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Liz Weston

Thursday’s need-to-know money news

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Today’s top story: 3 tasks for new retirees that will pay off later. Also in the news: Credit card interest vs. buy now, pay later, forget the fed, pay off your credit card debt, and cities where it’s cheaper to buy than rent.

3 Tasks for New Retirees That Will Pay Off Later
Taking care of one more to-do list early on can set you up for a better retirement.

Credit Card Interest vs. Buy Now, Pay Later: Which Is Better for My Budget?
Key differences, like how rates are calculated and how much debt you can take on, are crucial to consider when weighing each financing option.

Forget the Fed, Pay Off Your Credit Card Debt
Credit card debt is always expensive, no matter what interest rate changes the Federal Reserve makes.

It’s Cheaper to Buy a House Than Rent in These Cities
Purchase prices and rents are skyrocketing, but there are areas where homeownership isn’t entirely out of reach.

Wednesday’s need-to-know money news

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Today’s top story: Why many new cars are cheaper than used. Also in the news: Do this if you’ve already refinanced your student loans, how to find a COVID test to return to the United States, and how the student loan pause has played out for borrowers.

Why Many New Cars Are Cheaper Than Used
Due to the lack of new-car inventory, the average used car now costs more than a new one.

Do This if You’ve Already Refinanced Your Student Loans
Time to refinance again.

Ask a Travel Nerd: How Do I Find a COVID Test to Return to the U.S.?
You need a negative result within one day of your return flight to the U.S. Have a plan for getting tested.

How the Student Loan Pause Has Played Out for Borrowers
New data show many borrowers have used that extra room in the budget to shore up their overall finances.

Tuesday’s need-to-know money news

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Today’s top story: 3 ways to get money back when COVID ruins your vacation. Also in the news: 5 key numbers to know about savings accounts, a new episode of the SmartMoney podcast, and red flags to look out for from personal finance influencers.

3 Ways to Get Money Back When COVID Ruins Your Vacation
COVID-19 still has the potential to derail plans, but you can protect the value of your vacation with some options.

5 Key Numbers to Know About Savings Accounts
Knowing about account minimums, fees and rates can help you maximize your savings.

Smart Money Podcast: The Fed Interest Rate Hike, and What’s a Credit Card Authorized User?
Higher interest rates may affect your mortgage and credit card payments, as well as everyday finances.

17 Huge Red Flags From Personal Finance ‘Influencers’
There’s good advice out there, as long as you can tell the good financial influencers from the shady ones.

3 tasks for new retirees that will pay off later

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After a working lifetime of alarm clocks and meetings, you might be looking forward to a lot more unstructured time once you retire. But taking care of one more to-do list early on can set you up for a better retirement.

The following assumes you’ve already done some basic financial planning. Ideally, before you retire, you’ll create a budget, decide when to claim Social Security, settle on a sustainable withdrawal rate from your retirement funds and figure out how you’ll cover health care expenses. If any of those topics are still a mystery, consider talking to a fee-only financial advisor. If money’s tight, you may qualify for free or low cost consultations through the Foundation for Financial Planning, National Association of Personal Financial Advisors or the Association for Financial Counseling & Planning Education, among other organizations.

Even longtime do-it-yourselfers should consider getting expert retirement planning advice, says Catherine Azeles, a certified financial planner and investment consultant in Harrisburg, Pennsylvania. Although your days may be simpler without workplace demands, your finances often become more complex.

In my latest for the Associated Press, learn 3 tasks for new retirees that will pay off later.

Monday’s need-to-know money news

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Today’s top story: Why rising car prices make gap insurance worth a look. Also in the news: The fed interest rate hike, and what a credit card authorized user is, how to apply for a credit card, and how to handle a windfall.

Why Rising Car Prices Make Gap Insurance Worth a Look
If your car is totaled or stolen and you owe more than it’s worth, gap insurance can help pay the difference.

Smart Money Podcast: The Fed Interest Rate Hike, and What’s a Credit Card Authorized User?
Higher interest rates may affect your mortgage and credit card payments, as well as everyday finances.

How to Apply for a Credit Card: Questions You’ll Be Asked
Applying for a credit card isn’t hard, but it helps to know in advance what information you’ll need.

‘Where’d the Money Go?’ How to Handle a Windfall
A windfall can either be a lifeline to short-term financial relief or a stepping stone to long-term financial stability.

Q&A: The ins and outs of I-bonds

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Dear Liz: As you know, interest rates on certificates of deposit are extremely low. I was thinking of investing in government I-bonds. Can you discuss the pros and cons?

Answer: I-bonds are guaranteed by the U.S. government and currently pay an interest rate of 7.12%. But they do have some downsides.

The rate on Series I savings bonds is a composite of two rates: a fixed rate, which is currently zero, and an inflation rate, which changes every six months. The semiannual inflation rate is currently 3.56%, which translates into a 7.12% annual rate. This rate applies for I-bonds issued November 2021 through April 2022 and is good for the first six months you own the bond, according to Treasury Direct, the financial services site that allows you to buy securities including I-bonds directly from the U.S. government.

Although the rate can change, it can’t go below zero, so you can’t lose your principal. However, you also can’t cash in I-bonds for the first year, and if you cash them in before five years, you’ll lose the previous three months’ worth of interest.

Also, the bonds don’t pay interest to you directly. Every six months, the interest earned is added to the bond’s principal. That creates a new principal value, and interest is then earned on that value.

The bonds are exempt from state and local taxes but subject to federal taxes. You can opt to pay federal tax on the interest each year, but most people defer reporting the interest until they cash in the bond or it stops earning interest at 30 years, in which case it’s automatically cashed out and the interest reported to the IRS.

You can buy up to $10,000 in I-bonds electronically each calendar year. You can buy another $5,000 in paper bonds, but only if you use your tax refund to do so.