Money Management

Help me help my mom with her money problems!

GenuineGoldens — Sat, 31 Oct 2009 14:37:57 GMT

My mom and I have a very close relationship. She is my best friend. We share everything with each other. My husband and I are living comfortably, but because of a recent house purchase and remodeling and such, we've lost our cushion in many of our accounts. Of course, stressed about money, I yapped about it to my mom on the phone. A few weeks later, she revealed to me that they (my mom and step-dad) are in BAD shape, money-wise. I feel soooo bad. Here I am complaining about "almost living paycheck to paycheck", and they are going w/o groceries and heat for their home! Their biggest concerns right now are gas for the vehicles and propane to fill their tank for the winter. Both myself and my aunt offered to give my mom money to have their tank filled up, but she refuses it.

My mom is currenlty going to nursing school to get her LPN. She has a part-time job as a care-giver for two adults with Autism. She was working full-time with this job, but was becoming overwhelmed with that and school. She didn't have time to study, and her grades were dropping. She failed this class last year for the same reason, and can't afford to do it again. Her husband works full time at the same place my husband does. I don't know what his pay is, but I do know its nowhere near what he was making at a former job. My husband is the assistant manager, so he gets better pay. The only day she has off with no school or work to go to is on Saturdays. She spends LITERALLY all day to studying. Her husband has started taking on odd-jobs (for cash) for others when he has a day off of work. He's currently making more money doing this than at his regular job, as these are cash jobs. I guess the majority of his paycheck goes to childsupport. They've had a lot of expenses lately with car problems as well. My dh has helped them tremendously in this area, but doing the labor to repair them.

What can I do to help? I really don't think they have a budget until recently when money has became very tight. She told me the other day that by the time they pay bills, they have $140 left to buy groceries and anything else they need for the month. I haven't put it to paper yet, but I think this could be do-able.

Pride keeps my mom from accepting money. I'm thinking about seeing if she can set aside some time for me to go over and help her access her situation, create a budget and see if and where they can cut costs. She is very hesistant to go anywhere or have anyone over, b/c she desparately needs no distrations and time to study. Is there anything else I can do?

Is THIS why my credit score keeps going down? SO ABSURD!

Deborahmichelle — Sun, 06 Jan 2008 18:03:13 GMT

Dear All, I pay off my credit card (which I use for all purchases, due to guarantee on items I purchase & better control in my own experience than using cash) BEFORE I get the bill. I check online for the amount due, & then add $20-$30 so that I can get into the next billing cycle with a credit. Well, my FICO score (which my cc company posts on the webpage) keeps going down. I suppose that they penalize you for paying in advance! How absurd! (Since I am not allowed to save my money -- public benefits penalize saving -- I am not losing any return on my cash.) PS I'm not planning to purchase anything for which I'd need a loan, so the FICO score is only of academic interest.

Comments, anyone? Yours in Him, Deb

Too much spending on children, reader needs help

Pat — Thu, 12 Nov 2009 18:02:12 GMT

She writes:

Buying things for my children (ages 7 & 12) tends to trip me up, such as toys (like American Girl doll stuff and Wii gaming!) As well as all of their activities! (Violin/symphony orchestra, ice skating, fencing, swimming, karate and homeschool art class.) It’s a huge lack of balance in our family spending pie chart! My husband and I do without, shop and sell resale, stick to bare bones grocery with me scratch cooking a lot and making my own laundry detergent and cleaning supplies, we are do-it-yourselfers and spend little on restaurants and entertainment…any other extras. We save for retirement, college, tithe, emergency fund, car repair and a house maintenance account and property tax fund. I manage to pay off the charge cards every month, but I am spending a HUGE portion still on gifts/children. HELP! I have been told as an adopted child myself that studies show we overindulge our children to excess! My stepchildren who no longer reside with us are also supported –on the 22 year old daughter we have paid off her car at 12,000!, covered her car insurance and cell phone for a long time, paid a great deal of her college and make payments or her personal remaining college debt as main birthday/Christmas gift - as debt free lifestyle is important to my husband. On 23 year old married daughter, we are also giving $200 a month for her credit card (lawyer/child custody debt) since she and her hubby recently had a new baby together, adding to her family of her little stepdaughter also. This is concerning me as my husband is approaching retirement from the military with a reduction in pay and an unstable job situation.

Do you have advice for her?

Inside Wire Maintenance for Telephones

Virginia Needlewoman — Sat, 14 Nov 2009 14:37:55 GMT

I live in an area where we have storms, etc. I do not have a SO or DH who can do things like repairs on phone wires for me. I am not good at repairs. Mom's relatives are not good at repairs either so having them decide that I was not related to them is no loss when it comes to doing repairs.

I have one of those Verizon Unlimited Calling Plans plus Caller ID plus the monthly Wire Maintenance Plan. I can't begin to tell you how much that little fee has saved me since 2007 when I started paying the bills for Mom. I still have to pay for new jacks that are installed or for new telephones.

I also pay $5.99 a month extra to DirecTV for "protection". That saves me from having to pay for Service Calls.

For me, that's peace of mind. For others who are good at repairs, it could be an unnecessary expense.

Here's a look at the unintended consequences of good intentions (credit cards & hoome buying)

Deborahmichelle — Fri, 13 Nov 2009 17:31:47 GMT

Dear All, A NY Times columnist has an interesting look at the unintended consequences of good intentions concerning credit cards & home buying today http://www.nytimes.com/2009/11/13/opinion/13carney.html?th&emc=th Yours in Him, Deb

We're going to continue getting worse unemplooyment (NY Times)

Deborahmichelle — Sun, 08 Nov 2009 14:25:18 GMT

Dear All, Today, Sun 11/8, the NYTimes has an article about why increased productivity (read: robots, etc) & outsourcing are going to mean that unemployment is going to continue increasing, even though we may welll be out of the (deepesst part of the) recession. http://www.nytimes.com/2009/11/08/weekinreview/08goodman.html?_r=1&emc=tnt&tntemail0=y Yours in Him, Deb

Dave Ramsay---Your Thoughts?

dolly77 — Fri, 18 Sep 2009 19:01:10 GMT

I'm sure ol' Dave has been discussed here at the Dollar Stretcher numerous times, but I'm not as regular here as I'd like to be and I've probably missed those discussions.

I finally went to the library yesterday and checked out The Total Money Makeover. Stayed up last last night and read the entire book.

Wasn't as great as I thought it would be. I'm sure it does work for A LOT of people. In fact, I know it does because it is highly recommended on a lot of frugal blogs and sites I visit. But, to me, it seemed a little impractical.

There was somewhere in the book where Dave said (paraphrase) ".......most of you should be able to save $1000 in a month.....". That's going to be impossible for a lot of people! I know he is counting on everybody selling their cars, homes, etc. but what about people who are already living very frugally and have great mortgages and car loans that must be paid? Then there are variables like utilities, food, medical, insurance (car, home, life), etc.

I could totally see how the book would be helpful to those who have been blowing money right and left, without a clue, but it doesn't seem to address the needs of those of us who have already embraced frugality.

Oh, well. Just my two cents worth. What are your thoughts? And what books have you found helpful?

Ugh, co-signer blues and psych problems (long)

TizzyLizzy — Mon, 02 Nov 2009 05:00:21 GMT

Not sure where to place this as it's really several problems combined. The shortest version is that years ago, we co-signed (I know, I know, but too late now...) some of dd25's student loans. She's been doing *okay* on paying them 'til the last year or so - the payment is about $450.00/month. She's recently had to move back home from a shared apartment as she couldn't keep everything paid on her income - she works a temporary administrative job for the government, but has so far continued to have her job 'renewed', though her absenteeism lately has been abyssmal - she simply 'walks out' if she's having a 'bad day'.

Dd is seeing a counselor for what might eventually be bi-polar II disorder - right now, she's being treated for depression. She goes shopping when she knows she has overdue bills (never opens her mail) and never unpacks the bags until she's desperate for money, then returns what she can for cash. She has seen a financial counselor, too, (all free thru work) but only one time and didn't follow up with his suggestions nor return for another session. I'm having trouble believing that all her problems stem from a disorder - she has had numerous but mild health problems thru the years, and has been looking for a 'diagnosis' for a long time, I honestly think she would like to lose her job and/or possibly get disability. She has resented both her having to work and having bills since college and has made that known. Of course, when I tell her she MUST work and pay her bills in order to live here, she immediately falls apart, telling me how depressed she is, that she's having a panic attacks at work, etc. If anyone has any info or websites to help me deal with this, that would help. I admit to being from the pull-yourself-up-by-your-bootstraps-and-get-on-with-it generation and need to know how to approach this. Everyone here pulls their weight and she has to cooperate or move. Also, me and dh care for my very elderly parents and his dm. It requires at least two doctor's appointments per week, plus we do their bill-paying, grocery shopping, etc. I CANNOT take on anyone else right now, especially a grown child.

Dh is close to retirement - no way can we add $450.00 a month to our budget, but we may have to. My thought is to take dd to a bank and open an account for the payment amount to be deposited in each month, then be automatically deducted when the loan is due. An account I can monitor and add to if necessary. The way I understand it, if the account is kept current for two years, dd can have our name(s) taken off as co-signers and the loan becomes soley her responsibility. This, of course, will only work if she continues to work.

What's everyone's experience with co-signing, student loans, psychchiatric problems, etc.? Liz

The NYTimes weighs in on the BENEFITS of a deep recession

Deborahmichelle — Mon, 02 Feb 2009 16:08:25 GMT

Dear All, Did you know that the death rate goes down as unemployment goes up? Neither did I. That & other fascinating, & optimistic, facts are set forth in today's NY Times http://mail.google.com/mail/?hl=en&tab=wm#inbox/11f37b14e1e3d3c3

I ususally foreswear agreement with an article that I post, but I like this one.

Yorus in Him, Deb

Business Story in Today's NYTimes.com: Dow chemical rAises rates for 2nd time in a month

Deborahmichelle — Wed, 25 Jun 2008 15:19:45 GMT

The above-entitled story refers to all of the plastics that surround us .... Yours in Him, Deb

Personal finance/investing

Alex the Bold — Tue, 06 Oct 2009 17:18:33 GMT

I've been batting this around for a while now. This might ramble a little. Bear with me. I'm wondering if anyone can poke holes in them.

As matching 401(k) contributions by my company are "free money" I am putting the maximum amount in. I am also paying off my credit cards as rapidly as possible. I keep the maximum 401(k) contribution because I know that I'm getting a 100% return on that money, which is better than the negative drain of the credit card APR.

When I have finally paid them all off (about three years), I have to do something with the money I will have freed up. I want to invest it, but I don't want to invest it through a 401(k) or something similar. As the saying goes, "the broker gets paid when you make money. And when you lose money."

What sorts of investments should I be reading up on in the intervening three years? I'm a cautious investor. I never would have bought a 2 bedroom house in a suburb for $600,000 as part of a flipping scheme because I understand what a pyramid scheme is. Nor am I one of the devotees of the "I bought this rundown house, put $70,000 of work into in, and made a $10,000 profit when I finally sold it. Only busted two fingers." Land sounds like a sensible thing to invest in (not something bought off eBay in the foothills of North Dakota -- 20 acres that can only be reached by helicopter), but again, I could use some preliminary advice, like the title of a few books. Individual purchase of stock also sounds promising (I think it's called Direct Investment, you buy the stock with a minimal fee and hang on to it for however long).

Basically, I understand that putting money in a glass jar and burying it in a backyard is the worst thing to do because the money loses buying power ($25 from 10 years ago does not buy $25 of stuff today). But I've gotten so fed up with reading these stories about how the CEOs who wiped out their companies and the hedge fund managers who wiped out investors' portfolios are still making millions, that I want as little as possible to do with that. If I'm going to end up eating cat food 25 years from now, at least let it be by my own doing, rather than as the victim of some slicksters who I can never get punished.

How I decide if I need a new gizmo

Sheppard — Mon, 26 Oct 2009 19:40:00 GMT

I have very little willpower when it comes to being distracted by shiny new toys. So what i do now is take the cost of the item and move that much money out of my main bank account into a savings account. Then I see if I need that money in the next 30 days. If I need it within the 30 days, I still have it to hand to use. And if I don't need it, and don't want the item any more (which happens 99% of the time), the money can either stay in savings or I can withdraw it if I need it

At many credit unions & banks, you can now deposit a check by scanning it ....

Deborahmichelle — Mon, 26 Oct 2009 15:56:01 GMT

Dear All,, The SACRAMENTO BEE has a story this AM about how at many credit unions & banks, you can now deposit a check by scanning it in. See http://www.sacbee.com/topstories/story/2281288.html Yours in Him, Deb

Why & how proposed national health care legislation may hurt soome consumers ...

Deborahmichelle — Sun, 25 Oct 2009 13:08:15 GMT

Dear All, Today's NY Times has a story about how & why proposed national health care legilsation may hurt sooome conssumers. http://www.nytimes.com/2009/10/25/health/policy/25view.html?emc=tnt&tntemail0=y Yours iin Him, Deb

Easy spenders and tight fists

Pat — Mon, 19 Oct 2009 19:09:25 GMT

Some of those on the "no spend" threads are really struggling with not spending on a day to day basis. I appreciate their efforts, but sometimes I have the opposite one: I don't want to spend, even when there are things I need. (Mind you, I said sometimes, not always).

For instance, I need to have my eyes checked and know I'll need new glasses. I keep putting it off because I don't want to be out the money. I keep saying "I can't afford it," even when I'm putting enough to cover them in a savings account. That's awful, now that I've written it down!

Have you ever put off buying something you really needed because you didn't want to spend the money?

Mortgage refinancing - should I?

karenteacher — Sat, 03 Oct 2009 16:59:26 GMT

Last August, I began looking at the possibility of refinancing my mortgage to lower my interest rate and, hopefully, roll my HELOC, and possibly my student loans, into one payment, which would be lower than the current minimums, with the intention of reducing my repayment times and costs. The mortgage broker was unable to get me a low enough interest rate at the time, and I let it drop. Thursday she contacted me to let me know that a low enough interest rate was now available, and was I still interested. I'm not quite sure... so I'm looking for opinions. Here is the data:

1st Mortgage balance: 164,028.04 interest rate: 5.5% fixed minimum payment $1049.27 (not including escrow) - current payment $1099.27 (not including escrow)

HELOC balance: $36,603.34 interest rate: prime - 0.51% (currently 3.99%) variable minimum payment 1% (approximately $125) - current payment $400

Student loans: $4,617.35 interest rate: 6.125% fixed minimum payment $72.33 - current payment $400

Total amount owed: $205,248.73

Minimum due per month: $1246.60

Total amount paid per month: $1899.27

Proposed refinance: based on loan of $212,000, including paying all of the above and fees - will be reduced slightly to reflect the lower balances compared to August. The value of the house is roughly $280,000, so going over 80% loan-to-value and having to pay property mortgage insurance is not an issue - that's about 76% loan-to-value, so there's wiggle room depending on the appraisal.

Interest rate: 4.5% fixed

Fees: 1% origination $2120, .75% loan discount $1590; total fees including these would be $8733.60

Minimum payment $1334.17 - but I would continue to pay the extra money above, so $1899.27, so an extra $652.67/month

The repayment period would be roughly the same - sometime in 2021 either way, assuming I never increase my overpayment - but the interest charges would be roughly $15,000 lower. However, if I stay with what I have now, my student loans will be completely paid off in August 2010, and, should my financial situation change, I will have much lower minimum payments; likewise, at my current rate of repayment, my HELOC (which will get the $400/month from the student loans rolled into it as soon as they are paid off) will be repaid in about 5 years, again reducing my minimum payments in case of problems. So it's not just the cost - based solely on that I would take the refinance - it is also a question of reducing my expenses in case of changed financial circumstances. Due to car repairs and plumbing repairs, my savings are down lower than I would like, and in the next 5-10 years I will need to replace my roof - having an active HELOC is a fall-back for those expenses, but the rate is variable, and that concerns me.

I would like to pay these debts off as quickly as possible - they're the only debts I have - but I am concerned about increasing my minimum housing payment and not having the funds from the student loans and later, the HELOC, available if I need to adjust my payments in the future.

What would you do?

Seven mistakes we make with our money

slk2042 — Fri, 16 Oct 2009 18:07:29 GMT

Here is an interesting article I just read about seven bad habits we have that cost us money:

http://finance.yahoo.com/expert/article/moneyhappy/196161

I thought it was scary that Americans spend as much in overdraft fees as we do on fresh vegetables. Either we bounce too many checks, or we don't eat enough greens!

People who have given up looking for jobs ....

Deborahmichelle — Mon, 07 Sep 2009 15:20:10 GMT

Dear All, Here is a NY Times article about the hidden unemployed, those who have stopped looking for jobs out of frustration (they have looked long & hard, to no avail). Yours in Him, Deb http://www.nytimes.com/2009/09/07/us/07worker.html?_r=1&emc=tnt&tntemail0=y

Mint.com??

jennylyn — Tue, 06 Oct 2009 01:32:36 GMT

Has anyone used mint.com before? I have read about it in several places now and just checked out the site. Seems really neat (it's a free site that tracks your spending, savings, accounts, budgets etc by downloading info from you statements). Anyway, was thinking about signing up but would some feedback if anyone has used it before.

How Big of an Emergency Fund?

Pat — Wed, 30 Sep 2009 16:01:01 GMT

I know we've bounced this around a few times before, but a reader wants to know:

My next goal is to build a fully funded emergency fund. (I’m following the Dave Ramsey plan). I struggle with how much I will need in that fully funded emergency fund. Sometimes I think I need to take my income minus the extra that is going on bills and using that figure 6 months worth. Other times I feel that if I was in the midst of an emergency (lost job) I would cut out all frills, i.e., cable, any eating out, etc.

Would love to see some info on how much people should plan for per month and how many months they would feel comfortable with.

Would you please give your opinions to help her decide? Thanks.

Prepaid debit cards?

forginahead — Thu, 03 Sep 2009 21:38:35 GMT

GAWD -- These overdraft fees are KILLING me on this dang checking account. I'm wondering whether to simply close the account and go all cash, or if I should get a pre-paid debit card that won't let you go over.

Thoughts? Experiences?

Saving Money

Brandy — Wed, 09 Sep 2009 17:40:18 GMT

One of this week's articles is about saving money by some older methods and some tips for today's high tech world.

Check it out!

Credit Cards for Those Under 21

Brandy — Mon, 14 Sep 2009 12:17:17 GMT

MSN reports, "A new law bans plastic for those under 21 unless they have enough income or get someone to co-sign."

Read the article

Thrift in Japan - A big change frooom the citizens' previous luxury buys

Deborahmichelle — Mon, 21 Sep 2009 21:05:54 GMT

Dear All, THe NY Times today has ann iintriuging article on Japanese people's makign do with cheaper alternatives -- like buying an umbrella to cut down on cab rides! http://www.nytimes.com/2009/09/21/business/global/21yen.html?_r=1&emc=tnt&tntemail0=y Yours in Him, Deb

The New Fico

Brandy — Mon, 14 Sep 2009 12:04:38 GMT

MSN shares some things about the new FICO scoring.

"Those with small blemishes on their record should benefit from the FICO 08 scoring change, while high-risk borrowers and those who "piggyback" are the likely losers."

Read the rest of the article.