Starting this week, every Thursday I’ll be dedicating my blog post for the day to answering one of your financial questions. This week’s comes from Patsey in Woodland North Carolina. She writes:
I have a 22 year-old daughter who begins work as a nurse in July. I have recommended the asset allocation (early career in your book The Difference) after she saves up 8 months in expenses in cash or money market fund. Do you have a better recommendation or did I miss the mark?
Answer: In a perfect world, we would all have 8 months in living expenses in the bank. The reality is however, that putting that much in the bank, especially when you’re starting out, can be a daunting task.
Yesterday Karen Blumenthal stopped by my radio show to discuss her new book “The Wall Street Journal Guide to Starting Your Financial Life.” Starting small, Blumenthal says, is a key thing for workforce newbies to remember. “The first paycheck you might have immediate living needs…you don’t want to run up debt. You need to commit some of each paycheck to build that fund. Start with even $25 and then increase it. In every paycheck you should aim for as much as 10%. If you can’t do that right off the bat start with what you can do,” said Blumenthal. More…
What’s $7? Enough, evidently, to get me taken to task by my pals David Bach and Carmen Wong Ulrich on this morning’s Today. This was the question from JP in Odessa, TX:
“I want to refinance my wife’s car and her current interest rate is 7.4%. I am the cosigner for her. If we refinance her car, will that lower our credit score? We only owe $15,000 which is less than the car is worth. The reason I am asking is that we plan to purchase our first new home this year.”
I said yes. A car refi is a a no brainer of a transaction. It costs about 15 dollars and takes about the same amount of minutes. I also checked with the credit bureaus to make sure that this swap would not affect JP’s credit – something I would not want to happen in light of his desire to go mortgage shopping soon. They assured me it would not as long as he did the shopping within 30 days and replaced the loan with another the same size.
The others on the panel? They disagreed with me. It’s only $7, David said and Carmen agreed.
More…
MONEY 911
On this morning’s segment, we talked about how an auto loan refinance affects your credit (it doesn’t, if you do all of your shopping within 30 days) and how to lower your monthly student loan payments, among other things. Watch the video for more:
This morning, I joined Dr. Nancy Snyderman – author of Medical Myths That Can Kill You – on Today to talk about the number one cause of bankruptcy in the country. If you watched the video above, you know it’s not unaffordable mortgages or even credit card debt.
It’s illness. And cancer patients are suffering. They’re having trouble paying for life-saving care – running up large debts, filing for personal bankruptcy and even delaying or forgoing potentially life-saving treatment. Even having private health insurance (that you purchased or receive through your employer) isn’t enough to save you.
More…
I mentioned in my first post that I have a bad habit of emptying my wallet by going out to eat. Although I’ve cut back a bit – the pain in my back tells me my money would be better spent on a new mattress – I’m still managing to hit my favorite spots a few times a month.
How? I don’t know about you, but in my Brooklyn neighborhood, the restaurant deals are flowing.
On Tuesday nights, my fiance and I can bring our own bottle of wine to our favorite Mediterranean spot, saving us at least $20 – $30. On Thursdays, we can get a free entrée at a local French restaurant if we buy another entrée and an appetizer (Although not a deal I can take advantage of, this same restaurant lets kids eat for free on Friday nights). There are more than a handful of restaurants in Manhattan – including David Burke’s Townhouse, where an entrée at dinner will easily run you upwards of $30 or $40 – offering three-course lunches for less than $25. More…
