Holiday tipping: what you really need to know

Holiday tipsWriting about holiday tipping for MSN was always a bit fraught, mostly because a fair number of people every year seemed to think I invented the practice–and resented me deeply for it.

Here’s the scoop, per the Emily Post Institute: Holiday tipping exists. It’s a thing, in every region of the country. Who you tip and how much varies by your situation, your budget and where you live (“Tipping averages tend to be higher in big cities,” the Post Institute advises.)

In the Weston household, we tip the people who make our lives easier throughout the year who aren’t regularly tipped at the time of service. That includes newspaper deliverers (yes, we still have those), the mow-and-blow guys (called “gardeners” elsewhere), our house-sitter and our cleaning lady. The tips generally equal the cost of one week’s service, with something extra for the folks who have been with us a long time.

I’d feel pretty weird about not tipping them, to be honest. If I can afford to pay for their services throughout the year, I can certainly come up with a little “thank you” at year’s end.

If your budget really can’t accommodate cash tips, the Post Institute says it’s okay to substitute a handmade gift or (at the very least) a handwritten note of thanks. It’s all about taking a minute to say “I appreciate you.”

But nothing says that quite like cash.

 

 

 

Wednesday’s need-to-know money news

Today’s top story: Financial tips that should be ignored. Also in the news: Lessons from Millennials, questions to ask about your health-care costs during retirement, and learning the basics of the 401(k). Hope

5 Financial Tips That Can Lead You Astray
Tips that belong on the Do Not Follow list.

20 Lessons We Can Learn From 20-Year-Olds
From the mouths of Millennials.

4 Questions to Ask About Your Health-Care Costs in Retirement
What you must ask while planning your retirement.

401(k)s Made Easy: The 7 Things You Really Need to Know
401(k) basics explained.

It’s Time to Start Tracking Every Single Dollar You Spend
That dollar you used yesterday to buy a losing lottery ticket? Track it.

New giveaway: “Confessions of a Credit Junkie”

Confessions of a Credit Junkie High Res OriginalCongratulations to Kim from Davis, California, who won the copy of Mary Hunt’s “The Smart Woman’s Guide to Planning for Retirement” that I was giving away last week.

This week’s giveaway is Beverly Herzog’s “Confessions of a Credit Junkie.” Beverly made big mistakes with her credit, but was able to dig her way out. In the process, she became an expert on credit and credit cards. Whether you need inspiration for dealing with debt or just want some tips for getting the most out of your cards, Beverly’s book will be a big help.

To enter, leave a comment here on my blog (not my Facebook page).

Click on the tab above the post that says “comments.” Make sure to include your email address, which won’t show up with your comment, but I’ll be able to see it.

If you haven’t commented before, it may take a little while for your comment to show up since comments are moderated. But rest assured, it will.

The winners will be chosen at random Friday night. Over the weekend, please check your email (including your spam filter). If I don’t hear from a winner by noon Pacific time on Monday, his or her prize will be forfeited and I’ll pick another winner.

Also, check back here often for other giveaways.

The deadline to enter is midnight Pacific time on Friday. So–comment away!

Credit myths that need to die

YCS4 coverThe more you understand about how credit works, the more frustrated you get with how much misinformation is floating around out there. At least, that’s true for me and the three experts who joined me last week on a Google hangout to talk about “Credit myths that need to die.”

John Ulzheimer, who’s worked at Equifax and Fair Isaac, has unique insight into the credit reporting world. One thing that drives him around the bend is the persistent myth that employers use credit scores to evaluate applicants. Another myth he hates: the one about how closing accounts hurts your credit scores.

Gerri Detweiler, who writes for Credit.com and runs the DebtCollectionAnswers.com, discusses how medical debts affect your credits and debunks the myth that you need to carry balances to improve your credit scores.

Maxine Sweet heads consumer education at Experian and battles the myth that there’s just one credit score.

Take some time today to check out our discussion. You’ll come away from it a lot more informed about credit and how to make yours the best.

Tuesday’s need-to-know money news

Today’s top story: How to stop the barrage of credit card offers. Also in the news: How to lower your property tax bills, keeping your financial resolutions, and why playing a lottery that you’ll never, ever win could be a good thing. 3509554-lottery-ticket

How to Stop Getting Credit Card Offers in the Mail
Opting out of the onslaught.

How to Lower Your Property Taxes
Three steps to cutting your tax bill.

Three Ways to Keep Your Financial Resolutions in 2014
How not to break your resolutions by January 2nd.

Why Playing The Lottery Is A Good Investment
Yes, you read that correctly.

Rules to Follow When Giving Gifts in the Office
Navigating the dreaded gift swap.

Monday’s need-to-know money news

Today’s top story: Changes are coming to the 2014 mortgage market. Also in the news: The privacy of your credit score, financial predictions for 2014, and how to avoid charitable giving tax mishaps. credit

What You Need to Know About the 2014 Mortgage Market
Seven possible changes to next year’s mortgage market.

How Private Is Your Credit Score?
The amount of people who know your credit score might surprise you.

10 Personal Finance Predictions for 2014
NerdWallet reads the financial tea leaves.

Giving to Charity? Watch Out for These Tax Traps
Your generosity could come with a hefty price tag.

Will Banks Ever Pay Savers More?
Why banks hate people who save their money.

Elderly parent wants to help unemployed sons

Dear Liz: Both of our sons, ages 63 and 59, are currently unemployed. We are 93 and self-supporting with Social Security and my retirement benefits. We live in our own home and are able to handle all our expenses, even though my wife requires a companion for 12 hours each day.

I believe we should financially aid both sons, to the limit of our ability, but my wife disagrees.

They are the two main beneficiaries of our estate. Each one is scheduled to receive about $40,000 upon our deaths. How should we proceed?

Answer: If your estates won’t amount to much more than $80,000 at your deaths, it doesn’t sound as if you have the financial wiggle room to help your sons. Your wife already requires significant care and may need more in the future. Plus, she’s likely to outlive you, which would mean getting by on less (certainly a smaller Social Security benefit, and perhaps a smaller pension amount as well). Any money you give them, in other words, is likely to be to her detriment.

Lack of savings makes becoming a landlord risky

Dear Liz: My husband and I, both 44, own and live in one side of a duplex. The owners of the other side are moving next year and have offered to sell it to us. We don’t have enough in savings to cover a 20% down payment for a traditional mortgage, but our neighbors offered to do owner financing. Rentals are hot commodities in our area, and we’ve been told by real estate agents that they could get the place rented within a week for more than we’d make in mortgage payments. This would be an amazing opportunity for us, but if for some reason the property went vacant we couldn’t cover the payment unless we make some major changes to our budget, such as selling our RV ($325 a month) or temporarily suspending contributions to our 457 deferred compensation plans (we contribute $300 a month and both our jobs come with pensions that will replace 60% of our salaries). We currently also make a truck payment ($350 a month) and have $2,300 in credit card debt, but we only have $1,000 in accessible savings.

Answer: You’re not in a great position to be landlords. You have too little savings to cover the inevitable repairs and vacancies you’ll face. Plus, your credit card and vehicle debts indicate you’ve been living beyond your means.

Still, this may be a promising opportunity. A rental that is cash-flow positive — in which the rent collected exceeds the cost of the mortgage, property taxes and insurance — can be a decent long-term investment. If you’re willing to commit to improving your finances and taking this risk, it could work out.

Talk to some other landlords first to see what challenges they face and what typical vacancy rates they experience. You’ll want to locate a lawyer who understands your state’s landlord-tenant laws to draw up any paperwork you’ll need.

If you decide to proceed, sell the RV and use whatever’s left after paying off the loan to pay down your credit card debt. Then redirect the RV payment to paying off the rest of the cards and building up your savings. (A note for the future: RVs are fun, but they’re luxuries, and luxuries should be paid for in cash.)

Don’t compromise your retirement savings. Your generous pension could get whittled down in the future, or you might lose those jobs. Having a decent retirement kitty of your own is simply prudent.

How to start Roth IRAs for your kids

Dear Liz: I would like to start a Roth account for each of my kids. (They’re in their 30s.) Is it better to start an account in my name with them as beneficiaries or to start the accounts in their names?

Answer: Roth IRAs can be a wonderful way to save, but they’re not custodial accounts. You won’t be able to control the accounts or prevent your adult children from spending any money you deposit.

If you still want to help, though, let your kids know you’ll contribute to any Roths they set up. They can open a Roth if they have earned income at least equal to the annual contribution and their incomes are below the Roth limits. The ability to contribute to a Roth phases out between $178,000 to $188,000 for married couples in 2013 and from $112,000 to $127,000 for singles.

Ideally, you’ll contribute to your own Roth first. The limit on contributions is $5,500 this year.

Friday’s need-to-know money news

Today’s top story: 5 things home-buyers forget to ask their lenders. Also in the news: Retirement mistakes 30-somethings need to avoid, renting versus buying a home, and how to escape from a job that you hate.Offering Advice

5 Things Homebuyers Forget to Ask Their Lenders
Five questions that are absolutely essential to ask.

4 Retirement Mistakes 30-Somethings Make–And How They Can Avoid Them In 2014
Don’t assume it’ll be easier to save money when you’re older.

Renting vs. Buying a Home: Which Is Smarter?
Are you prepared to handle the stress of home ownership?

5 Tips for Changing Careers on a Budget
You don’t have to suffer through a job you hate.

Smart Spending: Buy these items after Christmas
Unless you’re a child, you can wait a day or two for your presents.