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Liz Weston

Friday’s need-to-know money news

June 1, 2018 By Liz Weston

Today’s top story: Here’s how Millennials can buy retirement income. Also in the news: How to hack your employee health benefits, simplifying the complex rules for flying with pets, and what President Trump’s banking deregulations mean for you.

Here’s How Millennials Can Buy Retirement Income
Introducing personal pensions.

How to Hack Your Employee Health Benefits
Getting the most from what your company offers.

3 C’s Simplify Complex Rules for Flying With Pets

What Trump’s Banking Deregulations Mean for You
What this means for your wallet.

Filed Under: Liz's Blog Tagged With: banking deregulations, Employee health benefits, millennials, personal pension, Retirement, traveling with pets

How to hack your employee health benefits

June 1, 2018 By Liz Weston

Employee health benefits can have huge value, but you may not be taking full advantage of yours. In my latest for the Associated Press, three hacks that can help you get more of what your company offers.

Filed Under: Liz's Blog Tagged With: Employee health benefits, hacks, tips

Thursday’s need-to-know money news

May 31, 2018 By Liz Weston

Today’s top story: How to snag credit card rewards flights in peak season. Also in the news: Panic-proofing your portfolio for the next bank crisis, how to land the best airfare, and the pros and cons of a debit rewards card.

How to Snag Credit Card Rewards Flights in Peak Season
Don’t be held back by blackout dates.

Panic-Proof Your Portfolio for the Next Bank Crisis
Protecting your portfolio from the unexpected.

Landing the Best Airfare Is a Matter of Timing
How to beat the clock.

Should You Use a Debit Rewards Card?
The benefits and drawbacks.

Filed Under: Liz's Blog Tagged With: bank crisis, credit card rewards, debit rewards card, travel rewards. portfolio

Wednesday’s need-to-know money news

May 30, 2018 By Liz Weston

Today’s top story: Why new grads shouldn’t snooze and lose on their employer’s 401(k). Also in the news: Ditching debt by working side gigs, how to decide if that life insurance rider is worth it, and how freelancers can save for retirement beyond an IRA.

New Grads, Don’t Snooze and Lose on Your Employer’s 401(k)
One of the biggest steps you’ll take in your new financial life.

How I Ditched Debt: Paying With Cash, Working Side Gigs
One man’s experience paying down his debt.

How to Decide If That Life Insurance Rider Is Worth It
A look at the extra benefits.

How Freelancers Can Save for Retirement Beyond an IRA
Other options to consider.

Filed Under: Liz's Blog Tagged With: 401(k), college graduates, debt, freelancers, life insurance, life insurance riders, Retirement, retirement savings, side gigs

Tuesday’s need-to-know money news

May 29, 2018 By Liz Weston

Today’s top story: How to save money by thinking like a college student. Also in the news: What an average retirement costs, how soon should you worry about your credit, and how to budget for your kids’ summer vacation.

Save Money by Thinking Like a College Student
You can skip the ramen.

Let’s Get Real: What an Average Retirement Costs
Breaking down the numbers.

Ask Brianna: I’m 18. Should I Worry About My Credit Yet?
It’s never too soon.

How to Budget for Your Kids’ Summer Vacation
Summer can get very pricey.

Filed Under: Liz's Blog Tagged With: Credit, Credit Score, Retirement, saving money, summer vacation budget, tips

Q&A: When buying a car, be strategic with your money. Here’s how

May 29, 2018 By Liz Weston

Dear Liz: My son, 27, has a 2009 car that needs a new engine and is not running. The engine would cost $6,100 to replace, which is money he doesn’t have. He owes $10,000 on his car loan at 6% interest. The car would be worth only about $4,500 if it were running.

Should he sell the car to a junkyard for $200? Should he refinance the car loan for the remaining months he’ll make payments and also try to get the interest rate reduced?

He also wants to buy a 2016 car for around $18,900. He needs the car to get to work every day. Should he buy this car and have two car loans? Or should he look for an older car for now, until he gets the “upside-down” loan paid off?

Answer: It’s unfortunate that your son’s response to overspending on one car is to overspend on a replacement.

Let’s go over some basics of smart vehicle ownership. In general, we should avoid borrowing money to pay for assets that lose value — and a car is pretty much the definition of an asset that loses value. New cars depreciate by about 20% as soon as you drive them off the lot and lose roughly half their value in the first three years. The vast majority continue losing value until they’re sold for scrap. Only a handful of classic cars ever appreciate.

That means paying cash for cars is usually the smart move. Since most people can’t swing that, at least at first, the next best policy is to make large enough down payments so the cars we buy aren’t upside down, or worth less than what we owe.

When people are upside down on vehicles, the best practice is typically to “drive out” of their loans. That means continuing to make payments until they own the cars free and clear. Ideally, they would then keep the cars until they’ve saved enough to make substantial down payments on the replacement vehicles or buy a replacement outright.

Pouring more money into this particular car probably doesn’t make much sense. Your son probably won’t be able to refinance, since he has no equity in the vehicle. He might be able to roll the negative equity into a loan on a new car, but that would leave him in an even worse financial position: more deeply upside down and probably paying a higher interest rate.

Your son should consider getting a personal loan, perhaps from a credit union, to pay off the balance. Instead of spending nearly $20,000 on a 2-year-old replacement, he should aim to spend $3,000 to $5,000 on a good, reliable older car. If he can pay cash, great. If not, he should work to get both loans paid off as quickly as possible and start saving for the next car.

Filed Under: Credit & Debt, Q&A Tagged With: auto loans, automobiles, autos, car shopping, q&a

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