A quick guide for moving into mutual funds

By Michele Lerner

Like many people, the recession encouraged me to take a harder line with my budget. I'm definitely saving more and being more careful with spending.  But I'm also looking past just saving the money I already have -- I'm looking into earning it.

This morning, I checked on the interest rate on my emergency savings account, and it turned out to be less than 0.5 percent, much lower than I realized! As a result, my next financial move will be to shift some of those savings into a fund where the interest is higher. I decided to do some research, and thought it might be helpful to those foraying into this higher return territory.

From savings accounts to mutual funds

While your basic emergency savings should stay intact in a fund where the money can be accessed quickly when necessary, as soon as that savings account has reached your target comfort level it is time to move into slightly riskier territory to increase the return on your money.

Investors with a deep understanding of the stock market might feel ready to invest in individual stocks, but individuals who are new to the investment world tend to opt for a mutual fund. A mutual fund pools money from investors and builds a portfolio of investments within the fund, with the investors sharing in the gains or losses of the fund.

The main reason new investors opt for mutual funds, besides their professional management,

By Sierra Black

Credit cards: the best friend and worst enemy of anyone trying to live on a budget. Your credit card is there when an unexpected bill comes up, and it can help you through a rough week when you don't quite have enough to cover groceries and pay for gas for your car. However, depending on how you use it, your credit card can also be your biggest downfall, enabling you to rack up large amounts of debt.

Managing money is hard. Especially when you're just starting out, you'll make mistakes. Having a credit card in your pocket can feel like a safety net when there's a gap between your income and your expenses.

Using credit cards to get into debt

There were plenty of weeks when I depended on my credit card to get me through to my next paycheck. Like many young Americans before and after me, I didn't always pay it off again when that paycheck came. Pretty soon, I was carrying chronic debt on all of my credit cards. A lot of it.

At that point, my helpful credit cards started to look more like enemies than friends. I was living beyond my means, and the credit cards that once helped me do it now ate up a big chunk of my income in interest payments every month. It was time for a change.

Using credit cards to get out of debt

I didn't start out

By Peter Andrew

You say tomatoes...

Do you think the Federal Reserve should be more like the Bank of England? No, I'm not suggesting it should employ people with funny accents or lose most of its international influence. But perhaps its people could learn something from their opposite numbers in London about plain speaking. The Daily Telegraph, a UK-based newspaper, reported at the end of September 2010 some remarks by the deputy governor of the Bank of England. He told British savers to, "stop moaning and start spending."

Well, that's blunt, and you can't imagine a senior Fed official coming out with anything like it. However, if you look at what the Fed does, rather than what it says, it's hard to escape the conclusion that it's trying to send a similar message to Americans. Perhaps it should just come clean like the Brits.

Saving accounts that lose you money

Partly thanks to the Fed, interest rates right now are generally at or near historic lows. That's great if you need a mortgage, but bad news if you're saving up for the down payment you'll need to get that home loan - or for anything else for that matter. Indeed, if you factor in fees and inflation, you can actually come out at a loss by keeping your money in some savings accounts.

But don't despair. It may be a long time before we again see the sorts of high rates for savers that

By Megg Mueller

When it comes to saving money, everyone has their own, tried-and-true tactics. I clip coupons for the grocery store and compare them against my shopping list and against the grocery store sales flyers from my local paper. Maybe you keep your thermostat tightly regulated, doling out paper fans and sweaters to your family as the season's change. Whatever your personal money saving tips are, I bet there's a few you might not have thought of that just might save you a bit more each month.

1. Talk is not always cheap. Many people initially get locked into a cell phone contract, and then never look at their plan again except to pay the bill. But every few months, you should evaluate your usage. Are you texting more, and talking less? Have your monthly call minutes gone up due to that new boyfriend who isn't with the same carrier? Options such as unlimited text messaging, or family share plans can often save you money in the long run.

Your life changes, and so should your cell phone plan. Most carriers today allow you to change your plan at any time during your contract period. However, the catch is that you'll likely have to start a whole new contract, which extends your time with that carrier, so make sure to find out the details of your plan before switching.

2. Information is power. Most people know that a budget is a good

By Barbara Marquand

In the wake of the financial meltdown, top money expert Saly Glassman says investors need to take responsibility of their finances and get their investments back on track. Glassman, ranked the nation's No. 1 woman financial advisor by Barron's, is author of "It's About More Than the Money: Investment Wisdom for Building a Better Life" (FT Press: 2010).

We recently chatted with her about today's hot personal money management issues, from coping with losses to investing independently with discount brokers.

MoneyBlueBook.com: What's your advice for investors coping with losses?

Saly Glassman: The best way to deal with a loss is to step back and make an unemotional evaluation of what happened. By looking with more objectivity at the situation, you can analyze what role you played in contributing to that loss. Were you overextended with your borrowing? Did you have unrealistic expectations with that return? Did you not save enough? Did you not do enough research on the kind of investments you were buying and the person who was advising you? Ask yourself, "What role did I play in the loss that I incurred?"

If you say, "It's everybody else's fault," where does that take you? How can you be part of the solution if you had nothing to do with the problem?

MBB: What are the biggest mistakes investors have made in the last two years?

Glassman: Common mistakes

By MoneyBlueBook

This is a guest post from Marc Pearlman.

Back in the early to mid-1990s I made my living by sitting in front of computer monitor with green and red glowing pixels that flashed stock and commodity prices. I was an off-the-floor stock and commodity trader, and in my world, green and red meant everything. Green meant I was making money, and red meant I would be drawing out of my savings to pay for monthly expenses.

Fortunately for me, I was given some sage advice from a wealthy mentor of mine who was about 25 years my senior and knew of an obstacle that I was likely to encounter. I still remember his wise words: "Kid, make sure you put money into an account you can draw from when times are lean--and expect some lean times. It's part of the game."

Even though I heeded his advice, there was one thing I didn't account for: the feeling I'd have when trekking to the bank to withdraw those savings. While I had been diligently depositing money in my high yield savings account specifically to be drawn on when needed, the mental anguish of seeing my balance decrease--sometimes month after month--was one of the biggest challenges I had to overcome as a trader.

From Retirement Saving to Retirement Spending: Getting Past the Anxiety

Fast-forward 16 years: now I manage other people's money for a living. I'm on the phone with a client in his mid-60s who recently retired. He asks me if taking $10,000 out of