Wednesday, December 21, 2011
Friday, December 16, 2011
The Aging Brain
From Wikipedia
Age is a major risk factor for most common neurodegenerative diseases, including Alzheimer's disease, cerebrovascular disease, Parkinson's disease and Lou Gehrig's disease. While a plethora of research has focused on diseases of aging, there are few informative studies on the molecular biology of the aging brain in the absence of neurodegenerative disease or the neuropsychological profile of healthy older adults . However, research does suggest that the aging process is associated with several structural, chemical, and functional changes in the brain as well as a host of neurocognitive changes. This page is devoted to reviewing the changes associated with healthy aging.
Brain plasticity refers to the brain's ability to change structure and function.[4] This ties in to that old phrase, “if you don’t use it, you lose it,” which is another way of saying, if you don’t use it, your brain will devote less somatotopic space for it. One proposed mechanism for the observed age-related plasticity deficits in animals is the result of age-induced alterations in calcium regulation.[5] The changes in our abilities to handle calcium will ultimately influence neuronal firing and the ability to propagate action potentials, which in turn would affect the ability of the brain to alter its structure or function (i.e. its plastic nature). Due to the complexity of the brain, with all of its structures and functions, it is logical to assume that some areas would be more vulnerable to aging than others. Two circuits worth mentioning here are the hippocampal and neocortical circuits.[6] It has been suggested that age-related cognitive decline is due in part not to neuronal death, but in fact, synaptic alterations. Evidence in support of this idea from animal work has also suggested that this cognitive deficit is due to functional and biochemical changes such as enzymatic activity, chemical messengers, or gene expression in cortical circuits.[6]
Compared to other tissues in the body, the brain is deemed abnormally sensitive to oxidative damage.[15] Increased oxidative damage has been associated with neurodegenerative diseases, mild cognitive impairment and individual differences in cognition in healthy elderly people. In ‘normal aging’, the brain is undergoing oxidative stress in a multitude of ways. The main contributors include, protein oxidation, lipid peroxidation and oxidative modifications in nuclear and mitochondrial DNA.[15] Oxidative stress can damage DNA replication and inhibit repair through many complex processes. One of these processes includes telomere shortening in DNA components.[16] Each time a somatic cell replicates, the telomeric DNA component shortens. As telomere length is partly inheritable,[16] there is individual difference in the age of an individual and the onset of cognitive decline.
If older adults have fewer attentional resources than younger adults, we would expect that when two tasks must be carried out at the same time, older adults’ performance will decline more so than younger adults. However, a large review of studies on cognition and aging suggest that this hypothesis has not been wholly supported.[39] While some studies have found that older adults have a more difficult time encoding and retrieving information in a divided attention situations than do younger adults, other studies have not found meaningful differences.Similarly, one might expect older adults to do poorer on tasks of sustained attention, which measure the ability to attend to and respond to stimuli for an extended period of time. However, studies suggest that sustained attention shows no decline with age. Results suggest that sustained attention increases in early adulthood and then remains relatively stable, at least through the seventh decade of life. [40] More research is needed on how normal aging impacts attention after age eighty.
It is worth noting that there are factors other than true attentional abilities that might relate to difficulty paying attention. For example, it is possible that sensory deficits impact older adults’ attentional abilities. In other words, impaired hearing or vision may make it more difficult for older adults to do well on tasks of visual and verbal attention. [37]
The human brain shows a decline in function and a change in gene expression. This modulation in gene expression may be due to oxidative DNA damage at promoter regions in the genome. Genes that are down-regulated over the age of 40 include:
Structural Changes
As people age, there are a number of changes that take place, whether physical, chemical or biological. Therefore, it is logical to assume the brain is no exception to this phenomenon. Computed Tomography (CT) studies have found that the cerebral ventricles expand as a function of age, and this process is known as ventriculomegaly. More recent MRI studies have reported age-related regional decreases in cerebral volume.[1][2] Regional volume reduction is not uniform; some brain regions shrink at a rate of up to 1% per year, whereas others remain relatively stable until the end of the life-span.[3] The brain is very complex, and is composed of many different areas and types of tissue, or matter. Differing properties of different tissues in the brain may be more or less susceptible to age-induced changes.[1] The brain matter can be classified as either grey matter, or white matter. Grey matter consists of cell bodies in the cortex and subcortical nuclei, whereas white matter consists of tightly packed myelinated axons connecting the neurons of the cerebral cortex to each other and with the periphery.[1]Loss of Neural Circuits and Brain Plasticity
Thinning of the Cortex
Advances in MRI technology have provided the ability to see the brain structure in great detail in an easy, non-invasive manor in vivo.[7] Bartzokis et al., has noted that there is a decrease in grey matter volume between adulthood and old age, whereas white matter volume was found to increase from age 19-40, and decline after this age.[7] Studies using Voxel-based morphometry have identified areas such as the insula and superior parietal gyri as being especially vulnerable to age-related losses in grey matter of older adults.[7] Sowell et al., reported that the first 6 decades of an individual's life were correlated with the most rapid decreases in grey matter density, and this occurred over dorsal frontal, and parietal lobes on both interhemispheric and lateral brain surfaces. Also worth noting, that areas such as the cingulate gyrus, and occipital cortex surrounding the calcarine sulcus appear exempt from this decrease in grey matter density over time.[7] Age effects on grey matter density in the posterior temporal cortex appear more predominantly in the left versus right hemisphere, and were confined to posterior language cortices. Certain language functions such as word retrieval and production were found to be located to more anterior language cortices, and deteriorate as a function of age. Sowell et al., also reported that these anterior language cortices were found to mature and decline earlier than the more posterior language cortices.[7] It has also been found that the width of sulcus not only increases with age,[8] but also with cognitive decline in the elderly.[9]Age-Related Neuronal Morphology
There is converging evidence from cognitive neuroscientists around the world that age-induced cognitive deficits may not due to neuronal loss or cell death, but rather may be the result of small region-specific morphology of neurons.[5] Studies by Duan et al., have shown that dendritic arbors and dendritic spines of cortical pyramidal neurons decrease in size and/or number in specific regions and layers of human and non-human primate cortex as a result of age (Duan et al., 2003; morph). Interestingly, a 46% decrease in spine number and spine density has been reported in humans older than 50 compared with younger individuals.[6] An electron microscopy study in monkeys reported a 50% loss in spines on the apical dendritic tufts of pyramidal cells in prefrontal cortex of old animals (27–32 years old) compared with young ones (6–9 years old).[6]Neurofibrillary Tangles
Age-related neuro-pathologies such as Alzheimer’s disease, Parkinson's disease, diabetes, hypertension and arteriosclerosis make it difficult to distinguish the normal patterns of aging.[10] One of the important comparison aspects between normal aging and pathological aging are neurofibrillary tangles. Neurofibrillary tangles are composed of paired helical filaments (PHF).[11] In normal, non-demented aging, the number of tangles in each affected cell body is relatively low[11] and restricted to the olfactory nucleus, parahippocampal gyrus, amygdala and entorhinal cortex.[12] As the non-demented individual ages, there is a general increase in the density of tangles, but no significant difference in WHERE tangles are found.[12] The other main neurodegenerative contributor commonly found in the brain of patients with AD is amyloid plaques. However, unlike tangles, plaques have not been found to be a consistent feature of normal aging.[12]Role of Oxidative Stress
Cognitive impairments has been attributed to oxidative stress, inflammatory reactions and changes in the cerebral microvasculature.[13] The exact intensity of each of these mechanisms in affecting cognitive aging is unknown. Oxidative stress is the most controllable risk factor and is the best understood. The online Merriam-Webster Medical Dictionary defines oxidative stress as, "physiological stress on the body that is caused by the cumulative damage done by free radicals inadequately neutralized by antioxidants and that is to be associated with aging."[14] Hence, simply put, oxidative stress is the damage done to the cells by free radicals that have been released from the oxidation process.Compared to other tissues in the body, the brain is deemed abnormally sensitive to oxidative damage.[15] Increased oxidative damage has been associated with neurodegenerative diseases, mild cognitive impairment and individual differences in cognition in healthy elderly people. In ‘normal aging’, the brain is undergoing oxidative stress in a multitude of ways. The main contributors include, protein oxidation, lipid peroxidation and oxidative modifications in nuclear and mitochondrial DNA.[15] Oxidative stress can damage DNA replication and inhibit repair through many complex processes. One of these processes includes telomere shortening in DNA components.[16] Each time a somatic cell replicates, the telomeric DNA component shortens. As telomere length is partly inheritable,[16] there is individual difference in the age of an individual and the onset of cognitive decline.
Chemical Changes
In addition to the structural changes that the brain incurs with age, the aging process also entails a broad range of biochemical changes. More specifically, neurons communicate with each other via specialized chemical messengers called neurotransmitters. Several studies have identified a number of these neurotransmitters, as well as their receptors, that exhibit a marked alteration in different regions of the brain as part of the normal aging process.Dopamine
An overwhelming number of studies have reported age-related changes in dopamine synthesis, binding sites, and number of receptors. Studies using positron emission tomography (PET) in living human subjects have shown a significant age-related decline in dopamine synthesis,[17] notably in the striatum and extrastriatal regions (excluding the midbrain).[18] Significant age-related decreases in dopamine receptors D1, D2, and D3 have also been highly reported.[19][20][21][22][23] A general decrease in D1 and D2 receptors has been shown,[21] and more specifically a decrease of D1 and D2 receptor binding in the caudate nucleus and putamen.[20][23] A general decrease in D1 receptor density has also been shown to occur with age. Significant age-related declines in dopamine receptors, D2 and D3 were detected in the anterior cingulate cortex, frontal cortex, lateral temporal cortex, hippocampus, medial temporal cortex, amygdala, medial thalamus, and lateral thalamus[19] One study also indicated a significant inverse correlation between dopamine binding in the occipital cortex and age.[20] Postmortem studies as well show that the number of D1 and D2 receptors decline with age in both the caudate nucleus and the putamen, although the ratio of these receptors did not show age-related changes.[22] The loss of dopamine with age is thought to be responsible for many neurological symptoms that increase in frequency with age, such as decreased arm swing and increased Rigidity (neurology).[24] Changes in dopamine levels may also cause age-related changes in cognitive flexibility.[24]Serotonin
Decreasing levels of different serotonin receptors and the serotonin transporter, 5-HTT, have also been shown to occur with age. Studies conducted using PET methods on humans, in vivo, show that levels of the S2 receptor in the caudate nucleus, putamen, and frontal cerebral cortex, decline with age.[23] A decreased binding capacity of the 5-HT2 receptor in the frontal cortex was also found,[21] as well as a decreased binding capacity of the serotonin transporter, 5-HHT, in the thalamus and the midbrain.[25] Postmortem studies on humans have indicated decreased binding capacities of serotonin and a decrease in the number of S1 receptors in the frontal cortex and hippocampus as well as a decrease in affinity in the putamen.[26]Glutamate
Glutamate is another neurotransmitter that shows a trend to decrease with age.[27][28][29] Studies have shown older subjects to have lower glutamate concentration in the motor cortex compared to younger subjects[29] A significant age-related decline especially in the parietal gray matter, basal ganglia, and to a lesser degree, the frontal white matter, has also been noted.[27][28] Although these levels were studied in the normal human brain, the parietal and basal ganglia regions are often affected in degenerating brian diseases associated with aging and it has therefore been suggested that brain glutamate may be useful as a marker of brain diseases that are affected by aging.[27]Neuropsychological Changes
Changes in Orientation
Orientation is defined as the awareness of self in relation to one’s surroundings [30] Often, orientation is examined by distinguishing whether a person has a sense of time, place, and person. Deficits in orientation are one of the most common symptoms of brain disease, hence tests of orientation are included in almost all medical and neuropsychological evaluations.[31] While research has primarily focused on levels of orientation among clinical populations, a small number of studies have examined whether there is a normal decline in orientation among healthy aging adults. Results have been somewhat inconclusive. Some studies suggest that orientation does not decline over the lifespan. [32][33] For example, in one study 92% of normal elderly adults (65–84 years) presented with perfect or near perfect orientation. [34] However, there is also data that suggest that mild changes in orientation may be a normal part of aging. [35][36] For example, Sweet and colleagues concluded that “older persons with normal, healthy memory may have mild orientation difficulties. In contrast, younger people with normal memory have virtually no orientation problems” [36] (p. 505). Hence, research up to this point suggests that normal aging is not associated with significant declines in orientation to person, place, or time. But, mild difficulties may be a part of the aging process and are not necessarily a sign of pathology.Changes in Attention
Many older adults notice a decline in their attentional abilities.[37] Attention is a broad construct that refers to “the cognitive ability that allows us to deal with the inherent processing limitations of the human brain by selecting information for further processing” (p. 334).[38] Since the human brain has limited resources, people use their attention to zone in on specific stimuli and block out others.If older adults have fewer attentional resources than younger adults, we would expect that when two tasks must be carried out at the same time, older adults’ performance will decline more so than younger adults. However, a large review of studies on cognition and aging suggest that this hypothesis has not been wholly supported.[39] While some studies have found that older adults have a more difficult time encoding and retrieving information in a divided attention situations than do younger adults, other studies have not found meaningful differences.Similarly, one might expect older adults to do poorer on tasks of sustained attention, which measure the ability to attend to and respond to stimuli for an extended period of time. However, studies suggest that sustained attention shows no decline with age. Results suggest that sustained attention increases in early adulthood and then remains relatively stable, at least through the seventh decade of life. [40] More research is needed on how normal aging impacts attention after age eighty.
It is worth noting that there are factors other than true attentional abilities that might relate to difficulty paying attention. For example, it is possible that sensory deficits impact older adults’ attentional abilities. In other words, impaired hearing or vision may make it more difficult for older adults to do well on tasks of visual and verbal attention. [37]
Changes in Memory
There have been many different types of memory identified in humans, such as episodic, semantic, strategic, working, source spatial, and non-declarative.[1] Studies done by Rapp et al., have found that memory functions, more specifically those associated with the medial temporal lobe are especially vulnerable to age-related decline.[6] A number of studies utilizing a variety of methods such as histological, structural imaging, functional imaging, and receptor binding have converging evidence that the frontal lobes and frontal-striatal dopaminergic pathways are especially affected by age-related processes resulting in memory.[1]Genetic Changes
Variation in the effects of aging among individuals can be attributed to both genetic and environmental factors. As in so many other science disciplines, the nature versus nurture debate is an ongoing conflict in the field of cognitive neuroscience. [10] [11] The search for genetic factors has always been an important aspect in trying to understand neuro-pathological diseases. Research focused on discovering the genetic component in developing AD has also contributed greatly to the understanding the genetics behind normal or “non-pathological” aging.[11]The human brain shows a decline in function and a change in gene expression. This modulation in gene expression may be due to oxidative DNA damage at promoter regions in the genome. Genes that are down-regulated over the age of 40 include:
- GluR1 AMPA receptor subunit
- NMDA R2A receptor subunit (involved in learning)
- Subunits of the GABA-A receptor
- Genes involved in long-term potentiation e.g. calmodulin 1 and CAM kinase II alpha.
- Calcium signaling genes
- Synaptic plasticity genes
- Synaptic vesicle release & recycling genes
- Genes associated with stress response and DNA repair
- Antioxidant defence
Delaying the Effects of Aging
The process of aging may be inevitable, however, one may potentially delay the effects and severity of this progression. While there is no consensus of efficacy, the following are reported as delaying cognitive decline:- High level of education [11] [41]
- Physical Exercise [42]
- Staying intellectually engaged i.e. Reading and mental activities (such as crossword puzzles) [43]
- Maintaining social and friendship networks [44]
- Maintaining a healthy diet i.e. Omega-3 fatty acids, and protective antioxidants [10]
"Super Agers"
Longitudinal research studies have recently conducted genetic analyses of centenarians and their offspring to identify biomarkers as protective factors against the negative effects of aging. In particular, the cholesteryl ester transfer protein (CETP) gene is linked to prevention of cognitive decline and Alzheimer’s disease[45]. Specifically, valine CETP homozygotes but not heterozygotes experienced a relative 51% less decline in memory compared to a reference group after adjusting for demographic factors and APOE status.Cognitive Reserve
The ability of an individual to demonstrate no cognitive signs of aging within the context of an aging brain is called cognitive reserve.[41] [13] This hypothesis comes into play when two patients have the same brain pathology, one leading to noticeable clinical symptoms, while the other continues to function relatively normally. Cognitive reserve explores the specific differences between these two individuals, biologically, genetically and environmentally which makes one more susceptible to an increased decline in cognitive functioning, and allows the other to age more gracefully.Nun Study
A study funded by the National Institute of Aging, studied a group of 678 Roman Catholic sisters and the effects of aging. The researchers used autobiographical essays that were collected as the nuns joined Sisterhood. Findings suggest that essays that early idea density, defined by number of ideas expressed per ten words and the use of complex prepositions, was a significant predictor of its author’s risk for developing Alzheimer’s disease in old age. Lower idea density was found to be significantly associated with lower brain weight, higher brain atrophy, and more neurofibrillary tangles [46]See also
Tuesday, April 12, 2011
Eight Steps to Financial Health
by Laura Rowley
Originally posted on Sunday, October 31, 2010, 12:00AM
Like many Americans, Leah West, 40, is struggling to shed debt and manage an array of financial obligations. After her divorce seven years ago, Leah, a mother of three, enrolled in college and earned her bachelor's and master's degrees. She moved up the ladder in health care administration, and earns about $80,000. But she's now saddled with more than $82,000 in debt, mostly student loans; and her home is worth less than what she paid it. Leah also wants to set aside money for college tuition for her kids, and build a retirement fund.
Since September, I've been coaching Leah in her quest to improve her finances, a journey she blogs about at WomansDay.com. Her story offers practical lessons in how to attack multiple financial goals and maintain momentum. Here are just a few:
1) Focus on the positive
Before you confront a mountain of bills, remind yourself what's working for you. Leah had earned a master's degree — an accomplishment just 6 percent of Americans can claim. She enjoys her job, has a solid income and excellent insurance coverage. She is in good health, has three wonderful kids, and can cover all her bills without falling further into the red. Relationships, education, career experience, health and spirituality are all components of well-being; savoring the positive can provide the momentum to tackle the bad stuff.
2) Set one to three manageable goals
Don't overwhelm yourself with a list of ten things to fix immediately. Leah's priorities were eliminating her credit card debt; creating a plan to pay off her student loans (which were in forbearance); and building up an emergency fund of $10,000. Once we had a strategy up and running, we could move on to other goals, such as college savings and retirement.
3) Get a handle on the real numbers
Although Leah was making double the minimum payment on her credit cards, she felt she wasn't making progress. I used an online debt calculator to show her the truth: By paying twice the minimum, she would banish the debt in 15 months and pay $302 in interest. If she made only the minimum payments, it would take more than six years, and she'd pay $1,328 in interest. Use tools like this one to help you get a grip on the math.
Leah also got the hard numbers on her student loan debt to make sure the loans weren't snowballing at absurdly high interest rates, and disrupting the rest of her financial plan. Fortunately, the rates were quite low, so we left that alone for the moment to focus on the debt paydown. (That would free up the cash necessary to eventually tackle the student debt.)
Finally, we discussed Leah's retirement plan. She had enrolled in a 403(b) plan when she started her job at a health center and contributed steadily for four years. But about 18 months ago, her employer eliminated matching funds because of budget cuts, so Leah stopped contributing. The health center is expected to reinstate the match next year, and Leah plans to jump back in then. It's a smart move from a numbers perspective: It's better to pay down credit card debt at 20 percent interest than to contribute to a plan with no match, because she's unlikely to earn a 20 percent return on her retirement savings.
4) Rank your rates, then cut them down
Leah listed her credit cards on a single page from highest to lowest interest rate, along with the amount due and the company contact information. She called each lender and asked for a rate reduction, using this script: "I have been a cardholder since ____. In the past few months, several credit card companies have offered me lower rates than my current rate with you. I value our relationship, but would like you to match the other offers that I have received and reduce my interest rate by 10 percent. Are you authorized to adjust my interest rate?" (If they say no, ask politely to speak to someone who can and repeat the request.)
Although it took several hours of phone hassles, Leah cut her interest rate by 13.5 percentage points across three cards. Savings: About $275.
5) Snowball it down
When we started, Leah had four months left on her car payment. Once that debt is paid off, she'll direct the money to the highest-interest credit card. Similarly, when that's paid off, the money will be targeted (with her car payment) to the next credit card until they're all completely paid off. Then that giant snowball of cash will be used to pay off her student loans. The key is to keep the money out of her daily budget, so she doesn't use it to boost her lifestyle.
6) Track spending to the penny
Leah began looking for ways to reduce her monthly expenses, and thinking about her choices in a value-oriented way. For instance, she could move from her home on Cape Cod to a cheaper suburb of Boston, but she values living on the beach. On the other hand, Leah realized she was dropping about $400 a month at a corner convenience store, on non-essentials like deli sandwiches and homemade ice cream. She's eliminated those indulgences, dropped a gym membership she barely used and found ways to save on her cable and auto insurance. The idea is to cut where she can so she can spend on what she values most. The only way to do that is to know where every penny goes.
7) Look at ways to increase your cash flow
Leah usually gets a tax refund in April of more than $1,000. She spoke with an accountant about changing her withholding at work to get more cash in each paycheck (and no refund in April, because that's giving Uncle Sam an interest-free loan for a year). The accountant ultimately advised against it for now, but she'll revisit the idea next year. More importantly, she increased her income by working freelance on her blog. Those extra paychecks are earmarked to pay off her debt and build an emergency fund of $10,000.
8) Keep a gratitude journal to stay motivated
Leah started a journal right after her divorce, when she was overwhelmed and frightened about the future. She returned to it recently when she hit a financial setback — her partner of more than two years moved out, and took all of the living room furniture with him. (She bought a few basic pieces so the kids wouldn't have to sit on the floor.) The journal reminded Leah of how far she's come, and helped her find the energy and patience to keep moving forward.
Originally posted on Sunday, October 31, 2010, 12:00AM
Like many Americans, Leah West, 40, is struggling to shed debt and manage an array of financial obligations. After her divorce seven years ago, Leah, a mother of three, enrolled in college and earned her bachelor's and master's degrees. She moved up the ladder in health care administration, and earns about $80,000. But she's now saddled with more than $82,000 in debt, mostly student loans; and her home is worth less than what she paid it. Leah also wants to set aside money for college tuition for her kids, and build a retirement fund.
Since September, I've been coaching Leah in her quest to improve her finances, a journey she blogs about at WomansDay.com. Her story offers practical lessons in how to attack multiple financial goals and maintain momentum. Here are just a few:
1) Focus on the positive
Before you confront a mountain of bills, remind yourself what's working for you. Leah had earned a master's degree — an accomplishment just 6 percent of Americans can claim. She enjoys her job, has a solid income and excellent insurance coverage. She is in good health, has three wonderful kids, and can cover all her bills without falling further into the red. Relationships, education, career experience, health and spirituality are all components of well-being; savoring the positive can provide the momentum to tackle the bad stuff.
2) Set one to three manageable goals
Don't overwhelm yourself with a list of ten things to fix immediately. Leah's priorities were eliminating her credit card debt; creating a plan to pay off her student loans (which were in forbearance); and building up an emergency fund of $10,000. Once we had a strategy up and running, we could move on to other goals, such as college savings and retirement.
3) Get a handle on the real numbers
Although Leah was making double the minimum payment on her credit cards, she felt she wasn't making progress. I used an online debt calculator to show her the truth: By paying twice the minimum, she would banish the debt in 15 months and pay $302 in interest. If she made only the minimum payments, it would take more than six years, and she'd pay $1,328 in interest. Use tools like this one to help you get a grip on the math.
Leah also got the hard numbers on her student loan debt to make sure the loans weren't snowballing at absurdly high interest rates, and disrupting the rest of her financial plan. Fortunately, the rates were quite low, so we left that alone for the moment to focus on the debt paydown. (That would free up the cash necessary to eventually tackle the student debt.)
Finally, we discussed Leah's retirement plan. She had enrolled in a 403(b) plan when she started her job at a health center and contributed steadily for four years. But about 18 months ago, her employer eliminated matching funds because of budget cuts, so Leah stopped contributing. The health center is expected to reinstate the match next year, and Leah plans to jump back in then. It's a smart move from a numbers perspective: It's better to pay down credit card debt at 20 percent interest than to contribute to a plan with no match, because she's unlikely to earn a 20 percent return on her retirement savings.
4) Rank your rates, then cut them down
Leah listed her credit cards on a single page from highest to lowest interest rate, along with the amount due and the company contact information. She called each lender and asked for a rate reduction, using this script: "I have been a cardholder since ____. In the past few months, several credit card companies have offered me lower rates than my current rate with you. I value our relationship, but would like you to match the other offers that I have received and reduce my interest rate by 10 percent. Are you authorized to adjust my interest rate?" (If they say no, ask politely to speak to someone who can and repeat the request.)
Although it took several hours of phone hassles, Leah cut her interest rate by 13.5 percentage points across three cards. Savings: About $275.
5) Snowball it down
When we started, Leah had four months left on her car payment. Once that debt is paid off, she'll direct the money to the highest-interest credit card. Similarly, when that's paid off, the money will be targeted (with her car payment) to the next credit card until they're all completely paid off. Then that giant snowball of cash will be used to pay off her student loans. The key is to keep the money out of her daily budget, so she doesn't use it to boost her lifestyle.
6) Track spending to the penny
Leah began looking for ways to reduce her monthly expenses, and thinking about her choices in a value-oriented way. For instance, she could move from her home on Cape Cod to a cheaper suburb of Boston, but she values living on the beach. On the other hand, Leah realized she was dropping about $400 a month at a corner convenience store, on non-essentials like deli sandwiches and homemade ice cream. She's eliminated those indulgences, dropped a gym membership she barely used and found ways to save on her cable and auto insurance. The idea is to cut where she can so she can spend on what she values most. The only way to do that is to know where every penny goes.
7) Look at ways to increase your cash flow
Leah usually gets a tax refund in April of more than $1,000. She spoke with an accountant about changing her withholding at work to get more cash in each paycheck (and no refund in April, because that's giving Uncle Sam an interest-free loan for a year). The accountant ultimately advised against it for now, but she'll revisit the idea next year. More importantly, she increased her income by working freelance on her blog. Those extra paychecks are earmarked to pay off her debt and build an emergency fund of $10,000.
8) Keep a gratitude journal to stay motivated
Leah started a journal right after her divorce, when she was overwhelmed and frightened about the future. She returned to it recently when she hit a financial setback — her partner of more than two years moved out, and took all of the living room furniture with him. (She bought a few basic pieces so the kids wouldn't have to sit on the floor.) The journal reminded Leah of how far she's come, and helped her find the energy and patience to keep moving forward.
Friday, March 4, 2011
25 common ways people waste money
Plug your financial leaks, and pocket the savings.
Has your budget sprung a leak?
Nearly everyone has spending holes. And as with other kinds of leaks, you may have hardly noticed them. But those small drips can quickly add up to big bucks. The trick is to find the holes and plug them so you can keep more money in your pocket. That extra cash could be the ticket to finally being able to save, invest, or break your cycle of living from paycheck to paycheck.
From Kiplinger.com
See if any of these sound familiar, then look for ways to plug your own leaks:
1. Carrying a balance. Debt is a shackle that holds you back. For instance, if you have a $1,000 balance on a credit card that charges an 18% rate, you blow $180 every year on interest. Get in the habit of paying off your balance in full each month.
2. Overspending on gas and oil for your car. There's no need to spring for premium fuel if the manufacturer says regular is just fine. You should also check to make sure your tires are optimally inflated to get the best gas mileage. And are you still paying for an oil change every 3,000 miles? Many models nowadays can last 5,000 to 7,000 miles between changes, and some even have built-in sensors to tell you when it's time to change the oil. Check your manual to find the best time for your car's routine maintenance.
3. Keeping unhealthy habits. Smoking costs a lot more than just what you pay for a pack of cigarettes. It significantly increases the cost of life and health insurance. And you'll pay more for homeowners and auto insurance. Add in various other expenses, and the true cost of smoking adds up dramatically over a lifetime -- $86,000 for a 24-year-old woman over a lifetime and $183,000 for a 24-year-old man over a lifetime, according to "The Price of Smoking" (The MIT Press).
Another habit to quit: indoor tanning. There is now a 10% tax on indoor tanning services. As with cigarettes, the true cost of tanning -- which the World Health Organization lists among the worst-known carcinogens -- is higher than just the price you pay each time you go to the salon.
4. Using a cell phone that doesn't fit. How many people do you know who have spent hundreds of dollars on fancy phones, and then pay hundreds of dollars every month for the privilege of using them? Your phone is not a status symbol. It is a way to communicate. Many people pay too much for cell phone contracts and don't use all their minutes. Go to BillShrink.com or Validas.com to evaluate your usage and see if you can find a plan that fits you better. Or consider a prepaid cell phone. Compare rates at MyRatePlan.com.
5. Buying brand-name instead of generic. From groceries to clothing to prescription drugs, you could save money by choosing the off-brand over the fancy label. And in many cases, you won't sacrifice much in quality. Clever advertising and fancy packaging don't make brand-name products better than lesser-known brands.
6. Keeping your mouth shut. No one wants to be a nuisance. But by simply asking, you may be able to snag a lower rate on your credit card.
When shopping, watch for price discrepancies at the cash register, and make a habit of asking, "Do you have a coupon for this?" You might even be able to haggle for a lower price, especially on seasonal or perishable items, floor models or big-ticket purchases. Many stores will also match or beat their competitors' prices if you speak up. And try asking for a discount if you pay cash or debit -- this saves the store the cut it has to pay the credit-card company, so it may be willing to give you a deal. It doesn't hurt to ask.
7. Buying beverages one at a time. If you're in the habit of buying bottled water, coffee-by-the-cup or vending-machine soda, your budget has sprung a leak. Instead, drink tap water or use a water filter. Brew a homemade cuppa joe. Buy your soda in bulk and bring it to work. (Better yet, skip the soda in favor of something healthier.)
8. Paying for something you can get for free. There's a boatload of freebies for the taking, if you know where to look. Some of our favorites include restaurant meals for kids, credit reports, software programs, prescription drugs and tech support. You can also help yourself to all the books, music and movies your heart desires at your local library for free (or dirt cheap).
9. Stashing your money with Uncle Sam rather than in an interest-earning account. If you get a tax refund each April, you let the government take too much money in taxes from your paycheck all year long. Get that money back in your pocket this year -- and put it to work for you -- by adjusting your tax withholding. You can file a new Form W-4 with your employer at any time.
10. Being disorganized. It pays to get your financial house in order. Lost bills and receipts, forgotten tax deductions, and clueless spending can cost you hundreds of dollars each year. Start by setting up automatic bill payment online for your monthly bills to eliminate late fees and postage costs. Then get a handful of files to organize important receipts, insurance policies, tax documents and other statements.
Finally, consider using free budgeting software such as Mint.com to see exactly where your money goes, making it much harder for you to lose track of it.
11. Letting your money wallow in a low-interest account. You work hard for your money. Shouldn't it work hard for you too? If you're stashing your cash in a traditional savings account earning next-to-nothing, you're wasting it. Make sure you're getting the best return on your money. Search for the highest yields on CDs and money-market savings accounts. And consider using a free online checking account that pays interest, such as ones offered by Everbank and ING Direct.
Your stocks and mutual funds should be working hard for you, too. If they've been lagging behind their peers for too long, it could be time to say goodbye. Learn how to spot a wallowing fund or stock.
12. Paying late fees and missing deadlines. Return those library books and movie rentals on time. Mail in those rebates. Submit expense reports on time for reimbursement. And if you make a bad purchase, don't just stuff it in the back of the closet and hope it goes away. Get off your duff, return it and get your money back before you lose the receipt.
13. Paying ATM fees. Expect to throw away nearly $4 every time you use an ATM that isn't in your bank's network. That's because you'll pay an ATM surcharge, and your own bank will hit you with a non-network fee. Consider switching to a bank, such as Ally Bank, that doesn't charge ATM fees and reimburses you for fees other banks charge. Another way to avoid fees if there's not an ATM in your bank's network nearby is to get cash back when you make a purchase at the grocery store or drugstore.
14. Shopping at the grocery store without a calculator. Check how much an item costs per ounce, pound or other unit of measurement. When you comparison-shop by unit price, you save. For example, if a pack of 40 diapers costs $13, that's 33 cents per diaper. But if you buy a box of 144 diapers for $35, that's 24 cents per diaper. You save 27%! (Of course, buying more of something only saves money if you use it all. If you end up throwing much out, you wasted money.)
15. Paying for things you don't use. Do you watch all those cable channels? Do you need those extra features on your phone? Are you getting your money's worth out of your gym membership? Are you taking full advantage of your Netflix, TiVo and magazine subscriptions? Take a look at what your family actually uses, then trim accordingly.
16. Not reading the fine print. Thought you were being smart by transferring the balance on a high-rate credit card to a low-rate one? Did you read the fine print, though? Some credit-card companies now charge up to 5% for balance transfers. Also watch out for free checking accounts that aren't so free. Some banks are starting to charge fees unless you meet certain criteria.
17. Mismanaging your flexible spending account. For some people, that means failing to take advantage of their workplace FSA, which lets employees set aside pre-tax dollars for out-of-pocket medical costs. Other people fail to submit receipts on time. And the average worker leaves $86 behind in his or her use-it-or-lose-it FSA account each year, according to WageWorks, an employee benefits provider.
18. Being an inflexible traveler. You'll save a lot of money on travel if you're willing to be flexible. Consider traveling before or after peak season when prices are lower. Or search for flights over a range of dates to find the lowest fare. Booking at the last minute also can save you money because hotels and airlines slash prices to fill rooms and planes. And flexibility pays off at blind-booking sites, such as Priceline or Hotwire, which offer deep discounts if you're willing to book a room or flight without knowing which hotel or airline (or other details about the flight) you're getting until you pay.
19. Sticking with the same service plans and the same service providers year after year. Hey, we're all for loyalty to trusted service providers, such as your bank, insurer, credit-card company, mutual fund, phone plan or cable plan. But over time, as prices and your circumstances change, the status-quo may not be the best deal any more. Smart consumers are always on the lookout for bargains.
20. Making impulse purchases. When you buy before you think, you don't give yourself time to shop around for the best price. Take the time to compare prices online, read product reviews and look for coupons when appropriate.
Make it a policy to give yourself a cooling-off period in case you're ever tempted to make an impulse purchase. Go home and sleep on the decision. More often than not, you'll decide you don't need the item after all.
21. Dining out frequently. Spending $10, $20, $30 per person for dinner can be a huge drain on your wallet. Throw in a $6 sandwich for lunch every day and you've got quite a leak. Learning to cook and bringing your lunch from home can save a couple hundred bucks each month. When you do go out, consider getting carry-out instead of dining in (you'll save on the tip and drink), skip the overpriced appetizer and dessert, and search the Web for coupons ahead of time.
22. Trying to time the stock market. In trying to buy low and sell high, many people actually do the opposite. Instead, employ the simple strategy of "dollar-cost-averaging." By investing a fixed dollar amount at regular intervals, you smooth out the ups and downs of the market over time. If you take out the emotion and guesswork, investing can become less stressful, less wasteful and more successful.
23. Buying insurance you don't need. You only need life insurance if someone is financially dependent upon you, such as a child. That means most singles, seniors or kids don't need a policy. Other policies you can probably do without include credit-card insurance (better to use the premium to pay down your debt in the first place), rental-car insurance (most auto policies and credit cards carry some coverage), mortgage life insurance and accidental-death insurance (a regular term-life insurance policy will do the trick).
24. Buying new instead of used. Talk about a spending leak -- or, rather, a gush. Cars lose 20% of their value the moment they're driven off the lot and 65% in the first five years. Used models can be a real value because you can get a car that's still in fine working order for a fraction of the new-car price. And you'll pay less in collision insurance and taxes, too.
Cars aren't the only things worth buying used. Consider the savings on pre-owned books, toys, exercise equipment, children's clothing and furniture. (Of course, there are some things you're better off buying new, including mattresses, laptops, linens, shoes and safety equipment, such as car seats and bike helmets.)
25. Procrastinating. Time is an asset money can't buy. Start investing for retirement as soon as possible. For instance, if a 40-year-old saves $300 a month with an 8% return per year, he'll have $287,000 by age 65. If he had started saving 15 years earlier at age 25, he'd have more than $1 million.
Has your budget sprung a leak?
Nearly everyone has spending holes. And as with other kinds of leaks, you may have hardly noticed them. But those small drips can quickly add up to big bucks. The trick is to find the holes and plug them so you can keep more money in your pocket. That extra cash could be the ticket to finally being able to save, invest, or break your cycle of living from paycheck to paycheck.
From Kiplinger.com
See if any of these sound familiar, then look for ways to plug your own leaks:
1. Carrying a balance. Debt is a shackle that holds you back. For instance, if you have a $1,000 balance on a credit card that charges an 18% rate, you blow $180 every year on interest. Get in the habit of paying off your balance in full each month.
2. Overspending on gas and oil for your car. There's no need to spring for premium fuel if the manufacturer says regular is just fine. You should also check to make sure your tires are optimally inflated to get the best gas mileage. And are you still paying for an oil change every 3,000 miles? Many models nowadays can last 5,000 to 7,000 miles between changes, and some even have built-in sensors to tell you when it's time to change the oil. Check your manual to find the best time for your car's routine maintenance.
3. Keeping unhealthy habits. Smoking costs a lot more than just what you pay for a pack of cigarettes. It significantly increases the cost of life and health insurance. And you'll pay more for homeowners and auto insurance. Add in various other expenses, and the true cost of smoking adds up dramatically over a lifetime -- $86,000 for a 24-year-old woman over a lifetime and $183,000 for a 24-year-old man over a lifetime, according to "The Price of Smoking" (The MIT Press).
Another habit to quit: indoor tanning. There is now a 10% tax on indoor tanning services. As with cigarettes, the true cost of tanning -- which the World Health Organization lists among the worst-known carcinogens -- is higher than just the price you pay each time you go to the salon.
4. Using a cell phone that doesn't fit. How many people do you know who have spent hundreds of dollars on fancy phones, and then pay hundreds of dollars every month for the privilege of using them? Your phone is not a status symbol. It is a way to communicate. Many people pay too much for cell phone contracts and don't use all their minutes. Go to BillShrink.com or Validas.com to evaluate your usage and see if you can find a plan that fits you better. Or consider a prepaid cell phone. Compare rates at MyRatePlan.com.
5. Buying brand-name instead of generic. From groceries to clothing to prescription drugs, you could save money by choosing the off-brand over the fancy label. And in many cases, you won't sacrifice much in quality. Clever advertising and fancy packaging don't make brand-name products better than lesser-known brands.
6. Keeping your mouth shut. No one wants to be a nuisance. But by simply asking, you may be able to snag a lower rate on your credit card.
When shopping, watch for price discrepancies at the cash register, and make a habit of asking, "Do you have a coupon for this?" You might even be able to haggle for a lower price, especially on seasonal or perishable items, floor models or big-ticket purchases. Many stores will also match or beat their competitors' prices if you speak up. And try asking for a discount if you pay cash or debit -- this saves the store the cut it has to pay the credit-card company, so it may be willing to give you a deal. It doesn't hurt to ask.
7. Buying beverages one at a time. If you're in the habit of buying bottled water, coffee-by-the-cup or vending-machine soda, your budget has sprung a leak. Instead, drink tap water or use a water filter. Brew a homemade cuppa joe. Buy your soda in bulk and bring it to work. (Better yet, skip the soda in favor of something healthier.)
8. Paying for something you can get for free. There's a boatload of freebies for the taking, if you know where to look. Some of our favorites include restaurant meals for kids, credit reports, software programs, prescription drugs and tech support. You can also help yourself to all the books, music and movies your heart desires at your local library for free (or dirt cheap).
9. Stashing your money with Uncle Sam rather than in an interest-earning account. If you get a tax refund each April, you let the government take too much money in taxes from your paycheck all year long. Get that money back in your pocket this year -- and put it to work for you -- by adjusting your tax withholding. You can file a new Form W-4 with your employer at any time.
10. Being disorganized. It pays to get your financial house in order. Lost bills and receipts, forgotten tax deductions, and clueless spending can cost you hundreds of dollars each year. Start by setting up automatic bill payment online for your monthly bills to eliminate late fees and postage costs. Then get a handful of files to organize important receipts, insurance policies, tax documents and other statements.
Finally, consider using free budgeting software such as Mint.com to see exactly where your money goes, making it much harder for you to lose track of it.
11. Letting your money wallow in a low-interest account. You work hard for your money. Shouldn't it work hard for you too? If you're stashing your cash in a traditional savings account earning next-to-nothing, you're wasting it. Make sure you're getting the best return on your money. Search for the highest yields on CDs and money-market savings accounts. And consider using a free online checking account that pays interest, such as ones offered by Everbank and ING Direct.
Your stocks and mutual funds should be working hard for you, too. If they've been lagging behind their peers for too long, it could be time to say goodbye. Learn how to spot a wallowing fund or stock.
12. Paying late fees and missing deadlines. Return those library books and movie rentals on time. Mail in those rebates. Submit expense reports on time for reimbursement. And if you make a bad purchase, don't just stuff it in the back of the closet and hope it goes away. Get off your duff, return it and get your money back before you lose the receipt.
13. Paying ATM fees. Expect to throw away nearly $4 every time you use an ATM that isn't in your bank's network. That's because you'll pay an ATM surcharge, and your own bank will hit you with a non-network fee. Consider switching to a bank, such as Ally Bank, that doesn't charge ATM fees and reimburses you for fees other banks charge. Another way to avoid fees if there's not an ATM in your bank's network nearby is to get cash back when you make a purchase at the grocery store or drugstore.
14. Shopping at the grocery store without a calculator. Check how much an item costs per ounce, pound or other unit of measurement. When you comparison-shop by unit price, you save. For example, if a pack of 40 diapers costs $13, that's 33 cents per diaper. But if you buy a box of 144 diapers for $35, that's 24 cents per diaper. You save 27%! (Of course, buying more of something only saves money if you use it all. If you end up throwing much out, you wasted money.)
15. Paying for things you don't use. Do you watch all those cable channels? Do you need those extra features on your phone? Are you getting your money's worth out of your gym membership? Are you taking full advantage of your Netflix, TiVo and magazine subscriptions? Take a look at what your family actually uses, then trim accordingly.
16. Not reading the fine print. Thought you were being smart by transferring the balance on a high-rate credit card to a low-rate one? Did you read the fine print, though? Some credit-card companies now charge up to 5% for balance transfers. Also watch out for free checking accounts that aren't so free. Some banks are starting to charge fees unless you meet certain criteria.
17. Mismanaging your flexible spending account. For some people, that means failing to take advantage of their workplace FSA, which lets employees set aside pre-tax dollars for out-of-pocket medical costs. Other people fail to submit receipts on time. And the average worker leaves $86 behind in his or her use-it-or-lose-it FSA account each year, according to WageWorks, an employee benefits provider.
18. Being an inflexible traveler. You'll save a lot of money on travel if you're willing to be flexible. Consider traveling before or after peak season when prices are lower. Or search for flights over a range of dates to find the lowest fare. Booking at the last minute also can save you money because hotels and airlines slash prices to fill rooms and planes. And flexibility pays off at blind-booking sites, such as Priceline or Hotwire, which offer deep discounts if you're willing to book a room or flight without knowing which hotel or airline (or other details about the flight) you're getting until you pay.
19. Sticking with the same service plans and the same service providers year after year. Hey, we're all for loyalty to trusted service providers, such as your bank, insurer, credit-card company, mutual fund, phone plan or cable plan. But over time, as prices and your circumstances change, the status-quo may not be the best deal any more. Smart consumers are always on the lookout for bargains.
20. Making impulse purchases. When you buy before you think, you don't give yourself time to shop around for the best price. Take the time to compare prices online, read product reviews and look for coupons when appropriate.
Make it a policy to give yourself a cooling-off period in case you're ever tempted to make an impulse purchase. Go home and sleep on the decision. More often than not, you'll decide you don't need the item after all.
21. Dining out frequently. Spending $10, $20, $30 per person for dinner can be a huge drain on your wallet. Throw in a $6 sandwich for lunch every day and you've got quite a leak. Learning to cook and bringing your lunch from home can save a couple hundred bucks each month. When you do go out, consider getting carry-out instead of dining in (you'll save on the tip and drink), skip the overpriced appetizer and dessert, and search the Web for coupons ahead of time.
22. Trying to time the stock market. In trying to buy low and sell high, many people actually do the opposite. Instead, employ the simple strategy of "dollar-cost-averaging." By investing a fixed dollar amount at regular intervals, you smooth out the ups and downs of the market over time. If you take out the emotion and guesswork, investing can become less stressful, less wasteful and more successful.
23. Buying insurance you don't need. You only need life insurance if someone is financially dependent upon you, such as a child. That means most singles, seniors or kids don't need a policy. Other policies you can probably do without include credit-card insurance (better to use the premium to pay down your debt in the first place), rental-car insurance (most auto policies and credit cards carry some coverage), mortgage life insurance and accidental-death insurance (a regular term-life insurance policy will do the trick).
24. Buying new instead of used. Talk about a spending leak -- or, rather, a gush. Cars lose 20% of their value the moment they're driven off the lot and 65% in the first five years. Used models can be a real value because you can get a car that's still in fine working order for a fraction of the new-car price. And you'll pay less in collision insurance and taxes, too.
Cars aren't the only things worth buying used. Consider the savings on pre-owned books, toys, exercise equipment, children's clothing and furniture. (Of course, there are some things you're better off buying new, including mattresses, laptops, linens, shoes and safety equipment, such as car seats and bike helmets.)
25. Procrastinating. Time is an asset money can't buy. Start investing for retirement as soon as possible. For instance, if a 40-year-old saves $300 a month with an 8% return per year, he'll have $287,000 by age 65. If he had started saving 15 years earlier at age 25, he'd have more than $1 million.
Tuesday, February 15, 2011
Feeling Comfortable with your Bookkeeper
With which local organizations are you affiliated?
If your DMM is active in community organizations such as the chamber of commerce, a church or religious organization, community action groups, or a local provider’s council, connections in these groups will help your DMM better serve you since they will be able to refer you to other professionals and resources in the community.
- DMMs shall have concern for the well being of their clients.
- DMMs shall provide services in an equitable manner for all clients.
- DMMs shall not exploit their clients financially, socially, emotionally, sexually, physically or in any other manner.
Friday, February 4, 2011
Code of Ethics
Code of Ethics
The American Association of Daily Money Managers is committed to promoting high standards of client services provided by its members.
As Daily Money Managers (DMMs), we provide personal business assistance to clients who have difficulty managing their personal monetary and business affairs. As DMMs, we are not acting as accountants, financial advisors, or attorneys, unless separately educated and properly licensed to do so.
Click here for a printable version of the Code of Ethics.
The American Association of Daily Money Managers is committed to promoting high standards of client services provided by its members.
As Daily Money Managers (DMMs), we provide personal business assistance to clients who have difficulty managing their personal monetary and business affairs. As DMMs, we are not acting as accountants, financial advisors, or attorneys, unless separately educated and properly licensed to do so.
- DMMs shall have concern for the well being of their clients.
- DMMs shall provide services in an equitable manner for all clients.
- DMMs shall not exploit their clients financially, socially, emotionally, sexually, physically or in any other manner. DMMs shall avoid those relationships or activities that interfere with professional judgment and objectivity.
- DMMs shall disclose any affiliations that may pose a conflict of interest.
- DMMs shall not exploit a relationship with a client for personal or financial gain.
- DMMs shall strive to ensure fees are fair, reasonable and commensurate with the services performed. All fees for daily money management services are to be discussed with the client or other person accepting responsibility for payment prior to the initiation of services.
- DMMs shall take all precautions to avoid harm to the client or his or her property.
- DMMs shall respect the rights of their clients.
- DMMs shall protect the client's right to privacy and confidentiality in accordance with the laws of the state where the services are performed.
- DMMs shall maintain detailed, accurate, financial records for the client, based on information made available from client. (Deposits into and withdrawals from financial accounts shall be documented in terms of the source of the deposit and the purpose of the expenditure.)
- DMMs shall achieve and maintain high standards of competence.
- DMMs shall accurately represent their professional experience and training when requested by their client, client's family or someone looking out for the client, prospective client and other professionals.
- DMMs shall keep current with issues affecting their clients (health insurance, consumer fraud, etc.)
- DMMs shall keep current with public and private services available to their clients, for use in resource referrals.
- DMMs shall refer clients to other service providers or consult with other service providers when additional knowledge and expertise are required.
- DMMs shall define his/her role clearly to other professionals.
- DMMs shall treat clients, family members, colleagues and other professionals with fairness, discretion and integrity.
Click here for a printable version of the Code of Ethics.
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