The goal of the most recent Simply Money session was to make mutual funds not just understandable, but fun. And with the help of fund snapshots from Morningstar.com, many attendees began to see once-meaningless investment statements as valuable, applicable information.

One participant, who struggled to grasp the concept of a mutual fund, later mentioned that she and her husband had two money managers. She quickly understood the course instructor’s view that most individuals can be “self directed.” And she was shocked to learn about all the fees she might be paying, including “expense ratios,” the fund manager’s annual cut from the investment and a “load” (the charge the investor pays to buy into and perhaps exit a fund). “So that’s another fee that they get?!” she asked.

Most would-be investors – especially those with less than $250,000 to invest – don’t need the help of a money manager. Instead, they can handle it themselves by keeping their investments simple, Gichon suggested. Gichon said she has three types of savings: an emergency cash fund; a retirement fund; and a “what if” fund that she can dip into within the next seven years, should she want to make some lifestyle changes.

Six mutual funds are plenty, Gichon said. Pick them based on risk and how long you have until retirement, she said. The typical fund is already diversified and invested in hundreds of companies. Also, standard age-related guidelines exist on what share of one’s investments should be in company stocks, government bonds and other types of funds.

The bottom line: invest in no-load funds, Gichon counseled, since paying a load doesn’t mean better returns; and invest in funds whose expense ratio falls below the 1.5% average.

Orla O’Sullivan is a New York-based journalist whose work has been widely published in business and consumer media on both sides of the Atlantic.

Read more about Orla’s participation in Galia’s Simply Money workshops.

Have you heard about the 2010 Roth IRA Conversion? Financial pundits are beginning to chatter, so if you’ve got an individual retirement account (IRA) you’re probably in search of the facts and what it means to you. In a nutshell, starting in 2010 everyone is eligible to convert a Traditional IRA to a Roth IRA, and for those who convert in 2010, there is a break on when you can pay the taxes.

Will it affect you? Only you can decide. Start by getting your arms around the changes. Here are five things you need to know before you jump on the bandwagon (by which I mean, “talk with your tax advisor”).

1. What is the 2010 Roth IRA Conversion?
You probably know there are two types of IRAs: Roth and Traditional. They basically differ in when they are taxed. Roth IRA contributions are taxed before they go into the IRA; Traditional IRAs are taxed when the money is withdrawn.

The change is that starting in 2010, there will be no income limits on who can convert from a Traditional IRA to a Roth IRA. (Historically, the limit for converting has been $100,000 in modified adjusted gross income.) However, income limits will still apply for Roth contributions.

2. Advantages of converting
Once you convert from a Traditional to a Roth IRA, any earnings from that point on accumulate tax-free. Plus, there are no taxes to pay in retirement (provided you are at least 59 ½ at retirement and you’ve had your account for at least five years).

3. Disadvantages of converting
Converting won’t get you a free pass on income tax. But if you convert in 2010, you do have two choices for when to pay. Either pay it all in the 2010 tax year or evenly split the income (and therefore the tax) between the 2011 and 2012 tax years.

4. Who should convert
As you’ve probably figured out, not everyone will benefit from converting. But it may make sense for people in these situations:
• You believe your tax rate at retirement will be the same or higher than it is now.
• Retirement is a long way off and you can pay the tax now from sources other than your IRA (to avoid the penalty for early withdrawal and the loss of tax-free growth on that amount).
• You plan to leave the Roth IRA to your heirs (tax-free). Unlike traditional IRAs, Roth IRAs don’t require you to take minimum distributions at age 70½. That means the money may grow tax-free until your heirs are ready to withdraw it.

5. Talk to your tax advisor
Now you’ve got the lay of the land on the 2010 Roth IRA Conversion. But everyone’s situation is different. So before you decide whether it’s for you, consult your tax advisor. They’ll help you evaluate your own financial situation.

But a sweet deal isn’t the only thing you should factor in when considering buying a home. Low prices and tax credits are great, but the question still remains – can you afford it?  Make sure you can swing a hefty down payment (we’re talking at least 20%) to make you a homeowner sooner rather than later. Factor in costs such as homeowner’s insurance and taxes, as well as closing costs, which can run up to 5% or more of your home purchase price. Do your research and negotiating, check out your monthly expenses and figure out how much you can afford when all is said and done. You don’t want to be house poor. And you certainly don’t want to be in the poor house.

If you haven’t scratched that itch just yet, now may be a pretty good time. Got your financial ducks in a row? Consider yourself ready for the house hunt. Money Under 30’s 10 tips for house hunting can steer you on the right path to the house of your dreams.  

We can’t guarantee tender loving luggage handlers, short bathroom lines or in-flight movies NOT called The Pink Panther 2, but we have a few ideas on ways to avoid unwelcome fee surprises at the ticket counter. First, Smarter Travel has put together this handy guide to airline fees to keep your in-flight costs from soaring.

We say pack less and cram all you can into fewer luggage pieces that you have to check. Better yet, go carry-on only and ship boxes to your destination ahead of time. Snacks? Go all movie theater on the airlines. No one REALLY wants to spend $6 for a bag of lousy popcorn. And no one really wants to pay $?? for a tiny bag of airplane nuts. That’s nuts. We’re not condoning “smuggling” but a well-stashed bag of licorice or cheese thingies in your carry-on will taste pretty good come about 2 hours in flight. Oh, and eat a big meal before you fly. Sometimes the obvious stuff isn’t so much.

Let’s hear from you, travel-savvy Savers. How are you saving dollars when hitting the airways?

The idea of saving money sounds about as exciting to me as window shopping or paying taxes. While I recognize how meaningless stuff is, I still love new stuff. I fantasize about the kind of rug I want to buy for my bare, unfinished dining room. Modern or Oriental? Wool or chenille?  I divide my mental wish-list into what I can buy now, and what I’ll buy when I have more money one day. You can call it a sickness. I call it being raised by capitalists.

Fortunately for me, I write about money on my website, DailyWorth.com. Unfortunately for me, I have to walk my talk.  

Hot Water
I recently posted a column on DailyWorth about spending hiatuses. In case you haven’t heard, freezing all unnecessary spending for a predetermined period of time is the hottest thing since knitted Uggs. Bloggers everywhere seem to be upping the ante, extending their hiatuses and bragging about how little deprivation they’re feeling. 

I know I overspend. I also know that I use shopping as a way to cure boredom or soothe feelings of inadequacy. So last week I threw my hat into the ring. For one week, I declared so effortlessly and publicly, I’d only buy food and pay bills. Nothing else. 

How It Went
Overall, I’d say my week-long spending hiatus wasn’t a huge success. It was, however, a small step in the right direction of spending less and saving more. I liken the experience to my one week on Atkins or the three years I spent on Weight Watchers. You can do anything for a week, but will the habits stick? The jury’s still out. 

Even so, I did save $380.00 during my week of reduced spending. 

My old down comforter had two huge tears. Rather than buying a new one, I broke out the needle and thread – and saved $200! I cooked dinner (instead of opting for take-out) on Friday night and Saturday night. $60.00 saved!! The real “Aha!” moment happened on Day Two, when I realized I could tally each dollar saved and, at the end of the week, transfer the cash into a designated savings account for home improvement projects, like fixing our two fireplaces. I really want working fireplaces. Saving money alone does not motivate me. Saving money with a prize in mind definitely does. Lesson learned: There’s got to be an upside.

Will I join the masses of bloggers extending their spending sabbaticals from weeks to months to years? Probably not. But I’m inspired. And soon, I’ll be sitting by a fire.

Amanda Steinberg is the founder of DailyWorth.com — a free, daily email about personal finance for women.

Last in a series on protecting yourself online. October is National Cyber Security Awareness Month.

Phew, you’ve done it. You’re online and confident you’re protected against all the Cyber bad guys out there, ID theft, smart security practices, and protecting your PC (viruses included). Congrats, you’ve built your own personal security zone. So now what? Here are some other proactive steps you can take to get your personal information off the public radar.

Use online banking to eliminate sensitive account information circulating in the mail. Thoroughly shred mail – especially credit card bills, statements, and offers for preapproved credit – before you throw it away. Cross-cut shredding is more effective than strip shredding. Choose organizations with an “opt-out” privacy policy.

We know online security can seem like a hassle, and sometimes a lot of work. That is, at first. Once you’ve synced your habits with your machine’s security, your Internet browser updates and all the application ‘patches’ - that’s the tough stuff. We can’t protect you against carpal tunnel, but when you’re surfing the medical site for your symptoms, you can rest easy knowing that your info is safe.

There are signs that the recession is slowing, at least in the stock market. The Dow Jones Industrial Average is up nearly 60% since mid-March 2009. So what do you do? Invest more? Or did you miss the boat already? There’s no better time than the present to get back in the driver’s seat and steer your investments toward personal financial success. Start by replacing these 4 common investment do’s & don’ts with simple steps that will help you be a successful investor in good and bad economic times.

Don’t: Blindly follow published investment advice.
Do: Your own homework.
Ask yourself whether you’re better off relying on someone who claims to beat the market in the short term or doing your own investment homework.

Don’t: Put all your eggs in one basket.
Do: Diversify.
Don’t believe that you need to have a small fortune to have a diversified portfolio. Putting even small amounts of money in broad index funds that have low fees and no minimum investment requirements will do it.

Don’t: Ignore investment costs.
Do: Find affordable funds.
Keep more of your returns by finding low-cost investments. Read the fine print of the indexes you’re investing in and compare it to similar investment options.

Don’t: Expect high returns in a short period.
Do: Stick to a sound strategy.
Assume as much risk as you can comfortably tolerate, but no more. Taking on too much risk may make you prone to overreacting to the ups and downs of the market. Make a plan and stick to it.

A spin of a wheel, a lucky guess or a drawing from a hat can make a person the proud owner of something they never dreamed of being able to afford. But FRUGILLIONAIRE explains that even with the purchase price covered, these gifts can still cost the recipient some major cash. The cost to run and maintain a new boat, car, or even the cost to install new kitchen appliances can make some prizes a little less desirable.  And any added prestige or pleasure a new McMansion or a lottery hit can give you is probably going to get outweighed by not-so-lucky things like higher taxes, maintenance expenses and general headaches.

Moral of the story, scoring some free loot may mean fees to boot.  

We admit that it’d be pretty sweet to win gas or groceries for a year or maybe a contest that pays your bills for a few months. But most “free” things in life probably aren’t. So what’s the bestest thing you’ve ever “won,” only to find out that it’s still costing you today?

Online security isn’t just about the online user. It’s also about the desktop, laptop or handheld that they’re using. There’s plenty you can do to ensure your hardware stays safe from malware and other risks.

First things first, set yourself up with an additional user profile for everyday web surfing. This way your access is limited – and so is a potential hacker’s. The administrator profile should only be utilized when servicing your machine. Another thought, give the kids individual accounts on your PC. It’ll make them feel super important and minimize the havoc they can wreak…curious minds. Don’t be afraid to tell anyone else who uses your computer about safe practices. Speak up or they could be clicking on pop-ups (maybe surfing unsavory sites) and all your evasive tactics will have been done in vain.

Have you paid good money and installed anti-virus and anti-spyware/adware software? Set them to auto-update. You’ll be getting your money’s worth and they will help protect against online banking fraud and ID theft . Make sure you keep online applications up to date, too. Programs commonly used when surfing the Internet can be harnessed by fraudsters to compromise your information. Most vendors will periodically issue ‘patches’, or self fixes, to combat recent loopholes in their coding. Go one step further. Register your software with the vendor; you’re ensuring you receive up-to-the-minute notification of any new patches. Once you’ve done that, go to The Security Zone at ING DIRECT and get Rapport from Trusteer – it works on top of anti-virus software to protect you from even more online threats.

Are you a PC security guru? Share your expertise with friends and family. If everyone secured their PCs properly, there’d be less opportunity for online information breaches. And cyberspace would be a safer place.

Up Next: Online Security: Now what?

Of course, when it comes to a big ticket item—like a new fridge or computer—you’re going to have some nagging doubts. So how do you squash those “what-if” fears? The Consumerist says you and a savings account are the best cure against any gizmo malfunctions. Instead of forking over extra bills for a warranty that isn’t ABSOLUTELY necessary, park those funds in a savings account and rename that account “Oops, it broke.” Think you’ve got a better nickname for a savings account?  We’d love to hear it.  And tell us your thoughts on extended warranties and those nagging “what if” scenarios.