Wednesday’s need-to-know money news

Today’s top story: The student loan tip that saves you money year after year. Also in the news: Overlooked small business tax deductions, when you need a cashier’s check and how to get one, and why Americans are drastically under-saved for retirement.

This Student Loan Tip Saves You Money Year After Year
It’s all about auto-pay.

5 Overlooked Small-Business Tax Deductions for 2017
Don’t forget these deductions.

Cashier’s Check: When You Need One and How to Get It
Another form of payment.

It’s worse than you thought: Americans are drastically under-saved for retirement
Are you one of them?

Q&A:Prenup may help with student loan issue

Dear Liz: You recently heard from someone who discovered after marriage that his wife had more than $100,000 in student loans. Would having a prenuptial agreement help in this situation?

Answer: Possibly. Debts incurred before marriage are considered separate rather than joint debts, but creditors still sometimes try to go after joint assets to get paid. A prenuptial agreement, which is a written contract created before marriage, could help a couple limit liability for each other’s debts.

In this case, the husband was willing to help his wife resolve the debts, but knowing about them before marriage would have been helpful — to put it mildly. The loans probably would have turned up during the financial disclosures required when drafting a prenuptial agreement. Even couples who won’t consider a prenup should pull their credit reports together so each knows what he or she is getting into.

Wednesday’s need-to-know money news

Today’s top story: What to do when you haven’t received your W-2s. Also in the news: When you should use your emergency fund, how overborrowing can add over $100 a month to your student loan payment, and how a millennial couple paid off $20,000 in debt in two years.

Haven’t Gotten Your W-2? Take These Steps
Getting your tax docs in order.

When You Should Use Your Financial Emergency Fund
Determining true emergencies.

Overborrowing Could Add $119 to a Typical Monthly Student Loan Payment
Only borrow what you truly need.

How This Millennial Couple Paid Off $20,000 in 2 Years
Sticking to a plan.

Friday’s need-to-know money news

Today’s top story: NerdWallet Survey: Nearly half of Americans emotionally overspend. Also in the news: RushCard holders are in for a $10 million payout, the best way to make extra money, and why some are worried student loan robocalls could increase under Trump.

NerdWallet Survey: Nearly Half of Americans Emotionally Overspend
Are you one of them?

RushCard Holder? You Might Get Slice of $10 Million Payout
Settlement for 2015 system breakdown.

Ask Brianna: What’s the Best Way to Make Extra Money?
Searching for side gigs.

Why some are worried student loan borrowers may get a flood of robocalls under Trump
Loan companies could lose their limits.

Tuesday’s need-to-know money news

Today’s top story: 2017 Tax Checklist. Also in the news: How home insurance defends your Super Bowl party mishaps, how using TurboTax could help with your student loans, and new apps to bolster your personal finances.

Super Bowl Party Fouls: How Home Insurance Defends Your Turf
Making sure your party mishaps are covered.

How Using TurboTax Could Help With Your Student Loans
Looking into refinancing options.

2017 Tax Checklist: What to Gather Before Filing
Get your paperwork in order.

Online DIY options to bolster your personal finances
Apps to help you get organized.

Friday’s need-to-know money news

Today’s top story: IRS changes you should know about before filing taxes. Also in the news: How to avoid your parents’ money mistakes, how to avoid tax scammers, and what to do when you’re struggling with student debt.

IRS Changes You Should Know About Before Filing Your Taxes
New rules for the new year.

How Can I Avoid My Parents’ Money Mistakes?
Charting your own financial path.

As Tax Season Approaches, So Do Scammers
Be on the lookout.

Struggling with student debt? Here are 6 things you should know
Don’t ignore the problem.

Navient student loan lawsuit

Federal regulators just smacked the student loan servicer formerly known as Sallie Mae with a lawsuit accusing it of all kinds of bad behavior. This is a big deal, since the company, now called Navient, handles billions of dollars of loan payments for about one out of four borrowers. The New York Times said the accusations were “eerily similar” to the systematic failures during the foreclosure process.

Read on to find out more about the lawsuit and what to do if you’re struggling with education debt:

Feds Sue Student Loan Giant Navient: What Borrowers Need to Know

Q&A: When a new spouse brings surprise debt to the marriage

Dear Liz: I’m 58 and got married for the first time almost two years ago. I discovered my wife has several incredibly large outstanding student loans, including a parent Plus loan for her son’s education that she thought was in deferment and that has nearly doubled to well over $100,000. In addition, my wife has her own student loans, which total over $40,000 and have rates from 3% to nearly 7%. Needless to say, I was shocked and dismayed to discover this debt and wish she had shared it with me earlier.

We have looked into consolidating the loans into the U.S. Department of Education’s student debt relief program, which creates a monthly payment program based on income and forgives the remaining balance after 25 years. I’m uncomfortable with this plan. The long duration of monthly payments would be a big struggle and, after 25 years, we would have paid nearly $40,000 over the current principal even with the outstanding balance being forgiven.

I’m contemplating liquidating all my non-retirement accounts and half of our savings to pay off the larger parent PLUS loan.This would leave us with very little liquid reserve but still some substantial retirement accounts. Our combined income is around $75,000. We would then consolidate my wife’s lower-rate debt and try to take a personal loan out to pay off the higher rate loans if we can secure a lower rate. Do you have any other suggestions as to my options?

Answer: Your situation is a perfect example of why couples should review each other’s credit reports before marriage. At the very least, you could have figured out a plan to deal with the debt at least two years earlier and saved the interest that’s accrued since then.

As you probably know, your wife is stuck with this debt. The government can pursue her to her grave because there’s no statute of limitations on federal student loan debt collections. The government also can take part of her Social Security retirement or disability checks, something collectors of other kinds of debt can’t do. Even bankruptcy isn’t a viable option for most borrowers because student loan debt is extremely hard to get erased.

It’s understandable that you don’t want to be making student loan payments into your 80s, but paying the loans off much faster probably isn’t a reasonable option, given your income. So liquidating other assets to pay off the parent loan may be the best option. The wisdom of this approach, however, depends on how well you’ve saved for retirement, your job security and how much of an emergency fund would remain. If you lost your job after paying off the parent loan, you couldn’t get that money back to pay your expenses. By contrast, you could have your payment lowered under the Department of Education’s plan if you lost a source of income.

Consolidating your wife’s debt inside the federal student loan program would allow her to retain some important consumer protections that aren’t available with other debt, such as the ability to defer payments for up to three years if she faces an economic setback. If you do refinance your wife’s debt with private lenders to lower the rate, consider doing so with a private student loan rather than a personal loan if you want to retain the ability to write off the interest.

This is a complex decision with a lot of moving parts, so you’d be smart to discuss your plan with a fee-only financial planner before deciding what to do.

Wednesday’s need-to-know money news

stack-of-billsToday’s top story: Trump’s student loan repayment play vs. Obama’s REPAYE. Also in the news: What to do if you’re rejected for a checking account, how divorce can affect your credit score, and how easing your financial stress could help you live longer.

Trump’s Student Loan Repayment Plan vs. Obama’s REPAYE
Understanding the differences.

Can’t Get a Checking Account? Don’t Give Up, Get Moving
Doing the repair work.

3 Ways Divorce Can Affect Your Credit Score
Be prepared.

Don’t Let Money Worries Shorten Your Life
Easing your financial stress could help you live longer.

Tuesday’s need-to-know money news

financial-toolboxToday’s top story: 7 ways to improve your finances in 2017. Also in the news: How to help your kid graduate from college debt-free, how rising home values can boost your mortgage refinance, and why Americans are blowing it when it comes to personal finance.

7 Ways to Improve Your Finances in 2017
Making the most of the new year.

Help Your Kid Graduate From College Debt-Free
The greatest graduation gift of them all.

Rising Home Values Can Boost Your Mortgage Refinance
You could be able to tap your home equity.

Americans are blowing it on personal finance
Making financial literacy one of your goals.