Making it, keeping it: Eight tips to manage your money

Equally important is the manner in which we manage those earnings. Making the right money decisions is an essential ingredient in the recipe for long-term financial security. That's why it's so important for you to sharpen your money management skills.

Here are eight tips that can help you become a better money manager:

Open a money market account at your bank and have it linked to your checking account to allow for telephone or online transfers.

Then, make all of your deposits into the money market account where they will immediately start drawing interest.

NEVER make deposits directly into your checking account. Keep a minimum balance in the checking account and transfer cash by phone or online only as needed to cover checks written.

Notice how checks are slow to come in from people who owe you money?

That's because hanging on to cash as long as possible keeps that money available to draw interest.

Set up a system for paying bills only when they're due. Don't jeopardize your credit standing by paying bills late; pay your bills when they are due - not before, not after.

Credit life insurance is far more expensive than most other types of insurance.

Although it does offer some protection to the borrower, the prime beneficiary is the lender. If you die before you pay off the loan, the proceeds of the policy will go directly to the lender. Nothing goes to your estate even though you paid the premiums.

It may seem satisfying to discover that Uncle Sam owes you money at tax time, but don't be fooled.

The IRS gets the last laugh when you over-pay your estimates. When you do that, you're giving them an interest-free loan at your expense.

"The least expensive way for you to pay your tax liability is to have estimated payments come out as close as possible to the amount owed," says C.P.A. Tom Normoyle, Huntingdon Valley, Pa.

Here's the catch: You'll be charged a "convenience fee" of about 3 percent of the tax liability paid.

This is in addition to any interest charged by the credit card company for installment payments.

The bottom line: Don't do it. Almost any other way to come up with the money you need for your payment will be cheaper.

When you use a debit card, you must already have the money in your bank account.

Debit cards give you no grace period for paying your bill. The money is deducted from your account immediately each time you use it.

By using credit cards and paying off your balances in full each month, you have up to 40 days' free use of someone else's money. This is called "using the float," the period between the purchase date and the date payment becomes due. That's the smart way to use credit.