By Terry Savage, The Street.com

Some life insurance policies are starting to haunt the living. Three years ago, I said “premium financed” policies were “not exactly a scam, but dangerous.” Today that warning seems like an understatement.

More than $20 billion of these so-called “spin life” insurance policies have been sold and now they’re starting to implode. Many policy holders don’t realize the trouble they face.

The concept seemed straightforward when sales were rampant several years ago. Agents promised clients that investors would lend them money to pay the premiums for the first two years, until the policy was past the “contestability period.” Then the policy would be sold to an investor, who would continue to pay the premiums, hoping to collect on this “bet” on the senior’s longevity.

Agents were encouraging elderly people to buy huge life insurance policies on themselves, even though they didn’t need the insurance, and couldn’t afford the premiums.

Why would any person let a stranger become the owner of a policy on his life? The answer is simple: money.

Pre-death bonus: Seniors were tempted by upfront “bonuses” that ranged from thousands of dollars to expensive cruises just for letting the investor bet against the insurance industry’s mortality tables, and eventually collect the policy proceeds. And they were promised more money when the policy was sold.

At first, there was no risk to seniors. The loans to pay the premiums were “non-recourse.” However, three years ago, insurance companies decided that customers needed to guarantee at least 25% of the premium. The insurers potentially sensed problems brewing, but still wanted to sell policies.

Sales agents collected fat commissions by convincing seniors there was no risk. Household names in financial services were raising money to buy these policies, betting they would pay premiums for a few years and then collect on death. Among them were LaSalle Bank (now part of Bank of America (Stock Quote: BAC)), Credit Suisse Group (Stock Quote: CS) and funds managed by Berkshire Hathaway (Stock Quote: BRK.A) and Goldman Sachs (Stock Quote: GS).

Death bet gone wrong: Then came the credit crunch. Demand for the policies dropped as investors struggled to borrow. When the two-year premium period expired, the insured expected brokers to sell the policies, allowing them to collect their bonuses. But there was no money to complete deals.

Suddenly, seniors faced premiums on insurance they didn’t need and couldn’t afford. It wasn’t unusual for a senior to take out a $5 million policy, citing estate tax purposes. The premium on that policy could be $200,000 a year.

Sure, they could stop paying premiums and drop the policies, but most had signed documents agreeing to repay at least 25% of the first two years of premiums, plus interest. At the end of two years, the senior would owe $100,000 plus interest, adding another $6,000 to the tab.

Forgiven loans taxed: If the senior manages to pay off the guaranteed amount, plus interest, the lender will “forgive” the balance and additional interest. However, the policy holders will owe taxes on the forgiven debt.

If $300,000 plus $18,000 in interest was forgiven, a senior in the 35% tax bracket would owe an additional $100,000 in taxes on this phantom income.

Marc Sheridan and Don Tolep of Sheridan Wealth Advisors in Bay Harbor, Fla., say they’re seeing more seniors facing financial ruin with these loans. They say the Internal Revenue Service might be collecting as much as $1 billion in taxes on this income.

It’s estimated that more than 10,000 of these “spin life” policies were sold in recent years. It looked like easy money for those willing to “share” their insurable capacity. Now they’re learning an expensive lesson. And that’s the Savage Truth.

By MainStreet.com Staff Writers

Getting older means dealing with a number of different issues you never had to before. One person that can help you handle those issues is an elder care attorney. Elder care attorneys specialize in issues that specifically pertain to seniors and their families. Whether or not you need the assistance of an elder care attorney depends on your and your loved ones’ needs and resources.

Elder care attorneys specialize in a number of different areas. Here are some of the things and elder care attorney can help you with:

1. Estate planning: Creating last wills and testaments as well as living trusts to plan the distribution of your estate after your death.

2. Oversight and administration of an estate: An attorney can serve as a personal representative or executor to manage how a will or trust is carried out.

3. Insurance claims and settlements: When disputes arise with insurance companies either for health insurance, long-term care insurance or life insurance, an elder care attorney can help advocate for you.

4. Medicare, Medicaid and Social Security benefits: If you or a loved one is denied these benefits, an elder care attorney can argue your case.

5. Drafting and reviewing certain legal documents: An elder care attorney can provide assistance with durable powers of attorney, advance directives and other legal documents.

6. Legal guardianship: An elder care attorney can help you designate who will make decisions for you if you become incapacitated. Your attorney can also help you create a living will to make sure your wishes in regards to life-saving medical treatments are known.

7. Elder abuse and neglect issues: If your loved one has been abused by an assisted living facility or home health care worker, an elder care attorney can pursue legal remedies.

8. Long-term care concerns: Elder care attorneys can provide valuable assistance in managing the long-term care needs of elderly clients with illnesses and/or disabilities. Those suffering from Alzheimer’s disease and other degenerative diseases, for example, can benefit from having an elder care attorney to help manage their finances and long-term care arrangements.

With more and more baby boomers entering retirement, the elder care legal specialty is growing. Finding an elder care attorney is not as difficult as it once was, but you still need to do your due diligence. Most elder care attorneys do not focus on all of the subjects that fall under the purview of elder law. It’s best to find an elder care attorney that is experienced and well versed in the specific area that pertains to your needs.

The best way to find a good elder care attorney is through a recommendation from a family member or friend. You can also search for members of the National Academy of Elder Law Attorneys. Before hiring an elder law attorney, you might want to ask these questions:

Denise A. Manniello of Federal Credit Repair Services

 Thanks to Geezeo you’ve mastered your money.  You’re the king (or queen) of cash flow.  You’d like to show Congress how to budget, and think saving should be in the Olympics. There’s just one problem.  Your credit still sucks.  Should be an easy fix for a pro like you, but somehow you just never get started.  Bad credit costs you money and the longer you wait to fix things the more cash you lose. Don’t be afraid to consider hiring a credit repair service.  I sat down with credit repair expert, Denise A. Manniello of Federal Credit Repair Services.  I asked Denise about her services and what people should know about credit repair. 
 

Is there a difference between credit restoration and credit repair?  

Credit restoration is typically marketed to affluent clients, households with $200,000 or more in yearly income.  While credit repair is marketed to those earning less.  Other than semantics, there is no real difference between credit restoration and credit repair services.  
 

What are some misconceptions about credit restoration?

That it’s a scam and doesn’t work.   
Fraudulent companies have given the credit repair industry a bad reputation. The Fair Credit Reporting Act and the Credit Repair Organization Act has made fraud less common than it was 7 years ago.  A reputable company will be working to remove negative items from your credit report daily.  Our clients can log in to their files through our website anytime and check out their progress.       

Credit restoration/repair has to be done by an attorney.
It’s more important to find a qualified service provider with credit industry experience. If that person happens to be an attorney, then great.  Never assume that a being a lawyer automatically qualifies someone to fix your credit.  In fact, attorneys are often not subject to the same stringent state laws as credit restoration firms.  So consumers should be aware they have more options available than just hiring a lawyer.   

Credit repair companies can guarantee results.
No credit repair company can guarantee a specific outcome because they are not the reporting company. In other words, I cannot rewrite your credit report. Credit grantors report information to the bureau directly.  Client results depend on the ability of each bureau to verify the items disputed.  I can only call attention to negative items and push to get them resolved and reported correctly. It is illegal to guarantee certain kinds of results and these guarantees are usually a sign that you’re dealing with someone less than reputable. 
 

Why or when should a person hire an expert instead of fixing their credit themselves?

The biggest factor working against people trying to repair credit on their own is lack of knowledge. Even if they are aware of the law and their rights, they don’t know how the system works as a whole. We understand why and how the credit bureaus and creditors do what they do, and we act as your representative to get you the results you want.  Having  the tools to build your dream house doesn’t mean you’re the best person for the job. The same principle applies with credit repair.
Furthermore, money and credit issues are very emotional for most people. Our affluent clients value our services because we help without judgement or negativity, this isn’t usually the case when people deal with creditors directly.  

Tell me about your typcial client. 

I typically work with affluent clients, who are at the $200,000 + household income level.  I work to educate youth through special programs in schools, and I’m seeing more clients who are interested in learning how to get and maintain exceptional credit. 

What’s the tipping point for your clients?  What makes them finally decide to call a professional?

People know they have to take action to solve the problem but want to avoid the pain of dealing with creditors directly.  They also want to save time.  Credit repair takes a tremendous amount of time and effort.  It’s easy for people to get off track because our lives are so full, but professionals are paid to keep working toward results.   Some other reasons people might call me are major life events that can affect their credit like marriage, divorce, or refinancing a home.  There are also clients who want to avoid  credit mistakes again so they call me to learn how to budget and better manage their financial lives.  

Negative items on a credit report can cost you thousands. Don’t be afraid to hire a service to get you on the road to sparkling clean credit. Thanks for answering my questions Denise.   Go to FederalCreditRepair.org   to view more common credit repair questions.

By Michael Schreiber | MainStreet.com

When it’s time to retire, a great career in any field means little if you didn’t save enough.

So when it comes to savings, even legal eagle Sonia Sotomayor is not free from judgment.

After President Obama nominated the U.S. Court of Appeals judge to the Supreme Court her saving habits became the center of intense speculation.

As The Washington Post reported last week:

Sotomayor, an avid Yankees fan, lives modestly, reporting virtually no assets despite her $179,500 yearly salary. On her financial disclosure report for 2007, she said her only financial holdings were a Citibank checking and savings account, worth $50,000 to $115,000 combined. During the previous four years, the money in the accounts at some points was listed as low as $30,000. When asked recently how she managed to file such streamlined reports, Sotomayor, according to a source, replied, “When you don’t have money, it’s easy. There isn’t anything there to report.”

The above news nugget led to blog attacks on Sotomayor. The sharpest crticism came from Harvard economics professor Greg Mankiw, who declared Sotomayor is a “spender” who “lives paycheck to paycheck” and who would have “shocked and appalled” Mankiw’s dear old grandmother because the Supreme Court nominee apparently saves so little.

But it’s possible Sotomayor already has six figures or more squirreled away in her Thrift Savings Plan. Money in that account, which is a version of the 401(k) for federal employees, does not need to be publicy reported, as Mankiw eventually acknowledged. (You can check out the last few of her financial disclosures here.)

Another econ professor, J. Bradford DeLong from U.C. Berkeley, retorted that Sotomayor’s finances are fine. DeLong says she has about $1 million in equity in her Manhattan condo and her pension is worth $2.5 million, though he doesn’t source either of those figures.

For fun, let’s assume for the moment that the Post’s unattributed Sotomayor quote is true, and she has no real savings.

At almost $180,000 a year, it would be ridiculous for someone not to put any money away. It flies in the face of everything we preach here at MainStreet. Given she doesn’t have children, $180K is a lot of money, even in pricey New York City. We’re kind of fantasizing about her saving habits coming up during confirmation hearings.

If Judge Sotomayor isn’t saving, it may have something to do with the fact that, as a federal judge, she can keep her job for as long as she wants. And when she does retire, she is, in fact, guaranteed a nice pension for life. So why save?

Well, when it comes to saving, we at MainStreet advocate a more conservative approach. Here’s what we would tell the high court nominee:

Remember, Your Honor, ideally your pension is just one of three legs of your retirement funding strategy. The other two are Social Security (which will hopefully be around when you retire) and your savings.

Consider this: You’ve been on the federal bench for about 11 years, which means your total income over that period has probably been just under $2 million. If you had put away just 10% of that, you’d have banked $200,000, and that’s not counting all that delicious compound interest.

Now, if you land the Supreme Court gig, you’ll get a nice little raise. You’ll make $208,500. (Beyond that, you’d be moving from New York to Washington, D.C.. If you live in the city proper, you’ll have about $70,000 more in disposable income including your raise, according Salary.com’s Cost of Living Wizard.)

We think it would be wise, and we hope you’ll agree, to start saving more. With federal budgets being what they are, you never know what could happen to your pension. So, assuming you get the new job, why don’t you start putting away the difference between your current salary and what you’ll make at the high court? That’s $19,000 a year. If you could swing that, all of our savings objections would be overruled.

By Marek Fuchs | MainStreet.com

Finance and having fun can fit together, it just takes some creativity. Of course, some strategies are more fun than others.

Example of a lame way? When I was a financial consultant, I’d perch a bowl of candy on my desk as a consolation for those who dreaded coming to see me to talk retirement goals. “Wish this were more fun? Here, have a miniature Krackel. In fact, take three.”

Or take my friend Kate Lombardi, who lives in Westchester County, N.Y., and uses a check book that reads “Joke Book” on its cover. When her husband asks her to use it for bills, she says, “I just pour myself a drink and hope it goes quickly.”

Gulp.

Have hope, though, says Bill Gustafson, the senior director of the Center for Financial Responsibility at Texas Tech University. He is faced daily with the unenviable task of speaking to a lecture hall full of non-majors about financial planning (yikes). But he insists that there are ways to make budgeting exciting, without resorting to sugar highs and Scotch.

Here is his four-point plan:

1. Give Yourself a Reward
An easy trick for couples is to set aside a small amount of money for a monthly bill paying completion celebration. When you and the missus (or mister) are finished paying all that month’s bills on time, take 50 bucks and blow it on a dinner and a movie. The point is to turn yourself into one of Pavlov’s dogs, associating your regular financial planning with a reward. This also, of course, works if you’re single.

“You can even celebrate with a walk in the park, which consumes less money,” says Gustafson. “But have it be a special, regular reward, directly linked.”

2. Set Up Countdown Calendars
When it comes to big numbers, don’t count forward, only backward. Take your mortgage. If you sit down to pay it with the 20 years or, say $300,000 you have left in mind, it is intimating. That’s a big, nearly incomprehensible nut, and being cowed is never fun. Gustafson suggests a Great Mortgage Countdown. Make a reverse, tear-off calendar that counts down the months left until you’re paid off. Once you make a payment, tear off that sheet and stomp on it in a dance of joy.

3. Involve the Kids
Gustafson once knew a minister who, over a period of time, involved his three sons in monthly bill paying, as well as long-term planning. Not only did the sons grow into knowledgeable spendthrifts, but the man of God got more than he ever thought possible out of household cash management. He got a lasting teachable moment.

4. Think in Bigger Terms
Financial planning can appear very small ball. Pay out a water bill here and the contractor’s invoice there, all while skirting overdraft. Unless you have a natural affinity for such details, they will probably induce narcolepsy. But if you are a big picture person, Gustafson suggests thinking in bigger terms, like your goal of financial security or a comfortable retirement. Gustafson helps run a clinic where financial planning majors help counsel graduating students and even professors, keeping that larger, holistic goal in mind.

“At that level, financial planning is quite altruistic,” he says. You are taking care of your family, a parent or a friend. At Texas Tech, they are sending people out on the right path in life. And that, at heart, is a fun and rewarding notion.

Of course, even Gustafson does not get too taken away with financial planning.

“Actually,” he said, “I do like the idea of booze.”

Cheers.

By MainStreet.com Staff Writers

If you pay your credit card bill late, you shouldn’t be surprised to see your interest rate go up. But many cards also have a “universal default” clause, which means your bank can hike your rate if you make a late payment anywhere.

Essentially, the universal default clause allows credit card issuers to raise your interest rate if you default on any of your outstanding credit obligations. (That is, if you’re more than 30 days late on a payment.) Even if you have never been late paying on that particular card, your rate can still be affected by late payments to other creditors. For many credit card holders these penalty rate increases occur without warning or explanation.

The good news? The new credit card legislation signed last week puts an end to universal default. The bad news? That law doesn’t go into effect until February 2010.

Credit card issuers began inserting universal default clauses in their agreements in the mid- to late 1990s after a wave of bankruptcies. In the interim years, virtually anyone could get a credit card (sometimes with very low introductory interest rates) regardless of his or her credit worthiness.

Now, when a credit card holder shows signs of financial difficulty, universal default allows issuers to change the terms of the credit card agreement to increase the interest rate. It’s a way to address the risk retroactively.

Almost anything can trigger a universal default rate increase. Of course, a late mortgage payment or a late payment to another credit card will suffice, but even a late payment on your phone bill or water bill might also do the trick. When the rate increases, it becomes whatever the pre-determined universal default rate is, which can be as high as 29.99%. It doesn’t matter what your rate was at the time of the default. Even if you are in a period of 0% interest, your rate can go up with a universal default clause.

The effect of a universal default rate hike can be dramatic if you carry a large balance on your credit card. For some, the rate can go up 20% in one jump. If you have a credit card with a balance of $5,000 on it, that would equal an additional $1,000 a year. With the current state of the economy, this practice can be even more burdensome for families than it has been in previous years.

If you’ve never heard of the universal default clause, you’re not alone. The terms are often buried in the fine print of your credit card agreement, and many consumers either don’t fully read these agreements or don’t understand the language. It’s growing resentment over these unseemly practices that led Congress to pass, and President Obama to sign, a new law that will end universal default and restrict the circumstances under which banks can hike your interest rate, among other things.

But you can be sure that credit card companies will try to get as much money out of you as they can before the law goes into effect in February. Until then, there are some things you can do to protect yourself from having your rates raised out of the blue.

First, check the terms and conditions of your credit card agreements carefully to determine which ones have universal default clauses. Next, organize your finances so that you don’t make any late payments. Paying bills when you receive them rather than waiting until they are due can help. An even better way to avoid late payments is to set up automatic online bill pay so you never have to worry about overlooking a bill.

By Stacy Baker | MainStreet.com

It’s easy to slip into bad habits when you’re under stress, and unfortunately many of our anxiety fixes impact our pocketbooks, making matters worse, rather than better.

“Stress seems to create behaviors such as over-eating, substance abuse, or shopping, that result in immediate, short-term gratification,” says Dr. Leslie Torburn, author of Stop the Stress Habit. “When we’re stressed, the bigger financial picture just doesn’t come into the decision making process.”

Big mistake.

An immediate-gratification mindset triggers our need to make ourselves feel better in the moment, despite the impact on our health or wallet.

“Stress leads people to seek comfort that is often obtained by spending money,” she says. “It’s important to step back and see how you spend your money. What are your financial goals and how are these bad habits sabotaging those goals?”

Here, Dr. Torburn’s cheap, but effective, fixes for the five most expensive stress habits:

1. Smoking. At around $9 per pack in some places, a pack-a-day cigarette habit can cost you $63 per week, or three grand a year. Just one extra pack per week (less than three cigarettes more a day) can up your expenses nearly $500 a year.

How to save yourself: Dr. Torburn suggests that getting your body moving can re-focus your attention off your craving and onto good health. Plus, filling your lungs with fresh air feels a lot better than smoke.

“If you’re at work and [usually] take a break to smoke, go walking instead, or walk for five minutes before you start smoking,” she says. “Take your breaks with non-smokers rather than fellow smokers. Sometimes all you need is a distraction to curb the temptation.”

2. Drinking. If the average cost of your favorite cocktail or glass of wine is around $10, two glasses a each week will add more than $1,000 a year (not including tax, tip and cab fare). And a six pack of beer at home (around $7) or a budget-friendly bottle of wine ($10) won’t save you much.

How to save yourself: Dr. Torburn suggests that if you’re looking to unwind, choose different activities, like walking, biking or hitting the gym. If you’re into the happy hour scene, start with water and intermix a less expensive seltzer with wine. “You’ll stay well hydrated and keep your bar tab down,” she says.

3. Shopping. Some estimates put leisure spending at about $113 per trip. Adding just one day of shopping to your weekly budget can rack up almost six grand in impulse purchases.

How to save yourself: Keeping busy and clear of stores can help. “If you do all your errands on the weekend, you may find yourself spending extra time shopping and buying things you don’t really need,” says Dr. Torburn. “Try getting your errands done during the week when you are on a tighter schedule with less time to browse. Then, on your days off, avoid shopping altogether. Do other fun things with your family, work in the garden, exercise, or take in a movie.”

4. Over-eating. Snacking or over-eating (say, suddenly adding dessert to your dining out tab), even just one little splurge a day, can quickly zap your budget. For instance, the average purchase at Pinkberry is $5.50, a small movie popcorn runs nearly $5 and a gourmet cupcake can run $3 and up.

How to save yourself: Dr. Torburn recommends bringing healthy snacks like fruit and vegetables, such as carrot and celery sticks, wherever you go. They’re not only cheaper but they’ll keep you full so you’re less likely to spring for dessert or eat too much at mealtime. Inexpensive healthy snacking (especially on foods that naturally fight stress) can be beneficial, she adds, in keeping you from overeating after a stressful day at work because you’re already full.

5. Caffeine addiction. Anxiety and lack of sleep can cause you to reach for a caffeine pick-me-up, but a medium latte runs you around $3.10. That’s nearly a hundred bucks a month sipped away.

How to save yourself: “Although it may be tough, opt for drip coffee,” recommends Dr. Torburn. “That will save you a few bucks. If you must, treat yourself to your favorite fancy coffee drink once a week. To save even more money, brew your own coffee at home and at work.” A pound bag (averaging about $7) will get you 20 to 30 cups of home-brewed joe.

By Karen M. Kroll | MainStreet.com

For most small business owners, dealing with deadbeat customers comes with the territory.

You want every sale you can get. However, a sale isn’t much good if you’re not paid. Given the sputtering economy, a growing number of clients or customers may decide to either delay payment or skip it altogether. However, there are ways you can cut the risk of getting stuck with deadbeat clients.

What to Do Before a Sale

1. Check out potential customers. Do a quick Google (Stock Quote: GOOG) search of their name, and see if any red flags, such as lawsuits, come up.

If the potential order is a large one – say, it would represent more than ten percent of your annual sales – it probably makes sense to spring for a business credit report, says Sam Thacker, a partner with Business Finance Solutions in Austin, Texas. These are available online through firms like Experian and Dun & Bradstreet, at fees starting at about $25. The more you pay, the more information you’ll receive.

Members of the National Association of Credit Management (NACM) can purchase business credit reports for about $15, says Toni Drake, a member of the NACM board of directors and president of TRM Financial Services, Inc., in Midland, Texas.

2. Request a portion up front. A good rule of thumb is to ask for enough to cover out-of-pocket costs directly associated with the order. To avoid generating hard feelings, Drake says, frame your request along these lines: “Our firm can do great work for you. Let’s structure the deal like this…”

3. Have new clients fill out credit applications. These should provide the company’s legal name and contact information – critical info if you later need to take legal action. The application should also give you permission to talk with several of the company’s vendors and its bankers. You’ll want to ask whether the firm has fallen behind in its payments or written non-sufficient funds (NSF) checks over the past year.

The application should state payment terms, including due dates, and the interest or penalties charged on late payments. Review these with clients, and have them sign the document.

What to Do After a Sale

1. Follow up. If you’ve done the work, sent the invoice, and the payment deadline has come and gone, call – don’t email – after a few days have passed, says Michelle Dunn, author of Become the Squeaky Wheel, and other books on credit and collections. Politely remind the customer of the bill, and ask whether there were any issues with the invoice or your goods or services. Then, ask when you can expect payment.

2. Consider compromise. Set up a payment schedule, and accept future orders on a cash basis until the balance is paid down. If it’s apparent that even waiting won’t assure you of all you’re owed – if the company has publicly announced layoffs, for instance – consider accepting partial payment.

3. Bring in the big guns. If you’ve set a new deadline that’s come and gone with nothing more in your bank account, consider engaging a collection firm. You’ll generally want to take this step within 90 days of the invoice deadline, Drake says. The longer you wait, the less you’re likely to collect. Most firms take about 25 percent of the amount they collect. Check out the collection firm before hiring it, however. Some have been known to simply walk off with the money they get, Drake says.

4. Get legal. Consider filing a suit in small claims court or entering a lien on the property, if that’s an option. “Don’t think you’re too small to do this,” Drake says, adding that fees generally total several hundred dollars. Keep in mind, however, that even if you obtain a judgment against the firm, you still need to collect. If the customer has no assets, you’re unlikely to get anything. On the other hand, judgments are publicly available, and can impact defendants’ credit records.

By Althea Chang | MainStreet.com

Considering online banking?

If you’ve already been shopping online regularly, changing over to solely online banking won’t seem like much of a stretch. Plus, data encryption technology and other measures ensure security over the Internet.

Here are some pros and cons of making the switch to banking online:

Pro: Strong First-Rate Yields
A major factor driving the popularity of online banking is the great returns from high-yield checking accounts compared with those at brick and mortar banks. Since all of an online bank’s business is done on the Internet, over the phone and by mail, these banks have low overhead costs and the savings is passed on to the account holder.

Jacksonville, Fla.-based Everbank’s high-interest checking account, for example, offers an introductory three-month bonus yield of 2.51% and a first-year APY of 1.84% for balances between $50,000 and $100,000, compared with a recent national average of 0.16%. And Everbank promises to offer yields among the top 5% of competitive accounts at leading banks and thrifts.

Redneck Bank, which is owned by the Bank of the Wichitas, offers a whopping annual percentage yield of 5.25%, as long as you play by their rules.

Another popular online checking accounts include Schwab’s High Yield Investor Checking Account (Stock Quote: SCHW) which offers a 1% APY. ING Direct’s Electric Orange Checking Account (Stock Quote: ING), which yields as much as 1.65% (if your balance is more than $100,000) and at least 0.25% (if your balance is $49,999.99 or less).

Con: Don’t Forget the Fees
Racking up ATM transaction fees can become a problem with some online banks.

ING Direct Electric Orange account holders can only use the Allpoint national network of 32,000 ATMs free. At other ATMs, you’ll have to pay the ATM operator’s fee, but ING won’t charge you for using an ATM outside of their network. Your best bet here is to opt for cash back every time you go to the grocery store.

Schwab’s account offers the best deal for those who make frequent ATM visits. You’ll get a rebate for all ATM charges during the same checking account statement in which you incur them.

Pro: Tech Perks
One of the best features of online banks, especially for the forgetful or undisciplined, is an automatic savings plan feature that allows you to transfer fixed amounts of money to or from other accounts on a weekly, monthly or quarterly basis.

And for those who like to micromanage their finances, you can upload you transaction information from ING and Schwab to your home computer for use with personal finance software including Intuit’s Quicken (Stock Quote: INTU) or Microsoft Money (Stock Quote: MSFT).

Kim Danger, nationally-recognized savings expert and founder of www.mommysavers.com, has teamed up with Uniroyal Tire to release a series of e-books for the frugal-minded. The team’s e-books and videos can be found at www.uniroyaltires.com/moremileageforyourmoney, and they are available for free.

My latest e-book, “Pamper Yourself for Less,” is all about making yourself a priority and creating some “me time.” The best place to start pampering yourself is in the home, so I have some tips to make your home more relaxing.

Remove the Extras

When you de-clutter your home, you’re not only getting rid of unwanted belongings, you’re removing “dead weight” from your life. This can surely be an overwhelming process, so I recommend starting the habit to clean for 15 minutes a few times a week. Once it becomes part of your routine, it’s going to be much easier to keep things tidy. After all, we bring things into our home on a regular basis, so it’s only natural that we remove what we don’t use. Make sure to keep a box somewhere in a central location for unwanted items that you don’t want to throw away: you can donate them to Goodwill, or you could sell them on either eBay.com or Craigslist.com if they are still in good condition.

Feng Shui

Many people have adopted the Chinese art or practice of Feng Shui (“Fung Shway”) to create harmony in their home. The aspect of Feng Shui that relates to creating positive effects in your home relies on the orientation of objects. For example, the way you arrange furniture in a room. When you decorate your home by allowing “chi” (energy) to flow through your home freely, your home becomes a more open, peaceful and relaxing place to be. The easiest way to put Feng Shui to use in your home is to remove clutter. Unnecessary junk hinders the flow of good energy through your living space. Color selection and décor are also factors. Here are some easy and inexpensive ways to put Feng Shui into practice in your own home:

Aromatherapy

As one of our most powerful senses, smell stimulates the part of the brain that connects memory and emotion. Aromatherapy has been connected with relieving stress, energizing the body and promoting general well being. Health claims aside, fragrances can help create a welcoming and calming home environment. Some frugal Do-It-Yourself ideas include:

Essential Oils — Essential oils are scents created from plant extracts. I like to put about 15 drops of lavender in a spray bottle of water to make a homemade air freshener. You could spray your pillow (or just put a few drops directly on your pillowcase) to get a more restful sleep.

Sweet Smelling Fabrics — Combine four tablespoons of fabric softener with a half gallon of water in a spray bottle to create a homemade fabric spray. Try it on sheets and towels for a fresh scent.

Do It Yourself Simmering Scents — Peel an apple or an orange and simmer the peels in a little water on the stove. Add some cinnamon, clove or nutmeg to get a great scent throughout your house.