There has been talk since 2002 of creating Universal Savings Accounts, or USAs, as they’re called. What do you need to know about them?

Currently, Roth IRAs are the most popular tax-free savings account, but they have limitations that can be addressed with a USA. You can only contribute to a Roth IRA if you’re making less than $160,000 as a married couple or $110,000 if you’re single. Your annual contributions are limited to $5,000 if you’re under age 50. If you take distributions before your Roth IRA is five years old or before you turn 59½, you’ll pay a 10% tax penalty (with some exceptions).

A USA works differently. First, unlike a Roth IRA, this type of account isn’t limited just to retirement savings. Rather, its purpose is to promote any kind of savings. Next, all American citizens can participate and contribute the greater of $10,000 or 50% of their taxable income. And, just as importantly, any distributions that occur three years after the creation of the account are tax-free and carry no penalties.
Compared to other IRAs and 401(k) plans, the USA offers greater benefits and ease of use.

Every now and again, a great idea comes along and trumps an existing one. This is certainly the case here. The incentive to save is built into the program and offers great benefits for participants. The only thing to watch out for is opportunistic politicians and lawmakers who might tinker with the benefits of these accounts, making them less attractive.

Do IRAs and 401(k)s meet your investing needs, or do you think a USA account could be even better?

Have you noticed the ads lately on television and other media that offer you the opportunity to make lots of money by selling your gold jewelry? They seem to be everywhere right now, and the reason is because these companies are attempting to take advantage of current market conditions to sway people to sell their unwanted jewelry for cash.

The whole concept is based on this premise: gold is always in demand + gold prices are high now and a lot of people have gold jewelry = a chance to make lots of money.

Is it really a good deal for those who sell? Only if it meets your expectations. But be sure not to sell important family heirlooms without consulting other family members.

What are the pitfalls to watch out for in this area? Be on the lookout for those buyers who offer a lot less than market value. The price of gold is based on the troy ounce of 24-karat pure gold, which is 31.1 grams. You can find current market prices at www.goldprice.org.

Where can you find a reputable buyer? Stay away from pawnshops and mail-based gold buyers. They offer the lowest prices for your gold, while jewelry stores tend to offer the most, mainly because jewelry is more valuable in that form than it is as scrap.

As the recession continues to deepen, what should you be doing with your discretionary money at the end of the month, after your basic living expenses are paid? Conventional advice has, in the past, touted the benefits of paying off high-interest debts as quickly as possible, then dividing your money to pay off debts and set some aside for savings. But in today’s economic slump, there are certain scenarios in which you may want to consider a different approach.

If there’s a chance you could lose your job …

Let’s face it, there probably aren’t many jobs that are 100% secure in this economy. If you have reason to believe you’re likely to get laid off, the best thing you can do for yourself is pay off debts. When you’re laid off, your income will be reduced to the amount of unemployment benefits you’re eligible for, and chances are you won’t have access to additional credit. Paying off as much debt as possible before you’re laid off will increase your available credit line in the event you need to access more money than you receive through unemployment benefits.

However, if the worst happens and you do lose your job, some financial advisers recommend reducing all debt payments, including those on high-interest credit cards, to the minimum only. When you’re unemployed, it’s more critical to make the rent or house payment, plus utility bills, before throwing extra dollars toward credit card balances.

If the debts you have are “good debts” …

Some people try to pay their mortgage off early. Typically, though, it’s better not to make additional payments on low-interest, tax-deductible debt like a fixed-rate mortgage unless you have a lot of extra money, because the IRS refunds part of the interest you pay on a home mortgage when you itemize your tax deductions. If your only debt is a home mortgage, you’d be better off saving for retirement or your kid’s college than you would be paying your mortgage off earlier.

Another source of “good debts” are student loans (usually). They often have lower interest rates than other sources of debt, and qualifying interest on school loans can be written off at tax time for as many years as it takes you to repay the loans. Make your monthly payments, but use any additional money to invest or save for your future.

Being unemployed has just gotten a little easier.

Unemployment benefits vary, depending on where you live, and range from a modest $133 per week in Puerto Rico to $628 a week in Massachusetts. But the passage of the massive federal stimulus package has resulted in an additional boost of $25 per week, or an extra $100 a month, for the unemployed. Combined with other unemployment benefits the stimulus package provides, the enhanced benefits should make a substantial difference. For example:

• Those who are out of work are now eligible to receive 20 extra weeks of unemployment benefits in all states, and another 13 weeks if you happen to live in a state with a higher unemployment rate.
• Previously, all unemployment income would be taxed as income. In 2009, you get to keep the first $2,400 of your unemployment income all to yourself, tax-free.
• Thanks to COBRA, workers can extend their health insurance coverage while they’re unemployed.

COBRA isn’t cheap, though, and when you’ve already experienced a deep cut in income, paying $400 or more monthly for COBRA coverage makes it an expense many people wish they could do without.

Under the stimulus package, the government will cover 65% of COBRA premiums for the first nine months of unemployment, saving individuals hundreds of dollars and families even more. I’d say this is the most beneficial aspect of the stimulus package as far as the nation’s unemployed are concerned.

Weekly unemployment benefits by state for 2009:

Alabama – $235

Alaska – $320

Arizona – $240

Arkansas – $409

California – $450

Colorado – $455

Connecticut – $576

Delaware – $330

District of Columbia – $359

Florida – $275

Georgia – $320

Hawaii – $523

Idaho – $364

Illinois – $511

Indiana – $390

Iowa – $426

Kansas – $407

Kentucky – $415

Louisiana – $258

Maine – $496

Maryland – $380

Massachusetts – $628

Michigan – $362

Minnesota – $538

Mississippi – $210

Missouri – $320

Montana – $386

Nebraska – $298

Nevada – $362

New Hampshire – $427

New Jersey – $560

New Mexico – $455

New York – $405

North Carolina – $476

North Dakota – $385

Ohio – $493

Oklahoma – $392

Oregon – $463

Pennsylvania – $547

Puerto Rico – $133

Rhode Island – $641

South Carolina – $326

South Dakota – $285

Tennessee – $275

Texas – $378

Utah – $427

Vermont – $409

Virginia _$363

Virgin Islands – $454

Washington – $515

West Virginia – $408

Wisconsin – $355

Wyoming – $387

Managing your finances is, in some ways, like managing your weight, according to a recent New York Times article.

Taking these three steps can help get your finances, and your body, in shape:

1. Changing your environment to remove food temptations eliminates habitual eating. If you can eat a bag of chips in front of the television and not even realize you finished the bag until it’s gone, you could solve the problem by keeping chips out of the house altogether, or by only eating in the kitchen, at the table, with the television off.
   Changing your environment to eliminate temptations will help you avoid shopping, too. If the Internet tempts you to shop, don’t visit retailers’ websites, and be sure to unsubscribe from online shopping newsletters.It makes sense that if you’re breaking your budget due to certain environmental cues, like the countless opportunities to spend money online, removing those cues will make it easier to cut back on spending.
2. Portion control is the prime ingredient of any diet — you need to be mindful of how much food you’re consuming and keep your portions healthy, not super-sized. Portion control is very similar to budgeting a fixed percentage of your money to different spending categories.If you fail to set aside “portions” of your money for various expenses, you can regularly find yourself reaching the end of the month with less money than you need for certain expenses because you over-indulged in other spending categories.
3. Weight Watchers is a well-known dieting tool that uses a points system for foods to carefully track everything you eat. Most experts recommend tracking all of your spending for a full month to better understand where your money’s going; then you can continue monitoring your spending to ensure you don’t fall off the wagon and blow the budget.

Knowing how much and what you’re eating is a key factor for managing your weight — and it’s no different when it comes to your money. If you don’t even know where you’re spending your money, you can’t figure out how to manage it better. While keeping track of food eaten or money spent can be time-consuming and challenging, it’s one of the best strategies for regaining control.

I’ve applied these tips to both dieting and my finances, and I find they offer good results whichever goal you’re pursuing!

One person’s trash is another person’s treasure — or in the case of foreclosed homes, one person’s tragedy can be another’s lucky day. U.S. News & World Report noted that in the third quarter of 2008 there were more than 750,000 foreclosure filings on U.S. properties. According to RealtyTrac, this is a 71% increase over the same period just a year earlier.

If you’re in the market to buy property, the number of foreclosures available at lower prices just might seem like the deal of a lifetime. While you can often purchase foreclosed properties at below-market value, there are a number of costly mistakes you’ll want to avoid. The top 6 mistakes of buying foreclosed homes, according to U.S. News, include:

1. Trying to buy a foreclosed home without the help of an experienced agent
2. Relying on real estate agents for legal advice instead of a real estate attorney
3. Expecting the foreclosed property to quickly increase in value after the purchase
4. Becoming blinded by a low sticker price and forgetting that most foreclosures require substantial (and costly) repairs
5. Trying to search all foreclosures at once rather than targeting a specific location
6. Assuming banks will accept any offer

For more on the pros and cons of foreclosure purchases, see Should You Buy a Foreclosed Home?

According to the News Tribune, Harvard Professor Elizabeth Warren thinks mobsters are envious of the power that student loan debt collectors wield. Federal student loan companies have the ability to garnish a borrower’s wages, seize Social Security or disability payments and even tap into your personal bank account (without a court order) if you don’t make payments on your student loan. It seems that loan companies benefit more when students default on their loans.

Private student loans are considered a private debt, and debt collectors in those cases don’t have quite as much power as those pursuing payment on federally funded loans. Private lenders can garnish your wages if you bring home more than $175 a week, but Social Security and other benefits are exempt from private debt collection.

Of course, it’s always better to make your payments, but should you run into tough financial times, try to work out payment arrangements with your student loan lenders to avoid defaulting.

Debt consolidation is one of the best ways to get excessive debt repayments under control. Consolidating all of your debts into a single monthly payment with a lower interest rate makes it easier to pay what you owe. As long as you can stop taking on new debt after consolidating existing debt, a debt consolidation loan can improve your credit score. Here are three big benefits of debt consolidation:

1. One monthly payment. If you’re currently trying to keep track of multiple credit card and loan payments, it can get complicated. When you have to pay several different bills each month, it’s easy to miss a due date or forget one completely. Consolidating each of your debts into a single payment will eliminate this problem.

2. Lower interest rate. When you consolidate multiple debts with various interest rates, you can usually get a lower interest rate than what you’re paying on the accounts separately. The interest rates on your existing debt can fluctuate throughout the term of the loan, while consolidation loans typically feature a fixed interest rate until the balance is paid in full.

3. Reduced stress levels. Anyone who’s ever experienced debt knows it can trigger a range of emotions. From depression and anger to anxiety and insomnia, debt is a monster that can overshadow many aspects of your life. Consolidating your debts and making payments more manageable will ease the strain and improve your mental outlook.

Everyone makes financial mistakes from time to time. The important thing is to learn from them. If you use a consolidation loan to manage your finances, don’t let your credit card use get out of hand or you’ll find yourself in worse shape than you were before you got the debt consolidation.

Just about anyone could tell you what they’d do if they won the lottery, but how many people have a financial plan for disaster? Do you know what you’d do if you lost your job and had to survive without income while you searched for a new job? What if you became disabled and unable to work?

The most obvious way to prepare for disaster is to save enough money to cover your living expenses for at least three to six months. Of course, this is easier said than done when the majority of Americans are living paycheck-to-paycheck, even in good times.

In a New York Times article called “Preparing Your Budget For Disaster,” Wisconsin financial planner Kevin McKinley has an interesting suggestion for financial disaster preparedeness that might seem a bit counter-intuitive. Borrow more money from a home equity line of credit or a credit card while you still can, he says, since the availability of the funds could disappear without notice. Once you’re unable to borrow and you’ve depleted your savings, you’ve run out of options. Borrowing money before disaster strikes means you can pay it back slowly over time and keep cash in savings for emergencies.

When faced with a recession, people talk about cutting back on all the non-essentials to reduce spending and keep their budgets in line. Things like cable TV, coffee shop lattes, and brand-name items are the first to go for many people. But what are you not willing to give up, even in a recession?

So-called sin stocks, like gambling, liquor, and candy companies, perform well even during a recession, according to USA Today.

1. Cigarettes
   Despite the well-known health effects of smoking, there are millions of people around the world who would rather sacrifice something else than give up their cigarettes. Despite the global economic downturn, several tobacco companies are reporting increased profits.
2. Alcohol
   Whether you’re the type of person who enjoys a glass of wine with dinner or a six-pack of Budweiser in front of the TV, it’s a luxury many people won’t give up during a recession. In fact, Anheuser-Busch is moving forward with price increases to keep up with the rising costs of raw materials.
3. Cell Phones
   Everywhere you go, you’re bound to see people chatting on their cell phones. Phones that were once a novelty and a luxury for people with large disposable incomes are now considered a necessity by many, regardless of how much money they earn. Personally, I think cellular phone providers would have to start canceling cell phone accounts for non-payment before people would give them up!
4. Candy
   Surprisingly, many candy makers (including Cadbury and Hershey) are also reporting increases in profits during the last quarter, despite the recession. Seems people are buying sweets to comfort themselves — or simply don’t feel the cost of a candy bar is going to break the bank.
5. Beauty Care
   Some women just couldn’t do without their makeup bag or every-other-month appointment at the beauty salon. From manicures to pedicures, hair waxing, hair cuts, coloring and styling, brand-name beauty products rarely see a big decline during a recession.

What about you? What types of products or services will you keep, even during the recession?