Ask Liz Weston

After all the extra work and activities of the holidays, I’m ready to put my feet up. But now’s not the time to slack off: there are still a few things to accomplish before the end of the year. Such as:

Return the misfires. Most merchants put a limit on how long you can return an item, and without a gift receipt you’ll usually have to accept what the item is currently selling for. That value may be dropping fast, so hustle yourself to the mall.

Use those gift cards. The longer you delay, the greater the chance you’ll lose or forget them or that insidious fees will eat away at their value. If you won’t use it, you could regift it or sell it to Plastic Jungle, Swapagift or one of the other card-buying sites.

Contribute to Goodwill or other charity. If you itemize your taxes, year-end donations of items in good condition can win you a valuable tax break. So can monetary donations—just make sure you get a receipt.

Make any other year-end tax moves. Taxes have become so complicated that I think most people would benefit from talking to a tax pro and getting their advice. But I think Jeff Schnepper did a good job summarizing some of the options in his recent MSN column.

Set up a system to track your money. If you’re not already using Mint, Quicken or a similar money-monitoring system, set up your accounts so you can get a fresh start with the new year.

Dear Liz: My wife and I are working to get out of debt, and I am interested in comparing the amounts we spend on mortgage, food, diapers and so on with what would be considered ideal or at least average for homeowners living in areas with a high cost of living. Do you have recommended percentages for various items? I am always looking for places where we can cut our expenses so we can pay off debt faster.

Answer: You can find averages in the U.S. Census Bureau’s annual Consumer Expenditure Survey, which you’ll find at www.census.gov. The categories are fairly broad — you won’t find a line item for diapers, for example — but the bureau provides averages for housing, food, transportation, clothing and insurance, among other categories. The bureau also slices the data various ways: by income, by metropolitan area, by child.

You may find the information more interesting than helpful, however, because every family’s situation is different. A couple with little debt and no children, for example, can comfortably afford a bigger mortgage payment than a family that has both kids and debt.

A better way to manage your spending is to use Harvard bankruptcy professor Elizabeth Warren’s 50/30/20 plan. Warren, who outlined the budget in her book “All Your Worth,” recommends limiting your “must have” expenses to 50% of your after-tax income. Must-haves include shelter, food, transportation, utilities, child care, insurance and minimum loan payments.

That leaves 30% for wants, including clothing, entertainment, gifts and vacations, and 20% for savings and debt payments.

Many families in high-cost areas find it extremely tough to keep must-haves to 50% of their after-tax pay. Some spend that much, or more, on their housing. But the 50/30/20 plan underscores how important it is to contain your basic overhead if you want to have money left over to pay down debt from the past, save for the future and enjoy your life in the present.

Dear Liz: Can you clear up something for me regarding Social Security survivors benefits? The yearly summaries I get tell me my family will receive payments if I die. But it’s not clear to me how long these last and if they expire when my children are no longer minors. Do payments continue to be made to my surviving spouse as well, and if so for how long?

Answer: Your unmarried children can receive Social Security survivors benefits until they turn 18, or 19 if they are still attending high school full time. Your kids can get benefits at any age if they were disabled before age 22 and remain disabled.

Your spouse can get benefits as long as he or she takes care of a child receiving your survivor benefits. Your spouse also can receive widow or widowers benefits as early as age 60 (or 50 if disabled).

The amount of the benefit depends on your average lifetime earnings and is estimated on the annual Social Security statement you get. The more money you make before you die, the greater the benefit.

For more information, SSA Publication No. 05-10084 is available on the Social Security Administration website at www.ssa.gov or by calling (800) 772-1213.

Dear Liz: After 36 years in insurance, I don’t have a convincing argument for or against damage waiver “insurance” from rental companies. I know that my auto policy’s coverage usually transfers to the rental car. However, “economic loss of use” to the rental car company while being repaired is typically not a covered loss under the customer’s insurance policy.

That gray area forces us to grit our teeth and recommend that our clients buy the damage waiver endorsement when they rent the car. The rental companies charge an insane daily rate, but what can you do? I personally do not usually follow my own advice and decline the coverage. Maybe I’m ahead, but maybe I’ll be stung some day.

Answer: If you pay for the rental with a gold or platinum credit card, you may well be covered for “loss of use” charges while the car is being repaired.

You’ll want to check the benefits guide that came with the card (if you’ve lost it, ask the issuer to send you a new one). The guide will outline restrictions on coverage, which typically include requirements that you use the card to pay for the entire rental cost, that you decline the rental company’s collision damage waiver option and that the rental be 15 days or less (31 days or less in a foreign country). Credit card coverage also typically doesn’t apply to antique or luxury vehicles (with the definition varying by issuer), motorcycles, trucks and vans.

Some things are a real waste of money, like appetizer trays from the supermarket or deli. (What, you can’t chop a few vegetables?)

Other expenditures may seem like splurges, but are well worth the money. Here are my nominations; feel free to add yours in the comments.

Valet parking at the mall in December. They could charge me $20 or even more, and I’d think it was a bargain to avoid the endless circling looking for a parking spot. So far, though, the most I’ve paid is $8 plus a tip, and many places charge less.

Oil changes. I used to do this myself—yuck. Now my trusted mechanic does it, and checks all the tanks and belts and other do-dads while he’s at it. He also has to dispose of the oil properly, another yucky task I’m happy to delegate.

Date night. Even when money was tight, hubby and I went out to eat once in awhile. There’s something about being out of the house, where we weren’t constantly reminded of all the chores we had to do, that helped us relax and focus on each other. Now that we have a kid, date night is even more important.

Preventative care and screenings. We have a high-deductible health insurance policy, which means we pay out of pocket for a lot of our health care. I don’t enjoy shelling out huge wads of money when a trip to Paris isn’t involved, but my mom died of a cancer that could have been detected and cured with a simple screening. So spend it we do.

Charitable donations. MSN contributor Donna Freedman has written frequently about how important she feels it is to give, even on her super-tight student budget. Through thick and thin, we’ve tried to keep up our giving, as well. This year, we feel especially blessed, and it’s been fun to involve our daughter in our end-of-the-year donation decision-making. (She likes cheetahs, so some of our contributions will be going to a cheetah preservation fund.) We’re also making a donation to Heifer.org, so I get to say, “I’m getting a water buffalo for Christmas!”

Whatever holiday you celebrate, may you have a joyous and peaceful one and a happy new year.

Dear Liz: I’m 28 and have had excellent credit since Day One. In May of this year, I leased a new car and found out my credit score was 780. In July I decided to lease a second vehicle. Instead of paying the leasing company monthly, I used a credit card balance transfer offer to write them a check for the entire two-year lease amount ($18,000). When I applied for two more credit cards in the following months, I was denied by both. I have never been late on any payments and always pay off my credit card debts (except for this balance transfer, on which I make monthly payments). Why was I denied credit? For a person with a great credit score, you can imagine how shocked I was.

Answer: You may not have the great credit you think you do.

You’ve been applying for a lot of credit in a short period, something that can adversely affect your scores. You also put a pile of debt on one of your cards, which can also hurt your numbers. Credit scoring formulas are sensitive to the amount of credit you’re using on each card. The narrower the gap between your balances and your limit, the greater the potential damage.

Even if your scores are still good, they might not have been good enough for today’s credit card issuers, especially if you applied for high-end rewards cards. These issuers often want FICO scores of 750 or above. Drop a point or two below, and you may be out of luck.

You didn’t ask, but you should know that leasing cars is an expensive way to go. Most people are far better off financially buying slightly used cars and driving them for 10 years or more. They don’t get to drive the latest models, but they save hundreds of thousands of dollars over their driving lifetimes compared with those who lease a new vehicle every few years.

Dear Liz: Our apartment was infested with bugs, had a leaky bathroom faucet that was never fixed after numerous requests, and then our ceiling fell in because of a roof leak that was not repaired. We had to make other living arrangements before vacating the apartment, and now they are saying we’re responsible for $1,800 for terminating our lease early.

Answer: In every state except Arkansas, the law requires landlords to provide “fit and habitable” housing, said attorney Janet Portman, the managing editor of legal self-help publisher Nolo and author of “Every Tenant’s Legal Guide.” “Fit and habitable” typically means the housing is waterproof and free from vermin infestation. The housing also must have heat, lights, water, functional plumbing and a working kitchen.

If the housing isn’t fit and habitable, you legally can break the lease if you didn’t cause the problem yourself and you gave the landlord a reasonable amount of time to fix the problems.

Fixed means fixed, by the way; you can break the lease if your apartment is still infested, even if the landlord has treated the infestation repeatedly, Portman said. You can consult Portman’s book and a local tenants’ rights organization for more information.

Dear Liz: When the stock market dropped this past year, I decided that was a perfect time to max out my 401(k) deduction to the plan’s 35% limit. The problem is that the IRS maximum contribution is $16,500, and it’s nearly impossible to get my withholding to exactly match the dollar limit. If I am slightly over the maximum at the end of the year, what is the IRS likely to do to me?
Answer: It’s typically not the IRS that takes action in these situations; it’s the 401(k) plan administrator that will either stop your contributions once you hit $16,500 for the year or send you back a check for any amount over the limit you’ve contributed.

You’ll have to pay regular income taxes on that money, but you won’t otherwise be penalized for trying to be aggressive about your retirement savings.

Some gifts are guaranteed to cost the recipient a small fortune (like, say, gaming systems). Others can offer a thrifier 2010. Here are my five nominations for the best money-saving gift ideas:

A better carry-on bag. The right roll-on can help you avoid checked baggage fees, which now run $15 and up at virtually all airlines (JetBlue and Southwest are two exceptions). But the wrong one will leave you blocking the aisle, trying to stuff a too-big, too-heavy bag into a crowded overhead. My vote: The Delsey Helium Fusion Expandable Suiter Trolley, which I’ve owned for more than a year and absolutely love. It’s inexpensive (around $80), lightweight and tough, with a basic built-in suiter that allows me to keep jackets and pants from getting too wrinkled. Consumer Reports liked it, too.

Sandwich and snack wraps. I like the selection offered by ResuseableBags.com, which range from clear to colorful. Made of cloth or non-leaching plastic, these cost about $5 to $8 each and replace throw-away plastic bags and wraps.

Rechargeable batteries. Now that our house is littered with Leapsters and other battery-operated toys, I’ve finally seen the light and started using rechargeable batteries. I like this Energizer charging gizmo for $20 that plugs into any outlet and allows you to shut off the charger.

A subscription to ShopSmart. This is Consumer Reports’ answer to Real Simple. ShopSmart magazine is a nicely designed synopsis of CR recommendations, with a “Buy this! Don’t buy that!” spin and a tagline of “No hype. No ads. Just great buys.” I especially like the fashion feature in each issue, where noted stylists offer their advice on how to update your wardrobe for less. A subscription is $18 for six annual issuers.

The right crock pot. Not eating out can save a ton of money, but many people are too tired after work to think about cooking. The solution: a crock pot, which allows you to start a meal in the morning and have it ready when you come home. You’ll want one with electronic controls that allow you to delay cooking and automatically reset to “warm” when the cooking is done. Unfortunately, too many slow cooker these days aren’t; the manufacturers have set them to heat up too fast, so you’ll want to read user reviews before you buy. I like the Hamilton Beach Set ‘n Forget model, which retails for $60 to $70.

I knew I liked Ron Lieber. He clearly dislikes gift cards as much as I do.

His recent New York Times column “Redeem all of gift card, or give store a present,” discusses the incredible $5 billion lost each year to “breakage,” or the amount of money put on gift cards that never gets spent.

His article is more circumspect than my MSN rant, “Gift cards are the new fruitcake,” but we make the same points. And the advice is the same: if you get one of these buggers, spend it fast, before the store goes out of business or fees eat up what’s left.