail. Make sure you keep all of the paperwork and call the number that is on the activation sticker on the card. As soon as you activate the cards, you need to do two things:

1. Sign the back of each card

2. Go to the credit card company's website, open an account (or add the card to an existing login), and setup automatic payment of the credit card bill.

We don't want that.

So set up automatic payment of the bill for the full statement amount on the due date. (And make sure you check on the first due date just to make sure everything went smoothly.)

Start Spending to Meet Requirements

Now you've got a handful of shiny new credit cards all waiting for you to hit a spending requirement before they'll pay out those bonuses you want. You have a plan in place from the above steps on how you're going to meet those requirements without going into debt or buying stuff you don't need. Get going ' the clock is ticking.

Which Credit Cards are Best for an App-o-Rama?

We plan to share with you some of the top cards to target for an App-o-Rama each month. We'll dive into specifics on why the cards are the best five that month.

Until then, here are two cards to consider:

1. Chase Sapphire

2. American Express Starwood Preferred Guest

Stay tuned until the next post for more on App o Rama!

Tagged as: American Express Starwood Preferred Guest Credit Card, AOR, App-o-Rama, Bonus Cash, Bonus miles, Bonus points, Chase Sapphire Preferred Credit Card, Credit history, Credit Score, Minimum requirements, Spending requirements