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Q&A: Special needs trust

April 13, 2015 By Liz Weston

Dear Liz: Your suggestions about resources to help a parent with an emotionally ill adult child were very helpful. But from a financial standpoint, don’t you think you should have discussed a special needs trust for the time when the parent dies? Whatever assets she has, most likely her home, should be put in this trust to protect her son’s eligibility for government benefits (Supplemental Security Income and Medicaid, for example). An inheritance could jeopardize his eligibility for these programs. It will be overseen by a responsible party and can never be taken as part of a potential lawsuit. This is something I recommend to my clients as a geriatric social worker.

Answer: Thank you for the suggestion. Given the brevity of this column, it’s impossible to cover all potential angles to every situation. In this case, there was no indication that the son was receiving government benefits or that his mother had sufficient assets to be concerned about an inheritance.

That wouldn’t be unusual. One study for the National Bureau of Economic Research found that 46% of Americans have less than $10,000 in financial assets when they die. Many single-person households (57%) have no home equity.

Still, even a small inheritance can disqualify someone from SSI, and losing access to Medicaid health coverage would be catastrophic for people who depend on the program. So parents who have both an heir who needs these programs and assets that might outlive them should discuss a special needs trust with an estate-planning attorney.

Filed Under: Q&A Tagged With: follow up, q&a, special needs trust

Friday’s need-to-know money news

April 10, 2015 By Liz Weston

teen-creditToday’s top story: Finding the best credit card for your teenager. Also in the news: Financial date nights, what to do if you can’t pay your taxes, and keeping old credit cards on your credit history.

5 Credit Cards for Teens
How to make sure their first card is the right one.

Avoid money fights with financial date nights
Dinner, a movie, and money talk.

Can’t Pay Your Taxes? How to Get IRS Relief
Don’t ignore the problem.

Use Recurring Charges to Keep Old Credit Cards on Your Credit History
Avoid the ding of a closed account.

Filed Under: Liz's Blog Tagged With: Credit Cards, credit report, Credit Score, IRS, recurring charges, Taxes, teens and money

5 ways going green can save some green

April 9, 2015 By Liz Weston

605x340xdollar-bills-2015-Dollarphotoclub_67129525.jpg.pagespeed.ic.0DZosyt27WIn honor of this month’s Earth Day, here’s a piece that first ran on DailyWorth.

If you’re trying to save money, you’ve heard all the usual advice about ways to cut back: brown bag your lunch, use coupons, shop sales.

But with Earth Day this month, maybe it’s time to take a fresh look at your frugal hacks and see which ones can be updated with the environment in mind. Many times you can save even more with some earth-friendly tweaks.

“Frugal and green lifestyles both mean making specific, informed decisions in order to waste as little as possible,” said frugal hacker Donna Freedman of Surviving and Thriving. “Bonus: Choosing to be frugal can make being green a lot more affordable.”

Old way: Brown bag your lunch.

New way: Reusable bags, wrappings and containers will extend your savings and help save the environment. An investment in an $8 Wrap-N-Mat, for example, will pay for itself in less than a year, assuming you’re spending 4 to 5 cents each for sandwich bags. Or you can just use a napkin or a bandana to wrap that PB&J. You don’t have to buy a special lunch bag, either; any small tote bag will work. Oh, and bring your drink in a Thermos. Bottled water isn’t friendly to the earth or your wallet.

“Bottled water is an environmental nightmare given the petroleum and other resources needed to manufacture and recycle and dispose of all those bottles,” Jeff Yeager, the author of four books on frugal living, including “Don’t Throw That Away! 1,001 Ways to Reuse Your Stuff.” “It’s also a waste of money since tap water is just as good.”

Old way: Make your coffee at home.

New way: Make your coffee sustainably. Still using paper coffee filters? Reuseable ones can be had for $4 to $7—about the same price as a box of 100 paper filters. Did you fall for the single-serve coffee maker fad? The variety’s great, but you’re using a whole lot of plastic pods that probably aren’t even getting recycled. (TreeHugger’s Lloyd Alter called pod coffee a “design for unsustainability.”) You could switch to pods that are mostly biodegradable, or just reserve your fancy coffee maker for special occasions and use a drip or French press version for your daily brew.

The single-serving coffee makers “may still be greener than driving to Starbucks for a cup of Joe, but it really defeats the whole intention of saving money and saving the environment,” Yeager said. (For more tips, watch his video on saving money by going green.

Old way: Shopping for clothes at discount chains.

New way: Buy gently-used clothing at consignment and thrift stores. Katy Wolk-Stanley, who blogs at The Nonconsumer Advocate, joined a “buy nothing new” movement called The Compact in 2007. Since then, she hasn’t bought new clothing other than underwear, bras and socks since 2007.

“Is it easy to only buy used? Yes and no. No, because sometimes a needed item is hard to find used,” said Wolk-Stanley. “However, that built-in lag time between wanting something and tracking down a used version often means that I figure out an alternate solution or simply that it was a momentary impulse and not buy it after all.”

Old way: Buy detergent and other cleaners on sale.

New way: Use a lot less, or make your own. A quarter-cup of laundry detergent is usually enough to clean all but the filthiest loads, while a tablespoon of dishwasher detergent will get your plates clean without overloading your machine with suds. Or make your own: Mary Hunt, author of several books including “Cheaper, Better, Faster!” has been making her own laundry soap for years.

“It’s better than anything I can buy–no perfumes, no dyes or other stuff that causes itching and other skin reactions—and infinitely cheaper,” said Hunt, who runs the Debt-Proof Living site. “Makes me smile to think of all the gallon plastic jugs, bottles, boxes, and other packaging I no longer buy with laundry products in them, to simply haul that fancy packaging to the trash.”

Meanwhile, vinegar and baking soda are two of the most versatile cleaners, and they’re cheap. They can replace most of the store-bought cleaners in your home.

“If you mix vinegar and water in a spray bottle it’ll stand in for Fantastik and other ‘all-purpose’ cleaners,” Freedman said. “You can use a straight vinegar spray if it’s a particularly greasy stovetop, but I use a 50/50 mix and it usually does the trick.”

Old way: Using coupons and sales to stock up on paper towels and napkins.

New way: Ditch paper for cloth. You already have dishtowels, rags and cloth napkins, so put them to use. (If you need to stock up, you can get Tekla dish towels from Ikea for 79 cents apiece.) While you’re at it, ditch those stinky sponges for good old-fashioned dishcloths. I love the Ritz Cotton ones with a scouring side, $8.99 for a five pack. I whip out a new one each day and toss the old one in the hamper. Yes, using cloth creates a bit more laundry, but I haven’t noticed I’m doing any extra loads.

“Buying less and reusing stuff is the way to save money and save the planet,” Yeager said.

Want more? Check out my other columns on DailyWorth.

 

 

Filed Under: Liz's Blog Tagged With: Earth Day, environment, frugality, green, saving money

Thursday’s need-to-know money news

April 9, 2015 By Liz Weston

scamToday’s top story: Last-minute tax filers need to watch out for an Obamacare scam. Also in the news: Paying to check your credit, how to delay taking Social Security, and retirement planning tips for women.

Last-Minute Tax Filers: Beware of This Obamacare Scam
Scammers are taking advantage of Obamacare tax penalties.

Should I Pay To Check My Credit Score?
The pros and cons of free credit reports.

3 Ways to Delay Taking Social Security
A delay could be financially advantageous.

Key Retirement Concerns And 7 Planning Tips For Women
What women need to know to prepare.

Filed Under: Liz's Blog Tagged With: Credit Scores, Retirement, retirement tips, Social Security, tax scams, tips for women

Wednesday’s need-to-know money news

April 8, 2015 By Liz Weston

635522783074355959-holiday-cardsToday’s top story: Finding the best credit monitoring service. Also in the news: The best move to make at tax time, how to get the best financial aid package, and how to keep your digital transactions safe.

How to Compare Free Credit Monitoring Offers
With credit theft becoming a near daily occurrence, it’s important to keep an eye on yours.

The Single Best Move to Make At Tax Time
Time to beef up your emergency fund.

4 insider tips to get the best financial aid package
How to make paying for college less traumatic.

5 Ways to Protect Your Digital Wallet
Keeping your online transactions safe.

How to Live Richly When You’re Feeling Broke
Cutting costs without cutting your favorites.

Filed Under: Liz's Blog Tagged With: credit monitoring, digital transactions. budgets, financial aid, tax tips

Tuesday’s need-to-know money news

April 7, 2015 By Liz Weston

credit-cardsToday’s top story: The pros and cons of paying your taxes with a credit card. Also in the news: Discharging private student loans, financial rules for 40 year-olds, and what FICO’s new credit score means for you.

Should You Pay Your Taxes With a Credit Card?
The pros and cons.

Can You Discharge Private Student Loans in Bankruptcy?
It won’t be easy.

40 Financial Rules For 40 Year-Olds
It’s time to get serious.

FICO Will Use a New Credit Score That Includes Your Bill Payments
What this means for your score.

Smart Ways to Trim Your Water Bill This Spring
Gardening season is nearly upon us.

Filed Under: Liz's Blog Tagged With: Credit, Credit Cards, Credit Score, FICO, Taxes, tips, water bills

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