Ask Liz Weston

Get smart with your money

Liz Weston

Thursday’s need-to-know money news

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Today’s top story: Re-Evaluating your airline miles credit cards. Also in the news: Saving money on school expenses, avoiding awkward money conversations at the holiday dinner table, and finding the best life insurance plan to fit your needs.

Do You Need to Re-Evaluate Your Airline Miles Credit Cards?
Changes to several programs has made some frequent travelers unhappy.

How to Save More Money on School Expenses
Don’t let school supplies drain your wallet.

How to Navigate Awkward Money Conversations at Your Family’s Holiday Dinner
AKA “How to avoid a food fight.”

Tips for Picking the Right Life Insurance Plan
Making sure your plan best suits your needs.

Will FlexScore Replace Credit Scores?
A new way of determining credit worthiness is on the horizon.

Food stamps are the symptom, not the problem

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eating breakfastThe conservative Wall Street Journal opinion page is not where you’d expect to see a piece headlined “In defense of food stamps.” Yet there it is, written by William A. Galston of the Brookings Institution.

Galston recounts the facts: that nearly half (47%) of the people on food stamps are children, that the typical income for families with children on food stamps is 57% of the poverty line (less than $11,000 for a family of three) and that 91% of food stamp benefits in dollar terms go to households living in poverty. Galston writes:

The large increase in the program’s cost over the past decade mostly reflects worsening economic conditions rather than looser eligibility standards, increased benefits, or more waste, fraud and abuse.

The only area where Galston concedes food stamp critics have a point is regarding relaxed requirements for able-bodied adults without children. He thinks those should be toughened up.

As for the argument that food stamps breed dependency? Galston disagrees:

The final complaint is the broadest: Food stamps are welfare, and welfare increases dependency. But the most rigorous research (summarized in a 2011 NBER paper, “An Assessment of the Effectiveness of Anti-Poverty Programs in the United States”) has found SNAP’s effects on work effort to be “small,” “statistically insignificant,” or “zero.”

What will get people off food stamps, he writes, is an improved economy. Now there’s a thought: Congress could focus on ways to help businesses generate jobs, rather than on beating up those who have lost them.

The problem with bargain hunting

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KONICA MINOLTA DIGITAL CAMERADeal sites. Garage sales. Thrift stores. All can be a part of a frugal lifestyle. Or they can just be substitutes for a more expensive shopping habit. The question to ask: Are these thrifty alternatives really thrifty for you? Or are they just feeding that lust for acquisition that leads to too much stuff and too little money?

In a terrific article for LearnVest titled “How I maxed out my retirement savings while making $28,000 a year,” writer Leah Manderson puts her finger on the problem:

I tried a stint at being frugal; shopping the sales and searching out deals on food, entertainment and other activities. What I discovered was that a lot of deal-hunting activities are attempts at “keeping up with the Joneses on less,” and, not surprisingly, they made me feel like a lesser version of the Joneses.

That feeling did not make me want to save money for my future—it made me want to spend more money on “deals”!

Manderson found more peace, and more savings, by unsubscribing from deal sites and making do with what she had: “I let my hair grow out, I made new outfits with clothes already in my closet, I rearranged my home decor to change my surroundings, I reread old books that I loved, and I got comfortable with living on less.”

Most of us have more than enough. Recognizing that can help tame the beast within that insists we “need” the new shiny thing that just captured our attention.

Or you can just remember something my grandmother said while laughing at retailer signs that promised big savings. “You’re not saving,” she said. “You’re spending!”

Wednesday’s need-to-know money news

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Today’s top story: 8 tax breaks expiring at the end of 2013. Also in the news: How to monitor your credit after a data breach, when it makes sense to have credit card debt, and could cheaper insurance convince you to buy a self-driving car?

8 Tax Breaks Expiring at the End of 2013
Teachers aren’t going to like this.

How to Monitor Your Credit After a Data Breach
Vigilance is key.

When Does It Make Sense to Have Credit Card Debt?
Credit card debt isn’t always a bad thing.

Will cheaper insurance sway you toward a self-driving car?
Are you ready to let someone (or something) else do the driving?

10 ways to avoid car-buying gotchas
Be prepared to walk away.

Tuesday’s need-to-know money news

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Today’s top story: 7 expenses that vanish when you retire. Also in the news: earning extra cash for the holidays, money mistakes to avoid in your 40’s and 7 questions to ask before you retire.

7 Expenses That Vanish During Retirement
Time to kiss commuting expenses goodbye!

7 Things Your Credit Score Doesn’t Reveal
The source of your debt is one of them.

Ready to Retire? Answer these 7 Questions First
Seven questions you need to answer before handing in your papers.

How to Earn Extra Cash for the Holidays
Legitimate ways to earn money from home for the holidays.

Money Mistakes You Can’t Make In Your 40s
Starting with having too much credit card debt.

At death, wills matter–promises don’t

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Dear Liz: If your in-laws promised you and their son their house, and have for over 20 years, and the whole family is aware that was the plan — your mother-in-law even had a will and a deed made up — do you think the executor of the estate has the right to do away with the will and take matters into her own hands? Do you think the daughter-in-law and the son have a right to stick up for what the parents wanted?

Answer: There’s a big difference between drafting documents and executing them.

Presumably the deed wasn’t executed, or used to legally transfer the house into your names. Otherwise this dispute wouldn’t be happening. Is the same true of the will? In other words, did your mother-in-law sign it in the presence of disinterested witnesses (people who don’t inherit)?

If the will was properly executed, then in most states it must be filed with the probate court. The executor is supposed to follow the will’s dictates to the extent possible. (If your mother-in-law left more debts than assets, for example, there might not be enough left over to distribute according to a will.)

What seems likely is that your husband’s mother failed to follow through on her promise. If that’s the case, and there is no will, then the executor is obliged to follow state law to determine who gets what.

The results may not be what you hope. The home may need to be sold to pay creditors or to allow an equitable distribution of assets among all the legal heirs.

This assumes the executor is living up to her fiduciary duty. If she truly is taking matters into her own hands, however — deciding how the estate will be distributed without reference to a will or state law — then you and your husband should hire an attorney to file a lawsuit in probate court to get her removed and replaced with someone more responsible.