You Ask, Jean Answers

Ask Jean: Understanding Jobs Reports

“Jobs reports are always oriented towards claims for unemployment. Why don’t they report the employment number instead? Isn’t that a better indicator of the economy? Unemployment does not take into account those leaving the job market, falling off the unemployment rolls, etc.”
- Chaz

I think the confusion here stems from the fact that in the media, you often hear about the unemployment rate. But the Bureau of Labor Statistics, which tracks employment and releases the national unemployment rate every month, actually accounts for people who are employed and people who are unemployed.

“We take a monthly survey of households that asks people if they worked during the week that includes the 12th of the month. If they did not, and they are looking for work, they are counted as unemployed regardless of whether they received unemployment claims or not,” says Martin Kohli, a regional economist with the bureau. More…

Ask Jean: Name on the 529 Account

Hi Jean – I know you have many questions to answer. Sorry to repeat my question again but I’m really desperate for an answer. Should I change the name on my three kid’s 529 College Accounts to my mother’s name so that $4,000 a piece is not considered with the financial aid or scholarships they may receive? We wanted that money to be for books and spending money spread out over time. We will not have extra money to send them when they are in college. This was a little cushion we thought would help. They are 16, 13, and 9. And…if we change the name to my mom rather than us (the parents) are we going to be penalized? Thanks Jean!

Don’t worry, you’re fine. A 529 is always considered a parental asset as long as your child is still a dependent on your tax returns. If your child becomes independent, only then is it treated as the asset of the child. And unfortunately, though $4000 is a very nice sum of money, it isn’t going to make a big difference where financial aid is concerned. College tuitions are just too high.

Ask Jean: Figuring Out an Amount for Your Child’s Allowance

Jean: Loved the article in USA magazine. My question is: What are your children responsible for buying? Do they buy their own clothes, hygiene products, etc or is their allowance only for their wants and entertainment? How much do they get? We have friends that give their kids $150/month and the kids are responsible for buying everything. We give our child a small allowance but find ourselves dishing out more so we are trying to figure out how much to give. Thanks for the help – September

Hi September — Love YOUR name. My children are responsible for paying for entertainment, snacks and meals outside the house and gifts for their friends (which, if you have a teenage girl, you know is a lot) plus luxuries like clothing they don’t really need and manicures (again, teenage girl.). I basically figured out how much those things cost — $20-$25 a week and that’s what I give my kids. If you can say no to the dishing out without feeling like you’re leaving your kids short, you’re giving them the right amount. And for anyone who didn’t read the story: Here it is.

Ask Jean: Financial Aid

Jean – On the Today show, you mentioned financial aid for college students that everyone, regardless of income, should apply for. What was it and is there a website?  Thank you – Karen

Hi Karen –
Most everyone — unless you know for certain you will not qualify for financial aid — should fill out the FAFSA, the Free Application for Federal Student Aid. It’s not fun. But I recently finished a column for the Daily News about how to make it a little easier, you can check it out here. Good luck.

Ask Jean: Lowering Credit Card Interest Rates

Why would the Visa Credit Card people at my bank tell me the reason they cannot reduce my interest rate is due to the “Credit Bureau Act of 2009″?????? What exactly is this? Is this just a put off tactic or is there something to this? I’ve never heard this mentioned by advisors who say to ask for a reduction and give examples of people who get it. Thanks for your help.

Hi Betsy,
You’ve got me. The Credit Card Act of 2009 may be what they’re referring to, but I don’t know of anything in it that would prevent them from reducing your original interest rate. It prevents them from raising your interest rate on new purchases unless you pay 60 days late. What it doesn’t do is force them to reduce your interest rate. That they don’t have to do unless they feel like it and often they don’t feel like it unless they think they’re going to lose you as a customer. Here’s what to do: Call customer service back and ask again. If they say no, speak to a supervisor. And if that supervisor says no, speak to his or her supervisor. If you still strike out, look for a cheaper card to transfer your balance to (go to lowcards.com to find one). But don’t close the old card unless the annual fee is ridiculous. Closing it will take your credit score down.

Ask Jean: Shopping for Lower Credit Card Rates

Hi Jean,
I watch you all the time on channel 4 news. I like the way you answer everyday questions, rather than Suze Orman. I am thinking about your debt free diet. Right now I have a question regarding what else! Credit Cards. I just applied at my local credit union for a card at a lower finance rate to consolidate another card I have which I pay $100 a month and the interest takes up half the amount. I do have some cd’s that I can cash in to pay off. I do not use them but I did not close them. I do not have much left in life as far as savings goes. Help Please – MaryAnn

Hi MaryAnn,
Thanks so much for watching. You did exactly the right thing — when our interest rates are too high and our current creditors won’t lower them, we look for lower interest rates in the form of a balance transfer somewhere else. More…

Ask Jean: Mortgage In Bankruptcy Dragging Us Down

Hi Jean, I am really frustrated today. My husband and I claimed bankruptcy and it was discharged 2 years ago. We are trying to work out a modification on our mortgage (the mortgage was included in the bankruptcy). I just tried to get into a newer used car — the minivan we have is falling apart by the day. We are still in need of a co-signer. We have gotten a few small credit cards to help build our scores back up. We were at 740/745 when we filed and it brought our scores down to 640. We have built them up a bit to 700. When will we be able to get a car loan on our own? Is there anything else we can do? I got the feeling from the dealership that even if we had good scores, the house is what is dragging us down. Thank you for your time. – Robyn

Hi Robyn,
I’m sorry you’re frustrated. I wish that I could flip a switch and make this all better for you but the unfortunate fact about credit score improvement is that it takes months and, particularly after a bankruptcy, years — not days, not even weeks. Making sure that you pay every one of your bills on time and stay out of credit card debt is exactly what you need to do to get yourself back on your feet. More…

Ask Jean: House Poor

I am a single mom with a 4 and a 6-year-old. I was left with a $610,000 mortgage to pay. I have $160,000 put aside, that I am now getting into to pay this mortgage. I owe $3,300 a month. I have had the house on the market for 9 months and there are not a whole lot of buyers out there. I am in Steamboat Springs, Colorado, a resort town. My house is in a great location. I am trying to relocate to Austin, Texas. I would like to take the money I have left to put down on a house there, but if I hold on to this house, I will run out of that money and maybe get nothing for this house a year later. I really don’t want to foreclose, because I have excellent credit. What to do? I have my bank looking at it to get a loan and pay off the mortgage and then owe the bank and have a smaller monthly payment, but the only income I have coming in is child support which is enough to pay the bills and etc. – which then they might not even look at it as income. So confused! Really need some help.
- Shannan

Talk to your bank about the possibility of a short sale. Explain that you don’t have the money to continue paying this mortgage long-term and that you’ve had the house on the market but it is not moving. More…

Ask Jean: Tax Deductions for Donated Property

Enjoy your segments on the Today Show — wish they could be longer. I’m looking for information on how much tax deduction I realize for donating an item. I have a couple of instruments that could be donated to organizations who will put them into the hands of kids who wouldn’t otherwise have the opportunity to make music, but wondering if donating will be a huge loss or if I should continue to try and sell them.
– sheepdog55

When you’re donating an item or piece of property – rather than cash – you have to get at its fair market value, that is, what the item would sell for on the open market. That’s the amount that the IRS will allow you to claim as a deduction on your tax return. In most cases, it’s going to be a lot less than what you paid for it, because the item is now used. More…

Ask Jean: On the Verge of Bankruptcy

Hi Jean! My sister has found herself close to chapter 13 bankruptcy. Her attorney advised that she stop paying on her credit cards, which has now increased her total debt considerably. She is still making her mortgage payments on time. She and her spouse make too much money to file chapter 7, which she is fine with because she would rather pay off her debts. Her attorney said her monthly payments would total $3000 to do so – she knows she can’t afford that. Now the attorney is asking for another $1500 to continue to represent her. She doesn’t have that, so she can no longer use their service and she doesn’t know where to turn next. Do you have any suggestions? I advised that she contact her creditors herself to see what she could work out. Is it unwise to let one creditor know that you are working with other creditors as well? I have referred her to your website and your new books to see about finding some answers. She already has some of your books. Please help if you can. Thank you!
– Charger

At this point, your sister wants to look into credit counseling – and in fact, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that she – and all consumers – do so before filing bankruptcy. More…