Road to Wealth

Road to Wealth Archives

“An investment in knowledge pays the best interest.”
- Benjamin Franklin

In this column, “A Wealth of Knowledge,” Michelle Singletary answers your basic personal finance questions every week. Put yourself on the road to wealth by seeking answers to financial questions that you don’t know.

Expert Advice

Q: I have high credit card balances with high interest rates. I have not been late, nor am I behind on payments; however, it is a burden. Can you help? Evans Mills, NY A: For folks overwhelmed with credit card debt, I suggest they go to the National Foundation for Credit Counseling Web site to [...]

Q: I would like to do a “spending fast” with a youth council. Do you have any suggestions on how to get the youth to buy into the fast? Denise, Washington, DC A: First, good for you for trying to help young folks manage their money. And, what timing for your question, because April is [...]

Q: I have always been told (and everyone I know believes the same) that employee life insurance is the cheapest way to get life insurance. Out of curiosity, I took a look at what I could get privately and was shocked to find private term level life insurance 30% cheaper: $1,138/year for private vs. $1,643/year [...]

Q: If you already have a financial judgment against you, can a consumer credit service stop wage garnishment? Elizabethton, TN A: You will see a lot of ads from companies claiming if you give them money–sometimes thousands of dollars–they can help you get rid of a financial judgment. I would steer clear of such claims. [...]

Q: Which is better: Buying a car that’s new or used? A: If you’re dying for that new car smell, go to an auto parts store and buy a “new car smell” air freshener. But seriously, I wonder how much thought people give to the cost of buying a new car. The average cost of [...]

Q: Does it make sense to create a budget when unemployed? What’s the use? A: I know it sounds crazy that you would have to bother with a budget if you’re broke. But think about it. You actually need to budget more when your funds are limited. Why? A budget forces you to really look [...]

Q: I am a single parent of two and primary caretaker of an elderly parent. In 2004, I bought a new home for $650,000. My youngest son decided that he wanted to attend college in Florida. It is a private school, which cost approximately $45,000. I refinanced my mortgage at what I thought was going [...]

Q: How does debt negotiation work? Is this a good debt management strategy? Green Bay, WI A: I think what you are referring to are companies that promise to help you settle your debts for far less than you owe. Tread lightly here. Many of these companies are just scams. And those that aren’t will [...]

Q: When is a good time to cash in U.S. savings bonds? A: According to information on treasurydirect.gov, it’s important to check your savings bonds periodically to determine if they’re still earning interest, and if they’re not, they should be redeemed. I was surprised to learn that billions of dollars in savings bonds have stopped [...]

Q: I owe the IRS about $50,000. I also am in arrears for child support payments. I have about $40,000 in bills, car loan and credit card debt. I’m receiving unemployment insurance weekly. I can’t afford a bankruptcy lawyer or one to handle my IRS problems. Any suggestions? I am in dire need of help. [...]

Q: My husband lost his job. He was the main breadwinner. Right now, we are struggling to pay our monthly credit card balances. We are deciding whether to file bankruptcy or find another route for help. This is the first time we are having a hard time paying our bills, and we do not want [...]

Q: Is it better to lease or to buy a car? A: Many financial experts will argue the pros and cons of leasing a car Let me be crystal clear about where I stand on this issue. For the overwhelming majority of people who lease a car, it’s an incredibly unwise financial move. Here are [...]

Q: I recently found out that my home is worth $140,000 less than what I paid for it four years ago. I have a 40-year loan. My mortgage company refuses to modify the loan. I was not very well informed and took bad advice in this purchase. I’ve heard about people just walking away from [...]

Q: I am in the process of getting a divorce, and I want to rebuild my credit [score]. It’s very low. And, I don’t know where to start. I want to use a credit agency, but I am not sure. I have heard that it’s best to use nonprofits; but I never hear that they [...]

Q: My husband was divorced from his first wife approximately eight years ago. They have three accounts in collection, which is hindering our chances of purchasing a home. Is it possible to write a letter to the creditors to settle his half of the debt or is he responsible for it all? San Francisco, CA [...]

Q: Is it a good idea to make use of refund anticipation loans when filing taxes? What’s the big deal? A: A refund anticipation loan (“RAL”) is a short-term loan backed by your tax refund. And it’s a bad idea because of all the fees involved. The loan lasts only until your refund arrives, which [...]

Q: I am a homeowner thinking of getting our home into a short sale. I need a list of reputable companies who may well assist me with this process. Lake Forest, CA A: I’m so glad you asked about reputable companies, because there are so many scams out there for homeowners who need to sell [...]

Q: Now that it’s tax season, are there certain scams to be on the lookout for? A: Every year, the Internal Revenue Service issues warnings to taxpayers about tax scams. You would think the warnings weren’t necessary as people become savvier, but the scams keep coming. The most common tax scam is executed in what’s [...]

Q: My husband and I are in debt due to his previous foreclosure, and we both have school loan debt–his from many years ago, that he is paying off now; and I finished undergrad school last year. I lost my job in June of last year and have not found a job. I have searched [...]

Q: I have some medical school debt. It’s not significant compared to many, but one of the companies is threatening legal action and refusing to even consider accepting a plan to pay the debt. What are my options? Thornton, CO A: As you are finding out, student loan debt, which is the same as debt [...]

Q: My husband and I have been working really hard the last couple of years to get out of debt. Most of our cards are cut up, and we haven’t used them in a very long time. I have been enrolled in a credit counseling agency since September 2009. We pay $69 per month just [...]

Q: I have an estimated $40,000 worth of student loan and federal tax debt. My annual income is around $42,000. One of my dreams is to be debt-free by age 49. I am 46. What would you suggest to meet this goal? I also have custody of my two grandchildren, ages 6 and 2. Ronny, [...]

Q: I currently have an upside down car loan. I owe $13,000 dollars on a car worth approximately $3,000. I am currently two months behind on my car payments and wondered what could be done to get me out of the loan or deficiency that would come from repo. Waynesfield, OH A: Normally, I might [...]

Q: Credit card companies have regulations they must comply with when offering special payment plans. So, why do the options differ between companies, if they all have to abide by the same rules? Roseville, MN A: I’m afraid you are mistaken about any regulations that require credit card companies to offer the same type of [...]

Q: When does it make sense to declare bankruptcy? I make approximately $50,000 a year and own my own home, but owe over $50,000 in unsecured debt. I am behind in most of those accounts. Some are in collections. I’ve tried negotiating lower interest rates but, since I’ve ruined my credit rating, the credit card [...]

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Last modified: April 26, 2011 at 3:02 pm