In your book Map Your Financial Future: Starting the Right Path in Your Teens and Twenties you say it is critical for young people to start on the right track, why is it so important for people to be concerned with their personal finances at such a young age?

Simply put, decisions made today affect your future. If you make bad choices like I did when I was in high school and college you will end up saddled with a load of debt that takes a long time to pay off and a negative credit history that will make it harder to get necessities such as a car or a place to live. If you make responsible choices, it will make cruising through life so much easier. My book is designed to give readers a map to achieving financial freedom. It begins by stressing the importance of budgeting. Part two explores the world of credit. Part three talks about ways to increase your earnings. Part four discusses strategies for building wealth. Additionally, each chapter ends with a section called “Just for Teens.”

What is predatory lending and aren’t there laws to protect the public?

Predatory lending refers to tactics by lenders to take advantage of borrowers. Some of these individuals have poor credit scores or are uneducated and are steered into loans with high fees and payments the borrower cannot afford. There are predatory lending laws in each state to protect borrowers, but it is still important to educate yourself to prevent becoming a victim. To protect yourself ask the following questions when applying for a mortgage:

1. What are the fees? Loans where fees exceed 5% of the borrowed amount are excessive.
2. Are there prepayment penalties? These are fees paid to the lender if you pay the loan off early.
3. Is there a mandatory arbitration clause? These clauses prevent you from suing the lender for abusive lending practices.
4. Is there a balloon payment? Some loans may start off with low payments, but eventually have a huge payment that is due at once after a few years.
5. What is the annual percentage rate (APR)? Check www.bankrate.com for current mortgage rates.

What are the dangers of payday lending?

It can create a never-ending cycle of debt. According to the Center for Responsible Lending, the average payday borrower refinances a loan 9 times (4 ½ months) and pays $800 for a $325 loan. If you lack the cash in your account to cover the post-dated check the lender is holding, you risk having your check bounce. This will cause even more fees. The bank and the payday lender can charge you for having insufficient funds and threaten legal action.

What should we beware of with auto title loans?

Auto title loans are short term, high interest loans that are secured by your car. Borrowers typically receive a loan for 33% of the value of the car. Interest rates can exceed 300% annually. In addition, these lenders add extra charges such as car club memberships on top of the interest charged on the loan. A $500 loan with 25% monthly interest would require $625 ($500 principal + $125 interest). If the loan is not paid in full the borrower would be charged another 25% interest monthly until the loan is paid-in-full.

What alternatives would you recommend to avoid using these types of loans? If the loan is for an emergency then one way to prevent the situation from happening again is to build an emergency fund. Ideally you want to have 6 months worth of living expenses in this account, which can be in a checking or money market account, so that you have easy access in case of an emergency. You can gradually build this account up by putting aside a small amount from each paycheck until you reach your goal.

If you are borrowing the money to pay a bill, talk with the creditor and set up a payment schedule. There may be additional fees for doing this, but it is most likely cheaper than and payday or auto title loan.

You can apply for assistance with churches or community organizations. There are a number of black churches that have these programs where they will help with paying essential bills like rent and utility bills to help get you back on your feet. These programs usually don’t pay for things like cable, or if you want to get your hair and nails done.

Tax season is upon us what should consumers consider before getting a refund anticipation loan?

They give you an advance against your refund, but it comes at a cost – a steep one. Fees for processing the loan and preparing your tax forms can start at $100 and top $200 in some cases. It may seem like a small price to pay if you have a big refund and want to get your funds fast, but that money that could have helped pay down a credit card bill or student loan.

Instead of rushing for the quick payout, consider using online tax preparation companies which are part of the IRS’s Free File program. They will file your tax return electronically for free if you meet certain requirements. Check http://www.irs.gov for more details. Often, you can get your refund between eight to 15 days. If you don’t have access to the Internet you can also receive free tax preparation at your local IRS office if your annual income is less than $38,000. Most locations also offer free electronic filing. Call your local IRS office for details.

401(k) loans are becoming popular, however, you discourage people from these types of loans, aren’t they just taking a loan from their own retirement?

Yes. The good thing about 401(k) loans is that you are paying yourself back with interest. The bad thing is that it could take years to rebuild your nest egg to the level it was prior to taking out the loan. What’s more, in the unlikely event you quit your job or are laid off the balance of the loan becomes due immediately. If you don’t have the funds to repay at that time, the loan is treated as a withdrawal, which is subject to penalties.

Some people may have heard about the controversy with H&R Block and their Express IRAs, what some things to consider when setting up these accounts? When setting up an IRA or any type of investment account ask about fees. You should avoid firms that charge inactivity fees (fees charged on accounts where no trades are placed over a specific time period – usually 3 months). Also look for no fee IRA accounts. Scottrade charges no fees on IRA accounts. Sharebuilder has no minimum opening balance and has certain accounts where the annual IRA fee is waived.

Can you give a few last minute tax tips?

1. Contribute to your IRA account – If you have a traditional IRA your contributions prior to April 15, 2006 will be deductible from your 2005 tax return.
2. If you have a home based business, be sure to apply for the home office tax deduction. This allows you to write off a portion of your mortgage and utility expenses
3. Student loan interest is tax deductible as long as your income is below $130,000.
4. Donations – be sure to keep receipts of donations of clothes or cash given to charitable organizations.
5. If you purchased property and paid points and portion of the cost is deductible.

Is there any investment advice that may help people reduce their tax burden next year even if they don’t have a lot to invest?

• If your company has a retirement savings program like a 401(k) or 403(b) your contributions up to $15,000 are tax deductible for 2006. Even if you have to start out with 1% of your salary it is a good start and many companies match employee contributions so it’s like getting free money for saving.
• Another option is contributing to a traditional IRA. Sharebuilder.com allows you to open an IRA with no minimum balance. Scottrade requires only $500 to open an account