The financial regulation plan unveiled by the Obama administration last week entrusts a new regulator, the Consumer Financial Protection Agency, with implementing simpler rules and standardized options for consumer loans.

Behaviorally informed regulation, as opposed to the perennial calls for more disclosures, starts with presenting information and choices to get consumers to make decisions that the government thinks are in their interest.

The Obama budget proposal includes plans to require employers who don’t offer a 401(k) or similar retirement savings account to automatically enroll workers in individual retirement accounts, siphoning deposits directly from their paychecks. The program is aimed at the half of all working Americans — roughly 75 million people — who don’t have a retirement plan other than Social Security.

Workers would be allowed to opt out of the auto-IRAs. But that would force them to make a clear decision not to save this way, perhaps driving them to think more about their retirement needs. When the government this decade changed the law to encourage employers to automatically enroll their workers in 401(k) accounts, unless they opted out, employee participation shot up.

The Treasury is now considering proposals to direct tax refunds into a bank account automatically — rather than sending refunds through checks — to encourage people without a savings account to save more. Taxpayers would have the right to opt out if they decided the current approach worked better for them.

The credit-card legislation that sailed through Congress last year became behavioral economists’ first major win in the Obama administration. When the law takes effect next year, it will give borrowers a wake-up call: plain-English warnings and a prominent warning of how long cardholders would take to pay off their debt by sending only the minimum payment each month, and how much interest they’d rack up.

The key concern for opponents of the changes will be maintaining the element of choice in financial decision making, and ensuring consumers aren’t nudged too far in one direction. Even proponents say any changes must be easily reversible.

How can not exercising hurt your finances? Daily physical activity lowers the risk of a multitude of ailments, from heart disease to diabetes to certain kinds of cancer. These illnesses are obviously expensive to treat, even for people who have health insurance.

Medical bills are behind more than half of  all U.S. bankruptcies, and more than 75 percent of bankrupt families had health insurance at the onset of the illness. Meanwhile, a regular work-out might get you a raise. Studies have found exercise can improve your performance at work by boosting cognitive skills and productivity, and reducing stress and absenteeism.

Exercise is extremely important. Beyond helping you take control of your weight, it also manages your energy level and helps you sleep. Exercise keeps you mentally focused and builds discipline, two great habits for managing your money.

If you’re broke, it’s all the more reason to exercise. It helps lift your mood, by creating endorphins, and counter-acts any potential effects of depression or just ‘the blues.’ If you’re trying to pay the bills, the last thing you need is blues. You want lots of greens!

The less you want to do it, the more you probably should. The important thing is just to start.

Initially you should take some time to collect all of your bills and financial papers, so you have an accurate picture of where you stand financially.

You should choose a company that will customize their program to your individual needs. It’s possible to take all your payments and reduce them into one while they negotiate with your creditors for better terms, like lower interest, a lower balance, or perhaps even stopping late fees.

You will pay a fee for this service. It will be part of your monthly payment and is compensation for the work that they’re doing to secure betters terms for your debt.

It’s important to take the time to learn about budgeting and how to stay out of debt. You really don’t want to endure the stress of unpaid bills again and the collection efforts that your creditors will use.

Do everything possible to stick with the new plan. If you find that you have some extra money, send it in and you’ll be out of debt even faster. Most of the time you can pay off the debt through one of these programs in just a matter of months.

Make that first step of taking a realistic look at what you owe, choosing a provider and a program that is right for you and can be customized to your situation, and then following through with one monthly payment. In a few months you should be breathing easier and enjoying your life again. The sooner you start, the sooner you will be debt-free.

by stuartpilbrow

With so many Americans living beyond their means, what can people do to rein in spending? Sit down and figure out a plan, plain and simple! The reality is that the people who most need to make drastic changes don’t realize that straightening out their finances is not difficult to do.

The first step to better personal finances is to know where your money is going. Assess the damage to determine the extent to which you live within your means. Start by keeping track of what you spend for one month. Carry a notebook to jot down each item and its cost to get a quick sense of what falls through the cracks. This will show you how much of your hard-earned money went to genuine essentials, and how much of it went to items you could have done without.

Learning the difference between what you need and what you want is crucial to getting out of debt. The truth is, most people don’t need a fraction of the stuff they spend their money on. It’s the bare necessities that form the foundation of any budget.

During his life, Michael Jackson sold hundreds of millions of records. His musical legacy should easily have led him to amass one of the greatest fortunes in show-business history. But instead, a history of bad management, excessive personal spending, and big legal bills left him almost broke.

Jackson’s financial problem stems from the fact he continued to spend tens of millions of dollars a year even as his musical output—and his income—slowed down.  In recent years Jackson financed his personal debts by borrowing against assets, and by some estimates his total borrowings at his death may have exceeded $400 million.

His death parallels that of Elvis Presley, who died in 1977 at age 42. Like Jackson, at the end of his life, Presley hadn’t had a hit album in years. He was mostly relying on royalties from his past hits and doing shows in Las Vegas. But in death he became a moneymaking phenomenon.

Might not be a bad time to become a Michael Jackson impersonator.

Inadequate sleep is associated with an unhealthy lifestyle and not getting enough sleep has a detrimental effect on health and safety.

It’s easy to understand why so many people are concerned over the economy and job. but sacrificing sleep is the wrong solution. Sleep is essential for productivity and alertness and is a vital sign for one’s overall health.

Sleep is as important as diet and exercise to overall health, yet few people with sleep problems discuss their concerns with doctors.

If you’re having trouble sleeping, following the following guidelines can help you.

1. Use your bedroom only for sex and sleep

2. Keep a regular bedtime

3. Make sure your bedroom is dark, cool, and quiet, and that you’ve got a comfortable sleep surface, pillow, and bedding

4. Turn off the TV, and put the laptop away

5. Exercise as much as you can, but make sure you stop at least three hours before bedtime

6. Avoid foods and drinks high in caffeine for at least eight hours before bedtime; stay away from alcohol, which disturbs sleep.

DO get organized. Even if you’re a “messy”, this Do is crucial. You’ll miss important due dates, pay exorbitant late fees and possibly get into serious debt (or credit trouble) if you don’t have a handle on what you owe and when you owe it. A simple rule of thumb: the messier you are, the simpler your system. 

DO draw up a spending plan. Every dollar that comes into your household goes out in one way, shape or form, even if it’s to a savings account. Know where your money’s coming in and where it’s going. Without this information, you can’t possibly make wise financial choices. 

Overwhelmed by the thought? Ask a financially responsible friend or relative (whom you trust) to do it for you. You can’t argue with success—and they can help you make the hard decisions when it comes to having to “trim” spending in certain areas.

DON’T cut out all your fun. Decide, along with your family, what’s most important to you in terms of living a happy life. Then divide up your budget accordingly. If your family really enjoys eating out, plan for it. Just keep in mind you may have to spend a lot less on groceries or clothing. If none of us are the same then our spending plans shouldn’t be the same. If you love to read then cutting back on cable TV wouldn’t be a problem. If you love to watch sports, then cutting back on cable TV would be a serious problem.

DO allow impulse spending. Yup, you read it correctly. Unless you plan for a certain amount of miscellaneous, unexpected expenses in your spending plan, you’ll always feel as though you’re blowing your budget when you pick up items you weren’t planning to buy. Just like anything else, give yourself a “buffer”. A side benefit: you get to skip the guilt when you pick up that neat velour Elvis on the boardwalk.

DON’T use your local bank – unless you absolutely have to. Check out all available credit unions first. In most cases, they’ll have better rates and more friendly policies on everything from fees to lending practices. Each dollar you deposit buys you a share, or membership, in the credit union. So instead of being a customer you’re actually a “member”. Like the ad says, membership has its privileges.

DO use a debit card with protection. Before you use a debit card, make sure your checking account is safe in case you lose your card or it’s somehow stolen. Also make sure you have the right to reverse charges in case merchants don’t provide the goods or services you purchased. 

DON’T buy a new car. Considering the fact that new cars depreciate thousands of dollars as soon as you drive them off the lot, can anyone explain why buying a new car would be a good idea?

DO run numbers before every major financial decision. Conventional wisdom works—most of the time. But there are always exceptions. For example, in most cases, it doesn’t make sense to borrow from a 401(k). But there are instances where it’s financially beneficial. You’ll hear it preached from the rooftops that you shouldn’t use a home equity loan to pay off credit cards, or that debt consolidation loans are nothing but trouble. But if you’re financially responsible and ran into some tough circumstances, a HELOC or debt consolidation could be a lifesaver. Search online for calculators that will help clarify the situation. Numbers don’t lie.

And finally, perhaps the most important “Do” of all…

DO remember that personal finance is just that—personal. Everyone loves to give advice, and everyone loves to share their opinions. What worked for your mom and dad may not work for you. On the other hand, they probably have years of wisdom you can draw from.

Consider your personal finances an extension of who you are and where you’re going. Study the topic, and take the time to develop your own unique strategies when it comes to saving, spending and investing.