Depending on your body type, your health insurance, your self-esteem, and your possible health complications, weight loss that a successful bariatric procedure grants can have hidden costs attached. It is a wonderful thing to shed pounds quickly and more easily than with diet and exercise alone, but your body may not always adjust at the same pace – hanging jowls, deflated, pendulous breasts, a flattened, loose tummy, and other excess skin are all associated with speedy weight loss. Many post-op patients require additional cosmetic surgery to remove hanging skin, lift certain areas, tighten loose muscles, or adjust fat deposits. Apart from surgical procedures, patients who have undergone weight loss surgery may require dietary supplements, drug therapy, and even behavior or fitness therapy. There is no saying from patient to patient how many of these extra costs you might incur, and you might not know before surgery. This is not counting the costs of post-operative visits, nutritional shakes, gym memberships, and/or new clothing – which you may be happy and excited to buy, but which still costs money!

Whether or not you are able to get your insurance company to cover any of the costs associated with bariatric surgery depends on your individual situation. If your doctor recommends advises weight loss surgery because he or she feels that your obesity is a direct and immediate threat to your health, then you can ask them to provide your insurance company with a letter of medical necessity to encourage your insurer to cover the procedure. Medical proof that your weight puts you at heightened risk for heart disease and strokes, for example, will improve your chances. In particular, those who fall under the heading of chronic morbid obesity are most likely to be validated for assistance. In addition, if your doctor is able to provide documentation of other failed attempts to control your weight—such as psychological therapy and drug therapy—your case becomes that much stronger. Remember that talking to your surgeon is the best bet for putting a strong case before your insurance company! They may already have set requirements for you to meet before qualifying.

Between 1998 and 2004, the number of bariatric patients has risen eight hundred and four percent. That represents a rise from just over thirteen thousand patients to more than one hundred twenty-one thousand, as per the Agency for Healthcare Research and Quality. Nowadays, there are as many as a quarter million bariatric procedures being performed in America. The vast majority of patients are satisfied and do well managing their weight over the long term, further endorsements for the procedure.

If you are considering bariatric surgery, the first thing to do is to arrange a consult with a reputable surgeon. You should inquire as to the number of procedures your doctor has performed (experienced surgeons may have performed several hundred, or even over a thousand), and where they perform the surgeries. A Bariatric Center for Excellence is a hospital or clinic that has been given a distinction for its skill with an accommodation of bariatric surgeries and patients – having a procedure done at one of these places is ideal. The financial coordinator of your surgeon’s practice will be able to talk with you about what you personally can expect in terms of costs and any applicable insurance coverage. Hopefully at that point in the process you will be a good idea of what your “out the door” figure will be to get the surgery you want and need.

It’s ultimately up to you to determine whether any of the costs associated with weight loss surgery are something that you are willing to pay. Keep in mind that there are costs – both apparent and hidden – associated with obesity as well, and that you will continue to pay these for as long as you keep the excess weight on.

If you are lucky enough to have a sweetheart (lover, special friend, paramour, cuddlebunny, etc), now is the time to be thinking about how you are going to celebrate the holiday. I know that the pressure is on – my own spouse has been hangdog for weeks trying to extract from me my preference between jewelry and pampering (a pedicure and spa day) in advance of the big day, despite the fact that I don’t think much of Valentine’s Day on the whole. Here’s my advice for the fourteenth, however unsolicited: put your credit cards away someplace safe, and fight back the urge to go nuts. It is just far too easy to run up crazy charges on your plastic in the quest to get the big day just right, when people are frequently losing the true meaning of the holiday in a demented festivus of consumerism gone wild.

I made the mistake of wandering into Target the other night while waiting with a friend for our movie to start, and was dumbfounded by the assortment of red and pink merch that was on display. This was more than just your normal assortment of heart-shaped candy and faux roses in bud vases. There was abundant evidence that Valentine’s Day home décor is rapidly becoming a “thing,” much in the same way that people now go crazy decking the halls for Halloween and Easter. I saw Valentine’s Day themed throw rugs, wall hangings, paper lanterns, centerpieces, and knick knacks. There also seemed to be an entire aisle devoted to the creation, serving, and consumption of homemade VD tasty treats, from cookie cutters to sprinkles, from blush-hued spatulas and heart-shaped measuring cups (how impractical!) to festive plates, chargers, cutlery, table linens, and tumblers. There were even aprons embellished with lace and a splattering of hearts. This was in addition to the piles of cupid, heart, LOVE, and kiss-emblazoned clothing, from cheeky lingerie to bawdy boxer shorts, cute tees for the kids and suggestive ones for the grown-ups, hair decorations, candy-striped leggings, and even flannel PJs. Nor is the flood of pink and red limited to your local Bullseye: Go to the mall, the grocery store, the local mass merchandiser, or (Heaven forbid!) a jewelry store. Prepare to be dazed by the festoons of paper hearts, and the general mess of dart-stricken hearts, Cupids, and lipstick kisses that you see everywhere. It’s an epidemic, my friends.

There’s one thing that is common between all the goodies targeted at Valentine’s Day revelers – the opulent boxes of chocolate, the bottles of wine, and the taper candles to give a romantic glow – all of these things cost money! Let’s not even talk about how much money it costs to do things “right” and take your loved one out for a fancy dinner on the 14th. Many dining establishments charge special prices for meals on this day, meaning that you will pay big bucks for a meal that is very likely to be not all that special, considering the massive crowds and the hurrying that is probably going on in the kitchen. Many dining establishments will have special prix-fixe menus for the day, meaning that there is a limited selection and a set price. You can’t even treat your sweetie to their favorite dish!

Here’s an idea: this year, give your loved one a kiss and nothing more. An old song got it right when it said that the best things in life – and I daresay that love qualifies – are free. Chocolate is nice, but it’s not free… ergo, it doesn’t factor into the equation. If you go the traditional route and give your darling a dozen red roses (around thirty bucks this time of year), a box of scrumptious sweets (twenty to thirty bucks, again), a great dinner out (one hundred twenty bucks, if you add the wine selection), and a fancy dessert at home with candles and rose petals (forty bucks again), you could easily blow half a week’s paycheck on one night out! Why – just because society dictates that this is the one day of the year that you need to be ostentatious about your love for one another? It’s a farce. Don’t do it. Trust me. If you really like candy, go hit the stores on the 15th when it is 50% off. It will taste just as good. And if that isn’t a lesson about the important things in life, I guess I don’t know what is.

As one final word, let me tell you the same thing that I told a gentleman friend (no, not that kind… I’m happily married) who was considering a Valentine’s Day proposal of marriage to his beloved. He asked me what I thought, and I couldn’t tell him NO! vehemently enough. If you have a steady sweetie and were thinking that February 14th could be the day that you pop the question, I beseech you to think again – unless you already have chosen and purchased the sparkler that you intend to slip on her dainty little finger. Because this IS the prime season for proposals, a lot of jewelry stores have already upped the prices on a lot of unspectacular diamonds, thinking that love-stricken men desperate to get the timing right won’t notice that they are getting a subpar stone for a Tiffany’s price. Wait until March, and then stage your dreamy proposal. Your credit card will thank you, and your beloved will be too swept off her feet to car about the calendar. Anyway, let’s be totally honest here – Valentine’s Day proposals are a bit tacky, anyway!

Let me say one thing off the bat, for those of you clutching your pearls and freaking out on the other side of the computer screen: credit card rewards points themselves are not taxable. If you use your rewards cards strategically to game the best virtual income this way, rest easy. Depending on how you obtain them, rewards may be taxable as income, according to tax experts and the Internal Revenue Service. People who covet and collect rewards can rest easy. The traditional rewards points earned when making purchases with credit cards or debit cards are still tax-free. It’s credit card reward point ‘gifts’ that are taxable, says the IRS.

To differentiate, think about the perks and goodies that are given away as part of recruitment drives for new banking accounts of all sorts. The value or worth of these promotions is considered income, and if it exceeds six hundred dollars, banks are required to send 1099 tax notices to both the IRS and the rewards recipient. Depending on the taxpayer’s deductions, tax bracket and other income, the rewards bonus could turn into tax liability. Mark Steber, chief tax officer for Jackson Hewitt, the nationwide tax preparation service, warns that, with the “scope, the size, the simple magnitude of the gifts… all increasing,” more and more taxpayers may be on the hook without even realizing it.

Banks have seriously upped their levels of rewards in the face of revenue losses over the past two years courtesy of federal regulators cracking down on abuses in the financial industry. Banks can no longer count on billions of bucks in income from overdraft fees, late fees, overlimit penalties, and the interchange fees that used to go cha-ching cha-ching each and every time that a cardholder swiped their debit card at the point of sale. Banks are now pretty desperate to re-accumulate lost business. One way that has sprung up in popularity is offering tempting incentives to customers who commit to opening new rewards accounts. The most common? Giving away twenty-five- to forty thousand free rewards miles or points to new customers who meet purchase thresholds in the first ninety days after signup.

The competition for consumer sign-ups is turning into something of an arms race, says Steber, with credit card companies vying to outdo one another with bonuses. These companies desire customers: their services, their deposits, and their card purchases. They are willing to go to extremes to get them, and that means offering bigger and bigger rewards. They are all trying to outdo one another, and the customer wins from this competition. Well, kind of.

The IRS has never really had to pay much attention to credit card rewards sign-up bonuses before now, for two main reasons. First of all, up until recently, the type of rewards classified as income rarely – if ever – met the six hundred dollar threshold at which issuers had to report them. Secondly, the very type of reward that people are receiving the most – the points that they accumulate for big trips or splashy merchandise – have been earned as the result of the consumer making purchases with a credit or debit card. Citi spokeswoman Emily Collins points out that “rewards and airline miles that are provided in connection with a purchase on a credit card are routinely not subject to individual income tax reporting,” Citi spokeswoman Emily Collins, said in an e-mailed statement. And yet, on the other side of the coin, when a consumer receives some sort of a gift or incentive for opening a checking account “whether cash, a toaster or airline miles,” as Collins puts it – the value of that gift is, in fact, almost always considered to be income and therefore subject to being reported. This is a unique, distinct entity from miles or points earned by credit card customers for their purchases. It’s a picky distinction, but one that counts to the IRS.

Citibank blew the issue open and put it at the forefront of public attention when it sent out a flurry of 1099-MISC notices to customers who took advantage of a 2011 Citi promotion that offered 25,000 American Airlines frequent flier miles to anyone who opened a new bank account. One such customer told Bankrate.com that he was deeply surprised to see the notice showing six hundred forty-five dollars in “income” for the frequent flier miles. Citi, on the other hand, claims that the standard disclosure found in the terms and conditions of its promotions and on its ThankYou rewards program website makes this statement: “When frequent flier miles are provided as a premium for opening a financial account, it can be a taxable situation subject to reporting under current law.” The disclosure goes on to spell out the fact that, in accordance with federal tax code, Citibank may be required to file a 1099 form with both the consumer and the IRS for the tax year in which rewards were issued, and that customers are “solely responsible for any personal tax liability arising out of the redemption of ThankYou Points.”

An IRS spokeswoman, Michelle Elderidge, confirmed that Citi’s procedures for reporting were the right ones. Frequent flier miles given away as a “premium” for the opening of a new account can, in fact be considered taxable, she stated. Elderidge urged all rewards card customers to consult with a tax prep professional to determine what, if any liabilities they might have for rewards gifts they received in the past tax year. She stated that customers who have more than one account with a bank or who received multiple rewards for different promotions would receive a 1099 for the total amount received during the tax year. She points out: “The IRS also notes that information on a particular Form 1099 may include various different sources of income from the issuer.”

Tax experts say that being issued a 1099 for credit cards reward “income” is quite rare, and that there is little chance that Citi’s 1099s impacted more than a few of its customer base. Eric L. Green, a tax attorney with the Convicer & Percy law firm in Connecticut quoted by CreditCards.com, states that he has “yet to see” any of his clients receive a 1099 in conjunction with a rewards program. He disagrees with the section of law that would, theoretically, count such rewards as income in the first place. He states that credit card companies give consumers something of value – which, “in theory, would be income.” Still, says expert Steber, don’t take such statements as carte blanche to ignore a 1099 from a bank if one is sent to you. Nowadays, the IRS is quite efficient at tracking income. Should a taxpayer fail to report a 1099 income that has been submitted, they could easily trigger an IRS letter and the threat of a penalty.

Traditional rewards that many rewards card users have come to love are still safe and tax free because they are tied to purchasing something with a payment card. Many of the promotions currently on the market offer rewards points to sign up for credit cards with a caveat that the applicant must make a minimum amount of purchases within the first few months of opening an account. Those rewards are contingent upon spending. Steber explains the difference thusly: traditional rewards are “considered a reimbursement of the fees that you’re paying in association with being a member. It’s a rebate of your fees.” This structure, he says, accounts for the way that a great many rewards programs are set up.

The tax liability comes in when the reward is not tied to purchases you have made. This puts credit card rewards in the same category as prizes you might win on a TV game show, or those fabulous presents given away by talk show hosts like Oprah Winfrey or Ellen Degeneres. If these gifts exceed six hundred dollars in value, they must be claimed. It was a lesson that Winfrey’s studio audience learned the hard way in 2004, when everyone received a new car. The IRS said those are taxable property windfalls,” Steber says. “That’s what this [rewards gift] falls into.” You are so excited about winning a new car that you don’t register anything but happiness, he says, but you end up owing about seven thousand dollars – a rough estimate of the taxes on an average new car – and may not know it until April.

An interesting fact to emerge from the examination of this phenomenon is the realization that many banks simply don’t bother to get involved in reward income reporting, figuring that customers can figure out the tax implications of their swag on their own. Wells Fargo doesn’t offer rewards points for signing on for new credit cards, says spokeswoman Lisa B. Westermann. “Our giveaway for opening a checking account is usually a plush pony, which wouldn’t require a 1099,” she says. Wells Fargo’s disclosure reads: “Any tax liability, including applicable state sales tax and state and federal disclosures, connected with the receipt or use of a reward is your or the reward recipient’s responsibility.” At Discover Financial Services, customers earn cash back bonuses when they use their Discover More and Open Road cards. The bonus points can be redeemed for statement credits, gift cards, merchandise or to donate to a charity. It’s not that nobody considers credit card rewards to be income, as attorney Green stated – it’s that they simply don’t care.

Discover spokesman Matthew Towson explains that, with the Discover Miles card, customers earn air mileage points. With every ten thousand miles accumulated, customers have the option to trade in their points for one hundred dollars off the price of an airline ticket or redemption for gift cards or similar value. He states that the cash back bonus itself is not taxable per federal law, since it is technically considered a rebate and therefore not subject to taxation.

This brings up another salient point in the issue of credit card rewards and taxation, which is the value of non-currency rewards like points. To wit: how much does 25,000 in airlines miles equate to in dollars? Citi’s policy says: “The valuation of ThankYou Point redemptions for Form 1099-MISC tax reporting purposes will be at Citibank’s sole discretion.” Steber from Jackson Hewitt says the valuation is “complicated on a good day … You value it when you have the unrestricted right to it or when you have unrestricted use of it. What are miles worth? They may not have any readily ascertainable value.” After all, air prices change drastically. There is no fixed form of valuation.

According to Steber, the rewards tax issue is just part of the larger problem of Americans largely underreporting their income. The only reason Americans would ever even think to report “earnings” from credit card rewards is because the bank in question sends out a 1099 form documenting the gift to the IRS. If the six hundred dollar threshold isn’t met or the bank doesn’t report the gifts, there is a great chance that the IRS will remain clueless about how much taxpayers receive in this manner.

Still, the burden is on taxpayers to accurately report their income – and that includes sources that they might disagree with. Many don’t, but they should. The IRS believes that the underreporting of American income was the single biggest contributor to the tax gap in 2006. That gap is defined as the difference between what Americans owe in taxes and how much they actually pay. In 2006, the most recent year available from the IRS, that gap stood at $450 billion. Of that, $68 billion was from underreported personal income. Steber puts it thusly: if you make money (from your eBay job, your bank, and/or your employer), you have to pay taxes. End of story.

Prepaid debit cards can be a great alternative for unbanked Americans come tax refund time, but consumer advocates warn that it is crucial that users shop around. Yes, you won’t face check cashing fees – but you can end up nailed with a whole host of other fees, if you aren’t cautious and mindful of the rules and restrictions of using a prepaid debit card. Many of these cards have no upfront costs, admits Michelle Jun, senior attorney for Consumers Union, the nonprofit publisher of Consumer Reports, but they have lots of hidden fees for things like using an ATM to withdraw cash, for using it with a PIN to make store purchases, or for calling customer service. You need to make sure that the prepaid card you choose is one that will not come around to bite you and leave you with even less of your refund than you would have had if you took the paper check and presented it at your friendly neighborhood check cashing establishment.

Some of the biggest names in retail tax prep – think H&R Block, Jackson Hewitt, TaxAct, and Turbo Tax – all have their proprietary versions of tax refund prepaid cards. They are all quite different products, with different history. The Turbo Tax card, for instance, is in its second year of existence, says company spokeswoman Colleen Gatlin. She says that the card was intended to help those customers who expressed a desire for direct deposit of their refund monies, but didn’t have bank accounts. Other customers may have a bank account, but are not comfortable sharing it with tax preparers or even the IRS. Yet others would rather keep all or part of their tax windfall separate from the rest of their money – for instance, saying that fifteen hundred dollars of the refund goes into the checking account to pay down debt, and fifteen hundred goes on a prepaid card towards the purchase of a new TV.

The IRS has even tried to get its foot in the door of the prepaid card business. In a pilot program that kicked off last year, the IRS offered low-cost federal prepaid debit cards to some eight hundred thousand American taxpayers who were least likely to have a checking or savings account so that they could load their tax refund onto the cards. Less than one percent of those who were targeted by the program – about two thousand folks – actually opted to participate, making the program a huge flop. According to Treasury Department spokesman Matt Anderson, the program will not be offered again this year. Not really a surprise, with that turnout!

Consumer advocates are urging taxpayers to remember that they need not obtain a prepaid card from a tax preparer or the IRS to get their refund on plastic. After all, the majority of the prepaid debit cards and payroll cards available today have an account number and routing number that you can use when you do your tax return to have your refund deposited onto it. “So if you already have a card with low fees and good protection, go ahead and use that instead of getting a special one from your tax preparer,” says Chi Chi Wu, staff attorney at the National Consumer Law Center. Barring that, she said, it’s a good idea to shop around.

The first tip for making a solid decision when it comes to picking a prepaid card for tax refund purposes is to read the fine print, and pore it over carefully. Scan the cardholder agreement with an eye towards catching any monthly fees, transaction fees and inactivity fees, which can add up fast if you aren’t savvy as to how to avoid them. Check to see whether there’s a charge to call customer service or to check your balance. Will it cost money to load the card or to use it at an ATM? All these things make a big difference when it comes to your tax refund and you being able to keep as much of it as possible.

Once you have picked your prepaid debit card, go ahead and set your paycheck up for direct deposit. Most prepaid debit cards charge for in-person re-ups or deposits, and these fees can come to about five dollars! There is no need to pay that. Get the paperwork set up, and then sit back and relax. Another way to make sure you are saving money when using your card? When in doubt, always choose “credit” not “debit” when using the card in a store. Some cards charge a fee for each PIN-based transaction. To avoid ATM fees, get cash back when you shop at grocery stores or other retailers, and check your balance online or by phone.

And, lastly, ask yourself why you haven’t avoided all this trouble in the first place by simply opening a bank account. In most cases, a bank account is a lower-cost option and offers better liability protection than a prepaid card. “If you really want to keep your refund money separate from your other cash, open a savings account,” Wu advises. “Then instead of paying fees, you may even be able to make some money if the account pays interest.” There is very little in the way of good reasons not to open a bank account, given how costly the alternatives are.

The CFA points to this gap between rich and poor auto insurance customers’ premiums as a major reason why an estimated one-quarter to one-third of all households in this economic category cannot afford auto insurance and therefore don’t carry it, driving illegally. The high costs lead to what the study termed “disparate impacts.” After all, not all cities have the infrastructure for public transportation that can meet the needs of all citizens. Those who can’t afford car insurance and therefore don’t buy a car might be missing out on opportunities – regular employment and other chances to increase their income – that those with more money can easily take advantage of.

The CFA study was co-authored by Stephen Brobeck and J. Robert Hunter, who are slated to bring their findings to a meeting of state insurance commissions next weekend, urging them to address coverage discrepancies. Brobeck and Hunter suggest that one solution to the problem would be for insurers to offer lower premiums to those who have a clean driving history and a record of safety, regardless of income. Brobeck, the executive director of the CFA, cites the fact that, in some areas, responsible low-income drivers are being required to spend upwards of one thousand dollars a year for liability insurance that is no more coverage than what is offered to rich subscribers, and is unfairly priced to boot.

Per the study and the Bureau of Labor Statistics, low-income car owning households pay more than seven hundred dollars in annual premiums and moderate-income families typically pay more than one thousand dollars. There is often no such thing as comparison shopping for lower rates in these families. Much like the deserts of mortgage lenders in low-income urban communities, there may simply be no access to insurance offices for these people who most need it. Take, for instance, Washington DC. Of eighty insurance offices in the district, only three are located in the neighborhoods with the lowest incomes. Over half, on the other hand, are located in high-income areas.

The study indicts insurers with being “well aware that upper-income families are much more likely to own two or three expensive cars, with comprehensive coverages, than are LMI [low-to-middle income] households, who often purchase just minimum liability coverage on an old car.” The study uses an example to illustrate discrimination in insurance policy offerings: a single male from the city of Compton, California (a low-income area), aged under thirty years, who has been licensed for between six to eight years and drives between seventy-six hundred and ten thousand miles per year with just one traffic ticket and one at-fault accident, would be charged between $1,628 and $2,353 for basic liability coverage and between $5,670 and $7,500 for standard coverage including collision and comprehensive. This is per data gleaned from the California Department of Insurance. On the other hand, in at least several states including Arizona, Texas, and Arkansas, and probably in more, some major insurers charge individual consumers lower premiums for standard liability coverage than for minimum liability coverage. It appears that these insurers are discriminating against purchasers of the minimum coverage, who are disproportionately LMI car owners.

Insurers cannot prove that the ZIP code in which drivers live constitutes any particular risk to justify higher insurance prices, or that there is any correlation between geographical location and more accidents or claims. Still, they clearly discriminate against consumers not only on the basis of where they live, but on the basis of occupation, education, and credit rating as well.

If CD rates continue to tumble, will there eventually come a point where it no longer makes sense to invest this way? That was the topic of conversation in a column I read recently at bankrate.com. The question posed was: When one of your CDs matures, how low of a CD rate would it take for you to keep that money in a liquid account instead of rolling it into a new CD? For example, if the best long-term CD rate you can find is only a measly one percent, would that be so low that you would just move the money into a savings or checking account?

This sounds unfathomable to savers, but it could in fact happen if the Fed’s pledge to keep rates low until late-2014 materializes. Some internet banks have five-year CD rates dipping perilously close to the one percent mark – the 5-year CD APY at iGObanking.com is only 1.10%. ING Direct’s 5-year CD rate is even lower with a 1.00% APY.

There are two reasons that CDs are considered the favored form of saving money over a liquid account like a CD. Not only have CDs historically offered rates higher than those of bank accounts, but they also offer rates guaranteed not to fall until the point at which the bond matures. If CD rates continue to fall, those two advantages become less and less relevant. The Banktime columnist states that he previously mulled over this issue with savings accounts, the interest rates of which have also collapsed in the past several years. Per the poll, sixty percent of readers determined that one percent was the breaking point at which savings account rates no longer mattered. With rates so minute, the extra amount that you could earn by moving your money to another savings account may be too small to make the effort worthwhile. The rate literally matters no longer.

CDs may be about to cross into the same territory. The effort to open a new account is substantial, but there is also the problem that locking one’s money into a low rate for an extended period of time is financially risky. A mild early withdrawal penalty can mitigate this problem to some small extent, but there are still potential risks. Those who want to keep their money one hundred percent safe with no risk at all of loss may have no alternative to a CD but to turn to a checking or savings account. The Bankrate columnist says that, if you had a five-year ING Direct CD maturing today and you wanted to keep your money with ING Direct, he believes most savers would choose ING Direct’s savings or checking account instead of a new five-year CD with a 1.00% APY. Currently, ING Direct’s savings account pays 0.80%. That CD rate isn’t high enough to make up for the loss of liquidity in my opinion. However, it should be noted that the savings account rate may be much lower next year. That doesn’t help make the CD much more attractive. Even if the savings account rate falls to 0.40%, that 1.00% CD doesn’t look much better. In short, I think there’s a CD rate so low that most everyone will choose the liquid account over the CD.

And yet, the columnist says that he is not yet abandoning ship when it comes to CDs. His opinion is that we have not yet crossed the threshold of irrelevance with these bonds, because carefully-chosen long-term CDs remain safer for secure deposits than stashing money in liquid accounts. The columnist recommends using CD ladders with the highest possible rates and the lowest possible withdrawal penalties, just in case rates should suddenly make an upswing. For savers with CDs maturing over the next year, CIT Bank’s 2-year Achiever CD can be useful. If CD rates continue to fall, you can always fall back on this CIT Bank 2-year CD which allows for a one-time add-on deposit. But you will need to watch the system and take advantage of special promotions to maximize your return.

If you want to get out of your upside down position with your car loan, you have a few options. Could you refinance your auto loan? Could you possibly sell the car to recoup the upside down amount (which may be an option if your negative burden is not that high)? If the answer to both of these is “no,” then you need to consider how you came to be upside down on your loan in the first place.

The major way that cars lose value is when their owners pay too much for them in the first place. Cars depreciate like crazy, and especially within the first three years that you own one. If you buy a car and make only a low down payment – or no down payment at all – then you take on a loan for almost the whole purchase price of the car. From the moment you drive the car off the lot, however, you have a lot less in value on the car. If you buy a twenty thousand dollar car, for instance, and put only a thousand dollars down, you are underwater as soon as the back tires roll off the lot. The car is worth only sixteen thousand dollars as a used car in great condition, which is technically what you are now driving.

Not overpaying is the first step in avoiding negative equity. Unfortunately, it’s all too easy to overpay when you buy a new car if you don’t do your research. Once you have overpaid, there is little to be done about it. Your overpayment doesn’t make your car worth any more on the fair market, either – if you paid twenty-four thousand dollars for the twenty thousand dollar car listed above, you are not only more severely upside down, but you have an even more major problem. You can’t always blame yourself, though. Some people are not at all dumb or lazy, but get taken advantage of by an unscrupulous car dealer.

One mistake that you CAN avoid when buying a new car is adding too many fancy extra options to your car. You will run up the sticker price of your car, but probably do very little to up the value. Fancy rims, deluxe tow packages, and doodads like heated seats are a great way to end up even more upside down even faster. Another pitfall is when you are upside down on one car loan and roll the negative equity into your next car loan when you decide to trade in. Dealers may not even tell you that they are rolling the old debt into your new one, but your loan will be that much higher.

You can fall easily into these traps when buying a new or used room, unless you are clever enough to be very careful and protect your equity. Let me tell you something: it is close to impossible to avoid being upside down at one point in your auto loan. Many people aren’t even aware when it’s happening to them; it is so much a granted when dealing with financed vehicles. It may not even be a problem at first – it’s if and when you can no longer afford the loan that negative equity really rears its ugly head.

If you are upside down on your car loan, you may not need to immediately give the problem your attention. It’s not like this is great news – especially if you are upside down because of overpayment – but if you are able to pay your bill on time each month and got a fair deal on your loan, then it’s likely that the expense of your loan and the value of your car will even out within five years or so. A temporary imbalance is a yellow light, not a full-scale emergency… that is, of course, assuming that you don’t lose your job, have your hours cut, or otherwise become in some way unable to make your car payment in full.

How, then, can you get out of an upside down car loan? The answer, of course, is something you know already – you need to somehow pay down the excess debt. This may mean that you need to make some sacrifices or work harder. I assure you, however, that your effort is well justified. If you take strides towards paying down your debt, it is indeed possible to escape a loan that you could otherwise not afford. Your first step, if you can do it, is to attempt to move the excessive car debt to a credit line. There are many people who disagree with using credit cards any more than necessary, but a credit card isn’t anchored to your ride to and from work. If you can’t afford a five hundred dollar monthly payment on your car but have open credit on a card, moving your debt to a move manageable rate on a credit line may buy you time and save you cash. Of course, the key to success in this case is to move your money without buying more trouble. Don’t move auto debt to a credit line unless you know for a fact that you can commit to making lower payments on a credit line. The best card in this scenario is one with a low introductory APR, on which you can pay down as much of the debt as possible before the introductory period ends. You could also consider peer-to-peer lending courtesy of a network like Prosper or Lending Club. Another option is a local credit union, which may be able to provide a personal loan at a rate worth considering.

Another idea to consider when faced with the concept of negative equity? Raising some cash to pay off your excess debt. One way to do this is to sell some stuff. Here’s where the sacrifice comes in. You could dispose of big items like extra furniture or jewelry – especially with the price of gold these days – or you could get eBay-savvy and sell several smaller items to raise money as needed. Don’t exclude the idea of unloading the car itself, even though this won’t cover your whole overage. Getting rid of seventy-five hundred bucks of a ten thousand dollar loan, for instance, does make the balance a lot more manageable. Your car is only going to continue to lose value, keep in mind. If your inability to pay for your car has come to an extreme level, you should consider everything possible to keep yourself financially afloat.

Another way to get extra money, of course, is by getting a part-time job. If you need more income, this is in fact the time-honored way to get more cash. Keep in mind that this need not be a permanent situation, just a temporary set-up until you’ve dealt with the negative equity on your car loan. This situation might even be the push you need to start your own small business or find ways to make extra cash on the side – and if you keep a part-time job for the long term, you will always have that much more income!

Avoiding the problem of negative debt in the first place is the key to keeping yourself out of trouble. To this end, you need to make better choices from the get-go. Cars are always going to depreciate rapidly. As long as they have engines inside them, they’re going to drop like a rock in price. Car dealers know it, and they almost always make more money when you finance. When you’re ready for your next car, keep a few tips in mind so you can avoid being upside down on a car loan ever again. First of all, don’t finance a car purchase if you don’t have to. Don’t take out a loan if you can help it – buy a sturdy used car for which you can pay cash. It will likely mean that you need to settle for an older car. Still, it’s worth it to not be a slave to a car payment. We all dream of being able to pay cash for a new car, but know that it may not be possible. It will always be smarter to buy what you can afford. After all, wealthy people don’t take our car loans. These folks know the value of paying cash for your auto and driving them until they wear out. it your goal to stop the cycle of going from one car payment to another. If you break that cycle, you’ll be one step closer to achieving independent wealth. What a concept – getting ahead instead of just getting by!

When you shop for a car, it might help to imagine that you are buying a house instead. This might give you the mindset needed to save up at least twenty percent as a down payment on your new car in cash. A solid cash deposit at the table is the best way to avoid fallout from the epic depreciation that your car will experience in the first few years you have it. After you buy the car, do everything you can to pay more than the monthly minimum. If you absolutely must take out a loan, try to get a five-year loan so your monthly payment will be small. Then, if you can, pay up to double the minimum payment. You’ll pay off more of the principal earlier, which means you’ll build up less interest. The faster you pay off the loan, the better. Plus, a low payment gives you some wiggle room if your income is someday reduced.

Another way to beat the evils of depreciation is to do your part to keep your car in pristine shape so that it holds the maximum value possible. Don’t skip those oil changes! Don’t put more miles on it than you absolutely need to. Keep up with all scheduled engine inspections, fluid top-offs, and other preventative care. Take care of the paint job with frequent cleanings. Keep the interior clean and tidy. The better you treat the car, the higher the resale value will be. Make sure you can check off “excellent condition” when you look up the value, and you will milk every penny out of your auto.

Some couples, says Helen Graham, co-owner Real Estate by Graham in Reno and president-elect of the Reno-Sparks Association of Realtors, are troubled enough by the idea of having to split a home plagued with negative equity that they actually defer divorce in the hopes that the real estate market will rebound. Graham says that these couples can’t afford to get out – they each have a vested interest in the home, and can’t build a new life without the equity that they assumed they’d be getting when they bought the property. For those couples who can’t sit on their hands, heading to divorce court can open a whole can of worms inasmuch as division of assets is concerned.

The best case scenario, says Joel Sarmiento, a senior vice president with Wells Fargo Home Mortgage, is that a couple has just enough equity, credit, and general financial strength to meet the qualification bar for a mortgage modification. Unfortunately, not every divorcing couple will be able to pull this off. Sadly, most cannot. For those who are really willing to burn every bridge when they end a relationship, short sales or a decision to deed the house back to the lender can constitute a satisfactorily decisive end to a couple’s financial relationship. Of course, this usually means that both halves will leave with their credit as broken as their hearts.

Couples who are able to muster an amiable relationship after their marriage has officially ended – or who think they can, at least – may decide that they will continue to own the home jointly even after the divorce, says Surratt, hoping against hope that the market will improve enough that they can either sell or refinance. But this path is fraught with pitfalls that can snare all but the most agreeable of exes. What happens if the house needs a new roof? Does the spouse living in the house have rights to redecorate? Who gets to decide when the time is ripe to refinance? Surratt says that attempts to maintain co-ownership of a shared home after divorce have turned into page after page of legal tug-of-war over the rules of engagement.

Couples can end up paying much more for their divorce than they might otherwise have had to in these circumstances, because the property issues are too complex for a simple self-help divorce and require the (costly) intervention of an attorney. Adding financial insult to financial injury, the extra costs are just added salt in the wounds of cash-strapped couples who can’t tap a home-equity line of credit to pay the divorce lawyer.

It’s getting to the point, says Graham, that realtors are so turned off by the complexity of negative equity situations in divorce that they won’t even take potential listings until the parties involved have obtained the

assistance of an accountant and legal specialist so that they understand all the risks and complications involved. Take, for instance, short sales. These can result in a host of messy tax consequences, which are made all the messier when involving a divorced couple. The use of a quitclaim deed, meanwhile, can get the name of one spouse off the ownership of the house — but doesn’t remove responsibility for repayment of the mortgage unless the quit-claim deed is accompanied by a refinancing. Refer back to the paragraph about refinancing above, and you can understand how these situations quickly begin to resemble nothing so much as a dog chasing its tail.

One place for divorcing couples to start exploring their best options, says Graham, is through a free meeting with a HUD-approved credit counselor. These professionals can give unbiased advice and help couples understand their options. Of course, Surratt warns, no single option can completely remove the emotional aspects of dealing with disposing of a house that was once a divorcing couple’s marital home, much lessthe divorce itself. And although both couples may start with the best of intentions, divorces can grow petty and hateful quickly. Adding a real estate gone bad into the situation can, Surratt warns, “prove to be just one more reason for angry recriminations in a breakup.” Tread carefully.

It’s believed that some clinics will perform life-saving organ transplants on illegal immigrants, especially when they are young. There is no definitive data on the subject of organ transplants and illegal immigrants, just anecdotal evidence compiled from various reports: such as the story of an undocumented female immigrant who received no less than three liver transplants from UCLA Medical Center before her 21st birthday. On the other hand, it’s a known fact that officials can and do deny transplants to patients due to their immigrant status – although, unlike Navarro, most of these denied transplants come about due to the fact that the would-be transplantees don’t have insurance to pay for the operation.

University of Pennsylvania bioethics professor Arthur Caplan cites this sort of debate as the sort of “ethical gray area” that hospitals loathe. Doctors tend to find themselves in a state of distress over their lack of options in these situations, he says – they come into the situation attempting to help someone out, and find themselves smack in the middle of a firestorm over illegal immigration. On one side of the ring are immigration advocates and humanists who say that immigration status should be of no concern to hospitals, who are tasked with giving health care to those who need it. On the other side are the very outspoken and passionate proponents of stronger border enforcement and immigration law, who argue that more and more illegals could be tempted to jump the border if they know that they could receive life-saving care over here. They are supported in philosophy by fiscal conservatives fighting to contain the skyrocketing costs of healthcare in America.

Navarro, who is thirty-five years old, says that he never thought his survival would come down to his immigration status. He has held private insurance through his job at Berkeley’s Pacific Steel foundry for the past fifteen years. He has worked full time throughout his kidney failure, which started eight years ago. He’d come home from work each day and filter deadly toxins from his blood with the aid of a home dialysis machine. Gradually, however, he became sicker and sicker. Home dialysis is considered to be a short-term solution for kidney failure at best, with life expectancy for those confined to these machines estimated at about six years.

The Navarro family thought that their agony was over when they got a call this past spring that Jesus had reached the top of the UC San Francisco waitlist for a kidney transplant. His wife recalls their happiness at the thought that his health might finally turn around. During Navarro’s very last consultation before the transplant, however, it was discovered that he was an illegal immigrant. UC San Francisco called off the operation. Navarro’s wife, also an illegal immigrant (whose name was withheld in newspaper reports due to this fact), offered her own kidney. She was a match, but officials still said no. It’s not exactly known how Navarro’s immigrant status came to be on the table. Although the hospital will not comment specifically on Navarro’s case, UC San Francisco’s executive director of transplantation, Reece Fawley, said that the hospital’s clinic evaluates all patients for socioeconomic stability preoperatively. Included in that assessment is consideration of candidates’ “adequate and stable insurance coverage,” or other financial stability over the long term that is needed for follow-up care “long after transplant surgery.” Fawley said that immigration status is only one aspect taken into consideration.

Navarro lost his job at the foundry this month, thanks to an immigration audit. He had held the job illicitly, using a fake social security number. At the moment, his private insurance continues as it will for a time. He is trying to extend it. Should he lose it, however, he may end up on Medi-Cal, the state insurance plan. Medi-Cal will foot the seventeen thousand dollar monthly bill for Navarro’s daily dialysis, but it will not cover the cost of the immunosuppressive drugs that ward off organ rejection, which cost twenty thousand dollars annually. That’s a moot point, however, since Medi-Cal won’t pay for organ transplants for illegal immigrants. The hospital won’t perform a transplant without a guarantee that the drugs and accompanying treatment will be paid for, owing to the fact that these subsequent therapies are necessary to ensure that the transplant doesn’t fail.

There are those who believe that the hospital had a bioethical duty to perform the surgery since Navarro wouldn’t be taking a kidney away from another (insured/native) patient if his wife donated the organ, and that he wouldn’t be putting his wife at serious risk by taking one. It’s not as if there aren’t plenty of other organ donation patients who fail to follow through with their post-operative care plan, after all. Santa Clara University bioethics professor Margaret McLean questions why Navarro was denied “the opportunity to comply.” University of Southern California bioethics professor Michael Shapiro takes it a step further and wonders why, if Navarro had the organ – “the critical resource” – the hospital didn’t go ahead and transplant it solely on that basis that it would give him a “serious chance at life.”

On the other hand, there are and always will be detractors in cases like this. Bob Dane of the Federation for American Immigration Reform (whose mission statement is pretty much made evident in its name) argues that hospitals cannot responsibly provide long-term care to illegal immigrants, and that doing so discourages their home nations from developing their own adequate healthcare systems. Dane states the opinion that “you just cannot provide care for illegal aliens without getting into uncompensated care.”

Navarro, for his part, says that his main concern at present is finding another job – not saving his life. He states that he is worried about his family and is taking anti-anxiety pills to sleep, due to all the stress from the transplant situation. The Navarro family claims that they, too, are in a bind waiting for an answer.

Navarro’s situation is a distressing one. I think that even the staunchest anti-illegal-immigration diehards would have a hard time out and out consigning a human to death because of their political position. At the same time, it’s true that making life-saving care available to illegal immigrants could invite a flood of other undocumented individuals to come into the country and potentially leech jobs and benefits from “real” Americans. No matter where you fall on the political spectrum, you have to admit that it’s a sticky situation. As a fellow parent, I can’t help but feel heartbroken at the thought of Navarro leaving a young child behind. Also, I feel that the fact that Navarro’s prospective transplant organ belongs to his wife is an important consideration. It’s not as if he’s “taking” an organ from anyone else on the transplant list, after all. Not that these things should matter.

When you buy a potential retirement home, you are merging two important aspects of your financial life: real estate and retirement. Most people purchase retirement homes with a twofold purpose: increasing wealth over the long term and having a comfortable home to live in during one’s senior years. It’s true that buying a vacation home now for later retirement use can, in fact, up your net worth. However, you need to determine whether this is truly the best use of your retirement money. Considering the fact that all real estate is local, this can be tough to really get an idea for. It’s crucial to weigh whether investing elsewhere like in a lower risk, lower hassle diversified portfolio of financial assets like stocks and/or bonds could have a better outcome than real estate. Would your money go further elsewhere?

Here’s an example to give you an idea of the thought process in this situation. Let’s say that you plan on putting down sixty thousand dollars cash up front (inclusive of the down payment, closing costs, any rehab necessary, and furnishings), and taking out a one hundred fifty thousand dollar mortgage. Unless you rent the house out as a vacation rental when you aren’t using it, you will likely be losing around one thousand dollars a month by paying the mortgage, property taxes, homeowners insurance and repairs. That annual negative cash flow amount will inflate slightly each year with higher taxes, repairs and insurance. By the time that fifteen years have passed, you will have invested between two hundred sixty and three hundred thousand dollars in the property – sixty thousand up front plus twelve thousand a year (plus inflation) over fifteen years.

But okay, you say, when I sell the house I will recoup these costs… right? Well, let’s see this example though. After fifteen years, your home could conceivably be worth three hundred fifteen thousand dollars, thanks to a three percent annual appreciation (which is a broad assumption in these days of declining home values, but whatever). If you sell it for that amount – again, assuming that you can – you can go ahead and subtract twenty-five thousand dollars right off the bat for selling costs. Subtract one hundred thousand dollars, which is the remaining mortgage balance. That leaves you with one hundred ninety thousand dollars. Alas, you have already invested about three hundred grand in the house to date… so you are now underwater by one hundred ten thousand dollars. You’d need to sell the house for four hundred forty thousand dollars (an annual increase of almost four and a half percent for fifteen years) just to break even. In other words – total long shot.

There’s more insult to add to this injury, if you look at things like an economist would. A financial pro would insist on adding in the opportunity cost of the interest or dividends you would have earned if you invested all the three hundred thousand dollars into a financial asset, as well as any capital repair/replacement/upgrades that you certainly will have done at some point over that fifteen-year period. If you would have invested your cash with a five percent return from the get-go, you would have over four hundred thirty thousand dollars in the bank at year fifteen! Without a doubt, that’s a LOT more than the net one hundred ninety thousand dollars that you would have earned on the second home! If you could manage a six percent interest rate, the returns are even greater: four hundred eighty dollars after fifteen years.

Let’s take money out of the equation for a moment and just talk about realistic things. How exactly do you know for certain that you will definitely want to retire to a certain place in ten or fifteen years? What if you get divorced? What if you can’t handle the climate and need something warmer or cooler in your old age? There’s no question: to minimize risk and get the best return on your hard-earned cash, you are very likely better off keeping your money in a more liquid and less risky asset than a second home. Starting a diversified “retirement home buying fund” over buying a retirement home is probably a better idea. When you get close to retirement, you’ll have plenty of cash to buy your retirement home – be patient.

But Steph, you may be saying – you are not thinking of everything! What happens if I rent the home out, thereby drawing an income on it when not in use by my own family? Well, just know up front that there is no guarantee that you will be able to do this. Before you even fork over one dollar on a vacation rental, you need to ensure that it constitutes a good real estate investment with projected positive returns. Location is almost only the many determining factor in this calculation, but know that most fancy condos or beach houses, where the net rental income is very low compared to the purchase price, usually have projected negative cash on cash returns. Should you “invest” in one of these stinkers, with negative (four percent) cash on cash returns, even if it appreciates two percent per year, you are typically at a zero percent, or worse, return on your equity cash investment. That isn’t a deal most experienced investors would take. Unskilled laypeople might think they had a good shot of pulling through, but the numbers will get them every time.

It’s also worthwhile to mention the fact that vacation rentals are similar to hotels in that, for every dollar in rent you accumulate, you are likely to shell out seventy-five cents in taxes, management fees, furniture, cleaning, and utilities… and that’s before making your mortgage payment each month. That’s why these fancy properties are a losing proposition. Lower risk moderately priced regular rental properties run about thirty to forty percent expense ratio with reasonable mortgage payments. It is the moderately priced units that have decent cash on cash returns.

Also, don’t be wooed by the old misconception that you can get an income tax write-off for your second home. Unfortunately, rental properties are the ones with decent tax benefits – the mortgage interest deduction rarely does much for Americans on a net level. There is also the simple fact that you should NEVER make a decision based on the prospective tax benefits. No matter what, it is a rule that a tax benefit will not save the day on a bad real estate investment.

In a nutshell, know that, if you are going to invest your cash into an asset, like a second home, that produces only negative cash flow for the term of your investment, you’re stuck hoping some outrageously high appreciation in value will compensate for the negative cash flows. And hoping for appreciation in value is not a very sound, or likely to be successful, investment strategy. You will want to think seriously before dumping your money into a vacation home with the hope of it fulfilling your retirement.