Get smart with your money
Stories about how ordinary people pay off debt quickly can be amazing, inspiring — and somewhat deceptive.
These tales often mention the sacrifices debtors made but may gloss over the cost to their quality of life or the misguided choices they made. Becoming debt-free can be a worthy goal, but understanding the pitfalls can keep you from repeating others’ mistakes.
In my latest for the Associated Press, why some folks wish they hadn’t paid off their debt in such a rush.
Today’s top story: Why you should have a credit card even if you don’t carry a balance. Also in the news: Credit card debt is down in early 2017, how to take advantage of cooling car sales this summer, and how to avoid being a victim at the car repair garage.
Why Have a Credit Card if You Don’t Carry a Balance?
The importance of maintaining credit.
Credit Card Debt Shrank in Early 2017
Paying off debt.
How to Take Advantage of Cooling Car Sales This Summer
Prices are dropping.
How to avoid being a victim at the car repair garage
Don’t get taken for a ride.
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Today’s top story: How to read the fine print on credit card offers. Also in the news: Mistakes to avoid if you want your student loans forgiven, how to switch brokers and move your investments, and three retirement savings strategiess to use if you plan to retire early.
How to Read the Fine Print of Credit Card Offers
Paying close attention.
Want Your Student Loans Forgiven? Avoid These 4 Mistakes
Forgiveness is possible.
How to Switch Brokers and Move Your Investments
Big banking moves.
Three retirement savings strategies to use if you plan to retire early
Getting out as soon as you can.
Today’s top story: What to know before sharing credit accounts with a parent. Also in the news: Required minimum distributions, tax-smart ways to withdraw from a 529 college plan, and high bank overdraft fees prompt a call for plain-English disclosure forms.
What to Know Before Sharing Credit Accounts With a Parent
A generous idea that could backfire.
What Are Required Minimum Distributions?
A taste of your retirement
Tax-Smart Ways to Withdraw Funds From a 529 College Plan
Don’t get hit by a large tax bill.
High bank overdraft fees prompt call for plain-English disclosure forms
No more trickery.
Dear Liz: If and when we sell our house, the capital gain is likely to exceed the $500,000 exemption limit. I am carrying over a loss of about $100,000 from stock sales. Can I use this loss to offset the capital gain from the house?
Answer: Yes. Capital losses can be used to offset capital gains, including those from a home sale.
Dear Liz: My dad, age 90, needs personal care and I am trying to get him to move out of his house to a senior residential place. He is in agreement, but it is taking a long time to make this happen. He owns his home free and clear and, along with the sale of his home, has enough financial assets to cover these costs.
The problem is my two sisters’ husbands, who overspend and are in debt. These two guys continue to pressure my sisters to ask my dad for money for such things as their mortgages, expenses for their children and credit card debt. My sisters are not just starting out — they are in their 50s! Not only that, when I ask them for help with our dad, they flake out on me. I’ve told them that the financial assistance can’t continue because Dad will need his money to pay for his care.
I feel that my sisters’ and their husbands’ behavior is senior financial abuse. I read that this situation happens a lot in families, where the kids will milk an elderly, wealthy, sympathetic parent or grandparent, sometimes draining their savings. Or one dysfunctional sibling with take financial advantage of a parent, while other siblings in the family struggle with making ends meet. In our family, both my sisters have children, so my dad feels a soft spot for helping them out. I am single, no children, and I am treated differently. I do struggle to make ends meet. My dad is sometimes even reluctant to reimburse me $20 for gas that I spend driving him around and doing shopping and errands.
I’m trying to remain on good terms with my sisters but it is getting tough. Is there any financial advice or references you can give in my situation?
Answer: You’re right that most financial abuse of the elderly is committed by people close to the person, typically family, friends or caregivers. The toll isn’t small, either. A survey by Allianz Life Insurance Company found that the average victim lost $30,000 and 1 in 10 lost more than $100,000.
Family members may not see what they’re doing as abuse. They may think that they “deserve” the money or that it’s some kind of advance on a future inheritance. They also know that Dad just can’t say no and will continue to press him for money as long as they’re allowed to do so.
You and your dad should consult an elder law attorney to discuss ways your dad can be protected against predators. You can get referrals from the National Assn. of Elder Law Attorneys at naela.org, and the attorney can discuss your options.
One obvious solution would be for Dad to hand over his checkbook to you, which would give you the unpleasant job of standing up to your brothers-in-law. You’re certainly in a better position to do so than your elderly father, but he may not be willing to give up control or you may not want the job.
Another option is hiring third parties. Daily money managers provide personal finance and bookkeeping services to elderly clients. They can keep a watchful eye on transactions and spot signs of fraud. You can get referrals from the the American Assn. of Daily Money Managers at aadmm.com. Hiring a geriatric care manager also could be a good move. The manager could assess your father’s health, living and financial situations and help craft a plan to help him move forward. Referrals are available from the Aging Life Care Assn. at aginglifecare.org.