Rule 3: Don't use an ATM in a place without an easy exit
This is about saving, not safety. On your next cruise, bring cash, because the transaction fees on shipboard ATMs are downright piratical: On Carnival Cruise boats, for example, Bank Atlantic of Fort Lauderdale (which operates the machines) charges $6 per transaction. On Royal Caribbean, it's up to $5.50. "Anywhere that you are, in effect, a captive audience, they're going to make you pay," says Richard Barrington, senior financial analyst with MoneyRates.com. "That's airports, sporting venues, arenas, concerts, and tourist areas."
Even in routine locations, using other banks' ATMs costs you. Bankrate.com says the average fee is now $2.33. "Plan how you're going to access cash," Barrington says. "Decide how much you're going to need, then go to your own bank and get it." And if your bank is consistently inconvenient? Consider switching banks.
Rule 4: If you can't explain it, don't buy it
A recent Charles Schwab survey showed that 44 percent of investors plan to invest more in exchange-traded funds, or ETFs, over the next 12 months. Then the study asked investors to assess their understanding of ETFs. Forty-six percent called themselves "novices"; a quarter admitted they "don't know anything" about how to best use ETFs. I don't have any problem with ETFs, which are a relatively recent investment vehicle — similar to a mutual fund — that tracks the performance of a market sector and is traded like a stock. They are typically low-cost investments offering relatively easy diversification. But you shouldn't put money into even a simple investment that you don't understand. "If someone is pitching you an investment that sounds good on the surface — say, it pays you 6 percent a year — ask how it works," says Maurer. "If you open up the cover, what are you going to see?"
This is true for other products, too. Shopping for a new treadmill, I listened as a salesman tried to persuade me to pay $800 for features I wasn't sure I'd ever use. A personal trainer had more impartial advice: Lace up my running shoes and do a trial run in that showroom. I did — and bought a cheaper machine.
Rule 5: Banking online makes you smarter and safer
Yes, it saves time (nearly two hours a month, according to Javelin Strategy & Research) and money (about $60 a year in stamps if you pay 12 bills a month). But banking online also makes you smarter, because it puts you in control: You don't need to drive to the bank or pick up the phone for info on your accounts. "Or stand by your mailbox and wait," says Mark Schwanhausser, senior analyst with Javelin. "That's not control. That's being passive." Web banking lets you monitor your spending, tweak your budget, schedule payments, and more, particularly if you marry your online bank with the personal-finance management tools available online. (For more on online money tools, see "Does Your Plan Add Up?" on page 29.)
Online banking also makes you safer. Javelin's research found that people who bank online look at their money four times as often as those who bank the old-fashioned way. That helps you catch unauthorized withdrawals. "You can see every transaction within seconds," says Schwanhausser. "That's much different from reviewing statements at the end of each month."
And how: On average, in 2010 it took 13 days to detect fraud if you monitored accounts electronically, 49 days if you reviewed paper statements. "Fraud is one of those cases where the old truism applies," Schwanhausser says. "Time is money."
Jean Chatzky is the financial editor for NBC's Today. With additional reporting by Arielle O'Shea.
Also of interest: Buy this, not that