The Cost of Dipping Into a Retirement Account

More people are taking loans from their retirement accounts (401(k), 403(b) or what have you) than ever, simply because they can. Here’s the problem: Seeing one’s retirement account as a savings account or worse, a personal ATM machine. That’s so ridiculous I cannot even tell you. Sure it’s your money, but it’s not your money now. It’s for later. It is out of your reach, so you need to get it out of your mind.

Borrowing from the nest egg, from retirement savings

The beauty of an IRS-approved retirement account is that you get to save pre-tax dollars. It’s no secret that what you see in your paycheck is not the full amount you earned.

In fact, the amount in your paycheck is shrinking and many of our elected officials are trying to shrink that even farther by increasing taxes. You know what I mean if you live in California one of the most heavily taxed state with a governor who is threatening to once again increase sales tax, personal income tax, and taxes on small businesses. (Did I mention my husband and I left California for this very reason?) But I digress ….

A retirement account allows you to save your money before it gets taxed. If you take your money home, you have to earn about $1.00 to see $.75 in your paycheck. But if you put it that dollar into a retirement account instead, you get to deposit the entire $1.00. You get to invest the $.25 that belongs to the government. It’s not a gift; you will have to pay that $.25 to the government eventually. But for now you get to keep all the growth you will achieve by investing the government’s money! Get it? And it’s all locked up so it is safe from YOU. That’s the beauty of a retirement account.

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More Super Summer Slow Cooker Recipes

Slow cookers, what’s not to love? Up until a few days ago I was smuggly confident I had a very good handle on the slow cooker appliance—brands, sizes, prices and the best inexpensive options out there (see “Everybody Needs a Slow Cooker”). And now I just may need to add a fourth option—a casserole slow cooker.

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This is genius. The stone insert in a casserole slow cooker is a 9 x 13 stoneware casserole baking dish. It goes from the slow cooker base to the table for serving and it’s oven-safe, too. And you can leave the insert in the base set on warm to serve on a buffet table. The casserole slow cooker appears to be just perfect for making lasagna, breakfast casseroles, desserts and other casserole-type dishes that work best in that size and shape baking dish.

The Casserole Crock Pot comes in two versions—Manual Low, High and Warm Settings and Programmable Digital. I’ve just now ordered the manual version (half the price of the fancy model) and cannot wait to give it a test drive. Watch for my review and feedback coming up soon in a future post.

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Help! Rust Stains on My Fiberglass Bathtub

Dear Mary: Our water is very hard and as a result has created rust-colored stains in the fiberglass bathtub. I’ve tried to scrub it away with Comet, but that did nothing. How can I remove these terrible stains? MaryAnne

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Dear MaryAnne: I’m going to assume you have already tried applying a paste of baking soda and white vinegar to the stains, allowing that to sit for a few hours. If that or the Comet didn’t work, I have two options for you, starting with a product you may have already but never dreamed you’d use in a bathtub: Lysol Professional Toilet Bowl Cleaner. Cover the stains with it and allow to sit for an hour or so. You may need to scrub a bit with a Scotch-Brite or similar type scrubber. I am reasonably confident this may take those stains away, that’s how well it works to clean fiberglass, acrylic and porcelain tubs.

However, if your stains are really stubborn—or you would need to go out and purchase the Lysol toilet cleaner—I’d skip that and go straight for the big gun in rust-removers, Iron Out. I love this product because unlike other commercial rust removers, it contains no harsh or abrasive chemicals. And boy does it work well to remove rust stains from just about anything, including fabric.

Good luck and be sure to let us know how this works for you. 

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The Cheap and Easy Way to Build a Great Credit Score

Dear Mary: You have written in the past that it’s important that we keep our credit cards “active” even when we keep them at zero balance. How often should we use them to keep them active? Does it matter how much we put on them? Can it be a small purchase that we pay off immediately? Thanks. Nancy

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Dear Nancy: Using a credit card twice a year is more than sufficient to keep the account active. The purchase amount is inconsequential. Use it to purchase a 99-cent app and you’ll accomplish the goal. Then pay it off right away—even on the very same day. That way you won’t forget or run the risk of allowing a silly small purchase to create a rolling debt.

The system isn’t looking at the size of the purchase or the amount of time between purchase and repayment—only that a transaction is recorded and payment is received according to the terms and conditions you agreed to when you opened the account.

These days it’s important for every adult to own one good, all-purpose credit card for the purpose of maintaining a high credit score. To do so does not require one to carry a smidgen of debt (it’s NOT a debt score), nor to use the thing habitually. You could use your card to purchase two apps a year ($1.98 total, paid off immediately) and build a killer credit score. I have a feeling that’s exactly what you plan to do. Good for you!

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Making the Shift to Living with Cash

Banks and retailers benefited greatly over the past decades by promulgating the cashless lifestyle. They convinced us that it’s much safer to carry plastic and more convenient, too. Cash, they declared, is old-fashioned and clunky. Plastic is hip and cool. Gradually, Americans fell for the pitch and, in turn, got more than we bargained for. Going cashless has turned us into a debt-ridden society.

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But things are changing on the consumer front. Cash is making a comeback.

Some people, like reader Martin B., are moving to cash to avoid credit-card companies, collection agencies and others. Susan J. and her husband wrote that they’ve closed their bank and credit accounts because of past problems with overdraft charges and identity theft.

Still others like Bill and Jan W. are using money orders to pay bills. They cash their paychecks at their company credit union because it doesn’t impose high fees like check-cashing stores.

All of these people have gone to cash to avoid specific problems. But there’s another reason—perhaps even more noble than any other—that individuals are making the shift to a cash lifestyle: To reduce spending and improve savings. 

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How to Stop Worrying Forever

Somewhere in my life, I picked up the behavior of worrying. About money, mostly, but I can worry about anything, really.

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I don’t believe I was born worrying, so I must have learned to worry from past experiences and from watching people worry—probably my parents. Actually that’s good news. If you, like me, have struggled with learned worry, that means that we can unlearn this debilitating behavior.

I can’t report that I’ve completely won the battle against worry, but I have turned the corner where worry no longer controls me.  If worry is wreaking havoc on your life, there really is something you can do to put worry in its place.

Worry is useless. It doesn’t do anything. Worry cannot control the future or change the paste. It can’t pay a bill, solve a problem or cure an ill. But it can throw you into emotional paralysis.

Worry weighs heavily on your heart. And it is a very heavy, crushing weight. 

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Take it Slow and Easy

It’s summer, it’s hot and the last thing you want to do is to heat up the kitchen. Going out is expensive and the family has threatened a mass uprising if they have to look at one more summertime salad bar. Don’t despair! That slow cooker you reserve for the cold winter months is a perfect solution for the summer, too!

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Your slow cooker creates very little heat and is amazingly cheap to operate. It costs only pennies a day to operate all day long and with energy costs skyrocketing, that’s good news for your electricity bill, too. But, you may protest, I’ve tried to use a slow cooker and the results have been disappointing at best. Pardon my saying so, but that’s likely because you don’t know what you’re doing. You need a crash course in Slow Cookery!

Know your cooker. A traditional crock-pot where the heat surrounds the cooking insert is better than a slow cooker where the heat comes from underneath. The most common models have a removable pot insert. The two heat settings are low (200 degrees) and high (300 degrees). The slow cooker, or “multi-cooker” usually cooks from the bottom and might have a thermostat allowing a wide range of temperatures. The commonly used term Crock-Pot is Rival Manufacturing company’s trademarked name.

Curb the urge. Resist the impulse to peek inside the crockpot unless the recipe directs you to stir partway through. Every time you lift the lid, you add about 20 minutes cooking time.

Leave space. Don’t fill the insert so much that the lid doesn’t fit tightly. Without a tight fit a vacuum will not form, and that can dramatically affect cooking time

Vegetables on the bottom. They take longer to cook than meat. Root vegetables, like potatoes, carrots, and turnip, should be cut in small pieces, about 1-inch, and layered on the bottom of the crock so they will start to cook as soon as the liquid heats.

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How Credit Inquiries and Cosigning Can Affect Credit Score

Dear Mary: My son is looking for an apartment near his new job in order to avoid a horrendous daily commute. He recently told me that each time a landlord/manager runs a credit check on him, his credit score drops 15 points. What recourse does he have?

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Dear Judy: Most potential landlords and their management companies do check a potential tenant’s credit history because it’s a good indicator of how a person lives his or her life.

Credit inquiries are classified as either “hard inquiries” or “soft inquiries”—only hard inquiries have an affect on one’s FICO score.

Soft inquiries are all credit inquiries where your credit is NOT being reviewed by a prospective lender. These include inquiries where you’re checking your own credit, and inquiries made by businesses with whom you already have a credit account.

Hard inquiries are inquiries where a potential lender is reviewing your credit because you’ve applied for credit with them. These include credit checks when you’ve applied for an auto loan, mortgage, credit card, insurance and a search for a rental property such as an apartment.

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