Thursday’s need-to-know money news

imagesToday’s top story: The FAFSA changes students and their parents need to know about. Also in the news: Why you shouldn’t increase your spending when you have extra money, podcasts that will teach you about investing, and what your children should know about money at different stages of development.

The FAFSA Changes You Need to Know About
What students and parents need to know.

Don’t Increase Your Spending When You Have Extra Money
Don’t set yourself up.

9 Podcasts That Will Teach You About Investing
Learn about different approaches and strategies.

What your child should know about money by grade school, middle school and high school
Teaching the basics

Wednesday’s need-to-know money news

8.6.13.CheckupToday’s top story: How student loans can hurt your mortgage approval chances. Also in the news: How to keep your health care costs in check, why identity thieves love millennials, and easy retirement plans for the self-employed.

Can Student Loans Hurt Your Mortgage Approval?
Pay attention to your debt-to-income ratio.

7 Ways to Keep Your Health Care Costs in Check
How to rein in your medical spending.

ID thieves love millennials.
A social media created monster.

4 easy retirement plans for the self-employed
Don’t miss out on the tax benefits.

MasterCard tries out ‘selfie pay’ for online purchases
Civilization was fun while it lasted.

Tuesday’s need-to-know money news

shutterstock_62636899Today’s top story: Getting your credit ready for holiday shopping. Also in the news: Keeping your Social Security plan on track despite higher Medicare premiums, 3 points to add to your year-end financial checklist, and shopping tricks to make your budget last longer.

How to Get Your Credit Ready for Holiday Shopping
And make January bills a bit less painful.

Don’t let higher Medicare premiums derail your Social Security plan
Keeping your plan on track.

Add these 3 points to your year-end financial checklist
Three more to-dos.

Smart Shopping Tricks to Make Your Budget Last All Month
Stretching your dollar.

The 10 Best States To Enjoy An Early Retirement
Is your state one of them?

Q&A: Cosigning a loan

Dear Liz: Our son graduated from college last year and was recently hired as a permanent employee for a company he was contracted with for the past year. He wants to buy a new car but has limited credit history.

He has a credit card he has had since starting college. He uses it lightly and pays the balance off every month. If we are asked to cosign a loan, will paying for the car positively impact his credit scores?

Answer: Yes, an auto loan if paid on time should help his credit scores, but you shouldn’t cosign for it.

Many people who cosign loans somehow miss the important point that they are putting their good credit into someone else’s hands — and that one missed payment can trash that good credit, knocking 100 points or more from their scores.

Your son may be the most responsible 20-something on the planet, but he could still make a mistake. The only time that it makes sense to cosign a loan is when you are going to make all the payments on the debt.

He shouldn’t assume that his credit history is insufficient to get a loan. He can get his FICO scores, including the auto scores most often used by lenders, for about $20 apiece at He should then take those scores to his local credit union to see what interest rate he would be offered on a car loan.

If it turns out his credit isn’t quite up to snuff, the credit union may have some kind of “credit builder” personal loan that can help improve it. (Credit unions are owned by their members and tend to have better rates and terms than many other lenders.)

Since he hasn’t had an auto loan before, discuss with him how easy it is to overspend on a car when you aren’t paying cash.

The costs of insuring, maintaining and repairing a car, plus the depreciation, can be as much as the monthly payment. In other words, the vehicle is likely to cost him twice what he thinks it will.

Once he sees how much of his paycheck is eaten up by car costs, he might be willing to consider buying a used car instead of a new one or saving up to pay cash.

If he does go ahead, make sure he understands the dangers of being “upside down” on a loan. Owing more than a car is worth leaves you vulnerable if the car is stolen or totaled, since you won’t get enough from the insurer to pay off the loan.

You can buy extra coverage for the gap, but a better approach is to make a large down payment and limit the loan term to three or four years.

Q&A: Understanding pension vs Social Security

Dear Liz: I recently retired as a lifelong federal employee after 40 years of service. I participated under the old Civil Service Retirement System. My pension is about $85,000 per year. I will be 64 this year.

Twenty years ago, my ex-wife and I divorced after 17 years of marriage. Friends of mine have indicated that because we were married more than 10 years, I am eligible for a spousal Social Security benefit. I thought because I was covered under the CSRS, any Social Security received would be offset against the monthly pension payment.

I think this is due to the government pension offset, which has been in effect since 1983. My Social Security benefit would in effect be zero. Is my understanding accurate?

Answer: Yes. If you’re receiving a government pension based on work for which you didn’t pay Social Security taxes, then the pension offset typically reduces the amount of any so-called dependent benefits you might receive by two-thirds of the amount of that pension.

That reduction can wipe out any spousal or survivor benefit you might otherwise get.

Before the offset, people with government pensions that didn’t pay into Social Security could wind up better off than people who had paid into the system their entire working lives.
Those who paid into the system would get the larger of the checks to which they were entitled — either the dependent check or their own — while those who had pensions outside the Social Security system could get both their own benefit and dependent benefits.

There is a way you could have received a spousal benefit, and that’s if you had put off receiving your pension, said Laurence Kotlikoff, coauthor of “Get What’s Yours: The Secrets to Maxing Out Your Social Security.”

If putting off the pension would have increased the amount you received, it could have made sense to do so and take the spousal benefit in the meantime.

There are various other exceptions to these rules, so you should check out the government pension offset information available at the Social Security site,

Friday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: How to trick yourself into saving money. Also in the news: Retirement savings for Millennials, how to save $5 a day, and how to plan for retirement as a single person.

Financial Experts Reveal 7 Ways to Trick Yourself into Saving Money
You won’t even notice you’re doing it!

Millennial Investing: A Beginner’s Guide to Retirement Saving
You won’t be young forever.

15 Ways to Save $5 a Day
$5 a day adds up quickly.

How to Plan for Retirement as a Single Person
Preparing for the future.

Beware the “Coupon High” That Makes You Spend More
Just because you have a coupon doesn’t mean you have to use it.

Four ways to get a jump on tax season

bigstock-U-s-Income-Tax-Return-Form-28476797-e1390508229663Taxpayers face a cliffhanger again this year as Congress dithers about extending more than 50 expired tax breaks, including popular deductions for college tuition and fees, mortgage insurance and sales taxes.

As we wait for lawmakers to act, though, we still have time left in the year to make adjustments based on changes that have already happened. In my latest for Reuters, I share four ways to get a head start on tax season.

In my latest for Bankrate, how to find an honest financial advisor.

Thursday’s need-to-know money news

401k-planToday’s top story: How Generation X can get back on track for retirement. Also in the news: What financially successful people do differently, how to save on your next water heater, and why your daily routine could be costing you big bucks.

How Generation X Can Get Back on Track for Retirement
Before it’s too late.

12 Things Financially Successful People Do Differently
Never too late to start.

How to Save When You Buy Your Next Water Heater
Better for the environment and your wallet.

5 Habits That Are Costing You Big Money
What does your daily routine cost you?

8 Times When It’s OK to Ding Your Credit Score
But only 8!

Wednesday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: Financial steps to take after a natural disaster. Also in the news: Money fears and how to tackle them, excuses that are keeping you from financial success, and how umbrella coverage can supercharge your car insurance policy.

4 Financial Steps to Take After a Natural Disaster
Finding financial calm after the storm.

Top five money fears and how to tackle them
Taking them on, one fear at a time.

8 Excuses That Are Keeping You From Financial Success
Time to make a change.

How Umbrella Coverage Can Supercharge Your Car Insurance Policy
How to determine how much insurance you need.

How to Sell an Ugly House
Even without a fancy makeover.

Tuesday’s need-to-know money news

crop380w_istock_000009258023xsmall-dbet-ball-and-chainToday’s top story: How the new chip-based credit cards could accidentally hurt your credit. Also in the news: How to pay off lingering debt, which states have the best and worst financial habits, and why raiding your 401(k) is a mistake.

How Your New Credit Card Could Hurt Your Credit
Make sure you check your recurring charges.

A Simple Guide to Paying Off Lingering Debt
Slow and steady progress.

The states where people have the best and worst financial habits
How’s your state doing?

Why Raiding Your 401(k) Is a Mistake
The ultimate last resort.