Today’s top story: How to discover what personal finance nerds know. Also in the news: How to get a judgment off of your credit report, the high cost of college tuition convenience fees, and what’s really behind all of your financial fears.
10 Things Only Personal Finance Nerds Would Understand
We could all stand to be a little nerdy when it comes to personal finance.
How to Get a Judgment off Your Credit Report
Difficult but not impossible.
Is Convenience When Paying Your Tuition Worth a 2.62% Fee?
Not when it could add up to over $1000 a year.
Common Money Fears and How to Get Over Them
What’s really behind those nagging financial fears?
Five apps to help you organize your personal finances
Something to do on your phone that isn’t Candy Crush.
Dear Liz: My husband returned a car to the dealer when he lost his job. Now the company says he owes it more than $7,000 (the difference between what he owed to the dealer and the price for which the car was sold). He refuses to pay any amount, but recently he received a letter from a law office demanding payment or they will take him to court. Is he obliged to pay this money? What options does he have to get rid of this debt?
Answer: A debt doesn’t disappear simply because someone decides not to pay it.
Your husband signed loan paperwork to buy the car, and this paperwork obligated him to repay a certain amount. Voluntarily surrendering the car didn’t change his obligation. Also, the surrender probably is being reported to the credit bureaus as a repossession, which is a big negative mark on his credit reports. Some people mistakenly believe that a voluntary surrender avoids credit damage. Typically, it does not.
Your husband could make matters worse if he continues his stubbornness. The law firm can take the collection to court, where it’s likely to win. That will add a judgment to your husband’s credit files and cause further damage to his scores. His wages could be garnished to pay the debt.
Your husband may be able to settle this debt for less than he owes, especially if he can offer a substantial lump sum, but negotiations with a collector can be tricky. He may want to consult an attorney for help or at least arm himself with more knowledge about what to do from sites such as DebtCollectionAnswers.com.
If this is just one of a number of unpaid bills, though, you both may benefit from talking to a bankruptcy attorney about your options.
In the future, keep this experience in mind when you go to buy another car. Making at least a 20% down payment and limiting the loan term to four years or less will help ensure that you’re never “upside down” like this again.
Dear Liz: I have a 401(k) that has a required annual distribution because I am over 71 1/2 years old. Can I use this distribution as qualified income to invest in a Roth IRA? I have no W-2 earnings, although I do have other income sources that are reported on 1099 forms.
Answer: To contribute to a Roth or other individual retirement account, you must have taxable compensation, which the IRS defines as wages, salaries, commissions, tips, bonuses or net income from self-employment. The IRS also includes taxable alimony and separate maintenance payments as compensation for IRA purposes.
So if the money reported on one of those 1099 forms is from self-employment income, then you can contribute to a Roth IRA. If the form is reporting interest and dividends or other income that doesn’t meet the IRS definition of taxable compensation, then you’re out of luck.
If you don’t have income that meets the IRS definition of taxable compensation, but your spouse does, you may still qualify for IRA contributions, provided you file a joint return that meets the required income thresholds.
Today’s top story: How your kids can hurt your credit. Also in the news: How to find the best financing when purchasing a new car, why baby boomers need help paying down their debt, and five banking fees that are actually worth paying.
5 Ways Your Kid Can Hurt Your Credit
Intentionally and unintentionally.
Need a New Car? Here’s How to Find the Best Financing Deal
Don’t forget to skip the “undercarriage package.”
Boomer Retirees Need a Hand Paying Down Debt
How to prioritize payments while saving for retirement.
5 Banking Fees That Are Actually Worth Paying
Some fees have long-term benefits.
How to Prepare for a Mini-Retirement
Making the big retirement picture seem less far away.
Today’s top story: AT&T agrees to pay customers over a hundred million dollars to settle claims of false charges. Also in the news: Why you should check your bills for mistakes, mortgage mythbusting, and why it may not be the right time to buy a new home.
AT&T May Owe You a Refund for Bogus Charges
The company will pay out over $100,000,000 to settle claims.
How Often Do You Check Your Bills for Irregularities?
Odds are not nearly enough.
5 Mortgage Myths Dispelled
5 Reasons You May Not Be Able To Afford A New House
Every day choices that could keep holding you back.
Can You Go Solar? Leases, Loans Make It Possible
Your electrical costs could take a nosedive.
Today’s top story: How to build credit faster. Also in the news: Debunking financial planning misconceptions, the dangers of overdraft fees, and why too many people are underestimating post-retirement health care costs.
Will More Credit Cards Help Me Build Credit Faster?
Proceed with caution.
6 Financial Planning Misconceptions — Debunked
Everyone can use a little help.
How to Avoid Paying Your Bank $70 to Borrow $6 for 6 Days
The perils of overdrafts.
Too Many Underestimate Healthcare Costs In Retirement
Planning ahead realistically is crucial.
When To Declare Bankruptcy
When to make one of life’s most difficult decisions.
Getting into an Ivy League school is basically a lottery for smart kids. There are no guarantees. Winning admission at many highly-regarded public universities is easier, but only by comparison. UCLA accepts about a quarter of its applicants, instead of the single digit acceptance rate at Harvard or Yale.
Look outside that privileged circle of “name brand,” well-known schools, though, and it’s a whole different universe. Most colleges are worried about getting enough students to enroll, not about how many they can turn away. The competition is particularly tough for small- to medium-sized private colleges that don’t have fat endowments. You can read “College is a now a buyer’s market,” my Reuters column this week, for more.
Here’s another fact you may have missed when reading breathless media accounts of “how hard it is to get into college”: where you go matters a lot less than your experience while you’re there. Elite schools apparently offer no advantage it comes to success in life.
I attended a small private college in the Pacific Northwest: Pacific Lutheran University. My alma mater recently named me one of its distinguished alumni. I was honored to be part of this impressive group, which included best-selling author Marissa Meyer and Air Force flight nurse/helicopter pilot Ed Hrivnak, who wrote the book “Wounded” about his experiences in Iraq and who was one of the first responders to the Oso landslide disaster in Washington state.
Research indicates a good reason for our success after school was the relationships we had with our professors. They weren’t far away creatures at the bottom of some cavernous lecture hall. They were accessible, they taught in small classrooms and they cared about our progress.
It’s only in the past few years that I’ve fully appreciated my college experience. For years I wondered if I should have attended a name-brand school. (I was accepted as a transfer student to Stanford, but opted not to go, since the financial aid office offered loans rather than the scholarships and grants I got at PLU.) Now I’m really glad I studied where I did.
So my advice to families contemplating college: open your eyes, and look beyond the name brands. There are some real gems out there that will be happy to have your kids and that will give them what they need to succeed.
Today’s top story: Look out for the latest IRS phone call scam. Also in the news: How social spending could be ruining your budget, why millennials should be pressing credit instead of debit, and how to extend the life of your child’s inherited IRA.
Don’t Fall for the ‘Steve Martin’ IRS Phone Call Scam
Watch out for this wild and crazy scam.
Fun And Finances: Is Social Spending Sabotaging Your Budget?
Putting your own financial well being first.
Pssst, Millennials! When You Pay, Choose Credit, Not Debit
How you could be losing out on interest.
Extend the life of your children’s inherited IRAs
Big changes could be in store for 2015.
Use Your Phone as a Piggy Bank: The 10 Best Personal Finance Apps
Putting that shiny new toy to good use.