Wednesday’s need-to-know money news

Today’s top story: 3 simple things anyone can do to stay out of debt. Also in the news: Summer is the perfect time for a financial checkup, how to ace back-to-school shopping, and how stashing receipts saved one man over $1000 in 7 months.

3 Simple Things Anyone Can Do to Stay Out of Debt
Knowing your limits.

Summer Is the Perfect Time for a Financial Checkup
Checking your financial health.

Ace Back-to-School Shopping With 6 Smart Moves
Starting the school year off right.

How stashing receipts saved one man over a $1,000 in 7 months
Hold on to every single one.

Tuesday’s need-to-know money news

Today’s top story: 5 times to stash your cash and pay with plastic. Also in the news: Chase switches to Expedia for its online travel, how to use autopay to boost your bottom line, and a guide to borrowing money from friends and family.

5 Times to Stash Your Cash and Pay With Plastic
Good for extra protection.

Chase Switches to Expedia to Power Its Online Travel Portal
More choices and flexibility.

How to Use Autopay to Boost Your Bottom Line
It could even help save for retirement.

A Guide to Borrowing Money From Friends and Family
How to handle that awkward conversation.

Your house isn’t a piggy bank

Your home equity could keep you afloat in retirement or bail you out in an emergency — but not if you spend it first.

U.S. homeowners are sitting on nearly $6 trillion of home value they could tap as of May 2018, according to data provider Black Knight. Lenders are eager to help many do just that through home equity loans, home equity lines of credit and cash-out refinancing.

The rates are often lower than other kinds of borrowing, and the interest may still be deductible, despite last year’s tax reform changes. But you can lose your home to foreclosure if you can’t pay back the loan, which is why financial planners generally frown on using equity for luxuries, investing or consolidating credit card debt.

Many planners point to the foreclosure crisis that started a decade ago as an example of what can go wrong when people binge on home equity debt.

In my latest for the Associated Press, why it’s dangerous to treat your house like a piggy bank.

Monday’s need-to-know money news

Today’s top story: 9 expenses to pack in your moving budget. Also in the news: How to stretch summer job money, retaking control over car payments, and when it pays to buy a one-way plane ticket.

9 Expenses to Pack in Your Moving Budget
Leave some wiggle room.

How to Stretch Summer Job Money
Invest in your future.

Car Payments Out of Control? Retake the Wheel
Get back in the driver’s seat.

When It Pays to Buy a One-Way Plane Ticket
One=way premiums are disappearing.

Q&A: Death means capital gains take a holiday for heirs selling a house

Dear Liz: I am in my mid-80s and in declining health. I want to advise my beneficiaries about possible taxation on the sale of my home after I expire. I bought the place in 1995 for $152,000. It now has a market value of about $400,000. The issue is whether that gain is taxable upon the sale after my death. I also have a $57,000 long-term capital loss carry-forward in my income taxes, which is being written off at a rate of $3,000 each year.

Answer: The gain in your home’s value won’t be taxable at your death. Instead, the home will get what’s known as a “step up in basis.” That means its new value for tax purposes will be its market value when you die. So if it’s worth $400,000 when you die and your heirs sell it for $400,000, no capital gains taxes will be owed on the sale.

The news isn’t so good for your capital loss, however. Any unused carryover expires at your death and can’t be transferred to your estate.

As you know, capital losses — losses on investments or assets that you sell — can be used to offset capital gains and reduce your tax bill. If your losses exceed your gains, you can offset up to $3,000 of ordinary income each year. Any capital loss remaining after that can be used the next year in the same way: first to offset capital gains, then to offset up to $3,000 of ordinary income.

Often when taxpayers have such a loss, they’re encouraged to sell investments that have increased in value to help use up the loss faster, but you should talk to your tax pro and estate planning attorney to see if that makes sense in your case.

Q&A: Auto dealers must abide by credit check limits

Dear Liz: I have loans and have paid my credit cards in full for over 30 years. My FICO score is 829. I don’t really care as I don’t plan to borrow in the future. I check my score and reports occasionally to check for a possible error or scam. Other than this, is there any reason at all that I should care?

I did notice a car dealership checked my score when recently I submitted a down payment check to order a car for which I would pay in full. I don’t believe they would refuse to sell me the car for cash if I had a lousy credit score, so they probably wanted some measure of reassurance about whether I have a lifestyle that could afford completing the deal.

Answer: You have many FICO scores, not just one, but if any one of them is 829, then the rest of them are probably pretty good, too.

Credit scores are used for more than borrowing decisions. In most states (but not California), insurance companies can use credit information to set premiums. Cellphone companies, landlords and utilities use them as well.

Car dealerships, however, aren’t supposed to pull your credit scores without your permission. That’s a violation of the federal Fair Credit Reporting Act.

If the dealership got your permission by telling you a credit check was necessary for a down payment (or an all-cash deal, for that matter), then it misled you.

To prevent money laundering, dealerships are required to ask for identification and a Social Security or Tax ID number from buyers who are purchasing a car for more than $10,000 in cash. That’s it.

But some dealers pretend the anti-terrorism Patriot Act requires them to check your credit when you pay cash, which is nonsense. Typically, dealerships run credit checks to see if they can make an extra buck by financing the deal. Those checks are coded as hard inquiries that can damage people’s credit scores. (That’s in contrast to what happens when you check your own credit, which creates “soft” inquiries that don’t affect scores.)

Your scores are high, so the credit check probably didn’t ding them much. But the dealership was accessing information about you that it didn’t need to have. Plus, the more outfits that have your credit information, the greater your risk of identity theft.

If you didn’t give your OK, you could file a Fair Credit Reporting Act lawsuit to collect up to $1,000 from the dealership. If you did give your permission, strongly consider withholding it the next time if you’re not interested in financing your vehicle.

Friday’s need-to-know money news

Today’s top story: How couples with kids retired early. Also in the news: 5 credit card tips to take to college and beyond, how a self-taught baker became a rising entrepreneur, and what not to do when hiring a lawyer.

How They Retired Decades Early — With Kids
How two families pulled it off.

5 Credit Card Habits to Take to College and Beyond
Track your spending.

How a Self-Taught Baker Became a Rising Entrepreneur
Feel inspired.

What Not to Do When Hiring a Lawyer
Save on fees when avoiding these mistakes.

Thursday’s need-to-know money news

Today’s top story: Summer is the perfect time for a financial checkup. Also in the news: Why your parents’ money guru may not be right for you, how to get ready for the next recession now, and what you don’t know – but should know – about how your financial advisor is paid.

Summer Is the Perfect Time for a Financial Checkup
A great time to get back on track.

Your Parents’ Money Guru May Not Be Right for You
Your goals may be different.

How to Get Ready for the Next Recession Now
Preparing for the worst.

What you don’t know – but should – about how your financial advisor is paid
Beware of conflicts of interest.

Wednesday’s need-to-know money news

Today’s top story: Home loans with 3% down. Also in the news: How one man paid off nearly $100K in debt, a travel rewards bucket list, and the possibilities of postal banking.

HomeReady and Home Possible: Loans With 3% Down for 2018
You’ll need a good credit score.

How I Ditched Debt: Smart Solutions for ‘Stupidest Decision’
How one man paid off nearly $100K in five years.

Travel Rewards Bucket List: Showering on a Plane
Hope the water pressure is good.

What Is Postal Banking?
New legislation could add banking services to your local post office.

Tuesday’s need-to-know money news

Today’s top story: Zap the fees that eat away at your wealth. Also in the news: Back-to-school sales for adults, the average retirement savings by age, and how to get free financial advice.

Zap the Fees That Eat Away at Your Wealth
Americans pay close to $400,000 in fees over their lifetime.

You’re Never Too Old for a Good Back-to-School Sale
Stock up on clothes and accessories.

The Average Retirement Savings by Age and Why You Need More
You can never have enough savings for retirement.

How to Get Free Financial Advice
It’s readily available.