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…
Saving – both for retirement and for college – seemed to dominate this week’s installment of Money 911 on Today. Watch the video below to see our take on 401(k) rollovers, 529 plans, and whether the money in your investment accounts is safe.
For the past few months, more and more people have been telling me that they’re keeping their cash at home. I’ve been wondering, is this actually anecdotal or is it just a trend? Let me know how much cash you’re stashing at home by answering the poll below. Your response is anonymous and I will post the results in a couple of weeks.
What’s influencing your decision to keep or not keep your cash at home?
I’ve been talking for many, many (many) years now about running a marathon. How many? About 15. I was training for the New York City Marathon with a friend and had even completed a 20-mile training run when I got pregnant with my first. I was able to run for the first five months of the pregnancy, but the marathon was out.
Over the years, I have talked about trying again. I’ve signed up. I’ve started training. For one reason or another — it’s difficult to get those really long training runs in when you have kids, my confidence was shot, I was tired! — I never made it. More…
