Personal Banking E-Newsletter - March 2012

Planning for Retirement? Don’t Overlook an IRA

Nearly 50 million American households own an individual retirement account (IRA).1 While the IRA has evolved into a popular retirement savings vehicle -- with more than $4 trillion in total assets -- it is often an overlooked component of most investors' financial planning strategies. In fact, over the past two years, only 15% of households that were eligible to contribute to an IRA did so. 1

Have you forgotten your IRA? Should an IRA be part of your overall investment plan?

Appealing IRA Benefits

Whether you are an active accountholder or just considering opening an IRA, there are many appealing benefits to this retirement savings vehicle.

  • Tax deferral: Traditional IRAs allow your investment earnings to grow tax deferred until withdrawn, typically at retirement. For 2011, the maximum contribution is $5,000, but for those aged 50 and over, the limit is $6,000. The limits are the same for a Roth IRA, but to be eligible to fully contribute, an investor must have a 2011 modified adjusted gross income of less than $107,000 for singles and $169,000 for married couples filing jointly. Singles earning up to $122,000 and couples earning up to $179,000 are eligible for partial contributions.
  • Deductibility: If you are a single taxpayer who doesn't participate in an employer-sponsored plan and you earn less than $56,000 in 2011, you can deduct your contributions to a traditional IRA off your income taxes. Couples earning under $90,000 are also eligible for a full deduction. Partial deduction limits also apply, up to $66,000 for singles and $110,000 for couples. Note that Roth IRA contributions are not deductible.
  • Investment flexibility: IRAs typically give investors access to a wider range of investment options than workplace-sponsored plans such as a 401(k). Depending on the financial institution you use to open your account, you can invest in a broad array of mutual funds, ETFs, individual stocks and bonds, CDs, annuities, even commodities and real estate.
  • Convertibility: Traditional IRA holders can convert to a Roth IRA to enjoy some of the additional benefits listed below. But before you decide make a switch, be sure to investigate the tax consequences of such a move.

Additional Roth IRA Benefits

  • Qualified tax-free withdrawals: Since Roth IRAs are funded with after-tax dollars, your withdrawals are tax free, as long as you have held the account for at least five years and are over age 59 1/2.
  • No RMDs: Unlike traditional IRAs, Roth IRAs are not subject to required minimum distributions (RMDs) once the accountholder reaches age 70 1/2.

1Source: Investment Company Institute, The Role of IRAs in U.S. Households' Saving for Retirement, December 2010 (

IRA account owners should consider the tax ramifications and other restrictions in regards to executing a Conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to current year income taxation.

© 2010 Standard & Poor's Financial Communications. All rights reserved.

Fraud Against the Elderly: How You Can Spot and Prevent Financial Abuse

Each year millions of senior citizens are victimized by financial fraud or theft of money, property or valuable personal information. Often, an adult child or other relative is responsible. Other situations may involve trusted individuals such as caregivers, legal guardians, investment advisors or new “friends.” And because the types of abuse may differ widely, it’s important to take a variety of precautions. Here are suggestions for protecting yourself and your loved ones:

Choose an advisor carefully. If you’re considering hiring a new broker, attorney, accountant or other professional, even someone recommended by a friend or relative, it’s best to independently look into that person’s background and reputation before investing money or paying for services. For example, you can confirm that this person is properly registered or licensed and has a clean record with regulators and other consumers. When in doubt about how to research this information, ask your state Attorney General’s office or local consumer protection agency for guidance.

Make sure you not only understand the role an advisor will be playing, but trust that this individual will do what’s best for you and your finances. Don’t be afraid to ask questions or say no. After all, it’s your money!

Be careful with powers of attorney. At some point, you may want to have a power of attorney, a legal document that authorizes another person to transact business on your behalf. While powers of attorney can be very helpful, be careful who you name as your representative. “Powers of attorney can be easily misused because they allow the appointed person to step into your shoes and do everything you can do, including taking money from your account and borrowing money in your name,” warned Debi Hodes, an FDIC Consumer Affairs Specialist. “This is a matter to discuss with a lawyer who should prepare or review the document for you.”

Protect your personal financial information. Never give out your bank account numbers, Social Security numbers, PINs (personal identification numbers), passwords or other sensitive information unless you initiate the contact. These requests may come from an unsolicited phone caller, letter writer, e-mailer or a person who shows up at your door. Be especially wary of someone who congratulates you about winning a (bogus) prize or lottery but first demands payment for taxes or other fees.

Also, keep your checkbook, account statements, and other sensitive information in a safe place. And shred paper documents containing sensitive information that is no longer needed.

Closely monitor your credit card and bank account activity. Review your account statements as soon as you receive them and look for unauthorized or suspicious transactions, which should be reported to your bank immediately.

Take your time when deciding on a major financial decision or investment. Make sure you understand the transaction and ask questions if you don’t. If you need to, ask a lawyer or financial advisor to help you understand the documents and discuss what’s best for you. “Walk away from anyone who says you must make a decision or otherwise do something right now,” said Hodes.

Be aware of scams involving reverse mortgages. These loans enable homeowners age 62 or older to borrow money from the equity in their homes. However, reverse mortgages can be complex products with a variety of risks and costs, and there are many reports of schemes by unscrupulous individuals using deceptive offers and high-pressure tactics to steer senior citizens into using the funds from a reverse mortgage for inappropriate or costly loans or investments. For guidance on the responsible use of a reverse mortgage, including how to locate a lender or a housing counselor approved by the U.S. Department of Housing and Urban Development’s Federal Housing Administration, start at or call 1-800-569-4287.

Finally, here are additional tips:

  • Beware of callers asking for money or information. If you’d like to reduce the number of telemarketing calls you receive, consider signing up for the national Do Not Call Registry (call 1-888-382-1222 or visit If you are on this list, be suspicious of calls from any company or organization that you have reason to believe is not eligible to contact you under the registry’s rules.
  • Don’t comply with requests from strangers to deposit a check into your account (perhaps as part of an Internet sale) and wire some or all of it back. “If you send the money and the check is counterfeit, you may be held responsible by your financial institution for the losses,” said Michael Benardo, Chief of the FDIC’s Cyber-Fraud and Financial Crimes Section.
  • If you use social media, many security experts advise against posting the names of relatives and anyone’s home address, full date of birth and daily activities because those can be valuable to a thief. “A scam on the rise involves con artists who look for personal information on the Internet that they can use to call or e-mail an elderly person and pretend to be a relative in distress — such as a grandchild being injured, in jail or lost in a foreign country — and needing money sent fast, without telling anyone else in the family,” added Benardo. “They may also represent themselves as a lawyer or law enforcement agent needing money to help your relative.”

Dirty Dozen Tax Scams

The IRS recently released its annual "Dirty Dozen" ranking of tax scams, reminding taxpayers to be cautious during tax season. The IRS compiles the list every year to highlight consumer scams that peak during filing season. Below are four of the most common tax scams and ways that consumers can protect themselves.

Identity Theft 

In 2011, the IRS protected more than $1.4 billion of taxpayer funds from getting into the wrong hands due to identity theft. The IRS has also stepped up its internal reviews to spot false tax returns before tax refunds are issued. If you receive a notice from the IRS informing you that more than one return has been filed in your name or that your return indicates you received wages from an unknown employer, it make be a clue that your identity has been stolen for tax purposes. If this happens to you, report it immediately to the IRS Identity Protection Specialized Unit via


This type of scam occurs with the help of an unsolicited email or a fake website that poses as a legitimate site to lure victims into providing valuable personal and financial information. Remember, no bank or government agency sends out unsolicited emails requesting this information. If you do receive an email that claims to be from the IRS, report it by sending it to

Return Preparer Fraud

Roughly 60 percent of taxpayers will enlist tax professionals to prepare and file their returns this year. If you plan on "outsourcing" your returns, make sure you choose carefully. Questionable return preparers have been known to skim off their client's refunds, charge inflated fees for return preparation services and attract new clients by promising guaranteed or inflated refunds. In 2012, every paid preparer must have a Preparer Tax Identification Number (PTIN) entered on the returns they prepare. If you hire someone to fill out your return for you, but they do not include this number or sign the return, do not provide you with a copy, or add forms you've never filed before, they may be scamming you.

"Free Money" from the IRS & Tax Scams Involving Social Security

This type of scam preys on low income individuals and the elderly, promising taxpayers they can file returns with little or no documentation, building false hopes for unrealistic returns and charging good money for bad advice. In the end, victims' claims are rejected and the scammers skip town. There are also frauds involving Social Security. For example, scammers will lure victims with promises of non-existent Social Security refunds or rebates. Be vigilant of any "free money from the IRS" claims.

False/Inflated Income and Expenses

Including income that was never earned, either as wages or as self-employment income in order to maximize refundable credits, is another popular scam. Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as the Earned Income Tax Credit could have serious repercussions.  This could result in repaying the erroneous refunds, including interest and penalties, and in some cases, even prosecution. 

Additionally, some taxpayers are filing excessive claims for the fuel tax credit. Farmers and other taxpayers who use fuel for off-highway business purposes may be eligible for the fuel tax credit. But other individuals have claimed the tax credit when their occupations or income levels make the claims unreasonable. Fraud involving the fuel tax credit is considered a frivolous tax claim and can result in a penalty of $5,000.

False Form 1099 Refund Claims

In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return. In some cases, individuals have made refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS.

Don’t fall prey to people who encourage you to claim deductions or credits to which you are not entitled or willingly allow others to use your information to file false returns. If you are a party to such schemes, you could be liable for financial penalties or even face criminal prosecution.

Frivolous Arguments

Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. The IRS has a list of frivolous tax arguments that taxpayers should avoid. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.

Falsely Claiming Zero Wages

Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported by a payer to the IRS.

Sometimes, fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any variations of this scheme. Filing this type of return may result in a $5,000 penalty.

Abuse of Charitable Organizations and Deductions

IRS examiners continue to uncover the intentional abuse of 501(c)(3) organizations, including arrangements that improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or the income from donated property. The IRS is investigating schemes that involve the donation of non-cash assets –– including situations in which several organizations claim the full value of the same non-cash contribution. Often these donations are highly overvalued or the organization receiving the donation promises that the donor can repurchase the items later at a price set by the donor. The Pension Protection Act of 2006 imposed increased penalties for inaccurate appraisals and set new standards for qualified appraisals.

Disguised Corporate Ownership

Third parties are improperly used to request employer identification numbers and form corporations that obscure the true ownership of the business.

These entities can be used to underreport income, claim fictitious deductions, avoid filing tax returns, participate in listed transactions and facilitate money laundering, and financial crimes. The IRS is working with state authorities to identify these entities and bring the owners into compliance with the law.

Misuse of Trusts

For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are legitimate uses of trusts in tax and estate planning, some highly questionable transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.

IRS personnel have seen an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering a trust arrangement.

Tips for Saving

Most people know they should be saving for a rainy day… but sometimes when it rains, it pours! Is your emergency fund enough to see you through? Consider the tips below to help you achieve big savings by starting small.

The average household should have three to six months' worth of living expenses saved in an emergency fund. Those expenses include rent or mortgage payments, cost of food, utilities and other recurring necessary expenses. The fund money should be risk-free (not stocks or other high-risk investments) and instantly accessible (not a 401K or IRA that requires advanced notice to withdraw from).

Building up this savings fund seems like a daunting task to many people. In fact, 68 percent of low income households and 42 percent of middle income households do not have a savings or money market account! A recent Consumer Federation of America (CFA) study shows nearly 50 percent of Americans live paycheck to paycheck and 40 percent say they live beyond their means. So how can consumers start saving?

The simplest tip to remember is to spend less than you make and save the difference. One way to do this is to round up for your expenses when budgeting and round down for income. For example, if your phone bill is $92.37 each month, budget for $100. If your monthly income is $1,692.99, round down to $1,600. This trick helps you live below your means and allows you to put the extra in savings each month.

Another way to save a little at a time is to develop a plan for where you will cut costs and how you will save. For example, if you buy a large coffee from a café each morning for $5, you could save around $50 each month by buying your own coffee and making it at home. Maybe you decide to end your cable and magazine subscriptions or rent a movie rather than going to the theater. However you choose to save, the important part is putting the extra cash into a savings or money market account.

Finally, make savings automatic by using payroll deductions or automatic transfers from checking to savings accounts. Talk to your banker about how these simple tools can start building your savings without you having to think about it.

Use these three tips to start small and build an adequate emergency fund so that you're prepared for any unexpected financial rainstorms!

Documents You Can Toss Right Now

It can be tricky to figure out what paperwork you need to keep and what you can toss. Too often we cling to paper because we may need it "someday."

"It's all fear, baby!" said professional organizer Monica Ricci of Catalyst Organizing in Atlanta. "We often fear what we are unsure of or don't understand. . . . If you're uncertain about the value or whether you'll need it again, you tend to err on the conservative side and keep it."

That can lead to overstuffed filing cabinets and paperwork clutter that weighs on your psyche.

But so much of what we keep is really unnecessary. To relieve your soul, and your filing cabinets, here's a list of paperwork you can live without. Such as:

401k statements

There's usually no need to keep these for tax purposes -- or any other purpose, for that matter.

When you put money into a workplace retirement plan -- a 401k, 403b, 457, SEP or SIMPLE -- you typically get a deduction for those contributions, and your returns grow tax-deferred.

But the tax man has to be paid eventually. When you take out the money, you typically pay taxes on the whole withdrawal -- none of it is sheltered. No amount of paperwork saved over the years will change that, so you might as well shred the statements and give your file cabinets some wiggle room.

One exception is when you make after-tax contributions to a retirement plan, such as those made to a Roth 401k. If you've made such contributions, your year-end summary should reflect that. Hang on to those so you can avoid paying taxes on the contributions when you withdraw them, and ditch the intervening statements.

You'll also want to keep the annual statements once you start taking withdrawals from the plans in retirement.

"Folks who are obligated to make mandatory withdrawals at age 70 1/2 and beyond may need to be able to prove the date on which their withdrawals started," said Los Angeles tax pro Eva Rosenberg, who blogs at "So I would try to get a printed or .pdf annual statement, showing the transactions for the year."

What about hanging on to the statements to see how your investments perform over the years? Well, you can do that, or you can use this newfangled thingy called the Internet to track the progress of your investments. Most 401k providers have all the information you'll ever need on their websites.

You'll need to keep more paperwork when it comes to your individual retirement accounts and Roth IRAs. Hang on to the following forms until your retirement accounts are emptied:

  • Form 8606, which tracks your nondeductible contributions.

  • Form 5498, which shows your annual contributions and the account's fair market value.

  • Form 1099-R, which details any withdrawals.

If you're one of the dwindling number of people who are covered by a traditional defined-benefit pension, keep the annual statements indefinitely. Those can help you track down your retirement benefits, even if the company shuts down someday.

Old insurance policies

The usual advice is to ditch the old versions of your insurance policies once the replacements arrive.

But consumer advocate Amy Bach, the executive director of United Policyholders, thinks it's worth scanning and saving homeowners policies (although you can still ditch the paperwork once it's scanned). Insurance companies are constantly shrinking the coverage they offer, Bach said, and they may not give you adequate notice of changes to your policy.

"If you suffer a loss, and your current policy offers less coverage than you thought you had, and if you feel you didn't get adequate notice about the reduction in coverage, you'd have proof of the better, older coverage," Bach said. "After the Northridge earthquake (in Los Angeles in 1994), there was a huge settlement with Allstate homeowners who proved through their very good lawyers that they got inadequate notice of reduction in their earthquake coverage under their homeowners insurance."

Scanning policies and storing them off-site, even if it's just as an attachment to an email, is a smart practice in any case. If your house is destroyed, you'll still have access to your policies.

You'd think you could get copies from your insurer or your insurance agent, but that's not always the case, Bach said.

"People are reporting to United Policyholders that their agents or brokers say they don't keep copies of the policies," Bach said, "and people seem to have trouble getting them."

If you find an expired life insurance policy, call the insurer to see if it has any value. If not, out it goes.

Claims are a different story. If you get a fat check from your insurer -- for a totaled car, for example -- you may want to hang on to the claim information for seven years, in case the Internal Revenue Service has questions about where that money came from. It's unlikely, so don't panic if you haven't kept such paperwork in the past. Just keep the possibility in mind going forward.

Medical claims can be problematic. If you've ever been dunned by a doctor for a bill you thought was long since paid by your insurer, you'll understand why it may be smart to hang on to claim information for a few years. You don't have to keep the actual paper, though. It's OK to scan the paperwork and store the digital copies off-site.

Investment prospectuses

Your mutual fund companies have to provide these by law, and they contain lots of important information, like the fees you're being charged. But do you read them? Yeah, right.

The information they contain is online if you ever need it. Consider signing up for electronic delivery so you can ignore further prospectuses without killing trees.

Old tax documents

You'd be smart to hang on to your actual tax returns indefinitely, but all the supporting documentation can be shredded after seven years.

The stuff you should keep includes not only the main form you send in (1040, 1040A, 1040EZ) but also any schedules (such as Schedule A, which details your itemized deductions, or Schedule C, for a business) and other attached forms, such as your W-2s. In short, if you send it to the IRS, you should keep a copy.

The rest of your documentation -- the paperwork you'd dig out if you were ever audited -- can be destroyed after the risk of being audited essentially expires at seven years (the IRS can audit you any time if it suspects fraud, but such audits are rare). This disposable documentation includes things like receipts for charitable contributions, records of child care expenses and canceled checks or receipts tracking other tax-deductible costs.

Bank and credit card statements

If they're not tax-related, you can shred these after a year, which is well past the point any disputes or other problems are likely to arise. If they are tax-related, keep them for seven years, but don't panic if you accidentally shred them early. Banks and card issuers typically give you online access to your statements for at least six years, so you can get copies of statements if you need them.

All the intermediaries

You can ditch ATM receipts and credit card slips after you make sure they're properly reflected in your monthly statements. You can ditch pay stubs after you get your W-2 form for the year (although you should hang on to your last stub of the year if you paid union dues or other tax-deductible expenses that aren't reflected anywhere else). If you get a detailed year-end summary of an account, you can trash the intervening monthly or quarterly statements.

Regular old bills

If they're tax-related, keep them for seven years. Otherwise, there's little reason to hang on to these. Shred utility, phone and Internet service bills after a year or so. If you get monthly statements and payment coupons for loans, you can shred those when you get your year-end statements -- or, better yet, sign up for electronic statements and payments to rid yourself of this unnecessary paper. Once you pay off a loan, hang on to the last statement showing a zero balance, just in case you get dunned by a clueless collector down the road.

Paperwork for stuff you no longer own

Trash warranties, registration cards and owner's manuals for anything no longer in your possession. The exception is real estate or any other asset that might have tax implications; you'll want to hang on to that paperwork for seven years after you sell.

There you go -- a ton of paperwork goes off to the shredder, and you never have to worry about it again. That should lift a load off your psyche.


5 Bad Money Habits to Kick for 40 Days

After Mardi Gras celebrations die down, many around the world vow to relinquish one bad habit for 40 days before Easter.

But instead of giving up old standbys for Lent, such as chocolate or lattes, consider putting a financial spin on your 40-day sacrifice. Kick a bad money habit while you have the support of everyone around you.

"One of the greatest things about Lent as an event is, it's a group of people suffering together," says Peter Fisher, a partner with Human Investing in Lake Oswego, Ore. "I think you could take that same approach to this financial 'Lent.'"

Vowing to stop ignoring your 401(k), giving up your monthly budget for wine or staunchly refusing to put unnecessary items on your credit card could all be worthy money goals during this time.

But before you pick your poison, consider turning your short-term goal into a long-term, healthy habit.

"If you can do something for 40 days, you can most likely keep it ongoing," says Lora Sasiela, financial therapist and owner of the Financially Smitten blog.

Items that can damage your wallet and waist

The booze, cigarettes and fast food aren't doing you any favors. Giving up these bad habits for 40 days could save you money and preserve your health.

If you're a pack-a-day smoker, you'll save at least $238 throughout Lent, as the average price of a pack of cigarettes reached $5.95 in 2011, not including local and sales taxes, according to the Campaign for Tobacco-Free Kids. If you live in an area with high taxes on cigarettes, such as New York City, expect to save closer to $500 over 40 days.

Giving up restaurants and fast food could save an extra car payment. The average consumer spends about $272 over 40 days on eating out, according to the U.S. Department of Labor's 2010 Consumer Expenditures survey.

Beer and wine are an extra $40, according to estimates from the Beer Institute, Wine Institute and the U.S. Bureau of Labor Statistics.

These vices may be difficult to give up, but remember, it's not forever, Sasiela says. It's important to stay realistic on what you can and want to give up.

"I think it's really important for people to really get clear on what their 'why' is," she says. "I think so often there are 'I should do this' goals, and they may not be aligned with what the person really wants."

Bad credit card and credit report behavior

People use credit cards to create an astonishing amount of debt each year. For households that use cards, the average debt was $15,799 in mid-2011, according to

"People will spend this month's lifestyle on next month's 'if-come,'" says Chad Carden, co-author of "Winning the Money Game: A Rulebook to Achieving Financial Success for Young People." "I will buy stuff this month, and I'm banking on that I'm still going to have my job (next month)."

It would take a cardholder about 15 years to pay off $15,799 by making the minimum payments at an 18.9 percent interest rate -- and would ultimately cost about $10,000 in interest.

Skip using that card for unnecessary purchases -- any items you haven't budgeted for -- and pay off the balance each month. You could bypass the cost of interest, or about $70 over 40 days using the previous card balance.

And while you're using your credit card responsibly, start building good credit report habits.

Take it one step at a time, Sasiela says. During Lent, pull your credit report from just one of the three main credit reporting agencies: TransUnion, Experian or Equifax. You can request a report for free once a year from each agency.

Ignoring your savings

Many don't have money tucked away for emergencies -- almost one-fourth of Americans, according to Bankrate's June 2011 Financial Security Index -- and it can seem like an intimidating goal.

But to start saving, Fisher suggests going on a "financial Paleo diet," which puts a money spin on the popular diet that encourages people to "cut out all the garbage."

"Here's my budget, and I'm going to cut out all the fat," Fisher says. "You're not coming up with this goal of 'I want to spend no money.' You're basically saying, 'I just want to quit throwing money away.'"

Sasiela says she's not observing Lent, but one way she plans to cut expenses is by giving herself manicures and pedicures instead of going to a salon for the service. It'll save her about $100 over 40 days, and more over the long term.

Trimming these extra expenses from your budget -- whether they're mani/pedis or fast food -- could accrue a nice chunk of savings that could be put to work as the start of your savings account, Fisher says.

But emergencies aside, you'll also need to stop ignoring your other savings needs. Your 401(k) won't contribute to itself, but your employer might.

Check out whether your company matches a percentage of your salary toward a retirement vehicle, open one and start contributing every month.

"Habit-wise, it should just be automatic," Carden says. "It's almost as if I make $100, I know that I really make $90" and put the other $10 in retirement savings.

Bad bank behavior

Banks may have backed away from charging customers the notorious $5 debit card fee, but they're still going full-steam ahead in charging customers for other services.

These include fees such as using ATMs and overdrawing from a checking account. But most of these costs can be avoided.

"We could argue all day long and say 'It's a bank ploy,' and 'They shouldn't let us do that,'" Carden says. "But at the end of the day, we need to sit down and take personal responsibility and say 'Do I have this money or do I not?'"

Pay attention to your banking habits over the next 40 days, and it could save you money over the long haul.

Making the unfortunate choice to overdraft every day for 40 days would cost you $1,233.20. Dodging just one of these account overdrafts could save you an average of $30.83, according to Bankrate's 2011 Checking Survey.

Same with ATM fees, which reached an average of $2.40 in the checking survey. Sidestepping this fee just once in 40 days could save you a few bucks; but bucking it once a day for 40 days will save you almost $100. ATM fees are easily avoidable by visiting an ATM in your bank's network or withdrawing money with your debit card at a grocery store or drugstore as a cash-back option.

Whether you're cutting back spending or trying to avoid pesky bank fees, keep your goal in mind while understanding you might make a mistake in those 40 days.

"We have to go into change knowing there are going to be falls off the wagon," Sasiela says. "Maybe it was too ambitious; maybe it wasn't ambitious enough. There's a lot of Goldilocks stuff to this, where everything has to be just right."