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If you sell things on the auction web site eBay, Paypal is an essential component of your auctions. Buyers can easily pay for their winning bids in a quick and easy way. And as a seller, you're guaranteed that the money you receive isn't part of some complicated online scam.

But there disadvantages to Paypal. Particularly if you're opening up a new account.

Paypal advertises that you can open a new account without a checking account or credit card. Technically, that is the case. But you will very quickly run into some serious limitations when it's time to withdraw your money.

There are several ways to withdraw money from Paypal. You can request the company mail you a check (which takes as long as two weeks to arrive). You can transfer money into a checking account. Or apply for a Mastercard debit card which is tied to your Paypal account.

If you don't provide valid checking account info, you're limited to withdrawing your money with a check. Even more inconvenient, unless you tie your Paypal account to a credit or debit card, you are limited to withdrawing and/or spending $500 per month.

There are a few reasons why you might not want to give Paypal checking account or credit card information. You might be one of the 20 percent or so of Americans who don't have a checking account. Perhaps you just worry about your privacy. Or you might have heard those horror stories from people who had a dispute with Paypal after the company unexpectedly withdrew money from their checking account.

But regardless of your reason, if you're looking for another option, I have a couple of suggestions.

The easiest way around Paypal's restrictions is to sign up for a pre-paid debit card that offers an option for you to make direct deposit payments into the account. Cards that offer that option include a bank name, routing and checking account number as part of their service. Even though it's not truly a checking account, it is enough info to keep Paypal happy. Even more convenient, you're are then able to transfer money directly from Paypal to your debit card. You can also use the new debit card number to satisfy Paypal's credit or debit card requirement. That will give you nearly unlimited access to your Paypal earnings.

There are a number of prepaid debit cards that would work for you. I am most familiar with CashPass and Mango. Both offer the routing and checking account info. And I have used both in the past with absolutely no problems.

One caveat is that both services do charge a fee. You have a couple of choices (a monthly fee vs a percentage of the transaction). But for most users, the charge is minimal and it's worth it to have easy access to your Paypal funds

If you have a negative chexsystems report on your record that's preventing you from opening a bank Account? If so, read on and you'll find your solution. 80% of US banks belong to the chexsystems credit checking network.

If chexsystems has you flagged in their database, chances are, you simply won't be able to open a checking account at a bank or a credit union and cashing your paychecks through a check cashing service isn't a very cost effective solution to this problem. There is hope, though. If you are diligent enough, you may just be able to find a non-chexsystems bank.

Non-chexsystems banks are not easy to come by since chexsystems represents 80% of all US financial institutions. If you are lucky enough to find one of these ever rarer banks, all that's left is for them to allow you a bank account with a prepaid debit card. Non-chexsystems banks can be viewed as a fresh start for people who have, for whatever reason, made a financial error that left a stain on their credit report.

They are a place to rebuild your credit rating, as well as save you potentially thousands of dollars in interest fees and service charges that check cashing stores are famous for. Perhaps the best part about non-chexsystems banks is; they will issue you a prepaid debit card that card can be used to receive your paycheck by direct deposit. More and more employers are insisting that their employees to hand over their financial Information so that their payroll operations are more efficient.

Not only that, but having a direct deposit account is a little extra insurance against ever misplacing a paycheck or losing cash. Another fantastic feature associated with non-chexsystems banks that issue prepaid debit cards is that you'll easily be able to review your account balance and even pay all of your bills online. This convenient, safe and time saving feature makes handling your financial resources much easier.

Many banks automatically cover overdrafts, but then charge hefty fees.

Last year alone those fees totaled 20 billion dollars.

New federal regulations are coming this summer that will require banks to ask before signing you up for overdraft coverage.

Should you say yes? Consumer Reports Money Adviser says not so fast.

Charles Berman had no idea he'd overdrawn his checking account.

Then he was hit with a flood of overdraft fees.

It started with a five dollar lunch that generated a 35 dollar fee.

"By the time I found out that I was overdrawing my account, I ended up with hundreds of dollars that I had to pay of overdraft fees for buying small items like a soda," said Charles Berman.

Currently, banks are allowed to automatically enroll you in overdraft coverage that can result in those hefty fees. But that's about to change.

Soon new federal regulations will require that banks get your permission to cover overdrafts.

Should you sign up? Consumer Reports says no. But some banks are pushing hard, sending brochures warning: "your debit card may not work the same way anymore" and "don't lose the flexibility" of overdraft coverage.

"It's true that overdraft coverage can help you in an emergency, say you need to have your car towed and don't have the money in your account. But the fees can be hefty, as much as 35 dollars each time," explained Greg Daugherty of Consumer Reports.

Far better, avoid overdrafts altogether.

If your bank offers it, sign up for electronic alerts when your account balance gets low.

"Another option is to link your checking account to your savings account or line of credit. The fees for that kind of protection are usually about 5 or 10 dollars per overdraft," said Daugherty.

As for Charles, he now checks his accounts frequently online to make sure he doesn't spend more than he has.

Automatic overdraft coverage has been controversial. Bank of America recently announced it's doing away with this coverage altogether on debit-card purchases.

The new federal regulations requiring you to sign up for overdraft protection will apply to new accounts as of July first and, for existing accounts, August 15th.

The underground or "black" economy is rapidly rising, and the fault is mainly due to government policies.

Here is the evidence. The Federal Deposit Insurance Corp. (FDIC) released a report last week concluding that 7.7 percent of U.S. households, containing at least 17 million adults, are unbanked (i.e. those who do not have bank accounts), and an "estimated 17.9 percent of U.S. households, roughly 21 million, are underbanked" (i.e., those who rely heavily on nonbank institutions, such as check cashing and money transmitting services). As an economy becomes richer and incomes rise, the normal expectation is that the proportion of the unbanked population falls and does not rise as is now happening in the United States.

Tax revenues are falling far more rapidly at the federal, state and local level than would be expected by the small drop in real gross domestic product (GDP) and changes in tax law that have occurred since the recession began. The currency in circulation outside the U.S. Treasury, Federal Reserve banks and the vaults of depository institutions - that is, the currency held by individuals and businesses - has grown by 13.3 percent in the last two years, while real nominal (not inflation-adjusted) GDP has not grown at all, and real (inflation-adjusted) GDP incomes have fallen by more than 3 percent. With the growth of electronic means of payment and financial service providers, it would be expected that the currency component of GDP would fall, not rise.

The underground economy refers to both legal activities, such as often found in construction and services industries where taxes are not withheld and paid, and illegal activities, such as drug dealing and prostitution.

Countries such as the United States, Switzerland and Japan historically have had relatively small, nonreporting and/or illegal sectors, a typical estimate being 13 percent of GDP.

Most European countries have had somewhat larger underground sectors (typically 20 percent or so) in part because of the desire to escape higher tax rates. Italy and some of the other Southern European countries are believed to have underground sectors that account for 30 percent or more of all economic activity.

I recall an Italian finance minister telling a few of us at a meeting a couple of decades ago that, for policy purposes, he assumed that "the economy was 40 percent larger than what was reported." In some developing countries and/or highly corrupt countries, underground or "off the books" activities are estimated to be as high as 70 percent of all economic activity.

The FDIC report about the size of the unbanked or underbanked sector in the U.S. should be of concern because those who do not use the banking system often have to pay higher fees to cash checks, pay bills (e.g., money orders, etc.), or transmit funds.

People who keep their savings in cash at home rather than in banks make themselves easier prey for criminals and are more likely to lose their money to fire, flood, or just neglect. Not surprisingly, a majority (71 percent) of the unbanked have household incomes of less than $30,000 per year.

There are many reasons people do not have bank accounts. Banks, because of the "know your customer" and other anti-money laundering regulations, make it difficult for nonestablished people, such as the young and transient, as well as legal and illegal immigrants, to open bank accounts.

Also, many of these same regulations are responsible for the rise in bank fees, which are a particular burden for low-income people. You can be sure that every time Congress passes some new law or the IRS implements some new regulation to "get tax cheats," much of the real burden of these compliance costs will fall on those least able to afford it, while those intent on finding their way around it will do so.

People also avoid having bank accounts because they are vulnerable to asset seizure, judgments, levies, etc. Increasingly, bankers and others who provide financial services are forced by governments to spy and snitch on their own customers, and this is a real turnoff for many people, which causes them to find other ways of maintaining financial privacy.

Many studies have shown that when people believe the taxes they are required to pay are reasonable and the political leaders tend to spend their tax dollars wisely, tax compliance rises, and vice versa. In the United States, there is increased evidence that many tax dollars are not being spent wisely and are often used to pay off political cronies.

Over the past year in particular, the public has become aware that many in Washington who advocate higher taxes and argue that everyone has a responsibility to pay taxes are themselves not complying with the tax laws and regulations.

When you have a secretary of the Treasury and the chairman of the House Ways and Means Committee (the tax writing committee) accused of cheating on their taxes, it greatly undermines the moral authority of the tax collectors, making the common citizens feel like chumps and, hence, much more willing to try to legally avoid or illegally evade taxes themselves.

The evidence is unambiguous; governments cannot increase tax compliance and decrease the size of the underground economy by ever increasing and more onerous regulations.

It is no accident that those governments that allow their citizens a high degree of personal and financial liberty, including financial privacy, and spend taxpayer dollars wisely, honestly and competently, have much smaller underground sectors than corrupt and oppressive governments. Washington, take note.

If you've heard about all the bank failures -- 122 this year -- you've got to be wondering about the safety of your money.

Which banks failed this year

Five banks failed Nov. 6. The largest was San Francisco's United Commercial Bank, the main operating subsidiary of UCBH Holdings, which received $299 million in government help through the Troubled Asset Relief Program last year. Looks like taxpayers won't be getting that money repaid.

It really does make you wonder about protecting your money. Here's what you should know:

Know what's protected

Money parked in bank accounts is usually protected by the Federal Deposit Insurance Corp. , but that doesn't mean all your money is safe. The FDIC insures checking accounts, savings accounts, certificates of deposit and retirement accounts placed in deposits at insured institutions.

You can ask your bank whether it's FDIC-insured. By the way, money that is placed in a money market deposit account as part of your checking is protected, but don't confuse that with a money market mutual fund , which is not.

Know what's not protected

Not every dollar sent to your bank is protected, including holdings in mutual funds (stock, bond or money market mutual funds ), annuities, stocks, bonds, Treasury securities and other investment products.

And what about that prized ring passed down by Grandma or other contents in a safe-deposit box at your bank? Those aren't protected either

Young adults between 18 and 29 years old don't trust traditional financial institutions very much, according to a new survey commissioned by Microsoft Corp.

Two-thirds of the survey respondents said they won't invest money in the stock market and more than half said they won't invest in a 401(k) or other retirement plan. Slightly less than half said they'd invest in an insurance policy and 22 percent said they would not even deposit money in a bank.

The survey was conducted by KRC Research in Washington, D.C., and asked 500 young people questions about finance.

The youths, which Microsoft describes as the "millennial" generation, weren't too optimistic about the future of U.S. financial institutions. There are an estimated 80 million U.S. youths in the "millennial" generation, Microsoft said.

More than 80 percent said they believe that more financial institutions will fail in the future and 80 percent said that U.S. financial institutions don't deserve any more bailout money.

"The financial crisis has created a deep sense of mistrust in millennials, which is keeping the next generation of wealth on the sidelines," said Colleen Healy, general manager of U.S. financial services at the Redmond computer giant (Nasdaq: MSFT), in a statement.