CLARKONOMICS: Executive producer Christa still remembers how dejected Clark was when Americans first started spending more than they made during the early 2000s.

Well, finally, we're seeing a reversal of that longstanding trend. In May, the average American saved 7 cents of every dollar earned. Heartening news, but still not enough for the long term. Americans typically saved a dime on a dollar before the early 1990s.

The May numbers may be something of a false positive. After all, withholding was recently adjusted and people had more in their paychecks.

But in general, the saving rate has been trending upward for months, which is good news.

Yet some people in Washington and on Wall Street are scared of our newfound zest for savings. Why? Historically, consumers accounted for close to 70% of economic activity. That means it will take longer for the economy to grow if we stop spending like chumps.

Be that as it may, the long term gains of developing a savings habit will put us all in better stead for the future. It all comes down to accountability. You must hold yourself accountable and do what you need to live on less than what you make.

How much can you save?

The FDIC has announced a settlement with a company running ads for above-market CD rates in 80 newspapers nationwide.

AmeriLife First Financial LLC reportedly used the high CD rates as a lure to get people in to buy annuities or other investments.

However, those who stood their ground and held out for the advertised CD rates got what they wanted. AmeriLife would pay a bank in cash to issue the CD at the advertised rate.

What a business model! Apparently the loss they took on the CD rates was outweighed by the gain of the sales commissions made on annuities.

Interestingly, AmeriLife put out a press release disputing the FDIC's findings.

The message here for you is be careful anytime someone promises you what exceeds what you can safely earn on a CD.

And remember, it almost never makes sense to buy an annuity. The only kind of annuity that Clark recommends if you're looking to not outlive your money is an immediate payout or life annuity. But you'll rarely hear about this option from salespeople because the commissions on it are so low.

Looking for the best online bank? Consumer Reports has a list of the top places to stash your cash in cyberspace.

INGDirect.com was named as the best bank with a score of 80, while HSBCDirect.com came in with a score of 78.

The online banks were ranked on customer service, fees and other criteria.

Of course, keep in mind that you can't make everybody happy, even with a clear winner like ING. Clark recently spoke to a man who had a bad experience going through them for a mortgage. Boy, was he sore at the consumer champ for recommending ING!

On the bottom of the tally, 3 of the giant monster mega-banks got atrocious scores for their online banking arms. Wells Fargo came in dead last with a score of 50, followed by Chase (58) and Bank of America (61).

Just to illustrate the disparity between the best and worst, ING pays 1.5% APY for savings vs. Chase (.01%), Wells Fargo (.05%) and Bank of America (.2%). Those are just embarrassing, silly numbers. (Editor's note: Rates accurate as of June 23, 2009.)

Don't read this and then turn around to do business with these giant bank clowns…they're ripping you off with high fees and low interest rates.

CLARKONOMICS: New rules intended to make money market funds safer than ever were announced today. The catch? Increased safety requirements will mean a lower return on your money.

Money market funds had long been considered just about the safest place to stash cash. During the nearly 30 years of their existence, no one had ever lost a single penny in a money market fund. They were specifically designed not to "break the buck," meaning that shares would always be valued at $1. In other words, you would get back out what you put in, plus interest.

However, one particular money market family called the Reserve Fund did break the buck last September. That caused a run on the fund and destabilized the industry when the Reserve Fund couldn't make its customers whole.

The feds had to step in with a temporary guarantee at taxpayer expense.

Today, the SEC by unanimous vote passed new rules to tighten the requirements on money market funds. These rules will now enter a period of time for comment and become the law of the land shortly afterward.

Thankfully, taxpayers will no longer have to back the interim support that the feds put in place.

And if you were one of the people who put money into U.S. Treasuries to wait out the storm -- where you're effectively earning zero -- now is the time to get back into money market funds or into an FDIC-insured savings account.

Last month, Clark gave listeners early warning about Advanta. This ailing credit card provider to small business was dealing with an unprecedented amount of debt, and at the time had announced it would shut down all credit lines sometime in June.

But Advanta ran out of money early and shut down 1 million accounts on May 30. People who were traveling on business suddenly couldn't use their credit cards to check into hotels or rent a car.

So now the inevitable question: How can small business find access to funds in a post-Advanta world?

If you're a business with an open line of credit at a bank, draw down that money now before it gets cut off. Be sure to deposit the money at a different bank or credit union.

In most loan agreements, there's a clause that allows the bank to claw back the money owed on a loan when it is suddenly called due. So if the money is sitting on deposit at the issuing bank, they'll just help themselves to your account to get it. You could easily wind up bouncing checks all over town.

(Editor's note: This advice also applies to individual homeowners with a home equity line of credit.)

As a business, you need to have multiple lines of credit. But Clark knows that's easier said than done in today's climate. If your lines of credit being shut off would put you out of business, then you have some homework to do to line up alternate sources of funding.

Americans are borrowing money at a decreasing rate, according to a new stat from the Federal Reserve. The amount of borrowing plunged in March 2009 by the fastest level since 18 years ago. In fact, that's the greatest reduction in borrowing dating back to World War II, if you go by real dollars and ignore inflation.

Americans are making individual decisions to not spend money they don't have. That's so unbelievably healthy for the long term. Cynics, of course, say this is a temporary phenomenon. But Clark begs to differ.

Back in 1976, the average American saved roughly 15 cents on every dollar. In recent years, however, most Americans saved zero or even negative $1.03 for every dollar they made. How do spend negative $1.03 on a dollar? By borrowing!

Today, thankfully, we're saving almost a nickel on a dollar!

Some people argue that saving more and spending less equates to a lower standard of living. Is not having closets full of clothes you never wear a lower standard of living? If the average car on the road is 6 months older than it used to be, does that equate to a lower standard of living? How about if you live in a smaller house?

Clark looks at your net worth, which is your assets minus your debts.

For too long, the double barn door metaphor could have described our spending. As one side of the barn opens wider, so too does the door on the other side. So we as a nation were always spending whatever extra we made over time. In economic terms, it's called marginal propensity to consume.

The alternative is to learn to be more careful with what you spend and pay yourself first.

Have you been turned down by the bank for a loan? Why not borrow directly from your fellow man online using a peer-to-peer lending site?

Prosper.com is the granddaddy in this arena, while LendingClub.com is another extremely popular site.

Clark has long believed that P2P lenders offer so much for borrowers, but there's relatively little upside for lenders.

For borrowers, the biggest challenge is that you need a minimum level of credit worthiness to participate. As an example, PertuityDirect.com requires a 660 credit score.

The interest rates you pay as a borrower vary by website. With Propser, it tends to be between 7% and 24%. (Editor's note: As of June 2, 2009, Prosper is not coordinating any borrowing or lending, pending a completion of the company's SEC registration.)

For lenders, The Wall Street Journal now reports they get a return on their money of under 3%. Not too enticing considering you can get a better return on CDs with no risk!

Finally, there's one oddball P2P option from Richard Branson. VirginMoneyUS.com is designed to help you make loans to friends and family members. The company handles all the paperwork, including sending notices about payments and collecting on debts in the event of default.

They even harass your family for you so you can preserve your relationships!

Most CD rates are looking anemic across the nation. But there are a number of smaller banks, credit unions and some wholly unusual sources that are offering rates above the national average.

As an example of the latter, Clark recently saw a banner ad on The Boston Globe website for a 5-year CD at 3.75%. He clicked through and sure enough it was a real deal available to members of AAA. That means tens of millions of people in the United States could take advantage of this deal!

3.75% is the highest interest rate available anywhere in America, according to BankRate.com. In addition, AAA is offering 3.25% for a 3-year CD. (Editor's note: Rates accurate as of May 29, 2009.)

If you're searching for more great rates, you can also try looking locally at any small bank in your town. Remember, your money is protected up to $250,000 with the FDIC, or with the NCUA if you're talking about a credit union.

Clark also recommends laddering your CD investments (1 year, 3 years, 5 years) so you always have money maturing. That way you have some money available should a more attractive interest rate present itself down the road.

Have you seen ads being run by the debt-settlement outfits on late-night TV? They promise to reduce your credit card debt to just pennies on the dollar without making you file for bankruptcy.

But that promise is an illusion. Here's the scoop: You usually pay an upfront fee to the debt-settlement firm, plus a monthly retainer. Their strategy is to get you to stop paying on your bills. They typically have you take the money you would have paid on monthly minimums and stash it in a savings account.

The basic idea is to make the credit card companies so desperate that they'll settle with you. The reality, however, is that you just wind up damaging your credit.

In fact, complaints about debt-settlement firms have doubled in North Carolina; tripled in Florida; and quadrupled in Oregon, according to The New York Times.

The reason these companies even exist goes back to 2005 when the bankruptcy laws changed in our nation. At that point, the banks stopped being cooperative with affiliates of the National Foundation for Credit Counseling (NFCC). They were cynically trying to force people into a position where they had no choice other than to pay up. The debt-settlement firms then popped up promising they knew how to defeat the banks.

The irony here is that the banks have now agreed to work with the NFCC again. A newly announced debt-management initiative offers reduced interest rates and the possibility to waive your late fees.

Britain is in danger of having its debt that the government sells (its version of Treasuries), downgraded to third world status. Like us, the British government has been spending money it doesn't have in an attempt to jumpstart its economy. And now, credit ratings agencies are calling into question their ability to honor these debts.

Why is this a scary thing for us? Britains' debt load by next year will be about 66% of their output of goods and services. America's debt load by next year, with all the deficit spending, will be almost 71%, a level of debt considered outrageous even in war time.

But forewarned is forearmed. We still have time to turn this around. The problem is that we're dependent on the kindness of strangers to keep our economy cooking these days. Communist China, for example, now holds over $1 trillion of our debt. But how do we really keep ourselves cooking? Simple. We don't spend money we don't have. Yes, it's complex with all the bailouts and promises flying around. So how do we come up with money? We could tax ourselves every which way -- or maybe, we conclude that government should be required to do less.

It's become normal in wealthy western culture to depend on government to "have your back." It previous times, we relied more on neighbors, relatives and charitable organizations to lend a hand. Maybe it's time to get back to that model. Executive producer Christa talks about a charity she saw on Oprah called Good News Garage that fixes cars for the needy to help enable their job search. Clark likes this. While it would be great if government was able to provide for all, right now it just can't afford that. So if you are doing reasonably well, now is a great time to give back and help out others. Clark supports a constitutional amendment that would require governments to balance their budgets. Sounds quaint, but it's a realistic step towards changing our relationship to government, and how much we expect from it. Clark thinks we as a country have gotten a little bit lazy. If we don't want to be downgraded to third world country status, we need to get it in gear.

CLARKONOMICS: You've probably noticed the price of oil steadily climbing recently. The latest trade price of a barrel of oil was $61--double what it went for just three months ago. This is in spite of the fact that there's a massive two-month supply of oil available right now. It may even reach a point where there are no more oil tankers left to store this unprecedented amount of surplus oil! So how could prices be going up? What happened to the classic rule of Supply and Demand?

When you look long term, oil prices generally do follow the law of Supply and Demand. But short term, it's human nature to fall victim to inertia. This means we tend to assume that whatever direction a market is going, it will continue to follow that trend, regardless of the facts. (We see this in the stock market--when things are booming, everyone starts to buy in even though the peak may have already happened by then, and vice versa.)

Clark thinks this is a "false rise" in the price of oil because there's a lot of money available that investors aren't sure what to do with. With "safer" investments like Money Market funds earning almost no interest these days, investors are turning to stocks and commodities, such as oil. When oil was at its lowest, many investors started buying in, assuming oil price would continue to rise. This demand feeds the prices higher. But the herd mentality that's pushed the price up is just a temporary situation. When will the prices equalize to more realistic levels? Clark goes out on a limb to predict that oil prices will start to fall right after the July 4th holiday.

(Last year at this time Clark was one of the few to predict that the $4 gas prices would go down to the mid-$2 range, going against all prevailing opinions at the time. Will he be on the mark for a second year in a row?)

The Securities and Exchange Commission has filed a civil suit against the family that operated the Reserve Fund.

Like all money market funds, the Reserve Fund was supposed to be a completely safe option for your money, with the price of a share fixed at a dollar. No one had ever lost a single cent in a money market account -- until the Reserve Fund "broke the buck" by devaluing shares below a dollar around September 2008.

The Bent family, which founded the fund, was not running a scam like Bernie Madoff. They simply made mistakes with the money and then let the situation spiral out of control. For example, they withheld money from Reserve Fund accounts to fight lawsuits. That's an outrageous abuse of the public trust, according to Clark.

And its precisely why he believes criminal charges should be filed in addition to civil charges.

But it's important to know that the Reserve Fund debacle was a total anomaly that involved one particular money market fund. In general, money market funds remain a safe option for your money.

In fact, the federal government is now guaranteeing money market funds through September 2009.

Savers can breathe a temporary sigh of relief now that government coverage on money market funds has been extended through Sept. 18, 2009.

Money-market funds have long been considered just about the safest place to stash cash. During the nearly 30 years of their existence, no one had ever lost a single penny in a money market fund.

Until last September.

At that time, Clark took a number of gut-wrenching calls from listeners who had money in one particular fund called the Reserve Fund. The Reserve Fund made silly bets with people's money and lost big in the failure of Lehman Brothers.

As a result, the Reserve Fund was forced to do something that's anathema to money market funds -- they "broke the buck" by devaluing shares below $1.

Money market funds don't have FDIC insurance. So the federal government had to set up an emergency guarantee program to quell people's fears. Their goal was to prevent a run on money market funds. That initial guarantee had been scheduled to expire later this month.

The consumer champ vividly remembers one call that came in last September from a listener whose father had retired on the $270,000 he had in the Reserve Fund. Suddenly, that $270,000 was marked down to zero when the Reserve Fund started freezing people's accounts before the government stepped in.

Your money market funds remain completely safe with the extended government protection. The industry itself has proposed new guidelines that should prevent a similar calamity from happening again. Of course, it's very important that the procedures go in place by September 2009 when the government protection ends.

By the way, Clark never his took savings out of money markets. That wasn't necessarily the wisest choice, but he firmly believes this whole Reserve Fund episode was a freak occurrence and won't happen again.

Clark has whined for years about how much we as a country have refused to save. In recent years, in fact, we had even ventured into the land of negative net savings rates for the first time ever -- even counting the Great Depression years!

But now we're in a process of "de-leveraging" and some people are beginning to save again. The chief economist for Moody's Economy.com now predicts the saving rate will be at 3 percent in a year and 8 percent after 2010.

A USA TODAY/Gallup poll finds that younger people are saving much better than those over age 50. According to the survey, 44% of those in the 18-29 age range are increasing their savings, while 40% of those in the 30-49 range are doing the same.

Could we be witnessing the end of the "when the going gets tough, the tough go shopping" mentality of the '90s?

In recent years, we as Americans were proud to have more stuff than anybody else in the world. Even the penny-pincher himself has a confession to make in this regard.

Clark has lost around 25 pounds over the last 8 months and finally decided to donate his old slacks to charity. He had 12 pairs of identical khakis -- and 2 had never been worn and still had the tags on them.

No doubt he saw them on sale and just couldn't resist a bargain. Clark is ashamed to admit it, but it's true. We as Americans need to rethink how we spend and consider our needs versus our wants.

With all the fever surrounding Election '08, Clark wants to (jokingly) throw his hat in the ring with a presidential bid for 2012! His platform probably won't get him elected, but he still wants to lay it out for your perusal.

• Spend only what you make -- In a Howard administration, your president would pass a balance budget amendment to the Constitution. We'd become a pay-as-we-go country -- instead of doing the opposite as we have for years.

• A flat income tax policy -- The flat tax would be somewhere around 18%. There would be a high standard deduction so that those with lower incomes don't get pinched. A flat income tax would also eliminate the corruption in Washington and let you know what tax burden you have.

• No more employer-provided retirement plans -- Goodbye to the 401(k), 403(b) and any other form of employer-provided retirement. Your president would require that every dime on a dollar your earn goes into a personal retirement account with ultra-low management costs and simple investment choices.

• Just say no to socialized medicine -- In a Howard administration, there would be just 12 health plans offered: 3 HMOs, 3 PPOs, 3 HSAs and 3 of the traditional 80/20 splits.

Every insurer would have to sell identical plans. That way you could switch to another insurer's HMO plan No. 2 if your insurer's HMO plan No. 2 is too costly. You would pay your premium based on age, and there would be no redlining based on your past medical history. You wouldn't be required to have health insurance, but you wouldn't be allowed to buy it when you're sick; instead, you'd have to wait 18 months.

A word about Medicare: Seniors would buy healthcare from private insurers in one of the 12 plans, but the government would subsidize catastrophic care at ages 55 and older.

Is it possible to simultaneously achieve the first 2 platform points? Of course not. By 2028, the costs of Social Security, Medicare and Medicaid will exceed what is today the entire federal budget, according to Forbes. So we would either have to raise taxes to an unconscionable level or tell people the truth that we can not afford to be Santa Claus to everybody.

In a Howard administration, we would all need to do a hard reset about the issue of personal responsibility vs. what we expect from government. Santa's sack is getting less and less full, so you've got to be your own Santa. Clark will be running on the Ebenezer Scrooge platform for 2012!

If you are a small business or an individual, it should come as no surprise that it's difficult to borrow money. Even businesses trying to borrow through the SBA loan program are having difficulty. The reality is that credit is loosening for the big players, but not necessarily for individuals quite yet.

One consequence of the difficulty in borrowing is that GMAC has raised lending standards so that you must have a FICO score of 740 or above. That's only a little more than a third of Americans. Historically, that's a very different scenario than it has been in the past when they would lend to anyone with a pulse who wanted a car. Now the pendulum has swung the other way.

It's no surprise either that auto sales are the worst they've been in 25 years. But there's always a silver lining to be found somewhere. If you're in a position of economic strength, now is a great time to buy a large vehicle. There's a massive oversupply of SUVs, for example, that should hang around for another 3 to 6 months. With gas prices dropping, now may be the time to strike.

New figures from Smart Money show that only 3% of millionaires inherited their wealth. That means 97% earned their vast fortune themselves. Smart Money also reports that 80% of millionaires are extra thrifty shoppers. Many of them even clip coupons!

Interestingly, only 8% of millionaires consider themselves wealthy, and 1 in 5 don't think they're wealthy at all. In addition, 75% are newly wealthy, and half of all millionaires made their money running their own business.

Clark has always despised debt. Overwhelmingly, millionaires are people who never like carrying debt either. In fact, Donald Trump is one of the only high-profile millionaires that Clark can think of who likes to do everything with borrowed money.

Borrowing should be targeted to creating wealth in a business. You'll find that millionaires in the making don't borrow heavily for lifestyle. Most who become wealthy only borrow to build their business, not to buy that 3-year old used car. They pay cash for the car instead.

Do you have money to invest, but you're not sure where to put it? Most people who are unsure about investments hire someone to help. One of the greatest danger points is in mid-career, when you find yourself with a great deal of money in a 401K. At that time you're at the greatest risk, because that's when you're most likely to end up hiring a commissioned salesperson. Is that a problem in itself? No. There are plenty of situations when paying a commission is just fine. But in the investment world, there can be inherent conflict of interest with commissions. There are plenty of investment products that may not be the best choice for you, but you may be sold on them because the commissions are humongous. Variable and Index Annuities are referred to as 'sold', not 'bought', since people don't buy these on their own -- they are convinced to do so. Salespeople use code words such as Retirement Secured Account and other phony phrases to keep from tipping you off that you're being sold an annuity. Sometimes a Life, or Immediate Annuity makes sense, but the commissions are so low you won't hear much about them.

Clark wants to warn you away from another term: "fee-based planners." These salespeople start with a fixed fee, but the commissions on products they may sell you defray those initial costs, which again, may not be in your best interest. Honest commissioned salespeople will rise above their personal interests and sell what's right for you.

The stakes are so high in investing that Clark urges you to consider fee-only planners. They'll give you a fixed price up front for their services, regardless of the product they recommend. You won't have to worry about conflict of interest. Their success will depend on your good word of mouth and how well they did by you. To find a good one, go to the National Association of Personal Financial Advisers website, NAPFA.org. Another good resource is Garrett Planning Network: garrettplanningnetwork.com

For the first time in a good while, you'll finally be able to earn much better rates on savings. You can now actually keep pace with inflation!

5-year CDs are again earning over 5% -- that's after months of 5-year terms yielding around 2.5%. 1-year CDs, meanwhile, are in the steady 4% range. For the shorter term, Clark suggests you might want to look at an online savings account.

So how do you find these deals? Many of the best ones are at community banks and credit unions in your hometown. Look on billboards or signs when you're driving around. Just don't look at the giant monster mega-banks!

You can also get a good survey of rates around the country at BankRate.com.

No one knows where CD rates are going from here. That's why Clark recommends laddering your CDs. The easiest way to do that is to split your money into 3 piles -- a money-market or savings account; a 1-year CD; and a 5-year CD.

A more sophisticated laddering approach would involve a 6-tier setup. Splitting your money into 6 even piles, you'd have the following set-up: A money-market or savings account; a 1-year CD; 2-year CD; 3-year CD; 4-year CD; and a 5-year CD.

Then when your 1-year CD comes due, you re-up in a 5-year CD; ditto for your 2-year CD, your 3-year CD, etc. That way you don't lock all your money into a 5-year CD if rates go up or down.

There is now a federal move to cap the interest rates that payday lenders can charge at 36%. That would extend the protection against outrageous rates now enjoyed by military personnel to all civilians.

As surprising as it sounds, a wide-reaching 36% cap would nearly demolish the payday lending industry. They simply can't staff their outlets and give out money haphazardly at that rate of return.

Clark believes the industry really brought this on itself. If they had kept to interest rates of only around 50% or 60% -- and Clark uses the word "only" very loosely! -- they may not have attracted such ire. But instead, the payday lenders have been greedy, sometimes charging hundreds or even thousands of percent interest!

On a related note, Clark is disappointed that credit unions have only had limited pilot programs for short-term borrowing. He feels they missed out on an opportunity to provide a real community service to those who would otherwise be targets for payday lenders.

As always, resist the temptation to go to a payday lender. It's never the right move.

There's a new trend that you need to know about if you have a home equity line of credit. Buried in your HELOC is a clause that allows the bank to freeze or reduce your line, at will, with almost no notice. In his TV work, Clark recently did a story about Bank of America doing this to its HELOC holders. But many banks other than just BoA are doing this.

This is a double whammy because many banks charged fees upfront to set up the HELOCs. So far they're not refunding the junk fees. Meanwhile, your credit score can also be demolished based on utilization of the HELOC. Say you have a HELOC with a $100K limit and you're only using $30K. That means you're using 30% of the limit, which is a relatively low level. But if your HELOC is suddenly dropped to a $30K limit, then you're using 100% of what's available to you and your credit is buckling under that strain.

Banks are slashing HELOCs because people are increasingly defaulting on them. Yet people with solid credit can get fantastic offers for borrowing right now because it's such an odd time in our economy. Clark's credit union is offering a 5-year fixed rate HELOC at 3.95%. That's really inexpensive! He also has access to car loans at 3.90% for new or used vehicles on loans of 4 years or less. There's such a stark contrast between what's available to people with good credit and people with bad credit.

College kids are bombarded with an average of 4 phone calls and 5 mailings every month to get them hooked on credit cards, according to a new PIRG study. There's a feeding frenzy because teens are the most profitable of all customers for the banks that issue credit cards. It's unreal to Clark that university presidents and alumni groups are co-conspirators with the banks in trying to demolish the credit standing of our youth. Some cash-hungry universities even make deals with banks to provide them with personal student information and on-campus access to students.

The consequences of this are severe. Clark's senior producer, Kim, ran up $17K of lifestyle debt at college by the time she was 24. She didn't get it all paid off until she was 31. Meanwhile, Citibank and other lenders are being sued in the state of Ohio for handing out coupons for free sandwiches to students. But the catch was students had to apply for a credit card before the coupons could be redeemed. You as a parent have to guide your teens and teach them about the dangers of debt. This should not be a onetime talk; it needs to be an ongoing educational process. Get your own finances in order so you can teach by example.

Once upon a time, Americans worked for 1 employer for an entire lifetime. They also got a pension for their years of service. Back then, you didn't have to save for retirement or make any of the accompanying investment decisions.

Today, only government jobs and a small number of large companies still offer pensions. The rest of us are on our own. Unfortunately, the average worker is faced with an alphabet soup of retirement options -- everything from the 401(k); to the 403(b); to the SEP if you're self-employed. Just figuring out the terminology itself can exhaust, bore or intimidate you.

Once you get past weighing the merits of a 401(k) or a Roth IRA, for example, then you have to choose individual investments to actually put your money in. Most people don't have the first clue. That's why Clark compiled his investment guide to give you a starting point.

Clark is a big fan of targeted retirement funds, which offer a very hands-off approach to retirement planning. With these choices, you pick the year you expect to retire -- let's say 2040. Then you buy the 2040 portfolio and sit back. Over the next 30 years, the company you choose picks a mix of stocks and bonds to get the best returns with the lowest overall risk. As you get closer to 2040, your investments automatically become less risky.

Forbes now reports there are 289 different targeted retirement funds in the marketplace. So which company offers the best? That would be Vanguard. This financial house offers no load mutual funds; no hidden 12b-1 fees; and management costs that are about one-sixth the average of other companies. T. Rowe Price and Fidelity Investments are also good places for your targeted retirement funds. You can't go wrong with any of these 3 low cost houses.

Clark created a lot of excitement about Series I bonds last month. They were a great deal up until April 30. But as of May 1, Clark is no longer recommending them. That's because the government has reduced the fixed rate of return to 0%. That's just nuts! So you might want to dial back if you're on a payroll saving plans where you get Patriot Bonds or I bonds. Both are now practically useless as savings tools.

However, they will continue to be a decent deal if and only if you purchased before May 1. People who bought between last fall and April 30 are earning 4.28%. That will bump up to over 6% in November. And if you bought in the late '90s, wow, you're getting a phenomenal deal and should hold onto them for the full 30-year term. Remember that, as an added bonus, all savings bonds are exempt from state tax.

So let's reiterate what Clark wants you to know: If you already own I bonds, they remain a good deal. But if you are planning on buying them, stop! They are no longer a Clark Smart buy.

It's no surprise that people are becoming more careful with their money. Research shows that folks are more interested in what people like Clark have to say. He's like a firefighter and the economic house is on fire -- they want him to put it out.

In an effort to scare up more cash, Christa recently had a garage sale. Unfortunately, she had 2 bikes stolen during the sale. Wow, times must be really tough; both bikes had flat tires and she was only asking about $10 each!

The San Francisco Chronicle recently ran a chart that detailed what's "in" and what's "out" when it come to your finances. These are classic examples and you may already be doing many of these. It's "in" to save, eat in, take a staycation, fix your old car, work past 65 (!), go to the library, drink tap water, take public transit and patch up your house. It's "out" to borrow, dine out, take an expensive foreign trip, buy a new car, retire early, go to the book store, drink bottled water, drive and remodel your home.

Clark recently read another story about a remodeling company that catered exclusively to wealthy clientele. This company is pink-slipping 25% of its workforce because even the rich folks are scaling back on remodeling. Likewise, the volume of laser eye surgery is declining because of cost. Maybe wearing glasses isn't so bad after all…

There's one area where Clark doesn't think you should cheap out. Waiters and waitresses are reporting that their tip income is down. The reason isn't only attributable to a decline in traffic. Rather, people are becoming stingy tippers. But you shouldn't take the tip income out of your server's pocket because you lived it up with fancy wine and lush desserts. Tip fairly based on service.

Are you afraid to open your own mail for fear of seeing your 401(k) statement? Clark recently spoke to one man who referred to his plan as a 301(j) because it keeps going the wrong way!

The Financial Times of London reports that every mutual fund company is seeing people pull money out with all the market volatility. American Funds saw a 7% decline in assets during the last 90 days, while Vanguard has seen a 4% decline.

Why is this happening? People fear a loss twice as much as they enjoy a gain. It's part of being human. We're backwards creatures; when stocks roar along, people pour money into them. So we're always paying too much on the way up and getting too little on the way down.

No one can time the market. Rather, it's time in the market that matters. Clark has 3 rules of thumb to help you maximize your money over the years. First, avoid paying commission fees. Buy only no-load funds. Second, beware of 12b-1 fees. These are phony charges that won't be disclosed unless you read through the prospectus. They are a made-up fee designed to take money out of your pocket. Finally, make sure your management fees don't exceed 1% or more. Avoid those 3 gotchas and you'll have more money over time.

Just don't try to figure out when to sell and when to buy. Keep buying every month through your 401(k) or other retirement plan. Time in is more important than timing. People are always asking Clark, "Is it time yet to get back in the market?" His standard reply is, "I never got out."

Many employers match what employees contribute to a 401(k) plan up to a certain limit. Well, Clark extended the same offer to his teen daughter about 4 years ago. He calls it "the daddy match" and he puts a dollar into her Roth account for every dollar of her pay she saves.

It's no secret that getting a teen to start saving early will help insure their financial security later in life. Clark loves pointing to a chart that shows a teen who starts saving at 15 and puts aside $2,000 for 7 years will have more than $1 million at 65. That's assuming a return on investment of about 8%, of course. Money has a strong ally in time. Most financial models show that your money doubles in value every 9 years.

Syndicated financial writer Humberto Cruz recently crunched the numbers and found that a 20 year old who puts $2,000 in a Roth for 10 years will have just under $500K at retirement time. And that's with never having to save again! If you wait until you're 30 and save at the same rate, you'll only have $370K at 65. So the message is clear: The earlier you start saving, the better off you'll be.

The same thinking applies to your car purchase. The Wall Street Journal reports that if you buy a Toyota Camry instead of a BMW and invest the money you saved, you'll have about $26K after 10 years. Do it all over again 10 years later and you'll have about $100K in 20 years. This is proof that an isolated decision today can make a huge difference down the road.

Financial writer Jonathan Clements recently wrote an interesting piece comparing people to junk bonds. Such a comparison is apt for about 20% of Americans. First, a little background: Junk bonds are typically issued by companies in financial trouble. They carry a high rate of interest because everybody's worried the company won't be able to pay up. So when you're talking about an individual, someone carrying too much debt can be called a walking junk bond.

About 1 in 5 of us carry such high levels of debt that there's a real question if we're good for the money. Have you created a perfect storm by having credit card debt, HELOCs, mortgages, car loans and more? If that sounds like you, recognition is the first step to erasing your junk bond status. Going forward, you have to be sure to buy things cash only and work your debt down, bill by bill. Your goal should be to create financial breathing space in the event of an emergency.

A lot of savers with idle cash are griping about the low rates on savings accounts and CDs from banks. Well, Clark wants to offer a possible solution. It's been a while since he's talked about Series I savings bonds, which were a fantastic deal in the 1990s up to about 2001. They're a great deal once again if you buy them before the end of April. Over the next 6 months, you'll get a return of 4.28% APY. Beginning in October, the rate will bump up to 6.06% for the following 6 months. That's a very competitive rate.

Series I bonds are an unnecessarily complicated product. The "I" stands for inflation, and they're like the cousins of the original savings bonds. I bonds offers a fixed rate of interest for as long as you own them, plus a floating rate based on the rate of inflation. You can own I bonds for a minimum of 1 year and a maximum of 30 years.

I bonds give you the opportunity to benefit from what's harming you. As high inflation erodes the value of your savings, I bonds give you the rate of inflation and a guaranteed return. That guaranteed return is puny, but earning anything about the rate of inflation on something that's 100% safe is great.

You can buy I bonds online from the U.S. Treasury at SavingsBonds.gov for as little as $25 or in-person from some banks and credit unions for a minimum of $50. The maximum amount you can buy is $5K per Social Security number. Be sure to pick them up now before the rates reset on May 1. You should plan on holding I bonds a minimum of 18 months until October 2009. If you surrender them before 5 years, you'll forfeit the last 90 days interest. So you don't want to cash them in a year from now and forfeit the 6.06%. The trick is to bail out when rates are bottoming out.

Every other year, the Federal Reserve tests high school and college students on their basic knowledge about money. The most recent test results reveal that the average high-school student got a 48, out of a possible 100, on the test. The average college kid only got a 62. People often ask Clark why they don't teach about money in high schools. Some schools actually do. They may have a lesson about the real cost of a car, for example, in math class. Yet the credit agenda -- not savings and investing -- is pushed in most of the teaching materials supplied to schools by the banks. Visa put money behind an effort to get pre-teens to have their first "Fee-isa" cards called the Buxx card. Thank goodness that effort bombed.

The responsibility to teach children about money lies with the parents, not the schools. Unfortunately, many families consider it impolite to talk about money. But that's a mistake, Clark believes. His second grader has already asked him, "How much money do you make, Daddy?" He prefers to give a non-answer, saying that he makes enough to save for a rainy day; save additional money for retirement; and still pay for their home, car and food expenses. Of course, that answer entails explaining that a "rainy day" has nothing to do with precipitation!

These kinds of talks with your kids need to be ongoing; discussing it just once is not enough. A couple that Clark used to know found that out the hard way. When the father lost his job, both parents told their 2 teens about the sacrifices they'd have to make until he found work again. The parents felt they really got their point across. But shortly after, the daughter came back and asked for $20 to go to the mall!

When it comes to teaching kids, Clark loves the 3 jars concept that came out of the Christian fundamentalist movement. Each jar is marked with a red, green or yellow heart. One jar can be used to hold money for charity; another jar holds money for current spending; and the third has money for longer-term savings. This provides a very simple, clear and tangible lesson for children.

Before 1965, the concept of credit as we have it today didn't really exist. In some cases, you could buy a car on a 3-year loan, but more than likely you paid cash. Houses required a real down payment. There was no complexity about what constituted money. It wasn't a credit card and it wasn't a debit card. It was cash! So watch your kids if they have debit cards. That plastic makes it hard to understand the concept of finite resources.

CLARKONOMICS: Clark is shocked by the level of debt that Americans carry. In the last year, the average American family's credit card balance was up 10%, according to stats from Moody's and The Wall Street Journal. The average balance on home equity lines was up 8%. In some states, the figures are even more horrifying. Credit card balances are up 15% in a year in California and Florida and up 20% in Nevada! What's going on? As home equity lines get shut off, people have turned to using credit cards to maintain their lifestyle. As a result of that, bankruptcy filings are up 30% year over year.

Amassing lifestyle debt is like walking a tightrope with no safety net. There are a lot of reasons why someone may dig themselves into a financial hole. Maybe you had a job loss or medical problems. But these are the exceptions rather than the rule. On Clark's show, you sometimes hear calls from families with children who are on constrained incomes and they manage to make things happen financially. That may mean doing without possessions that might be fun to have; that's the choice they made -- and it's working for them. That may not be the way you want to live. But the reality is that if you're living on borrowed dough, what fun is it to have anxiety whenever you open the mailbox or pick up the phone? The possessions are nice, but the insecurity that comes with borrowing to get them isn't.

CLARKONOMICS: Washington Mutual has received a $7 billion bail out to keep the bank solvent. While this was not funded by taxpayers, it's just the latest in the parade of the nation's largest financial institutions getting into trouble and facing insolvency. Why should you care if a bank survives or fails? What difference does it make to your wallet?

Clark thinks back to the last wave of bank failures in late '80s/early '90s. At that time, people tragically lost their life savings because they didn't heed warnings about being above FDIC limits. Today, the problem is twice as bad. Barron's reports that 40% of the money in banks is uninsured. Much of it belongs to institutions like non-profits and small businesses. But some of it is also held by individuals. If that sounds like you, heed Clark's warning and dial back your savings to under the $100K FDIC limit. If you have retirement money in a bank, that will be covered up to $250K.

Get in touch with the FDIC if you have any questions about your specific account(s). Clark also wants you to beware that many banks are peddling non-insured financial products inside their branches. You may see commissioned salespeople who look like they're bank employees pushing such products. Be sure to read the small print for a simple English disclosure about how you could lose money in these kinds of savings options.

CLARKONOMICS: Is this the best of financial times or the worst of financial times in the United States? Arguments could easily be made on both sides. Clark wants to share his thoughts amid all the campaign rhetoric you'll be hearing about the economy.

The average American family is living so much better than just a few years ago or a generation ago. Now, before you say this is a trite assessment on Clark's part, hear him out. If you go back 2 generations, nobody had air conditioning or dishwashers -- now they're taken as an article of faith in the modern American home. Clark and his wife recently bought a foreclosure that had 2 dishwashers, 2 laundry rooms and 2 ovens. Meanwhile, the average size of the American home in 1 generation is up 40% (even though family size is shrinking). We have all kinds of electronics at our disposal. We make more than we did a generation ago. The average family income, adjusted for inflation, is up over 20% in a generation.

But the "shop 'til you drop" mentality causes us unnecessary harm and anxiety. A decade ago, the average American bought 33 items of clothing during the year. Today, we buy 48 items, a whopping 50% more. Yes, they're less expensive and semi-disposable thanks to places like Target and Wal-Mart. But the disposable nature of buying and wracking up debt is what has us all bent out of shape. One generation ago, Americans saved 11% of what they made. Now it's 0 or a negative number when they overspend.

We are in the midst of a debt disease that has clutched us with a death-grip. So, yes, overall we're wealthier, but we are pulling the rug out from under ourselves by living above our means and taking on debt. Clark likes to say that we're seizing defeat out of the jaws of victory. So what can you do to make a change? You could buy a smaller home; keep your old car that's been paid off; or look in the closet and see that you don't need to buy any more clothes. You can't do all of these at once, so just pick one and try it out. Christa and her family are actively involved in a consumer cleansing. They're taking better care of what they have instead of accumulating more. Read about all about it in her new blog.

Budgeting is a topic that's front and center again for many Americans. Many people think of budgeting like being in prison, but Clark thinks it's freeing. Budgeting lets you reduce your financial insecurity and gain control back. There are great, free budgeting tools online like Mint.com and Wesabe.com.

A Journal of Consumer Research study shows that budgeting annually is better than doing it monthly. That's because there are expenses that pop up over the course of a year that you can't account for on a monthly budget. Data shows that people are far more accurate when they budget annually vs. monthly.

Clark doesn't usually carry any debt, but he still uses budgeting tools to see what happened with his money over the course of a year. Christa, meanwhile, likes to track her finances using a spiral notebook and some online monitoring. Others like to go back to basics using the envelope method. There's no one right answer, but you have to find what works best for you. Do you have a system? Are you doing anything at all to monitor your money? Give it a try.

Clark is in Milwaukee again today doing listener-appreciation events with 10-year affiliate WTMJ. He's been thinking about the answer he gave to an entrepreneur looking to raise more money for his business. He picked up The Wall Street Journal and wished he'd told the entrepreneur about peer-to-peer lending, which was being featured in a story. P2P lending allows you to give banks the heave-ho when it comes to borrowing. Individuals who are willing to take the risk lend their money to others -- after carefully vetting a potential borrower's credit standing. It's almost like an auction, where people advertise how much interest they're willing to pay.

You as a lender have the opportunity, with risk, to earn a great deal more on your money than at the bank or a credit union. You can minimize the risk of default by splitting your money into a number of smaller loans. When Clark first heard about the P2P business model, he mistakenly thought there would be a high rate of default among borrowers. The Wall Street Journal reports such risk-based lending totals $100 million, which isn't much yet. But estimates suggest we'll hit $1 billion in the next 2 years. The Internet has given us the power to take advantage of this cooperative lending model.

Prosper.com is probably the largest and oldest of the P2P sites. Others include LendingClub.com; Zopa.com (the only one insured by the National Credit Union Administration); GlobeFunder.com; and Virgin MoneyUS.com, among others. People have become obsessed with this idea and there are already blogs and message boards dedicated to P2P lending. One caveat: Know your risk. There will always be people trying to clean up a mess in life with money. Know that sometimes you'll lose and sometimes you'll win with these sites. Rest assured they use collection agencies to go after those who don't pay.

CLARKONOMICS: Clark recently got a call from someone who had CDs maturing and they were facing absolutely pathetic renewal rates. He wants to re-emphasis what he told the caller: There's a way to put money aside that will earn a better deal, is ultra-safe and traditionally has been for the ultra-wealthy: Tax-free money funds. With a tax-free money fund, you put money in and then get a checkbook to write checks. Normally, tax-free money funds pay lower rates than their taxable counterpoints. But right now the oddball financial climate has flipped that scenario on its head. Even someone in a lower tax bracket can benefit from a tax-free money fund right now.

The two bigs in this field are Fidelity and Vanguard. Fidelity is paying around 2.66% APY (with a minimum opening deposit of $5K, plus the minimum check size you can write is $500). Vanguard, meanwhile, is paying around 3.08% APY (with a $3K minimum opening deposit, but you'll incur monthly fees if you're below a $10K balance). Vanguard's historically low management fees account for their higher rate. If you earn more than $100K/year, tax-free money funds are probably a better choice than a traditional savings or taxable money-market fund.

Personal finance writer Greg Karp has taken a new approach to the financial reporting field. Most financial writing focuses on investing. But Karp has begun writing about how to not spend. It's what you don't spend that creates the breathing space in your life. His latest book, Living Rich by Spending Smart, offers things you can do daily and monthly to save. He's gone through a basic budget and -- by changing a stop at a convenience store or what you spend on your cable bill -- found that you could come up with an extra $7,000/year. Clark likes Karp's thinking because it deals with the immediate; it's not about cutting out a cup of coffee and ending up $100,000 richer in 30 years.

Think about your own life and the changes you could make. For example, say you just can't bear to part with your useless monopoly landline; you could, however, be paying less for it. Maybe you can trim off the voicemail fee by getting an old-fashion answering machine. Think about every bill you get and what you can do to cut it. You may not come up with $7,000 at the end of the year, but you're bound to come out with something more than when you started.

Vanguard took in more than $76 billion in deposits and crossed the $1 trillion mark in total assets during the past year. That's more money than Doctor Evil can get his arms around! Clark has long been a Vanguard fan. They're probably the world's largest cooperative; when you invest with them, you become a part owner of the company. All the money that normally goes out to traditional shareholders instead comes back to you in the form of expenses that are one-tenth what some competitors charge. Clark would love for you to look at them if you want to open a Roth account or have a 401(k) rollover from a former employer. Vanguard is self-serve, which means you must make your own decisions about what to do with your money. If you still want to use a commissioned person, the American Funds family is your best bet. Though their fees are substantially higher than Vanguard, they're still less than most other commission-based places. If you make more than $100K/year, consider putting your idle cash in a municipal bond fund, also available through Vanguard.

Other no-commission companies Clark likes include T. Rowe Price and Fidelity Investments. They both have fund managers who select mutual fund investments for you. Vanguard's specialty, meanwhile, is index funds where you buy slices and dices of many companies, like a Total Stock Market Index. Regardless of where you invest, you should consider putting a portion of your money in foreign capitalist markets. There are both established international funds and emerging market funds available -- known as BRIC investing (Brazil, Russia, India, China). Clark has not gone down the traditional BRIC road, but he has put 5% of his stock holdings in other third world countries. Fidelity, meanwhile, allows you to own the world in one purchase. Their 4-in-1 fund owns big companies, small companies, international companies and bonds. So if you don't want to think too much, this is simple one-stop shopping where you can put your money.

One caveat: Most of the investing world thrives on trying to use confusing language that impresses and intimidates. The goal is to make you feel incapable of making basic investment decisions. But Clark is all about trying to make things clear for you. Sometimes he succeeds, and other times he doesn't. Yet the first thing to do is spend less than what you make. There's no investing if there's no money left from your paycheck at the end of the day. That's the great American challenge right now.

In the latest installment of Clarkonomics, Clark discussed the impact that the Federal Reserve's continuing interest rate cuts have had on the stock market. The Fed is the nation's banker and is responsible for managing the size and direction of the economy, plus keeping inflation in check. There's a delicate balance that must be struck between not letting inflation get out of control and not letting the economy tank. Juggling those two duties is extremely difficult, and you'll find there are a lot of gripers when it comes to the Fed.

If the Fed cuts interest rates and there's investor fear about the economy being in sad shape, then the stock market will likely go down as result. It's a fear factor playing itself out in the market. On the other hand, why do stocks sometimes go up after cuts? That happens when interest rates on "safe" savings options like money-market accounts and CDs drop. So long as stock investors are not worried that recession is going to eat up earnings at companies, stocks will look more favorable than the so-called safe options. Therefore, people are more likely to take a chance on stocks when interest rates on the safe stuff are too low.

Right now the Fed is trying to stave off recession or reduce the impact, but it's also trying to prop up the giant monster mega-banks. There's the "Too Big To Fail" concept, an unwritten law that states the collapse of multiple monster mega-banks would be disastrous for our economy. So the Fed's cut in interest rates helps the monster mega-bank lower their cost of borrowing money to survive to fight another day. That's a hidden agenda that the Fed will never disclose -- after all, the free market dictates you're not supposed to bail out companies that make bad choices. If you were to buy stock in a giant monster mega-bank, there's a chance that you'd make money rather than lose because of the "Too Big To Fail" idea. That's not really how capitalism is supposed to work, but that's the reality.

So much has happened on the economic front while Clark was away in Hawaii. In the latest installment of Clarkonomics, Clark discussed the Federal Reserve's big cut in interest rates and the news about the economic stimulus package/rebates that will be coming this summer.

Did the Fed make the rate cut just to protect big-money interests in banking or did they have the long-term strength of the country in mind? The answer won't be clear for a few years. But you can feel the impact of the move right now: This is a great time to refinance your mortgage. Consider this option if you have good credit, some equity in your home and a current interest rate in the high 5 percent range. The greatest benefit will be for those who want 15-year loans, which may start at 4 percent. 30-year mortgages will probably see the low 5 percent range. If you have a home equity line of credit, these rates should be back in the 5 percent range after peaking in the 8s. Come March or April, you may want to look at converting from a floating rate to a fixed rate home equity line of credit. One of the ironies of the Fed's move is that being a borrower looks more favorable than being a saver right now. Most banks and credit unions are slashing their rates. So you may want to use this opportunity to put more of your dollar toward your floating rate debt and knock it out faster.

The economic stimulus package, meanwhile, makes use of the idea of negative income tax. That means people who are lower on the economic ladder are given more incentive to work by getting rebates and not having to pay income tax. But let's not lose sight of one thing: The purpose of this rebate money -- $100 billion approximately -- is so that politicians can get re-elected. It's not about stimulating the economy. Sure, people will be excited about the rebate, but the reality is it won't address the real problem. In the long run, we're better off with lower tax rates and a simpler system than having the government send out candy to people. One promising part of the stimulus package is that there will be specific tax breaks for entrepreneurs. Now that's a great way to create long-term rewards for the economy!

Interest rates on savings and CDs have declined overall with the economy in turmoil. But there are still some good offers available on the Internet or in local communities. While looking through the sports section of a newspaper, Clark saw a credit union offering more than 6 percent interest on savings. Then when he was traveling, he saw another newspaper ad for a bank offering around 5.75 percent on longer-term CDs. These rates are much higher than you'd typically find in the marketplace right now. So it's your assignment to seek out these good deals. Right now there's a lot of oddball stuff like this Washington Mutual offer: WaMu is having trouble attracting new checking account customers in Illinois, Texas and Georgia. So their current "Savings for Success" promotion offers 6.5 percent on savings for a year to residents in select states. There's a limit to how much you can put in, but this is a great rate. Clark's advice is to shop locally with small credit unions and banks trying to attract deposits. If you're looking at CDs, longer-term CDs are actually paying lower than shorter-term ones right now. That's because the banks are guessing there's a recession coming and they don't want to pay out high long-term rates. But the great thing is that there are still some banks and credit unions paying more than 5 percent on 5-year CDs. Usually, you'd want to ladder your CD investments (1 year, 3 years, 5 years) so you always have money maturing and could take advantage of historically higher rates for longer CDs.

Clark's Consumer Action Center answers calls off the air 45 hours a week. There's been a shift over the years from calls about cars and houses to…(drum roll, please)…questions about credit and debt. We as Americans are carrying much more household debt than we were in 2000, for example. So it's no surprise that the CAC is getting these kinds of calls. You're taking away your security blanket for the future when you take on tons of debt. The first step is to face up to your debts. Take all your debts, write them down and total them up. After you throw up, you can begin coming up with a plan to deal with the situation. Stop using your credit cards in the interim. You didn't get into debt overnight, so don't expect that you'll be out of it overnight. If you can conquer your debts in 30 months, that's a cycle most people can live with. It's when you go longer than 30 months that things get more difficult. Under those circumstances, you should sit down with the folks at NFCC.org (The National Foundation for Credit Counseling) for free or low-cost advice.

In the latest session of Clarkonomics, Clark delivered a "Recession 101" lecture. Read on for an easy-to-understand primer about this much-used term. Clark recently got a chuckle out of a Barron's story that featured economists stating the odds that we'd go into a recession, just like they were betting on a game! To be in a classic "recession," the gross domestic product has to have declined for 2 or more successive quarters. In layman's terms, that means that the sum total of economic activity in the United States has to have gone down for six straight months. Our nation has been fortunate enough to have steady economic growth. Our last real bump in the road was in early 2001. To complicate people's understanding of a recession, you can also have what's called a "growth recession." That's when unemployment rises but the overall economy continues to limp along OK. At best, we are in a growth recession right now. Another term you may hear is "misery index," which is equal to the rate of inflation plus the rate of unemployment.

It's very difficult to deal with both high inflation and high unemployment at the same time. Typically, you have to create stimulus to get the economy flowing again. To do so, the Federal Reserve may flood the market with money or the federal government may create job programs. We've had great run economically in this country. There are a lot of factors that suggest we won't have a great run in the immediate future. So here's Clark advice: If it looks like the storm clouds are gathering, it's your job to get your umbrella and clean up your financial house to deal with the rainy days that may come. Meanwhile, Jim Cramer has been saying that people are talking us into a recession, that it's a self-fulfilling prophecy of some kind. Clark disagrees. What matters are the fundamentals. Clean up your house and you'll survive.

It's no secret that people are feeling squeezed and living on fumes during these slow economic times. This has been an ever-present issue among the presidential hopefuls. Meanwhile, President Bush is set to propose an economic stimulus package and the Democrats will do the same. But is this all too little, too late? After all, we may already be in a recession right now; for one thing, unemployment is up from 4.7 to 5 percent. Stop for a moment and think back to our last recession in spring 2001. Economists didn't recognize or confirm it as such until a year later! Of course, you know from your own life if things slow down -- you'll see less hours at work, slow business if you're an entrepreneur, etc.

We're definitely seeing the early warning signs of recession, so this is the time to get your act together. A slow economy actually yields opportunity. It's always best to start a business at this point of the cycle because space and labor come cheap. Entrepreneurs who can keep costs under control will survive. Technology can help in this respect by allowing you to work at home or remotely. At-home businesses are ideal, but beware of zoning laws if you're in the retail or restaurant fields. Meanwhile, what should you do if you face a layoff and feel the entrepreneurial spirit? Don't throw the baby out with the bath water. You've probably spent years developing knowledge, a skill set and contacts in your field. Stick to what you know -- you'll find your greatest opportunity there.

Clark recently read an article in Money magazine that revealed 25 percent of people bury their heads in the sand when facing financial hardship. Think about all the folks who avoid calls from bill collectors or throw out past due notifications that come in the mail. This mentality reminds Clark of his late father, who once had a heart attack during a meeting. He simply excused himself from the table, sat in the bathroom until he felt better and then returned to the meeting as if nothing happened. Clark's friend Michelle Singletary recently wrote a column arguing that you have to face your difficult financial situations to deal with them effectively. The sooner you face it, the sooner you can work out a solution.

People are always looking for good web-based budget tools so they can get control of their spending. Clark hears people telling him that their money disappears as they move up the pay scale. It doesn't matter whether they make $25,000, $50,000 or $100,000 a year! Where does the money go and how can you easily keep track of it? There are a number of websites that can assist you in this task. Clark has been talking about Wesabe.com for a couple of weeks. Now Mint.com is a new one he recently discovered. You register anonymously and give Mint access to monitor all of your accounts. They use artificial intelligence software to analyze where your money goes on a daily basis. Sometimes people aren't really ready to face up to where their money is going. That's a personal choice. Clark just wants to give you the tools you need to take control of your finances. Other options include Yodlee.com and ClearCheckbook.com. All these sites say they're safe for you to use. Are they really? Clark's willing to take the chance because a greater risk is posed by uncontrolled spending.

Prosper offers people the chance to borrow or lend money online and completely bypass the banking system. As a borrower, you usually get money at a lower interest rate than you would at a bank. As a lender, you minimize your risk by lending in little slices to a lot of people. But some folks are still scared off by even the thought of losing money if they were to lend. One possible solution comes from Zopa, a European-based business that has just launched in the United States. This peer-to-peer lending site works with credit unions to get FDIC insurance on the money you lend out. So even if your borrower defaults, you still get your money back! The catch, of course, is that the rate of return is much lower than at Prosper. But Zopa is really a novel idea. Instead of completely bypassing the banking system, it uses a credit union as an intermediary. Clark promised a few weeks back that he would try out some of the P2P lending sites and report back on his findings. But he hasn't gotten around to it yet. Stay tuned for more…

About three weeks ago, Clark told you that E*TRADE was in danger of becoming insolvent. Customers began to flee after news broke, though there wasn't a full run on the bank. But those 60,000 people who had E*TRADE accounts with more than $100,000 in them narrowly escaped losing their shirts. Things didn't look too promising for a while. Some 30 companies were offered the chance to provide a bailout and passed up on the opportunity. Finally the Office of Thrift Supervision -- an obscure government department that becomes very important when banks fold -- intervened and got Citadel to invest $2.55 billion to keep things afloat.

Even if it E*TRADE had failed, those who were within FDIC limits would have been safe. The feds are very good at knowing how to handle these kinds of things. They got a lot of experience during the banking collapses of the late '80s! The good news is that your money is usually available the next day after a collapse if you had less than $100,000. But rest assured of this: More financial institutions will fail. Citibank nearly folded and Countrywide is in need of cash bailouts. So the important thing to know is that you must keep your investments within the safety range provided by FDIC coverage. Don't play with fire! Remember that the limit is $100,000, unless you're talking about an IRA. Then you're protected up to $250,000.

The financial world is swimming around in an alphabet soup that's really been harming a lot of people. Banks got into making weirdo exotic loans just so they could bundle and resell them as CDOs (collateralized debt obligations) and SIVs (structured investment vehicles). This is part of what fueled the bubble and meltdown in the housing sector. The banks were packaging dynamite and it blew up on them as people started defaulting on their loans. While the monster mega-banks were hit hardest, it was something of a shock when E*TRADE fell on hard times. Bankruptcy rumors recently drove the company's stock down 60 percent. The price made a slight rebound when news of a buyout or takeover broke. Barron's now reports that almost 60,000 people have more than $100,000 each in E*TRADE. The obvious danger is that those folks are above FDIC limits. But there's no need to do a run on the bank, Clark says; just lessen your exposure to below $100,000 so you won't get burned if E*TRADE goes under. We'll keep you updated on this story. On a similar note, Bank of America has had to cough up $600 million to avoid "breaking the buck" in money-market funds. The problem arose when BoA started to take the cash from money-market funds and get into dangerous weirdo exotic loans. Make no mistake, though -- BoA did the right thing by putting out the $600 million to ensure that no one lost on the usually stable money-market funds.

People sometimes balk when they learn that Clark is a member of AARP. But he's not interested in their political lobbying efforts; rather he's just a member for the discounts. AARP actually consists of two branches under the same name. There's the non-profit organization for seniors, and then there's a second for-profit branch that sells insurance, investments and much more. The Los Angeles Times' syndicated personal finance writer Kathy Kristof recently did an analysis of AARP's for-profit financial products and found that they are not necessarily the best deals. The assumption is that you must be getting a great deal if you're a member and you're being solicited. But that isn't always the case. Clark has long felt that Congress should outlaw the practice of non-profits setting up for-profit subsidiaries and selling products or services in an effort to cash in on a legacy name. Please note that Clark is not saying AARP is ripping you off with their financial products. Instead he just wants to people to know that the deals they're being offered may not be the best ones out there.

Many Americans are feeling squeezed financially, according to surveys. So that bodes the question: Do we have an income problem or a spending problem? Do we create our own hazard with finance or do we not have enough opportunity to earn a viable paycheck? Money magazine recently ran a story about how debt has risen so much over just one generation. The story adjusted figures for inflation and found that the average household debt one generation ago was $600. Today it's up to $7,300 -- a 1,200 percent increase. Mortgage debt has risen 50 percent, while the average size of a home has risen 50 percent! Think about that for a moment. Our expectations have grown so much that we're taking on 50 percent higher debt for a 50 percent larger house -- even though the average family size has shrunk. Clark's executive producer, Christa, is among those who have decided to take on more debt to have a larger home with her husband and two children. It used to be that multiple kids would share a bedroom, but today each child gets their own. So we are choosing to take on more debt that people did a generation ago. And it increases the amount of pressure that people feel when they face a job loss or illness. The question Clark wants people to decide for themselves is what is your additional debt worth to you? Is it better to live in a smaller home and have less debt? Only you can answer that.

There are some people out there in the finance world who are so brilliant that the banks would like to take a hit out on them! Chris Larsen, the founder of E-Loan, was one of the first people to make it possible for folks to know their credit scores. The banks didn't want this information to get out because they liked being able to con you into paying higher rates on loans when you were ignorant of your score. But today it's commonplace for credit bureaus and banks to make money selling your score to you.

Now Larsen is behind another new online development in finance called Prosper.com. As a peer-to-peer lending portal, Prosper.com allows both borrowers and individual people as lenders to connect and set their own rates without bank interference. Prosper.com is now approaching $100 million in transactions and has grown so strong that it has competitors. Barron's recently reported on a new one called LendingClub.com. One of the original problems with Prosper.com was a fairly high rate of borrower default. Today it's down to around 3 percent. LendingClub.com aims to limit the chance of default by only allowing you to get in the game as a borrower if you have a minimum credit score of 640. Most social lending sites also limit lender liability by allowing multiple lenders to supply small portions of the money being requested by one borrower. That way no one lender is in the hole if payments aren't being made. There are opportunities for both borrowers and lenders in these new sites. Check them both out and see which one may work for you. Now the banks have yet another reason not to like Larsen. He's figured out a new way to cut them out of the deal!

Clark has long believed that debt is a disease when it becomes your way of life. It can eat at you, lead to anxiety, hurt your confidence and so much more. The New York Post recently ran a story about how members of Generation X (aged 30 to 45) are saddled with debt. Some of their debt stems from educational loans, but even more is attributed to lifestyle debt. Some 33 percent are so deep in debt that they'll never get out. About 20 percent are depressed over the financial obligations stemming from their lifestyle. The irony here is that Gen X got into lifestyle debt because they were doing something that was called "keeping up with the Joneses" back in the 1950s. People want to live large and have all the things their friends have. But the folks who ride in BMWs with the fancy houses may not own -- rather they owe through financing.

If you watch TV during fall season premiere week, look at all the local ads for furniture with no money down or no payment until whenever. It feels like it's free, but it builds a burden in your life. The pleasure of the possession is eclipsed by the burden of the debt. It is the very freedom to borrow today that has created this burden. Past generations like the baby boomers had to put money down to buy their first homes; today you can finance 100 percent. But just because the freedom to borrow and get buried in debt is there, it doesn't mean you have to use it. The Post article quoted a Charles Schwab employee who said that they expected Gen X to be saddled with debt, but they didn't expect them to develop anxiety over it. That's funny, because Clark has been hearing about debt anxiety for 20 years doing the show. As a parting thought, Clark said home is defined by where you are with your family and loved ones. It's not defined by square footage, crown moldings or a huge stainless steel fridge in your kitchen.

Several recent bank failures have shown the hazards of having more than $100,000 in any one account. The FDIC insures regular deposits up to $100,000, and retirement accounts up to $250,000. Unfortunately for some, $109 million was uninsured when NetBank folded. Another failure in the Dayton, Ohio, area revealed that one in every six dollars at that bank was uninsured, according to a report in The San Francisco Chronicle. There may be more bank failures to come, so don't leave yourself exposed by having more than $90,000 (to be safe) in any one bank. Use CDARS.com (Certificate of Deposit Account Registry Service) if you have a huge amount of money you want to stash. With CDARS, you can put in up to 50 million and it will be spread around to multiple financial institutions so no one account exceeds the protection limit.

On a related note, the interest rates on CDs and savings are in turmoil. The advertised rate you see in magazines and newspaper may not exist anymore. For example, Emigrant Direct was paying 5.05% and now they're down to 4.75%. Credit unions are still paying good rates, and the mortgage lender banking arms have some of the best rates. Countrywide's banking arm is now paying 5.5% on a one-year CD, while their money market account is at 4.5%. So there are still some good deals out there, but some of the best have reduced their rates. Whatever you do, don't go to a mega-bank with their pathetic rates.

Sometimes it seems like young people have a huge bull's eye on their backs for the banks. People who are between the ages of 18 and 24 are being killed with bank overdraft fees. The latest stats say they're paying more than one billion dollars in overdraft fees every year. Clark recently heard from someone who has a teen that overdrew a debit account by $15 and that generated $80 in fees. As a parent, it's getting more and more difficult to teach the young about money. But it must be done. When Clark was in school, you paid for things with cash. Today there's no equivalent in a credit-crazy world. While cash is finite, plastic is infinite. A parent's most important lesson to a son or daughter should involve a pen and a check register -- showing them how to take debit transactions seriously. Banks are only too happy to approve transactions that will result in overdrawn accounts and high fees.

There's a bill in Congress that's trying to make it so that a bank must contact you for approval before they overdraw your account. The banks, predictably, are incensed about this because they may lose profit. Clark loves it when people have more info to make smart (or dumb) choices. What happened to ethics and morality in the banking world? Why do bankers get up in the morning and try to figure out how to rip off fellow Americans? If a bank approves an overdrawn transaction that generates fees, how is that moral or ethical?? It's not. The bill will probably be killed because the bankers are so strong giving dirty money to politicians. So teach your children well and you'll save them from losing money in the school of hard knocks.

People have about a trillion dollars sitting in lousy checking accounts at banks. They're being hit with a lot of arbitrary fees for transactions and they're not getting a lot in return. The typical bank pays about .1 percent interest on such accounts -- that's one tenth of one percent. Bank of America, meanwhile, pays about .05 percent -- one twentieth of one percent interest! So Clark had been advising people to seek out a checking account from the online banks that pay higher returns. But if you don't like putting your money in cyberspace, Fidelity Investments and Charles Schwab are now offering great checking account options too. Fidelity pays three-and-a-half percent on its mySmart Cash Account, while Schwab offers four-and-a-quarter on its checking account. You don't have to be an existing customer of either firm to participate. These options are FDIC insured and offer no fees, no minimum balance requirements and no ATM fees. Meanwhile, Clark's beloved credit unions are in this respect much like the conventional banks; they also offer puny interest rates. His credit union does, however, have one free checking option that you must ask for -- and it pays four percent interest. The bottom line is that you should consider switching your checking account if you're not happy with how your bank handles it.

Finally, Clark wants to clarify a point he made a few weeks ago when he was explaining money-market mutual funds. Some people thought Clark was saying that all money market accounts are risky. That's not the case. Find out what kind you've got. If it's legitimate and follows the "don't break the buck" principle -- offering a fixed share price of a dollar per share -- it should be a safe option.

It's been several years since the last "Clarkonomics" segment, but today we have another installment for you. This may again become a regular feature on the show since we're in a time of economic uncertainty. Before coming to the studio today, Clark was talking to a man about the stock market. It got him thinking about how what happens on Wall Street affects Main Street America. If you're one of those people with leveraged investments (investments you've made with borrowed money) this is not a good time. You may be getting "margin calls" from the broker who lent you the money. That's when they call you up and basically ask for more dough or they'll sell out your position.

A lot of people are hurting financially; the very rich have gotten burned by hedge funds and those who are struggling to get ahead in the housing market are getting clobbered on their mortgages. Are the rest of us also going to get squeezed soon? There are so many unknowns. But Clark has a standard piece of advice he gives people when the economy is facing tough times: Reduce the amount of debt you carry. Get your life in a position so that regardless of larger economic trends you're not feeling squeezed. Clark himself is now doing something that he hasn't done in 26 years: He's putting cash into a tax-free money market fund. He wants to build reserves because he believes that next year there'll be good opportunities to buy distress real estate.

Salaries change much more these days than they used to. Think about how yours may have fluctuated. It's three times more likely you'll have up to a 50% swing in income year-to-year than it was a generation ago. Also, the debt rate per person is way up from last generation. This doesn’t correlate. We have more financial volatility, but less of a safety net than ever before. Clark wants you to think about how this could affect you. Do you buy furniture or electronics on instant credit, cars with long term loans, or houses with no money down? Clark wants you to ask yourself: if your paycheck stopped tomorrow, what's your back up plan? How long could you handle your bills and obligations? One hour? One day? A month? A year? If the answer is "not that long", Clark says dial back on your debt, and dial up on your savings.

Clark says he needs to get better about talking in "shorthand" -- using specific industry terms without fully explaining them for the average listener. He sometimes forgets that most people just aren't as familiar with these words. This is especially true on the topic of investing. One example is the term "asset allocation"-- less than one in five people knows that it means to "diversify" your funds, or, not put all your eggs into one basket. Clark wants to define these things more clearly for listeners in the future. "Bonds" are another topic not fully understood. Here's how they work: A company or organization needs money and issues some bonds. People buy the bonds, get the interest promised, and ideally, hold onto them for the life of the term in order to get the purchase price back at the end. But let's say you have a bond that promises 5% interest, and now interest rates are at 6%. The issuing company would have to discount the initial price of the bond to get people to buy them. On the other hand, if a bond is paying higher interest than the current interest rate, it's worth more, and will therefore cost more to buy. So, as interest rates go up, the value of bonds go down, and vice versa. Another misunderstood topic is Roth IRAs, which are investments that allow you to save money tax-free. But if all these terms bore and confuse you, read Clark's online investment guide. He lists what he feels are the best companies and services that can help make retirement investing much, much easier for you.

Charles Schwab is trying to compete in today’s tough banking business by introducing a new checking account that earns 4.25 percent. There are no fees, no minimums and essentially no rules with this account, which is not the case with other financial houses. The only thing that seems slightly annoying to Clark is that you can’t deposit money into your Schwab checking account when you go into a Schwab office. He’s not sure why that is, but you may want to contact Schwab to learn more. Citibank is also trying to get ahead of the curve because its competitors – the “Direct” banks – are getting all of the market share. These include ING Direct, HSBC Direct and Emigrant Direct. They have been attracting billions of dollars in deposits because their interest rates are so much higher. As a result, Citibank is now offering an online-only 4.5 percent savings account. You can’t get it at a Citibank branch. You can only get it online at direct.citibank.com. If you have money sitting in low-interest savings accounts, move it!

Economists are saying the economy is in great shape and the GDP (gross domestic product) is going great guns. Yet individuals and families are seriously struggling. So there is a disconnect causing wealth to be distributed unevenly. The wealth is tilting toward very wealthy people and corporate enterprises. That’s why the luxury stores have been reporting great sales. And many companies have more money than they know what to do with right now. But on the other end, items cost more and gas is much higher. In addition, imports are about to cost more and any variable interest rates can negatively affect you. The silver lining is that if you’re a saver, you’re actually earning money on your money. But you still need a game plan. Cutting spending so you can put more money toward your debt is the key goal. Clark suggests writing down everything you spend money on for two weeks and review what you’re spending. Carry a little spiral notebook in your purse or on your person and record everything. Then, mark up the items you don’t really need and stop buying them. It will add up.

Clark talks a lot on the show about how banks treat customers like dirt. He often recommends trying a credit union or smaller bank instead. But there is another option he often overlooks. If you have a healthy chunk of change, you can do your banking with a stock brokerage company. Merrill Lynch, the nation’s largest brokerage firm, started this in the late 70s and called it a “CMA” or cash management account. It was the company’s version of being your bank, and it has become very popular. People are treated very well and get much higher rates on accounts. You can also borrow against your account at much lower rates than what you’d normally get. This “margin loan borrowing” can be risk, though. So, you never want to borrow more than 25 percent of your account. But if you’re frustrated with your bank and need the convenience of a big firm, consider this. Banks hold only about 12 percent of our assets these days. Most of our money is with brokerage houses and mutual fund services because they offer such better service.

People are getting more worried about lax security in the banking world. More than 40 percent are doing fewer online transactions and more than 50 percent are concerned about their financial information being compromised online, according to USA Today. And about 80 percent of people are now afraid of ID theft occurring online. Add to that the fact that only one of the eight largest banks has moved to cooperate with federal guidelines to use better online authentication. Only Bank of America has adopted real security measures, while 99 percent of banks only require a user name and password. It’s in excusable and unacceptable, and it’s happening at J.P. Morgan Chase, Citibank, Wachovia, Washington Mutual, US Bancorp and Wells Fargo. People can easily access your account and steal your identity with just the user name and password setup. In Europe, there is very little account takeover because they are required to have very tight security features. There are many ways to do this in the U.S., and it would save banks a lot of money in the long run. Instead, banks are undermining people’s faith in our financial institutions. It would behoove everyone if banks would wake up and set up more secure service.

The Federal Reserve has raised interest rates for the 12th time in a row. Rates are the highest level they’ve been since late 1999. The Feds are trying to apply the brakes on the situation with our economy as inflation gets more worrisome. So, even though you may not be feeling it in your own wallet, the economy is growing at a fast clip right now. So, the Feds are going to continue to push up interest rates. Home equity lines of credit will be at 7 percent, instead of 4 like last year. For people with questionable credit, rates will be in the 9 percent range. It’s a great time to be a saver, though. There are wide gaps between the lowest interest rates and the highest ones at banks. So you can’t just be a creature of habit and put the money where you’ve always had it If you’re not Internet oriented, you can find fantastic rates from smaller banks in the Sports and Business sections of newspapers. The best rate comes from emigrantbank.com, which is offering 4 percent on savings accounts right now. The worst rates are coming from the big monster mega banks. If you have home equity line debt, though, pay it off as quickly as you can.

Many big banks are dominating the credit card business, and their fees are so high it's embarrassing. These astronomical fees are creating opportunities for smaller businesses and credit unions. A reporter for the New York Times called major credit card issuers and asked about the fees for using a credit card overseas. He said it was not easy to get answers, but the funniest responses were why the fees existed at all. The most honest answer was that the bank needed to make more money. The truth is that traditionally you are charged for the bankers buying rate plus a 1 percent conversion fee. Just remember that banks have to tell you the fees they charge for overseas charges or they can be sued. Several years ago banks started charging up to 5 percent for absolutely no reason. Clark wants you to find out your credit card’s conversion fees before traveling overseas. He says most smaller issuers and credit unions will not charge ripoff fees and to use those cards if you can.

Criminals have had great success stealing money from about 2 million people through “phishing scams.” People have gotten taken through phony e-mails that appear to come from their bank, brokerage firm or other company. Well, the banks and financial houses have put some effort into stopping these scams, so the criminals have moved on to a new target – community credit unions. According to the San Francisco Chronicle, there have been 21 attacks on these financial institutions in the past few weeks. So, if you get an e-mail from your credit union, it’s possible that it’s bogus. Another scam out there is using the logo of the credit card industry trade association, CUNA. Hundreds of millions of these e-mails have been sent around the country, and the organization has had to hire six extra workers to handle the load. If you get an e-mail, don’t respond. If you’ve already responded and you suspect it’s a scam, you must contact your bank or credit union immediately. You’ll have to go in and fill out dispute forms. In other news, you may have heard about the security breech at Citigroup. About 4 million people had their information stolen in what is being called the largest self-inflicted breech so far. Citigroup transmitted the records of 4 million people without encrypting it, and the company took it’s time doing something about it. So, your information could be in the hands of criminals. Citi Financial is sending you a letter and so far, all they are offering is a meager 90 days of credit monitoring. That’s an insult. Clark thinks Citigroup should take responsibility and pay for any lost money. In 2005, it’s hard to believe that a financial institution is not encrypting information. There should be a law!

David Lazarus, the San Francisco Chronicle’s consumer columnist, recently took on the big banks for all of the fees they’re charging these days. Lazarus got a complaint from a reader about fees he was being charged simply for transferring fees at his bank, and Lazarus decided to check it out. First he called his bank, Wells Fargo, and was told it was “a federal regulation” to charge $10 for every transfer after making six in one month. He then called Bank of America and was told the company’s $15 transfer fee was indeed “required by law.” The next bank was Washington Mutual, which charges a $10 fee. So, is there a federal requirement that customers be charged for making too many transfers? NO! The customer service representatives are either not well trained, misinformed or are told to hide behind the federal government. Yes, there are certain banking regulations deemed by the Feds. But charging fees is not one of them. So, the next time someone at a bank gives you the “federal law” excuse don’t believe him or her. And fire that bank for treating you so poorly. Clark would also like to hear from any of these banks if they'd like to discuss the matter on air.

Have you ever looked through your bills and counted how many of them are ongoing monthly payments. According to the Chicago Tribune, companies are big on getting people into monthly cycles because we’re not likely to change them or cancel once we’ve set it up. But these little “monthlies” such as DVD subscription fees and satellite radio services add up and can take a toll on your finances. In Asia, people are even paying a subscription for their meals. People pay a monthly fee and once a month they can go eat at a choice of restaurants. It’s very profitable for the restaurants because people forget to go. Examine what monthlies you’re paying and see if you can cut pack. For your phone line, can you cut back on features? Do you really need all of those channels on your cable or satellite service? The money adds up fast!

What economists say is happening today is very different than what’s happening on Main Street USA. Economists say there is money floating around out there and financial houses have more than enough money to lend people. But banks, in many parts of the country, are acting completely the opposite. Banks are trying desperately to get new customers by giving away all kinds of goodies. It used to be a free toaster. But today’s gifts are much fancier. According to the Boston Globe, banks are offering gift certificates to home improvement stores and electronics stores, iPods, and cash! Banks are also offering specials on CDs. So, keep your eyes open for these offerings. Clark wonders how many people will go sign up just to get an iPod. They’re pretty hot these days.

People are crying out for a way to get a better handle on their money. And Elizabeth Warren is someone Clark mentions a lot in regards to the subject. Warren, a professor and author, is considered the nation’s expert on bankruptcy. She has written a “road map” for people who are so far gone that it seems hopeless. The road map is in her latest book, “All You’re Worth - The Ultimate Lifetime Planning Guide,” which is #28 on Amazon’s best seller list. Her theory is that you must live a certain lifestyle that includes several tenets. The first is that your “must pays” are no more than half of your after-tax income. “Must pays” include rent, car payments, utilities, car insurance and other debts. So, you have to consider if a new purchase – like a car – is within that 50 percent scenario. Secondly, you have 30 percent of your after-tax income for expenses, and you can spend that on whatever you like. That’s the one thing Warren says that Clark doesn’t espouse, but it may make sense to you. Lastly, you must save 20 percent of what you make. So, 50 percent of you income to live on, 30 percent for whatever, and 20 percent for your future. Many people feel trapped by a budget like this. But, in actuality, budgets give us structure and financial freedom.

We as individuals continue to go against our good intentions when it comes to savings. We intend to set money aside and talk about it, but four in ten people haven’t saved a cent for retirement. And four in ten of those people think they are going to be fine. That is simply not safe or smart. If you haven’t saved anything or have saved very little, that needs to change immediately. You must start putting part of your income into savings if you want to be financially stable in retirement. Most companies even offer a company match with their 401k plans, yet people still don’t save. Even if you can only put away 1 percent of your pay, it’s better than nothing. Then each year after, you can raise it by one percent. You won’t notice any change in your lifestyle. If you can change your elections only once a year, start at 2 percent and increase by two each enrollment period. If you have not retirement options at work or you don’t currently work, you can open a Roth IRA. Some plans require just $50 a month, which is nothing. If you’re self-employed, you can open a SEP (simplified employee pensions). These cost nothing to set up and the money invested in them becomes an immediate IRA. You can put as much as $42,000 into these accounts each year. Or, if you have a bad year, you don’t have to put anything in it. Don’t put this off until tomorrow. Do something about it today.

Giant mega banks haven’t been a favorite of consumers because of the hassle they put us through when we open accounts. It seems to take an Act of Congress to get accounts set up and activated in a reasonable amount of time. But some banks are coming up with new procedures that will allow us to use our accounts almost immediately. Bank of America, Citibank, Wachovia and Wells Fargo are just some of the banks participating in online account activation programs. It’s innovative and customer friendly, and Clark is glad the banks are catching on. The truth is, though, that it’s a good for the banks, too. People tend to be loyal and buy more products from banks they like. Check it out at your bank’s Web site.

Have you ever used a debit card at a gas station to “pay at the pump?” Say you fill up $20 or $30 worth. Then, two days later you get a notice from your bank that you’ve bounced some checks. How can that be, you’re probably thinking. But, what you may not know is that when you use a debit card, gas stations have the right to overcharge you a certain amount to ensure they get their money. Sometimes it’s only a $5 or $10 hold. But it’s up to each gas station to decide how much to hold in your account, and some put a $75 or $100 hold on the account. And, they also decide how long to hold that money. Some hold the money for up to three days, so that can really hurt you. If you want to use a debit card at a gas station, do not pay at the pump. Pay inside the station and you’ll be charged for only what was purchased. Or, the better alternative is to use a credit card. If you have a rewards card, you get the cash back or gas reward to boot.

Clark talked recently about the pathetic savings rates at banks these days. The average rate is still about one-half of one percent. But you don’t have to accept that rate. If you shop around, you can get some great rates. ING Direct, for example, has boosted its rate from 2.3 to 26. percent. And at emigrant.com, you can earn 3 percent with the “American Dream Savings Account.” You can see a list of the best savings rates at bankrate.com. Once there, scroll down and under the “Rates” section, you’ll see a link to “Best Rates.” There are high-deposit accounts, but also accounts that don’t require a minimum deposit. What about brokerage houses and mutual fund companies? If you’re earning anything less than 2 percent, you need to move your money. You should be earning at least 2.5 percent right now. If you have idle cash sitting in a credit union, you may think about moving that too. Credit unions offer great deals on checking accounts, but your savings would be better off in a higher-paying account.

Wal-Mart is a company people love to hate. Yet, the company just seems to keep growing and going. Wal-Mart is getting into the banking business, and it’s got other big banks shaking in their boots, according to Business Week. The first move is to launch a credit card designed for low-income earners, according to Business Week. It will be called the Wal-Mart Discover card and will have no annual fee. In addition, money orders cost 45 cents at Wal-Mart and customers can now cash checks at there for $3. For Mexicans and Central Americans who live in the country and don’t have bank accounts, this is great news. Wal-Mart is also clobbering traditional supermarket stores because the products cost so much less. The high-end customers are choosing to shop at places like Whole Foods while the discount shoppers are going to Wal-Mart, Sav-a-Lot and Aldi. So mid-level supermarkets will soon be closing en masse.

Have you heard of "Check 21?" There was a lot of publicity about Check 21 on the day it became a law and in the weeks leading up to that day. But Clark has heard only one Check 21-related issue since then. Check 21 is a law designed to help streamline the current check-writing system that we know. It was created in the fall of 2001 after the terrorist attacks, when the nation’s air fleet was grounded for weeks. Checks did not get where they needed to go and it caused a huge financial uproar. Now, when you write a check, a photocopy of that check is made and sent via computer to the bank and the money is withdrawn. Essentially, the money is deducted from your account within hours and sometimes minutes. The only operational problem has been that bank accounts are “double drafted.” But there are other problems with the law itself and Clark wants you to know about them. The law is not fair in that customers’ money is nearly automatically debited, yet banks can hold on to a deposit for your account for 11 days. It can cause checks to bounce and hurt your credit. The good news is that Congress has drafted another bill that allows for a quicker deposit of your funds and eliminates bounce check charges when you have money “in deposit.” The bill, known as the Maloney bill, also requires banks to add in your deposited funds first, before deducting for checks written. Banks won’t behave on their own, but at least Congress is doing something about it.

It’s January and it’s a good time to think about how to handling your money this year. In fact, Clark would love it if you joined the 20 million Americans who are paying bills electronically. It’s so easy to use and makes the process much more safe. Not to mention the fact that with almost all services are now free. The initial setup can be a bit tedious. But once that is set up, it’s done with the click of a button. Plus you avoid the risk of late fees because you know exactly when it will be paid and you have confirmation. Clark uses a service through his stock brokerage. He’s been using electronic bill pay since the late ‘90s, and he’s had only a few very minor problems. So, he highly recommends switching to electronic bill pay if you haven’t already.

The National Consumer’s League tracks consumer ripoffs and has an ongoing “Top 10 “ list of the worst ripoffs out there. The No. 1 ripoff right now is the buying club business that some credit card companies do business with. Basically, your credit card company sells your information to these clubs through an “affiliate relationship.” Then you are somehow magically signed up for the services or memberships and the charge soon appears on your credit card statement. A story in the Kansas City Star profiled the scheme recently and found that people are getting taken because they aren’t looking at their statements. The two big months when banks hook up with these companies and charge you are August and December. In August, lots of people are on vacation. And in December, the holidays keep us busy with parties, family gatherings and travel. Credit card companies also tend to add extra fees and pass through interest rate increases during those months. And if you don’t notice the charges and dispute them in time, you forfeit your money forever. Also, remember to never sign up for a “trial” membership for anything. And, double check your credit card statements every month!

Interest rates are now rising on anything with variable rates. You would think, as a result, that interest rates on savings accounts would rise too. But that’s not the case. Some banks are still paying less than a half a percent on savings accounts. The exception is online banks, which are paying 2 to 3 percent on savings accounts in some cases. The problem is that very few people have accounts with online banks. Many think it’s not safe, but that is simply not true. These banks are FDIC insured just like bricks and mortar banks. You can find online banks on bankrate.com under the Savings area. For a checking account, you want to be able to go into a branch. But for savings accounts, it’s just fine. Also, Charles Schwab is again making it easier to do business with the well-known brokerage that has experienced some turmoil over recent years. Ameritrade has also launched a new $5 stock-trading program, which is a great deal.

You’ve probably been charged a rip-off fee when you use another bank’s ATM machine. Maybe your own bank also charged you at the same time, meaning you were double-dipped on fees. But did you know that charging these fees is strictly an American practice. If you use an ATM overseas, you won’t be charged a fee. But that’s about to change. Several American banks are starting to charge you a fee when you use another bank overseas. Several of the big banks are now charging $5 to use another ATM, and others are as much as $10 per transaction, according to the Wall Street Journal. It’s outrageous because the cost to a bank is almost nothing. The good news is that not everyone is doing it. Some banks won’t charge you anything if you go to one of the banks’ co-op members. If your bank doesn’t offer a reciprocal agreement like this, it’s probably time to dump that bank. The other alternative is to take American money and exchange it for foreign currency. But you shouldn’t have to do that. ATMs should provide an easy, inexpensive way to get cash. If your bank doesn’t offer this option, consider joining a credit union. But it’s up to you to do your homework.

Clark has a special warning for people who carry fake Visa cards. There has been a breach of security at one of the big national merchants. No one is saying which merchant it is, but an employee has evidently obtained the records of an untold number of customers. That person is using people’s debit card numbers across the country without their knowledge. So, when people try to use their cards, they are being turned away. We need full disclosure by the banking industry about this and anytime it happens. We need to know how many people are affected and what institution is involved. So, for the next seven days, if you carry a fake Visa card, check your account for unauthorized debits. Criminals are striking fast before people realize what’s going on. Why is this so important? If someone gets a hold of your fake Visa numbers and charges up your account, that money is gone. You have to fight to get that money back, and banks decide on an individual basis. Also,Visa offers no protection for you if it causes checks to bounce. It’s a disgrace, but right now, banks are free to decide whether they want to help you out or not.

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In other banking news, you may have heard Clark talk about the computers – and personal information – stolen from Wells Fargo recently. To give you an update, Wells Fargo still will not disclose how many people were affected. But, if you got a letter and the offer of free credit monitoring for a year, the company is not going to automatically charge you after 12 months. So, don’t worry. Use the free monitoring for a year with no obligation. Both banks should come clean about what's really going on though.

Several months ago, Clark talked about how greedy the big banks have been getting when it comes to fees. As a result, people stopped using ATM machines. They started getting cash back at the supermarket or traveling to their own financial institutions to get cash back. Well, it has taught the banks a lesson. Several have changed their ATM policies and they are offering the use of other banks ATMs for free. Just check with your bank and find out if they are part of an alliance or a network. For example, the largest alliance has 32,000 machines. Another has 8,200. So, you just have to do your homework. This is happening, in part, because a number of very aggressive smaller banks have been offering free-fee ATM transactions. You basically use the ATM and your bank pays you back for the fees. Now, the giant monster mega banks are fighting back. And in this market share battle, consumers are the winners.

You are going to hear a lot of fuss about “Check 21” over the next 36 hours. It’s a new law that sprung out of the terrorist attacks of Sept. 11, 2001. Most checks move around the country by airplane, as you may know. When the attacks occurred, air travel in the country was grounded and merchants did not get their checks. There was a liquidity crisis that caused banks to brainstorm about the way checks move around the country. They came up with “Check 21.” Traditionally, you write a check and it takes a few days clear. Today, when you write a check to a merchant, a digital image will be made of that check and then it will be destroyed. The money in the check will clear in a couple of hours. So, if you are in the 30 to 40 percent of people who get their canceled checks in the mail, you’ll soon see a mix of real checks and substitute checks. This will count like a regular check. A digital image will not. But it will take a while for all of this to affect you, maybe two or three years. The concern of Consumer’s Union is that, during the transition phase, your account will be debited twice for the same item. A more important change that screams “anti-consumer” is the fact that Congress reduced the amount of time you have to dispute a charge on your checking account from 60 days to 40 days. So, when you checking account statement comes in, you want to check it within 48 hours for twice-debited items and other mistakes. If you don’t dispute these items within 40 days, you lose your money forever. Secondly, remember that when you write a check, the money will be debited within minutes or hours. Checks that you deposit, however, will still be held for five days. It’s not fair, but it’s the way it goes.

Do you remember when gas stations gave away freebies when you bought gasoline? It was when gas stations still used attendants to fill up your gas and clean your windows. And if you got more than eight gallons, you got a free gift. Savings & Loans did similar giveaways. You might get a free toaster or other gift if you opened an account. Freebies were really big in the ‘60s and ‘70s. And now they’re coming back into the mix. The banking business is picking up where we left off. You are going to see more offers for televisions and such when you open accounts. A bank in New York is even giving you a car if you buy a CD. A $100,000 CD gets you an entry level car. If you open a $400,000 CD, you get a Cadillac. But you earn just one percent on that money. Clark ran the numbers. Over five years, you’ll be giving up $70,000 in interest. So, you could buy the car for less. And, you have to pay tax on the value of the car. If you open the $100,000 CD, you’re giving up $14,000 in interest for the economy car. Another bank is offering a plasma TV if you open a CD. It’s a clever idea, but the interest rates are so low that these offers are really not a deal.

Recently on the show, Clark talked about how much it would save the federal government if seniors had their Social Security checks directly deposited into their bank accounts. Seniors simply don’t trust the direct deposit process, so they want their checks mailed to them. But Clark has now heard some alarming news about how having these checks directly deposited may actually be a bad idea. Several banks, including Bank of America, are seizing Social Security checks and taking the money if those people have some kind of debt or dispute with the bank. A judge ruled that BOA is breaking the law and said the bank needs to pay back $400 million to customers, according to news reports. The judge also filed an injunction against the bank in California, prohibiting it from seizing these funds anymore This is not only illegal, but it’s also incomprehensible. Why would anyone want to beat up on senior citizens like this? It’s their money, and it would be all theirs if they didn’t have direct deposit. Even worse, BOA is not the only bank doing this. Banks need to learn how to behave.

Say you own a business and you need some resources for that business. You may have noticed ads in a weekly or community newspaper from a well-known bank or mortgage lender, offering great deals on loans. You may even fill out a loan application with one of them and get approved. But before anything happens, the friendly bank representative tells you that you have to send a “loan processing fee.” And the money must be wired to them through Western Union. You send off the $600 to $800 and it’s gone forever. Why? These banks are bogus. The FDIC has issued a warning about these ads. Weekly and community papers don’t have large enough advertising departments to screen advertisers. If a company has money, they will take it. So, you should know a few things. First of all, a legitimate bank won’t ask you for an advance fee to take out a loan. The only exception is if you’re taking out a new mortgage when there may be a small application fee. Secondly, a bank would not ask you to wire the money to some third party. You would pay the money directly to that institution. And, lastly, just because an ad looks like it’s from a legitimate bank doesn’t mean it is.

You’ve probably bought something in a store with a check even though you don’t have the money in your account at the time. You figure you have a few days for the check to clear, and by then the money will be there. It’s called the “float.” Well, the float is slowly becoming a thing of the past. Because of a new law going into effect in October, money will be drafted from your account immediately when you write a check. It’s called “Check 21,” and it allows retailers to scan your check through a machine that deducts the cash within minutes. It’s essentially the end of the paper check system, as well, because the check will eventually be destroyed. There will be an image of the check online and that will serve as proof if you need it. But everything is becoming electronic, and a bank will know if a check is good right away. So, be prepared to move to an electronic bill pay system. It’s the smart way to go. What about checks that you deposit? Well, the float is no longer available to you, the customer. But the bank still will hold a deposit for a few days to make sure it clears. It’s not fair, but it’s the way it’s happening.

If you were planning to travel over this holiday weekend, but you’re worried about Hurricane Fran, Clark wants to tell you the facts about refunds and changes. In the travel industry, there are no uniform policies. Airlines have their rules, hotels have theirs and so on. At this point, United has the most generous policy for rescheduling a trip to affected areas. The company allows you to waive any change fees or penalty fees. The other five full fare airlines – Delta, Continental, American, US Air and Northwest – have varying degrees of very tough policies on rebooking. Unless you can reschedule your trip in the next few weeks, you will forfeit your ticket. American, for example, is only giving people until September 13 to reschedule a trip. That is ridiculous! Southwest on the other hand never has a penalty fee. JetBlue and Air Tran are both waiving fees and AirTran is giving people a year to rebook a flight. If you’re booked on a cruise, the industry’s basic position is that if the port is open, the ship will sail. The company may change the itinerary and even the port. They may just sail into safer waters. If you bought airfare from a cruise line and the flight has been canceled, the cruise line will make arrangements with you to reschedule. If you bought the airfare separately, you are on your own

Is it worth it to use an ATM machine that requires you to pay a fee to both the owner of the machine and to your bank? In the past, people didn’t see these fees as any big deal. The convenience of having money in hand made people overlook the fees. But today, people are fed up. The number of transactions per ATM machine have fallen by about two-thirds. There are more machines out there, but the number of transactions have declined by 30 to 40 percent in the past few years. As a result, banks are offering discounts on the fees. Clark saw one when he was in Montana recently. There was a sign on the ATM that said, “99 cent ATM fee,” which is less than the typical $2. If you need money desperately, try to go to an ATM that is offering a discount. But if you can avoid it all together, that is your best bet. Paying fees at an ATM is like throwing money into the wind. There is no benefit for you. Just train yourself to get money often, not on the spur of the moment. When you see your bank's ATM, stop and get money, even if you don’t need it right away.

Clark has some shocking news for you. The Federal Reserve has made it legally okay for banks to lie to you about your account balance. This is no joke. Banks tell you that you have more money than you do because they want you to spend more than you have and then overdraft your account. That way, they can charge you all kinds of overdraft fees. Clark has no problem with banks charging a fee if a customer overdrafts his or her account. But he has a huge problem with the Feds making it okay for banks to lie to us so they can rip us off. Where are the ethics in that? It’s one of the most anti-American moves Clark has heard about. The sad reality is that we have to balance our own checkbooks so we know what our balance is at all times. Each time you write a check or charge something on your debit card, write down the amount and immediately deduct it from your account. Don't risk giving the banks the satisfaction of charging you.

Clark trashed Bank of America recently for deleting the amount customers owed on their payment coupons. BOA, the 3rd largest bank in the country, was listing only the minimum payment on coupons because the company basically wants you to pay more in interest. So, after lots of badgering from Clark, BOA has backed down. They are not the only ones. MBNA and American Express also tried this ploy and eventually returned to the old policy. So, starting next month, BOA customers will once again see their balances on their statements. It’s never a good idea to only pay the minimum. If you never charged anything more on your card, but you only paid the minimum balance, it would take you 40 years to pay it off. So, stay away from minimum balances all together.

Clark has always been an advocate of credit unions because they offer far better deals on loans and checking accounts. Credit unions are co-ops, meaning the customers are the owners. So, if you’re having a dispute, it’s much easier to get help because the institution is there to serve its customers. Bankers are very upset because they are losing market share to credit unions. In fact, the American Bankers Association is offering $1,000 to any banker who calls out a credit union for giving away illegal memberships. Most credit unions have rules about who can become members. Some are for employees only; others are for people in a certain community. The funny thing is that bankers are upset about something they created. Six years ago, banks took a case to the Supreme Court that caused the court to almost outlaw credit unions. There was outrage across the land about the decision, and Congress voted to overrule it. In doing so, Congress came up with new, less restrictive rules for joining credit unions. So, instead of getting rid of credit unions, all the bankers did was make the monster bigger. According to the Orlando Sentinel, credit unions are getting letters from “people” trying to get improper memberships. It’s all in an effort to put the credit unions out of business. Banks should be focusing their energies on providing better service to customers instead of trying to discredit credit unions. Wouldn’t that be a better idea?

On October 28, law “Check 21” will officially begin. Some retailers have jumped the gun a bit on Check 21, the law that will essentially eliminate hard copies of checks. When you use a check at Wal-Mart, for example, they will run your check through a machine and hand it back to you. At that point, the money is automatically deducted from your account. Other companies are destroying checks right after they’ve been run through the system. These are premature versions of what will happen in October. At that time, companies will make digital copies of checks that will show up in your bank statement. But the physical check will be destroyed at the power company, credit card company or wherever it ends up. The digital images are called “check substitutes,” and they are considered as acceptable replacements for the original canceled check. Check 21 is going to save billions of dollars, but it will also eliminate a lot of jobs. The idea of a grace period after writing a check will also be a thing of the past. When you pay with a check, it will be automatic. Hopefully, people will stop using checks as a result and start using electronic bill pay systems. With everything going digital anyway, it will be much easier.

Banks are trying to overcome their cold, sterile image by – among other things - getting rid of the old teller windows. In fact, some are enlisting the help of retail experts to help with décor and atmosphere. Washington Mutual, for instance, is creating a “café-like” feel in its branches by hiring a greeter who helps customers through the banking process. Commerce Bank, which is in the Northeast, is open seven days a week and does not charge to count change or other services. Banks are trying to cross over into all kinds of other industries, including insurance and stock brokerages, to earn back a piece of the pie. Right now, banks have only 15 percent of the country’s assets. Stock brokerages and financial houses are handling more of our money, so banks will have to adapt or their market share will decline. Bank of America has set up a bank and Internet café in an old ice cream shop. There is a 42-inch plasma TV and a greeter to help customers. Maybe old dogs can learn new tricks. Clark sure hopes so.

Are bank mergers good or bad for you? You may have heard that Wachovia is taking over SouthTrust Bank. SouthTrust has been very successful throughout the years, so people in the business expected it to be bought off sooner or later. So, what’s in it for you if you’re with either if these banks? First of all, if you’re with the bigger bank, you don't have much to worry about. There are more ATM machines to visit, making it even more convenient for you. Customers of the other bank, however, almost always lose. All the procedures, policies and people are usually tossed out the window. In addition, as computer systems merge, problems almost always arise. Transactions get fouled up and money gets lost. But the biggest losers are the employees of the bank being bought. In this case, SouthTrust. The stockholders, on the other hand, win big. But the group most often forgotten when banks merge are taxpayers. Anytime banks merge, taxpayers take on extra risk. Why? Because taxpayers provide the insurance to keep banks running. So, as these banks get bigger and bigger, taxpayers end up on the hook if one of the big ones goes belly up. When the rash of bank failures occurred in the late '80s and early ‘90s, taxpayers were out $500 billion. If it were up to Clark, accounts would no longer be insured by taxpayers after banks reached a certain size. Monitor your SouthTrust accounts if you are a customer.

Do you go out of your way for a company that treats you poorly? Of course not. A recent study from Forrester Research asked consumers if they thought certain financial companies looked out for them. More than any other company, people thought USAA looked out for them. About 82 percent of people said the insurance and investment company, which serves former and active military, is definitely looking out for them. The next best score went to credit unions, but it wasn’t nearly as high. Only 62 percent of people thought credit unions were working for them. Other companies that got positive scores were Edward Jones and Geiko, both with 61 percent. On the other side of the spectrum, 70 percent of big banks had very low customer ratings. E-Trade had the lowest rating with only 19 percent of its customers thinking that the company looks out for them. Citibank got a 22 percent, while Fleet – which is merging with Bank of America – scored a 26 percent satisfaction level. BOA had a rating of 37 percent, and only 27 percent of Chase Bank customers felt like they were a priority. It is sad that consumers think big financial institutions are not at all interested in their needs. So, why do we put our money with them? USAA, on the other hand, should be really proud of what it has accomplished.

During the summer, the giant banks, insurance companies and stock brokerages will send you notices, telling you they “value your privacy.” Yet, in mice type on these notices, they tell you they have the right to share your personal and financial information with anyone who pays you money. You have to write them and tell them not to sell this information in order to stop it. They can also share this information with any affiliate bank. It’s rotten, terrible and, worst of all, it’s all legal. The banks somehow conned Congress into thinking this was a good idea. As a result, people get all kinds of buying clubs, credit protection plans, credit monitoring services and so on. One European bank took a very different approach, however. ING Direct has a privacy policy that requires you to “opt in” if you want your private financial information sold to other people. ING’s policy says that the bank “will only share your information with others at your request.” With most banks, you have to opt out of not having your information sold, which is completely insane. But it’s how things work these days. So, make sure you’re opting out of these programs if you get a “privacy policy” notice in the mail.

There is a sneaky rotten tactic credit card companies sometimes use that Clark wants to tell you about. It has to do with changing monthly statements to show only the minimum payment, not the full balance. American Express started this atrocious tactic. Then, after a lot of bad coverage, the company switched back to the old way. Then, MBNA tried it and quickly relented when the publicity started. Now, Bank of America is trying it. People who have BOA Visas are receiving statements that only show the minimum balance. What could the company be thinking after all of that negative publicity for AMEX and MBNA? Sometimes these financial houses need to get hit on the head with a two-by-four to learn a lesson. This is a horrible way to treat customers, and Clark would like to hear BOA's reasoning behind this.

Has your bank gone through a merger yet? A recent survey shows that customers are not as satisfied when a bigger bank takes over their smaller bank. Many people just take it, but about one in five head for the exit. The claims are that the bank loses its personal touch, fees are much higher and everyone you knew gets the boot. So what should you do? Know what matters to you. If you know that the good personal service and no fees are important, then you want to leave. Or if you like bigger banks and more branches and convenience, then you should be fine. There is a natural hierarchy with banks whereby they will eventually sell out to bigger banks. So, it will happen. But you can choose which kind of bank you want to join. And if you don't want to be a member of a bank anymore, join a credit union. Credit unions offer the best deals, and the best service but the least amount of inconvenience.

Banks are feeing consumers to death these days. A group known as PIRG – Public Interest Research Group – has learned that people pay approximately $228 in fees each year. U.S. PIRG is a group of college students that does research on consumer issues. Clark started a chapter at his college and he respects the work they do. Think about how many banks offer truly free checking these days. But people still choose fee-related banks anyway. The average ATM fee for using a machine other than your own is $1.55. Your own bank will charge you an average of $1.28. So you’re paying about $3 just to get your own money out. Also, sometimes ATMs from other banks either give out the wrong money or don’t give money at all. And once you’ve “withdrawn” that money according to the machine, it’s hard for you to get it back. So the idea that there are ATMs everywhere is an illusion. There are always gotchas. One bank charges $25 to replace your ATM card. All these fees add up to about $203 billion. So, pay attention to your balance and get money from ATMs that don’t charge you. Also, if your bank charges you fees, fire them.

Not too long ago, Clark talked about a scary trend in the banking business whereby banks were denying customers’ loans after pulling their medical records. For days after, people approached Clark to ask him if it was really true. At the time, it was possible because bank affiliates and big financial houses could share information with each other. So, at the time it was possible. But it’s now illegal. A law was passed to stop the ridiculous practice of denying people access, and banks will violate the rules if they deny anyone a loan based on medical history or current medical status. In the past, if an applicant had a past due bill to a hospital that showed a lengthy hospital stay, the bank could deny you. Now, it’s illegal. Although, the bank can deny you if you have a delinquent account. It’s nuts that we needed a law to make this happen, but thank goodness it was passed.

There are certain companies in the United States that keep their focus on serving the customer and are profitable because of that reason. One of those is the stock brokerage, Charles Schwab. Clark has done business with Schwab for more than a dozen years. But the company is engaged in something that makes Clark wonder if it has lost its moral focus. New players are running the company and they have been sending customers letters about “upgrades” to brokerage accounts. The letters make it seem like this is a great service they are providing. But what the packets really say in mice type is that many Schwab customers are going to be billed just under $300 a year per account, just for breathing. Others will be charged just under $150 per year, per account. Clark is appalled by this news and he wants to give Schwab representatives the chance to come on air and discuss what the company is doing. The San Francisco Chronicle has been grilling the company about why it’s charging the fees and if it’s fair to customers. Read Schwab's response.

Did you know that the banking industry has a kind of check prison? It’s not a prison that keeps you locked in, but that locks you out of the banking system entirely. Basically, a bank can arbitrarily decide to punish you if it suspects you have “misbehaved” with your checking account. It’s called “Chex Systems,”and once you are in this system you cannot have a checking account for five years. Now, if you don’t balance your checkbook and you commit overdrafts, there is a reason behind the bank’s decision. But if you make a mistake or the bank makes a mistake, there is no recourse. Say you move and close your account and a check bounces later, there should be an alternative. But right now there is not. If you get put into Chex Systems, there is no appeals process. It’s highly controversial, and consumer advocates have been fighting it for years. Under recent revisions to the Fair Credit Reporting Act, you can now appeal to Chex System itself. But the banks can still send you to Chex Systems prison on a whim. Thankfully, about a dozen states around the country allow you to get out of the program by taking a course in budgeting and handling finances. You receive a voucher to go open a checking account once you finish the course. Go to getchecking.org to see which states offer the class. But if you live in a state that does not have this “out,” appeal to Chex Systems directly.

Criminals are skimming money from you in several ways when you use ATMS these days. First of all, independent ATMS that you see in convenience stores are very dangerous because the banking industry has no pre-cautions set in place on these machines. Criminals install these machines and, over several months, they capture information of the people who get money out of the machines. They also install these card “skimmers” in regular ATM machines. They capture the information using fake card readers and then with the information they steal all of your money. The third way they steal your money is to install cameras in the racks next to the ATM machine. The cameras capture your hand motions and then the criminals can read your secret code and empty your checking account. Even worse, when this happens banks shrug their shoulders and say there is nothing they can do. That’s why it’s so important to keep track of your checking account. Read your statements each month, and if something looks unusual you must bring it up with your bank immediately. Banks have a 10-day window to conduct an investigation and at least give you a temporary credit for your money.

Getting a decent return on your money when you’re just saving it is really hard. Savings rates are pathetic right now. So, what should a conservative saver do with his or her money? Clark has an innovative offer for you from Washington Mutual, which has grown very quickly over the years. The company has sprouted so quickly, in fact, that it has come under scrutiny lately for customer service problems. But Washington Mutual is always coming up with new ways to provide products to the public, and Clark likes that. The most recent idea is to bid on CDs using the help of eBay. You tell Washington Mutual what rate you want on the CD. And, whoever offers the lowest interest rate gets the bid. So, you have to be willing to lose. But if you win, you will have the exact CD you want. It requires that you do your homework, and that includes checking rates online at sites like bankrate.com. You shouldn’t bid any lower than a quarter of a point above the best rate. In other words, you should get something back for taking the time and risk to bid. Clark loves the creativity involved in this initiative. They’re going to be doing all kinds of experiments like this, so it’s great for the future.

Phase IV of merger mania in the financial services world is under way as we speak. The prior phases involved local banks becoming regional ones and regional ones becoming national organizations. Then, about six years ago, Congress allowed all kinds of companies to merge whereby the same company the owned a bank could own a brokerage firm and an insurance company. Now, the behemoth banks are merging and the choices out there are shrinking even more. J.P. Morgan is now merging with Bank One, for example. And Citigroup is becoming the biggest financial house out there. We are parroting what’s happened in Great Britain and Asia, where gigantic financial houses control every aspect of the industry. The idea is to create cross selling, where one outfit tries to coerce you into buying insurance, banking, investments and more from them. The reality is that these one-stop shops have not been very successful selling things to people. But that is the current new wave. Clark has been trying to find something positive in all of this for the consumer, but he can’t come up with anything. Looking at Canada, there are five giant banks, and the general public basically despises them. So, people there have started doing more with credit unions. Similarly, when all the banks merged in the most recent wave, it created tremendous opportunity for smaller banks and credit unions. People wanted more attention and customer service. And the smaller, community banks have done especially well with small businesses. So, the urge to merge by these monster mega banks will probably not affect you in the least.