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 a lump sum of $7,000. I need advice on how to distribute this extra cash. I have $5,000 in an emergency fund, $13,000 in credit card debt, with a 34% interest rate and a $6,700 car loan with a 14% interest rate. What should I do with my extra cash? A: First, […]

Q: I came across a statement saying the government should allow homeowners to include their primary residence in personal bankruptcy. What does that mean exactly? Waldorf, MD A: Right now, when someone files for bankruptcy protection under a Chapter 7, they can wipe out unsecured debt. But you cannot keep secured property, such as a […]

Q: My 401(k) keeps losing money. But other information, including how much I’ll get in Social Security benefits, indicate that I need to put more into my 401(k). Should I keep investing when it is losing money? D. Little, Fayetteville, NC A: The question you should be asking is why your 401(k) is losing money, […]

Q: How does closing a credit card I am not using affect my credit? Should I close it, or leave it open and just sitting around? Keansburg, NJ A: I get this question all the time. Whether closing a credit card account will hurt your credit score depends on how much debt you are carrying […]

Q: I’m a single mom and, for several years, due to mounting medical and educational expenses for my child, I was unable to pay my bills on time, albeit, I did pay them. Now, I am in a better financial situation and can pay them on time, but I’m having trouble establishing a solid budget. […]

Q: My house has no mortgage. I have approximately $50,000 in credit card bills at about 12%. We are okay, but barely. I am paying credit cards at a rate to pay them off within three years. Should I take out a mortgage at a low rate, putting my house in jeopardy? (I am 66 […]

Q: I am the sole caregiver to my father, who lives with me. I am currently employed full-time, working under my marketable value due to my inability to work a normal schedule. I pay a caregiver for the hours I am at work. My father’s income is completely exhausted, paying for care for him so […]

Q: I own a home (primary mortgage) in one state, while living in another. I have rented my home and am renting where I live now. I’m considering refinancing the loan from a 4.67% (2 years ago) to a 4.25%, with 0 points and 0 closing costs. Will my circumstance have any implications in terms […]

Q: My husband recently received his green card and social security number and is trying to establish credit. He has none, obviously. A friend who works at a bank told us to try a secured credit card. He can’t even get approved for a secured card. Another person recommended a car loan with a co-signer […]

Q: I have a student loan that is about 15 years old and has tripled from $33,000 to $94,000 in that little time. I’ve asked for an explanation from the government and none of the explanations have made any sense. I’ve paid what I could over the years, but the government has recently come down […]

Q: I would like to know if we could file bankruptcy against IRS back taxes. I really don’t know if we should file bankruptcy or consolidate our debt. Muskogee, OK A: You can try to erase your tax debt in bankruptcy, but it’s not as easy as just filing. There are some hoops you have […]

Q: I was forced into a foreclosure because my spouse cleaned out our bank accounts and abandoned the house, and it is the only thing that should be negative on my credit. As a result of the foreclosure, all of my credit cards lowered my limits. I am looking for a counselor to advise me […]

Q: What are the legal consequences of refusing to pay unsecured credit card bills? What can they do to the debtor? Chattanooga, TN A: I have a question for you. Why would you “refuse” to pay your credit card bill? Is it because you are unemployed? Are your finances so tight that you can only […]

Q: I filed for bankruptcy this month. I need help with getting my student loan and IRS debt clear. Can someone help me? A: As a result of the recession and its aftermath, many people think bankruptcy is the answer to their financial headaches. And it can provide relief for credit card debts or other […]

Q: Would it benefit me to get a consolidation loan instead of paying on three separate credit cards? I have excellent credit. It’s just difficult making three separate payments. One would be better. Lynn, Fort Lauderdale, FL A: I don’t understand what’s difficult about making three payments? You send three checks or make three clicks […]

Q: I currently have a car loan that has a 17.5% interest rate because I had poor credit when I applied for it. Despite paying my bills on time for several years, my credit score does not seem to improve over time. I am interested in refinancing my car at a lower interest rate to […]

Q: I make over $100,000 a year and have about $20,000 in my 911 fund. But the kicker is my credit sucks. I made stupid mistakes when I was younger and in a bad relationship; he basically ruined my credit. Either way, it was my fault. I am ready to buy a house. I can […]

Q: How do I get rid of debt if I am barely making money? I earn an annual salary of $35,000, but my student loans owed are approximately $40,000. I would like to go back to school for a master’s, but that means accumulating more debt. Hartford, CT A: First, don’t you dare accumulate more […]

Q: I have made some quick decisions over the past year (leasing a nice car, leasing a nice apartment, etc.), all because I have taken a position that can pay for these luxuries. I have $17,000 in credit card debt and was sure I could really start making a good dent into them. But, unfortunately, […]

Q: I have a high debt ratio. I don’t own a home, but rent a very expensive two bedroom apartment. My son lives with me, and he is going to community college. This first semester, I paid for out of my salary. However, I need to get help with that, because of all the debt […]

Q: My husband has a $20,000 debt on an open line of credit. The interest rate is 27.5% and rising. The monthly payment is $540. Maybe about $50 of that monthly payment goes to the principal. I have been trying to look into programs for him because he says he doesn’t have time. Bull! Anyone […]

Q: How do I deal with the iPad mania? The guilt feelings create conflict if we don’t get the latest and greatest. Quint, Washington, DC A: My grandmother, Big Mama, taught me a very effective way to deal with electronic envy or, for that matter, wanting what others have. Ask yourself: “Is this a need, […]

Q: I just received a letter from a collection agency about an old doctor’s account (about $400). I had been out of a job for 18 months. Should I call them and try to arrange monthly payments or just send any amount that I can afford on a monthly basis? Tesa, Los Angeles, CA A: […]

Q: I want to combine about $5,500 worth of debt into one payment. How can I do this? I went through a bankruptcy in 2006. My credit is not bad, but my credit to debt ratio is too high at this time. Stroudsburg, PA A: With a recent bankruptcy on your credit files, I doubt […]

Q: I have a credit card that charges different amounts of interest for cash advances, purchases and balance transfers. But, I have noticed that, even though they charge the interest to each account, they keep increasing the amount of each account balance. Is that correct? Compton, CA A: Without more information, I can only take […]

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Last modified: April 27, 2011 at 3:21 pm