I’ve never had the need or the opportunity the learn about Medicare or Medicaid, two government programs that garner a lot of attention every two years, and that have recently been in the news because of President Obama’s attempts to bring about health care reform. Like many people, I didn’t understand how either program worked so I decided to do some research and put together this Foundation post.

The biggest difference between the two is eligibility based on financial need. Medicaid is designed to help low-income, financially needy individuals and is administered differently in each state. Medicare is not based on need and is entitlement based, through your payments into the program through your taxes. Medicare is administered nationally and the rules are the same everywhere.

If you’re curious to learn more, read on plucky adventurer because it starts getting a little more complicated.

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If you go back a ten or fifteen years, there were two things you could do online that would get you laughed at: finding a date and getting a post-secondary degree.

With dating sites flourishing and online education popping up everywhere, the stigma associated with the “online” versions of both have all but been washed away. Meeting someone online no longer means you’re meeting someone capable only with interacting with a computer and getting a degree online no longer means you took some cupcake classes and paid for a diploma.

However, just as how you still want to be careful with who you choose to meet in person from an online dating site, you’ll also have to be careful which online university you choose to attend. Like dates, not all universities are created equal.

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Everything I’ve ever read about debt settlement has been extremely negative and, for the most part, ugly. It’s because debt settlement is designed for people in very dire circumstances.

A friend of mine recently got into the debt settlement business since he was working with a lot of individuals in weak financial situations. We spent the better part of three hours discussing how debt settlement worked, why debt settlement made sense to some people, and why the business had such a bad reputation. My friend is a stand-up guy, I trust him, and so it was refreshing to hear about the business, warts and all.

In this Foundation series article, I hope to pass on some of that knowledge to you.

Last week I was volunteering at Meals on Wheels when one of the other volunteers, Cheryl, asked me about buying state bonds. Until last week, I hadn’t really given it much research because the idea of buying individual bonds was never tremendously appealing. There is a big barrier to entry when you’re buying individual bonds and it’s with the minimum purchase amounts. In Maryland, if you buy the bonds from the state through a broker, your minimum buy is for $5,000 and your purchase must be in increments of $5,000. However, you can buy them in smaller increments on the secondary market so I thought I’d give it a look for this Foundation series post on buying municipal and state bonds.

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For the first twenty years of your life, the most important measure of your future were your grades in school. Scored well, you got into better schools and tougher classes. Scored poorly and you didn’t. Just about the time I thought grades stopped mattering, I learned about my FICO credit score.

This little three digit number has caused so much consternation in its lifetime you’d think it was invented hundreds of years ago. Would it to surprise you to learn that the FICO score, for all its flaws, is actually an improvement on its predecessor? Before the Fair Credit Reporting Act in 1971 (full text of the FCRA), credit reporting agencies did whatever they wanted.

They collected whatever information they could find and sold it to whomever was willing to pay. The idea of a “credit score” didn’t emerge until the 1980s when Fair Isaac Corporation (FICO) put the data through a magical black box equation and spit out a three digit FICO score.

Pique your interest? Enough of the history lesson, let’s learn about FICO scores, how they are calculated (as best we know), and get on with this Foundation Series post!

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Depending on who you ask, a credit card is either a very useful financial tool or an incarnation of the devil. Your perception of credit cards is often colored by your personal experience, as it should, and it’s easy to see how a mountain of debt could make one despise credit. I’ve always seen them as useful tools, powerful in the hands of a responsible credit card user, and dangerous in the hands of someone unfamiliar with how they work. If you want a primer on credit cards, I invite you to read the Foundation series post, Basis of Credit and Debit Cards Explained.

This Foundation Series post will explain how to pick the best credit card for your needs. (after a discussion of whether you should even get a credit card!)

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April is Financial Literacy Month and to help kick off this month of financial education, I thought I’d go back to the basics with this edition of the Foundation Series. This post explains something that I think everyone should integrate into their personal finance routine – budgeting. Budgeting is one of those activities that sounds like a hassle, even if you’re a numbers person, but I guarantee that you will benefit tremendously from learning how to and implementing your own budget.

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Five years, on the first day of my first “real” job, the HR administrator of my company handed me a folder labeled XYZ Company Pension & Retirement Plan. Inside the folder was a description of the company’s pension and 401(k) package, two “things” that meant almost nothing to me. I knew what a pension was but had no clue was a 401(k) was, but the folder seemed to have enough information in it to help me start my own 401(k) company if I wanted to. I made some good decisions about my 401(k), mostly by luck (I put 40% of my money into emerging markets, which was a good choice but I did it for a bad reason – I had no reason!), but you shouldn’t have to.

Retirement investing is not rocket science, it’s just confusing with all the acronyms and the taxability and everything else. The basics, which we’ll cover in this Foundation series article, once you unravel the confusion, are fairly straightforward.

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Between the various bailouts, rescues, and spending packages, the United States Treasury has been working overtime issuing debt. If you’re like me, you’re probably wondering how this is even possible and how the government goes about doing it. During the First World War and World War Two, we went through a similar period where the government needed to borrow a lot of money to help fund the war effort. That gave rise to the patriotic posters that called for ordinary Americans to buy war bonds to support our soldiers fighting the enemy on foreign soil. That same mechanism, public debt, is what we use today to help fund many of our programs. This makes it a prime topic for the third installment of the Foundation Series.

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Welcome to the second edition of the Foundation Series (learn more about the Foundation series), a series of posts that discusses the very basics of personal finance and hopes to set a “foundation” for a solid financial approach to life. This edition tackles a topic that so many of us are introduced to with little preparation, debit and credit cards.

Part of the reason why we don’t get a gentle introduction is because it’s not in the interests of credit card companies to educate its customers. They introduce cards when you’re most impressionable, like the first few days of college. They give you the terms and conditions in microprint and include dozens of pages, virtually assuring that you won’t read every word. They add in counterintuitive business practices, like universal default and double cycle billing, that appear to go against all conventional wisdom about borrowing. They do this not because they’re trying to screw you, they’re doing it because their responsibility is to the shareholders of their company and the almighty dollar. They’re not trying to bankrupt you, but many aren’t going to hold your hand and, let’s be honest, we’re all adults capable of making our own decisions.

I won’t hold your hand either (sorry! ) but here’s a brief guide that should prepare you more than a hundred pages of 4 pt. font claiming to be terms and conditions!

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