Liz Weston

Giveaway: The Liz Weston library

February 25, 2014 By Liz Weston

Need to spring clean your finances? I’m giving away five sets of my two biggest sellers: “The 10 Commandments of Money” and “Your Credit Score.”

To enter to win, 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!

Tuesday’s need-to-know money news

February 25, 2014 By Liz Weston

Today’s top story: A security flaw in the iPhone could expose your information to hackers. Also in the news: How to transform your finances, reducing financial adviser fees, and what to do when your parents ask you for financial assistance.

Don’t Use Your iPhone Until You Read This
A security flaw is leaving personal and financial information vulnerable.

Transform Your Finances With One 3-Letter Word
No, it’s not “win” as in “win the lottery”.

Are excessive financial fees eating your returns?
Why it’s crucial to pay close attention to financial adviser fees.

6 Do’s and Don’ts for When Your Retired Parents Ask for Financial Help
The difficult questions to ask when roles are reversed.

Oklahoma requires students learn personal finance to graduate
High school students will have to have a working knowledge of personal finance.

A free guide to filling out the FAFSA–get it now!

February 24, 2014 By Liz Weston

Exciting news: One of the most-respected experts in financial aid has written a book about filling out the Free Application for Federal Student Aid (FAFSA)–and right now you can get it as a free PDF download.

Mark Kantrowitz, who helmed FinAid.org for years and is now publisher of Edvisors, has this to say about the book he co-authored with David Levy, who has 30 years’ experience as a university financial aid director:

The book is packed with 250 pages of insights and advice about filing the Free Application for Federal Student Aid (FAFSA), along with a step-by-step guide to completing the application form. There are tips about increasing eligibility for need-based aid, avoiding the most common errors and appealing for more student aid. I have attached a tip sheet about Filing the FAFSA that is based on the book.

If you have a kid heading off to college, this book is a must read. To get the book, register (also for free) at the Edvisors site. The book is also available to buy on Amazon in paperback for $24.95. The Kindle version is $8.95.

Ways to reduce tax burden

February 24, 2014 By Liz Weston

Dear Liz: My husband and I have worked very hard and paid off our mortgage and all other debt. However, we find ourselves with no deductions now and are getting killed on income taxes. What can we do to lower our tax burden without incurring mortgage or student loan debt, child-care expenses and so on? We are in about a 33% tax bracket and it seems like we are being punished for being frugal and responsible.

Answer: There’s an old saying, “Don’t let the tail wag the dog.” Incurring expenses just to get a tax break is usually absurd. When you were paying mortgage interest, for example, your tax break was only a fraction of what you paid out. In essence, you were getting about 33 cents back for every dollar you spent in interest.

Better ways to reduce your tax burden may include maxing out retirement plan contributions, taking advantage of flexible spending accounts if your employer offers them and installing alternative energy equipment in your home. (The credit for installing solar panels and similar systems equals just 30% of the cost, but the long-term energy savings may offset the rest of the bill.) If you own a business, consult with a tax pro about the many ways to cut your tax bill when you’re self-employed.

Just remember that you’re not being punished for your frugality. Your reward is more money in your pocket year-round.

Retiree can’t get home equity loan

February 24, 2014 By Liz Weston

Dear Liz: I retired last year. I am 67, have more than $1 million in my retirement accounts, $80,000 in individual stocks, $50,000 in cash and more than $200,000 in equity in my home. I don’t need to tap my Social Security benefit yet and can afford to wait until I am 70 to get the maximum monthly amount. I recently purchased a new car with a 0% loan for five years. That and my mortgage are the extent of my debt. One thing I would like to do is some home improvement. My fee-only financial planner suggested getting a home equity line of credit to cover the repairs and upgrades. This makes sense to me in that it spreads out the burden over time and is tax-deductible. My credit scores are 736, 801 and 839. But I’m finding it difficult to get a commitment from either my credit union or my bank because they don’t see an income. I have been with both of these institutions for more than 30 years and the credit union holds the first mortgage. How do we get the lenders to factor retirement assets into the qualification calculations?

Answer: Last year, mortgage giants Fannie Mae and Freddie Mac issued guidelines on retirement fund annuitization that would allow mortgage lenders to calculate a borrower’s income based on his or her retirement assets.

Lenders, however, have to be willing to go to a little extra effort to learn the rules and apply them properly.

If yours aren’t willing to do so, then it might be time to take your business elsewhere. A mortgage broker (referrals from http://www.namb.org) may be able to connect you with a lender who’s more up to date.