Get smart with your money
Today’s top story: Overcoming your fear of your college debt. Also in the news: 3 simple ways to boost your savings, tools and tactics to do your own financial planning, and overcoming your financial fears.
Are You Afraid of Your College Debt?
Start by knowing where you stand.
3 Simple Ways to Boost Your Savings
Easy peasy.
Tools and Tactics to Do Your Own Financial Planning
Tackling it on your own.
Things people seem to fear financially are not always worth worrying about
You can relax.
Dear Liz: When my husband’s brother passed away last year, he left a sizable estate to his second wife of five years (the mother of his children died 10 years ago). He left nothing to his two adult sons or young grandchildren. But the most troubling part was that he left no provision for his 29-year-old daughter who has disabilities and was still living in her childhood home.
Within months, the wife demanded that this young woman leave the property. The stepmother’s comment was, “Not my child, not my problem.”
We helped our niece move to our home and apply for Social Security disability and Medicare. She now is able to see doctors about her condition. She couldn’t remember the last time she had seen a doctor, which was probably in her teens when her mother was still alive.
A wheelchair has been ordered that will enable her to go out. She has a bank account and had to be taught how to use a credit card at the store and ATM. She started classes in early September to get her high school diploma. Her brothers are stunned that she is able to do all of these things.
I am thrilled for her and the progress she’s making, but I am furious with my late brother-in-law and the attorneys who completed his will. The attorneys were aware of this young woman and her needs, yet did not counsel her father to make provisions for her.
Answer: Your fury is understandable, but it’s not a given your brother-in-law got bad advice. It could well be that the attorneys counseled him about his options for caring for his special-needs daughter, and he simply ignored them. Given his long history of ignoring his daughter and her needs, that wouldn’t be surprising.
Dear Liz: About two years ago, I lost my timeshare because of financial hardship. I paid off the mortgage but after my divorce I missed paying the annual fees. Is there any way I can regain it, or can the company just take it like they did? Also, is it worth it to try to get it back? I think so because it is the only thing I own.
Answer: Please consider investing your money in an asset that can gain value over time. Timeshares don’t.
Timeshares give you the right to use a vacation property for one week each year. They aren’t an investment. In most cases, timeshare owners are lucky to get 10 cents on the dollar when they try to sell their interests.
Sites such as Timeshare Users Group and RedWeek are filled with ads from people trying to sell their timeshares for $1, and some will even pay others to take timeshares off their hands, perhaps by prepaying a year or two of maintenance fees. Those fees average about $900 a year but can top $3,000 on high-end properties. Resorts damaged by natural disasters or older properties that are being improved also may charge “special assessments” that can be hundreds or thousands of dollars more.
As you discovered, timeshare resorts can take back your interest if you don’t keep up with those fees. You also could have lost your timeshare if you hadn’t been able to pay the mortgage. (In general, it’s not a good idea to borrow money to pay for vacations or other luxuries, and that includes timeshares. The high interest rates charged by most timeshare resort developers make borrowing an even worse idea.)
In addition to taking your timeshare, the developers may have sold your delinquent account to a collection agency that reports to the credit bureaus. Those collections could damage your credit scores.
You could ask the resort developer if you can get the timeshare back, but you could just face the same problem again down the road. One of the biggest problems with timeshares is that there typically is no easy exit. Those annual fees and special assessments are due as long as you own the timeshare. You may not be able to find a buyer if money is tight or you’re no longer able to use it.
If you really loved vacationing at that particular resort, you probably still can. Owners who can’t use or trade their timeshare weeks often rent them out on the sites mentioned above, sometimes for less than the annual maintenance fee. Renting could be a much better deal than tying yourself to a timeshare that could become unaffordable.
Today’s top story: How to save money on health care. Also in the news: How to work from anywhere like a boss, one person’s homebuying journey in Seattle, and why employers check your credit report.
How to Save Money on Health Care
The three questions you need to ask.
How to Work From Anywhere Like a Boss
Reliable wifi is key.
How I Bought a Home in Seattle
One person’s homebuying journey.
Why Employers Check Your Credit Report
Lookimg for financial distress markers.
Today’s top story: Using your employer as a payday lender. Also in the news: One woman’s debt diary, how to get online coupons, and 10 things not to do if you win a billion dollars.
Short on Cash? Use Your Employer as a ‘Payday Lender’
A much lower interest rate.
Debt Diary: Feeling ‘Stretched Thin’ on Over $85,000
Curbing expenses.
Sign Up and Save: How to Get an Online Coupon
Never pay full price online.
10 things NOT to do if you win a billion dollars
Advice for South Carolina’s newest billionaire.
Today’s top story: Should you pay off your mortgage before you retire? Also in the news: New UltraFICO score could boost credit access for consumers, a cheapskate’s guide to shopping for credit cards, and 7 year-end tax planning strategies for small business owners.
Should You Pay Off Your Mortgage Before You Retire?
Or is it better to wait?
New UltraFICO Score Could Boost Credit Access for Consumers
Big changes are coming.
A Cheapskate’s Guide to Shopping for Credit Cards
Finding a card to match your careful spending.
7 year-end tax planning strategies for small business owners
Tax season is right around the corner.
Americans on average spend more on health care than they do on groceries, according to the Bureau of Labor Statistics’ latest Consumer Expenditure Survey. Saving money on medical care is a lot tougher than saving money on food, however. Two big culprits: opaque pricing and ever-changing insurance company rules about what’s covered and what’s not.
For help in cutting costs, I turned to a uniquely qualified individual: Carolyn McClanahan, an emergency room doctor turned certified financial planner. McClanahan, director of financial planning at Life Planning Partners in Jacksonville, Florida, frequently speaks at industry conferences, teaching other advisors how to help their clients best navigate the health care system.
In my latest for the Associated Press, the three questions everyone should ask to save money on health care.
Today’s top story: How today’s low taxes can nurture your nest egg. Also in the news: 4 questions to ask before you DIY, how a single mom masterminded a $700K swing from debt to savings, and how the new UltraFICO credit score will work.
How Today’s Low Taxes Can Nurture Your Nest Egg
New tax laws present a golden opportunity.
4 Questions to Ask Before You DIY
Doing it yourself could end up costing more.
Single Mom Masterminds $700K Swing From Debt to Savings
Learn how she did it.
Here’s How the New UltraFICO Credit Score Will Work
FICO scores are in for a big change.
Dear Liz: You recently answered a question about whether someone 65 or older with employer-provided health insurance needs to sign up for Medicare Part B, which covers doctors’ visits and requires paying premiums. Your answer was correct for an employee of a large employer. If the employer has 20 or more employees on a typical business day, then the group insurance coverage is primary when the employee has both Medicare and group insurance. So the employee does not need to purchase Medicare Part B. However, if the employer has fewer than 20 employees on a typical business day, then Medicare is primary for the employee. In that situation, the employee should buy Medicare Part B. The group health plan will not pay what Medicare should have paid had the employee elected Part B. Your answer needs the appropriate clarification.
Answer: The question was from a spouse who wanted to make sure that the rules covering her husband — the employee — also applied to her, which they do. The employee was told by his employer that he would not need to purchase Medicare Part B until he retired (and even then, there is an eight-month grace period before penalties start to accrue). That applies to spouses covered by the health insurance as well.
But you’re correct that smaller companies have different rules. It’s always a smart idea to seek clarification directly from a company’s human resources department and the health insurer as well as from the Medicare helpline at (800) MEDICARE ([800] 633-4227).
Dear Liz: I have a question about my late husband’s pension. He was with a company for 25 years and retired early with a defined benefit pension of about $3,700 per month. When he died four years ago, the pension stopped. The company said it was a “single life” pension, but when I tried to get records proving that, they said they had no records. Do you think I have any recourse to petition for some kind of pension? Should I find a lawyer and if so, what kind of lawyer handles this type of thing?
Answer: Traditional pensions typically give workers two options: a single life annuity, whose payments are higher but cease when the recipient dies, or a joint-and-survivor annuity that continues for a surviving spouse’s lifetime. When someone is married, the default option is supposed to be the joint-and-survivor annuity unless the spouse signs a waiver giving up rights to lifetime income. If the company can’t or won’t provide proof of such a waiver, then you’d be smart to get legal help to pursue the issue.
You may be able to get free legal assistance through the U.S. Administration on Aging’s Pension Counseling and Information Program, which currently serves 30 states. If you live in one of the states that isn’t served, you may be able to get help by visiting PensionHelp America, a site run by the nonprofit Pension Rights Center.