My Yahoo!Finance column that posts August 7 looks at the silver lining in the real estate downturn: The possibility of challenging your property tax assessment. Some jurisdictions make the process incredibly easy – even sending you the form to fill out to make your case. Others are complex, have tight deadlines, and don’t tell you exactly what proof is required.

For example, in my home state of New Jersey, the state relies on a “presumption of validity” standard – in other words, the tax assessor is always right unless you can prove him wrong. The homeowner’s evidence has to be “definite, positive and certain in quality and quantity to overcome the presumption” – which in terms of grounds for protest, has to be about as vague as it comes. (For instance, see this 2007 Superior Court ruling for an example of a Jersey man who bought a property for $40,000 in 1991, and the county reassessed its value at $360,000 in 2004. He appealed. And lost. Ouch.)

In that case, you may want to hire an attorney or other tax consultant to protest your assessment. Tap colleagues, friends and family first for recommendations. When you contact the attorney, ask for four to five references and documentation of his case record (you can also obtain this at the county government offices.) The attorney should be a member of the International Association of Assessing Officers, the group of professionals who do tax assessing. Ask how his fees are structured, and whether he would be willing to work on a contingency basis (a percentage of the tax reduction).

In my Yahoo!Finance column that posts on July 31, I outline some of the successful habits of financially peaceful people. Here are a few more:

They avoid pricey diversions.

When Nicholas Fidduccia was working in California, one of his bosses took him sailing. “He once said to me that if I ever wanted to know what it was like to own a boat, to put on a raincoat, step into a cold shower, and tear up dollar bills and flush them down the drain,” says Fiduccia, who retired this year at age 50. “I never got into any expensive hobbies that may have drained me financially.”

He is an avid photographer, however, but offsets his equipment purchases by selling some of his work. He also maintains a ballroom dancing habit that started in college. “I tend to be pretty lazy so anything to get me up on the dance floor doing aerobic activity is good – and socially it’s great too.”

They become experts in low-cost living.

Mary Lena Anderegg, 65, has been married 33 years and she and her spouse have lived on 30 to 40 percent of their combined salaries. They paid off their mortgage in just seven years. She has saved over the years by buying and maintaining used cars; raising vegetables in her garden; insulating her home to save on utilities; and hosting kids’ clothing swaps with friends.”We bought new underwear and new shoes, and for everything else did a clothing swap,” she says. To this day, she swaps books and even flower arrangements with friends. (She buys two new books a year and gets the rest from the library.)

“Keep your eye on the goal,” she says, “because until you are debt free you are not free. We really do not need things all the advertisers tell us we do.”

They keep recreation simple.  

Danny Kofke, a 32-year-old teacher who is married with two young girls, keeps leisure pursuits simple. “We go camping, we go to the park a lot, my mom works at library so we go once a week for story time – things that don’t cost all that much money,” he says.

They bought a 12-foot above ground pool for $100 at Target and swim daily in the summer. Rather than go to movies they subscribe to Tivo for $7 a month, so they can watch their favorite programs after the kids are asleep and zip through the commercials.

They give back.

Kofke’s school district recently implemented a new 403(b) retirement savings plan. “One teacher asked me to help her make a decision,” he recalls. “I spent about an hour in the media center and helped 10 of my colleagues with their choices. They told me how helpful I was. It made me feel so good. Empowering others is priceless.”For the last six years, Anderegg and her spouse have served as disaster relief volunteers for the Salvation Army and worked five hurricanes. They’ve made nine trips to Mississippi since 2006 to rebuild homes after Hurricane Katrina. “We’ve really been blessed,” she says.

Have you found financial peace? Comment here or email me at laurarowley123@aol.com.

Want to save on health care in the future? Don’t char the meat when you grill.

The August issue of Consumer Reports discusses the importance of going easy on the fire when you barbecue beef, chicken, lamb, pork and fish. Overcooking, burning and charring can transform amino acids and other natural substances into compounds called heterocyclic amines, or HCAs, which have been shown to cause cancer in laboratory animals, the issue reports.

Some studies suggest that ingesting these and other compounds might increase the risk of breast, colon, pancreatic, prostate, and stomach cancer. Consumer reports recommends cooking at a temperature below 325 degrees; marinating the meat, which can reduce HCA formation; and avoiding the direct flame. Fat or marinade dripping on briquettes or gas flames can cause flare-ups that contribute to HCAs and form other potential carcinogens that stick to the surface of food as char or ash.

Maybe it’s time to go vegetarian.

This week’s column on Yahoo!Finance will feature a follow-up to last week’s report on a Yahoo! survey about financial anxieties. Rather than focus on people who are worried by the economy (and there are plenty of them) I thought it would be helpful to talk to people who have found financial peace. These are not people who had smooth sailing financially — they’ve experienced layoffs, health issues, stock market declines. And yet they’ve made it through with their financial peace of mind intact. If you have a story of achieving financial peace, drop me an email. Meanwhile, I previewed this week’s column on the Today Show this morning. Here’s the clip.

President Bush this week approved a plan to prop up Fannie Mae and Freddie Mac. I can’t help myself; I have to take credit for predicting the debacle more than two years ago. Here’s what I wrote in my Yahoo!Finance column of February 17, 2006:

“Mostly, we can’t help wondering if the lending and spending free-for-all of recent history will end badly — for all of us. Imagine interest rates continuing to rise amid an employment downturn. The option ARM holders and other over-leveraged consumers put their homes on the market, or hand the keys to their lenders. The housing market experiences a sharp decline. Commercial banks, Fannie Mae, and Freddie Mac require a taxpayer bailout (a la the early 1990s) — increasing either the current or future tax liability.”

If only I was so good at predicting the direction of stocks. (Follow this link to read the entire column from 2006  http://finance.yahoo.com/expert/article/moneyhappy/2643).

I was startled by television images of people lining up at IndyMac Bank to get their deposits out of the bank since it was taken over by the federal government. One woman said she was going to put her money under the mattress. In a word, this is INSANE.

I did a quick segment on the Mike & Juliet Show on Fox Network explaining why, but I wanted to reiterate the information here, with a few salient details, because people are becoming totally irrational about the financial crisis.  (My own suspicion is that the media feels they dropped the ball on the sub-prime mortgage debacle and don’t want to miss the next crisis.)

Should you panic? NO! Regulators say that 99 percent of U.S. banks are in good shape — or in industry-speak, “well capitalized.” Indymac, the fifth bank to fail this year, lent a lot of money to people who had no incomes and poor credit. Not surprisingly, people with no jobs and no history of paying back their loans tend not to pony up the money you lend them. There are an estimated 100 to 150 banks having similar troubles. But that’s only 1% to 2% of the banks in the U.S.

We have been here before. In the 1980s, banks lent obscene amounts of money to commercial real estate developers, who tend to act like drunken sailors when you hand them a wad of cash. Aided by a Texas oil boom and favorable tax-shelter laws, they built office buildings and condos like crazy, even when there was no demand for them. They defaulted on their loans, and the empty office towers and condos were repossessed by the banks.

During the 1980s, more than 1,100 commercial banks failed or received assistance from the government. — 8 percent of the total. Another 900 savings and loans went belly up — representing 17.5 percent of all thrifts operating at the beginning of the 1980s.

Congress created the Resolution Trust Corporation (RTC) to clean up the mess. Between 1989 and 1995, when it was shut down, the RTC liquidated the assets of 747 institutions with more than $220 billion in deposits. The estimates of the cost to taxpayers vary widely; this FDIC analysis suggests the total was $153 billion.

Almost all banks are insured by the Federal Deposit Insurance Corporation, or FDIC, created in 1933 during the Great Depression to restore confidence in the banking system. It insures up to $100,000 of the money you have spread among checking, savings, certificates of deposit or money market deposit accounts (which are different from money market mutual funds). The insurance is $200,000 for joint accounts, and $250,000 for funds in an individual retirement account (IRA).

NO DEPOSITOR WHO HAS HAD LESS THAN $100,000 IN THOSE ACCOUNTS AN FDIC-INSURED BANK HAS EVER LOST A PENNY OF THOSE FUNDS IN THE LAST 75 YEARS.

To find out if your bank is FDIC-insured, look for the sticker on the bank’s front door or click here: http://www.fdic.gov/deposit/index.html

So what if your bank fails? As long as your deposits are under $100,000 in the accounts mentioned above, you don’t have anything to worry about. IndyMac’s account holders had access to everything — the only exception was that online banking and billpay were down for two days.

The FDIC does NOT guarantee other investment products that banks sell, such as mutual funds or brokerage accounts. If you want some assurance for those accounts, make sure the bank is a member of the Securities Investor Protection Corporation — or SIPC.

When IndyMac failed, some 5% of depositors had more than $100,000 in the bank. Don’t be that person. Stop worrying about things that you can’t control that are insured by Uncle Sam. Focus instead on getting the best deal from your bank: free checking, low or no minimums, a decent interest rate on your savings (see bankrate.com for the best savings rates) and no ridiculous fees for overdrafts or ATM usage. That’s where you’ll lose money. Not in a bank failure.

Do you hate credit card companies that don’t play fair? Now is your chance to level the playing field. Until August 4, the Federal Reserve is inviting public comment on Regulation AA. It would prohibit some of lenders’ more egregious practices — such as suddenly  jacking up the rate on your credit card without giving you a reason, applying payments in a way that maximize interest charges, and charging interest on debt you already paid off (known in the biz as “two-cycle billing.”) To post a comment on the regulations, go to this site: http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.

I discovered yesterday, to my consternation, that a tall skim latte has 100 calories. I’m not a daily Starbucks drinker; I indulge once or twice a month. Anyway, after reading a report that found keeping a food diary can double your weight loss, I decided to write down what I ate, and looked up the calories on Starbucks.com. (I’m not overweight but must be thinner than my sister Mary before our family reunion in August. Hopefully she won’t read this.)

I had this idea in the back of my mind that there are no calories in a tall skim latte, which is absurd, since the skim milk has to count for something. But these are the mental tricks we play when we don’t have a handle on the real numbers.

The process works the same for money as it does for food. Unless you write down exactly what you’re spending your money on, it will be impossible to figure out why you’re not making progress toward your financial goals. Unless you crunch the numbers with a credit card payoff calculator and figure out how much that interest really costs, you’ll continue to run up debt.

See this post for an overview of how to track your spending the old-fashioned way. As my finances grew more complicated, I switched from pencil and paper to online budgeting software. I use Mvelopes, which links to your checking, savings and credit cards, and electronically records all your activity. It shows up in a big transaction folder, and you click and drag each item into the right category: food, rent, clothing, and so on.

I also discovered yesterday that salad really does have almost no calories. And is cheaper, and better for you, than a latte.   

Next time you choose a mutual fund manager, look for age before beauty. That’s the conclusion of a new study by Harvard Business School’s Robin Greenwood and Stefan Nagel of Stanford University.  

Using age as a proxy for investment experience, the researchers compare the portfolio holdings and returns of mutual fund managers age 35 and younger to their older counterparts during and after the technology stock bubble of the late 1990s. 

At the start of the bubble, younger managers show little deviation from older managers. In fact, managers under age 35 have slightly lower technology stock exposure than the average manager in their Morningstar style category.  

But leading up to the mania’s peak in March 2000, younger mutual fund managers strongly increased their tech holdings, relative to the benchmarks for their fund, while older managers did not. Following low returns, younger managers are more likely to rebalance away from technology stocks. 

“Thus, during our sample period, younger managers appear to be trend chasers, in contrast with contrarian older counterparts,” the authors write. “Interestingly, this pattern repeats during the crash of technology stocks in 2000 and 2001.”  

The concern that inexperience tends to exacerbate market bubbles is not a new one. Recalling the 17th century tulip bubble, Charles Mackay reported in 1852 that “even chimney-sweeps and old clotheswomen dabbled in tulips.”   

I just finished the book Spend ‘til the End by economist Laurence Kotlikoff and columnist Scott Burns (see my July 3 Yahoo!Finance column for a review). Among other areas, the book explores some of the myths and realities about life insurance.

Kotlikoff’s research finds almost no logical relationship between the amount of insurance people need and the amount they have. One study he co-authored based on the Survey of Consumer Finances found couples age 30 needed a median of 12.6 years of income in life insurance. On average, they had just over a year. 

Insufficient insurance is the primary cause of poverty among widows. According to the authors, roughly one-third of secondary-earning spouses are drastically underinsured. Secondary-earning spouses between the ages of 22 and 39 comprise the biggest underinsured group. 

This obviously doesn’t have to be the case, because a 20-year level term policy is really cheap these days. The average non-smoking healthy person in their 30s or 40s can get $1 million in coverage for $1 to $2 a day, according to Denise Mancini of Accuquote.com. (Like Kotlikoff, this is the only kind of life insurance I recommend. The complex whole life products involve too many fees and mediocre investment returns.) 

How much coverage do you need? At minimum, take your annual household income, add your existing debt payments, and then multiply by the number of years left until your kids finish college. But this is pretty simplistic, because people’s needs vary depending on whether both spouses work, what kind of savings you have and whether others can lend support (maybe you’re lucky enough to have grandma and gramps paying for your kids’ college). Try out the insurance needs calculator at accuquote.com. Kotlikoff sells software called ESPlanner that does the math in detail. 

Kotlikoff points out that people with kids may need less insurance than they realize, because the kids receive Social Security children’s survivor benefits. Moreover, the less you earn, the lower your insurance needs as you get into your 60s, because Social Security retirement and survivor benefits replace a much larger percentage of your pre-retirement or pre-widowhood (or widower-hood) compared to people who are wealthy.