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Refinance Credit-Card Debt? Short Sell an Auto? Yes and No!

These days, with so many resources available given the proliferation of the Internet, it’s not always easy to know who to trust.

After all, if you can refinance your home mortgage, it makes sense you should be able to do that with your credit-card debt and auto loan too, right? Well, yes and no.

Dear Mary: With your guidance, I have successfully refinanced my credit-card debt with a P2P (peer-to-peer) loan from Prosper. I’m still surprised by how easy that was.

I have three credit-card accounts that totaled $7,523. The minute the Prosper loan proceeds hit my bank account I went online and paid each of these accounts to $0.

Now I have these three credit-card accounts at $0 balance, plus a new Prosper installment loan. I have two questions: 1) How will this affect my FICO Score, which was 720 when I applied to Prosper and  2) Should I close the credit-card accounts? Jonathan

Dear Jonathan: This move could actually improve your credit score. Because you have $0 balances on your credit-card accounts, your current “revolving utilization rate” is at 0 percent which in credit-score talk is perfect. That means you are utilizing none of the credit limits on those open-ended credit accounts. That should boost your FICO score because 30 percent of your score is based on your revolving utilization rate. The lower your rate the more points you get in that category. 

Reader Feedback: Instant Pot, Home Chef, Etiquette, Tap Water

I have the most loyal and responsive readers on earth. Every day I can count on my inbox filling up with your opinions, reactions, gratitude, funny stories, arguments and even an occasional rebuke from a reader who lets me have it!

What really gets my attention is when I receive hundreds of responses to a single post. That’s when I know we’re on to something. Here’s a tiny sampling to show you what I’m talking about.

INSTANT POT 

My new Instant Pot sat in the box for a few weeks. I wasn’t sure what to do with it and maybe I was a little scared. Thanks for pushing me to give it a try. I joined the Instant Pot Community online and now I’m so comfortable using it. That group is wonderful and I’ve learned so much. You’re right—Instant Pot is amazing. Now I use it every day to make at least one meal. It has paid for itself more than once by now. I’m hooked on Instant Pot! Sally

Please remind everyone to read 10 Common Mistakes You Can Avoid as New Instant Pot User before they even open the box. I made mistake #1, foolishly. IP Customer Service helped me rescue my IP. Colleen

I love my Instant Pot so much I gave one to my daughter-in-law for her birthday. Let’s just say that was the best money I could have spent. Molly

Thanks for this post about Instant Pot. I am getting acquainted with mine, and I just made yogurt! I loved that heating the milk to the right temp was preset and I didn’t have stand over the stove watching to see that the milk didn’t actually boil. And then I could just stick the thermometer in and do other things while the temp dropped to 110F. Then I mixed the starter (left over from store bought plain yogurt) and poured the milk into glass jars and set the pot again. It worked great! JM

HOME CHEF  

For the first time in my life, I look forward to making dinner when we have a Home Chef meal kit in the fridge. My 15-year old son and I do it together (a miracle right there) just like we’re on TV. Even better, we love everything about the food. Myria

Haven’t been in a restaurant or take-out joint since meeting your Home Chef. Kudos and many thanks. William

Invest in Your Debt—It’s a Sure Thing with a Solid Return

Should I invest or pay off debt? That has to be at the top of the most common questions I have received over the years. And the answer is a solid—it depends! But only on one thing:

If you do not have an emergency fund saved and stashed in a safe place—and I’m talking about at least $1,000—you should save madly while you keep paying the minimums required on your burgeoning debt. Once you have an emergency fund in place, the answer to that question is clear:

Dear Mary: I have $13,000 in credit-card debt. I have designed a plan in which I would pay the amount of interest charged to me on my last statement plus $930 each month. The way I figure it, by doing this I will have this debt paid off in 15 months. I am going to have to dip into my investment account to come up with that additional amount each month, but I can do that. I could also just pay off the whole amount from my investment account (it is not a tax-advantaged retirement account), but I don’t prefer to do it that way. My investment account is at about $209,000 and I really don’t want to go under the $200,000 mark in that account. What is your suggestion? Anonymous

Dear Anon: You don’t say the interest rate you are paying on that debt, so I am going to assume it’s the current average rate of 17.55 APR. You don’t say how your funds are invested, so I will assume you are invested in the stock market (some equity stock, some bonds).

Make Your Own Tub and Shower Cleaners—Cheaper, Better and Faster!

The only thing better than making things myself is when what I make turns out to be cheaper, better and faster than something I can buy in the store to accomplish the same goal. That makes me so happy!

Dear Mary: I love, love, love! the homemade Tub and Shower Soap Scum Remover. It works better than any product I have ever used. Our tubs and showers have never looked so good! Now, I would love to know how to make my own daily shower cleaner—the kind you just spray and walk away for daily tub and shower maintenance between cleanings. Any ideas? Polly

Dear Polly: Yes! I’m confident this is the recipe you’re looking for.

Daily Shower Cleaner

  • 1/2 cup hydrogen peroxide
  • 1/2 cup rubbing alcohol
  • 1 teaspoon liquid dishwashing soap (like blue Dawn)
  • 1 tablespoon dishwasher rinse aid (like Jet-Dry)
  • 2 cups water
  1. Pour all of the ingredients into a 24-ounce spray bottle. Mix gently. Each day before you step out of the shower, spray the walls then walk away.
  2. This no rinse, no wipe, no scrub shower cleaner spray is safe to use on glass, glazed tile, stone, tubs and shower curtains. The gentle formula contains no bleach, ammonia or harsh chemicals and it wont scratch surfaces or leave behind a dull residue.
  3. Store your daily shower cleaner in a dark cupboard, as hydrogen peroxide breaks down quickly in the presence of light.

Here, for readers who may have missed it, is that nearly magical cleaning potion you love so much (so do I!)

Tub and Shower Cleaner

Pour one cup blue Dawn into a 32-ounce spray bottle (1/2 cup Dawn if you are using a 16-ounce bottle). Fill the bottle the rest of the way with white vinegar. Apply sprayer top; shake gently to mix. To use: Spray liberally on the area to be cleaned. Allow to sit from 30 minutes up to overnight, depending on the severity of the problem. All of the offensive gunk and grime will break down and become soft and gooey. Simply rinse it away. For especially challenging situations—or if this is the initial treatment—use a sponge or brush to gently scrub the surfaces before rinsing. Caution: Do not use on stone, marble or granite.


Dear Mary: We live with extremely hard well water. Given this challenge, can you recommend a brand of laundry and also automatic dishwasher detergent that will suitable for hard water? Thank you! Jeannine

Dear Jeannine: Rather than changing products, I suggest you supplement what you are using now—in both the clothes washer and automatic dishwasher—with Super Washing Soda, also known as sodium carbonate. It’s a natural product (read more about it HERE including ten other ways to use washing soda around the house) that looks just like white powdered detergent. Super Washing Soda boosts the power of soaps and detergents because it instantly softens the water. I’d start by adding 1/2 cup Super Washing Soda to every laundry wash cycle and the same amount to each dishwasher load. You can just toss it into the machine before you close the door. As a bonus, sodium carbonate (Super Washing Soda) will clean out the hoses and pipes in your appliances to keep them from mineral build-up that can wreak havoc on a household appliance. 

Most supermarkets and discount stores carry Arm & Hammer Super Washing Soda, or you can easily order it online through Amazon. It comes in a 55-ounce box for about $5. Good luck and be sure to let us know how that works for you! 

Reader Feedback on Cordless Hand Vac, Instant Pot Single-Serve and Fresh AIR

Did you notice or read about yesterday’s massive Internet outage? As I fumbled and fumed over a variety of websites being down, I had to laugh at myself.

Here I was upset with a delay that would be measured in minutes when not that many years ago, I had to wait days—even weeks—to get responses. Back then, your responses and feedback came in envelopes with stamps attached.

Whether I hear from readers via the U.S. mail or through my inbox, I love it. But I have to admit that I am impatient. When it comes to hearing from you, the sooner the better!

Dear Mary: The first time I used my new handheld vacuum (see Best Inexpensive Cordless Handheld Vacuum) I discovered another great feature. With other handheld vacuums the bulk of the vacuum’s weight is generally in front of your hand. You need a bit of strength to hold it for long. But this specific new Dustbuster model has the weight balanced right under the handle (which is better designed than the Dirt Devil, in my opinion ) so you can manipulate it with ease and hold it longer than the others. Thanks for the heads up on this vacuum. Linda

Dear Linda: I couldn’t agree more. Finally, Black and Decker got it right with this Dustbuster redesign with a mighty 16v lithium battery.

Let’s Take a Few More Questions from the Audience

I don’t mention it as often as I should, but the truth is that I’d be lost without you, my loyal, encouraging and responsive audience. Thank you for being there every day and for filling my email inbox to overflowing with your comments, questions and outpourings of love and gratitude. Please don’t stop. Ever.

Speaking of questions, let’s take a few from the audience …

Q: I am having a problem with slow-cooker cooking. I got a new cooker and now everything—even pot roast—is turning out dry! Any ideas on what I’m doing wrong?

A: Slow cookers cook at a much higher temperature now than they did say 20 years ago. It is due to food safety concerns, but in reality and in my opinion, that has taken the advantage of the slow cooker away—the advantage for working families to start meals before work and come home to tasty, properly cooked food even if it’s been cooking for 8 hours or longer. All too often results are mushy, dry and flavorless.

Handling an Inheritance Requires a Game Plan

While not always easy to think about, inheritances are a part of the financial picture for many baby boomers—and just one of the topics that popped up as I reached into my mailbox this past week.

Dear Mary: Before reading your book, Debt-Proof Living I believed we were doing just fine with our money. Recently, my husband’s father died and we received a small inheritance. We sat down to decide how to handle this money. I pulled out the book and showed my husband the chapter on the 10-10-80 formula and the information about the Freedom Account.

We sat there and figured out our expenses. We were shocked to discover we’ve been spending almost $1,800 more than we make each month. I guess we didn’t notice because we would take a
“little” out of savings to cover expenses as needed. At this rate, all

Parents’ Financial Decisions and Their Adult Children

Parents of adult children may believe it’s none of their kids’ business how they handle their finances and what they do with their money.

While that may be true, never forget that every financial decision you make has the potential one day to become either a burden or a blessing for your family.

Dear Mary: One of our friends suggested that we look into a plan called “Life Estate,” which would make sure that our home goes to our children no matter what.

We own our home and have no debt, but have no long-term care insurance either. Of course, we hope to stay well until we die, but in the event we would have to go to a nursing home and our monies run out, we understand this plan would preclude the nursing home from taking our home. Your thoughts? Tom and Jackie

Dear Tom and Jackie: I am not an attorney, but I do have experience as a real estate broker. Generally, I can tell you that “life estate” is a term used to designate the way legal ownership or title is held on real property.

To do this, you would deed your property to your children, who become the “remaindermen,” while you become the “life tenants.”

As the life tenants, you retain possession of the property including full costs of maintaining the property. The life tenants cannot sell the property without the consent of the remaindermen. Further, your children would receive full ownership (fee simple) immediately upon the death of the last life tenant, without the property going through probate.

There are advantages and also a few disadvantages for you to convey your property now to a life estate that you need to fully understand before making a decision. I suggest that you meet with a qualified real estate attorney.

If you decide to deed your property to a life estate it should be as simple as completing forms and having them properly recorded in the county where the property is located.

Dear Mary: I have been reading your books, newsletters and this daily column for years. You have really helped me a lot. Thanks! I have passed along everything that I could to my parents, but evidently they haven’t read a thing.

A year ago, my brother bailed our parents out from foreclosure and they are still so far in debt they can’t see even a glimmer of light.

Now they want to come for a visit and I want to tell them not to come because I know they can’t afford it. If you ask them if they can afford it they will laugh and tell you they can’t afford anything, but that doesn’t change anything. They have nothing in savings, and spend money (credit cards) like they have all the money in the world, trying to keep up appearances.

Should I tell them that they can’t come visit until they get back on their feet again, or just let them come and continue to flounder and get more in debt than they already are? I’ve been able to put them off for a couple of months, but I don’t know how much longer I can. I feel like I’m caught between a rock and a hard place. Debbie

Dear Debbie: There is a reason I have NOT written a book, How to Manage Your Parents’ Money. That’s because you can’t control your parents or make any useful demands on them.

My advice is to back off. Call and invite them to come and visit at the earliest possible time. Do everything you can to make their visit enjoyable including not talking to them about their financial situation. Let the way you live and manage your finances speak louder than anything you can say.

Should they die broke leaving all kinds of debt, you will not be liable for any of it, provided you have not added your name to any of their accounts.

Please, just love them and allow them to have a warm and loving relationship with you despite your differences.