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Don't be embarrassed to ask money questions

December 17, 2011
By Mary Hunt , Times-Republican

Dear Readers: I recently asked a group of women of all ages to tell me the money questions they most wanted answered. Because they could remain anonymous, the responses poured in.

Q: I'm a stay-at-home mom and haven't had a paycheck since I was a teenager. Will I be eligible for Social Security benefits?

A. If you are married, you will be eligible. Your Social Security retirement benefits are tied to your husband's. You can file when he does, provided you're at least 62 at that time.

Your monthly check will be equal to 50 percent of his, if he waits until "full retirement age" to begin collecting benefits (65, 66 or 67 depending on the year he was born).

If he opts to begin drawing early at 62, then your benefit will be reduced to 37.5 percent of his monthly check. (If you're single, divorced or widowed, the amounts vary.)

We're not talking a lot of money here under the very best of circumstances, so plan on it as a supplement, not enough to live on. Go to the Social Security Administration website at www.ssa.gov, and check out the FAQs. This site is remarkably user-friendly.

Q. If my parents die with a lot of debt, will I be responsible for paying it?

A. You will not be responsible for their debts, unless you cosigned for a loan with them or you are a joint account holder on their credit card accounts. Your parents' debts will be paid out of their estate (everything they own, including real estate).

Once their funeral expenses are taken care of, unpaid creditors are next in line to be paid. If there is insufficient money or assets to pay all creditors, then the estate must be divided up as equally as possible, with secured creditors (the mortgage holder, for instance) receiving priority.

If your parents die with little to no assets, their creditors eat the loss. Talk to your parents about their estate planning. Check out www.aarp.org, or type, "how to talk to your parents about estate planning," into a search engine. There's good, free advice available.

Q. How can I break my payday loan cycle?

A. Payday loan stores, check-cashing outfits and finance companies are making these small short-term, high-rate loans. They can charge 15 percent interest a week, so if you can't pay off the loan immediately, the next week you owe 30 percent. You can see where this is going, right?

Maybe you only needed $100 to cover a short-term need, and a payday loan seemed so easy. You decided to get another one to cover that loan, and before you knew it, you owed more in fees than you ever borrowed.

Figure out exactly how much you owe, and then figure out how to generate the money as quickly as possible. Ask for help from a friend, family member or credit union. Sell everything you can to raise that money, or pick up a weekend job.

To learn more about why you should never take out these loans again, read "The Truth about Payday Loans" at www.Credit.com.

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Do you have a question for Mary? Email her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website. To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.

 
 

 

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