Frequently Asked Consumer Questions

WGN-TV Show Notes – Sept. 12, 2003

Q: Is there a Web site that allows you to take your phone number off the Web?

A: Go to the phone number websites: google.com (type in your number), switchboard.com, anywho.com, whitepages.com. Look for how to “delist” your number or a privacy manager.

Q: Where can you get a free credit report?

A: You can get a free copy of your credit report in Georgia, and in many other states, by writing to each of the three main credit reporting bureaus and asking for it.

The three bureaus are Experian, Equifax and Trans-Union. You don’t need to sign up for monitoring services, but you do have to put pen to paper because otherwise you can’t get the free copy.

You can get a free copy of your credit report online from E-loan.com, but I recommend you get one from each of the three credit reporting bureaus because different information can surface on each report.

Q: Is it smart to pay credit card bills online through the SmartCheck payment option? It asks for my bank routing and checking account information?

A: I do believe it’s safe and in fact, that’s how I pay my Discover Card bill. So if you end up doing it, you’re in good company.

Q: Is whole life insurance a major waste?

A: I do personally think you get much, much more for your money with term life insurance rather than any version of whole life.

Whole life is essentially a savings account with an insurance wrapper. You over fund the cost of your insurance each year and save the rest. The idea is that you save so much that eventually you have enough to cover the cost of the death benefit forever.

Unfortunately (ie the real world) that rarely happens. And, no matter where the stock market goes (because that’s where they’re investing those dollars), you’re double paying for the privilege. First you’re paying too much for the death benefit you’re getting (a full year and a half’s worth of premium pays only the commission on the policy), and second, you’re paying a management fee for the savings portion.

If you have dependents who would need help in case of your untimely death, you’ll do far better by purchasing a substantial amount of term life insurance on a level load basis (that means the renewals are fixed for 10, 20 or 30 years.) So if you’re a healthy 40 year old nonsmoker, you might be able to buy $500,000 in death benefit for $500 or less.

My favorite site to check out is www.quotesmith.com. But of course, you’ll find others at www.google.com.

Q: How can I set up a living will with as minimal expense possible?

A: Some employers have set up plans to help their employees obtain low cost legal services. You can check with your employer to see if they have such a legal services plan.

Some accountants have relationships with attorneys that can assist consumers with low cost legal services. And finally, some bar associations have referral systems that can guide you to attorneys that will draft simple documents at lower costs.

If these alternatives do not work for you, there are companies and do-it-yourself books that can assist you. Or, you might try a local stationary store to see if they have a living will or power of attorney that are valid for your state. Unfortunately, attorneys I have spoken to seem to feel that they sometimes are inadequate and at times may not be proper for all circumstances.

But if you don’t want to spend the money, that’s the risk you’ll take.

Q: What is the Web site that will allow me to find my credit score?

A: The site you’re looking for is www.myfico.com. It’s a joint venture with Equifax and Fair Isaacs, the folks who invented the credit score.

Q: What are the 4 pieces of important paperwork you should have in place before you die?

A:You need (1) a Will (2) a Living Will (3) Power of attorney for Health Care and (4) Power of attorney Financial Matters.

Q: Where can I get help to consolidate credit? I already got burned by a credit counseling agency.

A: You might try one of the national mortgage companies, like Countrywide Home Loans or Chase. They each have a sub-par lending group and may be able to help you make some headway with those bills. I hope you’re able to pay off your debt quickly and get out of your credit consolidation program.

Q: In light of events like September 11, what can I do to make sure I’m set up for a disaster?

A: I’m writing a whole book on the subject, that will be out next year. It’s called 50 Simple Things You Can Do To Disaster-Proof Your Finances.

Here are some of the things you need to do:

  1. Back up your computer data regularly. (CD-ROM rewrite hardware is cheap and blank CDs are even cheaper. This is the method I use.) Store it out of your home.
    1. Rent a Safe Deposit box big enough for your back up CD and your paperwork.
    2. Make copies of your important papers and keep the original ones in plastic.
    3. Buy a fireproof safe for your home. Keep a set of papers there and a set in your safe deposit box.
    4. Videotape and photograph your assets. keep this in your safe deposit box too.
    5. Construct an important people contact list. Distribute it when you travel.
    6. Write a will, power of attorney for health care and financial matters, and a living will.
    7. Keep an emergency contact list of doctors, lawyers, health insurance numbers and keep it with you when you travel.
    8. Make a photocopy of your travel documents/passport/credit cards.

Q: My company doesn’t offer paid maternity leave. Is there an agency I could contact for assistance?

A: Unfortunately, the Family Leave Act does not require companies to provide you with a paid maternity leave. Companies with 50 or more employees are required to give you unpaid leave, however, and to hold your job for you while you are gone.

There are no agencies I know of that provide assistance here. Pregnancy typically doesn’t qualify for short-term disability unless you have to leave your job because your pregnancy goes bad and you can’t work (if you develop high blood pressure or some other problem).

It would be very nice if all companies provided some paid maternity leave. The best you can do is to use your vacation time as part of your maternity leave and any other time off you’ll be given for the rest of the year.

Q: Can you share the links to organizations specializing in the fraudulent sale of securities?

A: Here they are:

www.sec.gov
www.nasdr.com
www.investorprotection.org
www.investoreducation.org
www.nasaa.org

Q: What is the best way to check out the builders financial strength?

A: A D&B is a good idea. Also, see if the builder is a member in good standing with the local builder’s association. But the most telling is if the builder wants you to put up all the cash upfront to build your home. If they don’t have the resources to build — or at least start to build — I think that’s a big red flag.

Q: How long should you keep bills, bank statements and other household documents.

A: You should keep bank statements for at least a year, to make sure that everything has been accounted for. Your credit card statements (unless you keep them in a software program like Quicken and Microsoft money) should be kept until everything has been resolved or longer if you may return a purchase or have to prove that you purchased something. Tax returns should be kept forever, I think. Keep home improvement bills and receipts until you’ve sold the house.

I have a longer list for specific documents in both of my books: 50 Simple Things You Can Do To Improve Your Personal Finances and 100 Questions You Should Ask About Your Personal Finances.

Q: I married and changed my last name. How can I change my name on the title of my home?

A: While you can change the name on the title to your home, it is not a requirement to do so. I am advised that the best way to change the name on your home is to use a quitclaim deed that would transfer title from your old name to your new name. However, it is probably not necessary.; When you sell your home, you would, in any event, sign the deed to the new purchasers as “Stacy Doe” formerly known as “Stacy Smith.”

Q: What is the web site for the government where I can buy the horses, land and automobiles?

A: These are government-run websites where you can buy real stuff, either outright, or at auction.

www.adoptahorse.blm.gov (horses and burros)
www.bid4assets.com (luxury items seized at auction)
www.gsa.gov/pr/prhome.htm (prime federal land)
www.gomr.mms.gov (oil-drilling leases)
www.abmc.gov (grave site flowers at American military cemeteries)

Q: Where can I find a good budget form to use each month?

A: I have one in my book, 100 Questions You Should Ask About Your Personal Finances, but it’s not electronic. You’d have to photocopy it.

You might want to think about investing in Quicken or QuickBooks, if you have a small business. It’s really worth it’s weight in Gold.

Q: We are receiving a house from my mother-in-law and wonder how we can get around paying taxes on that much money. I do believe that you do not have to pay taxes on a gift up to $10,000. What do we do with the remainder of that money? Could we have it written up to say that we are paying her, but we really aren’t?

A: It’s your mother who owes the gift tax, not you. But there are ways to structure the gift where she gives you (and your spouse) $10,000 of value each per year over a set number of years.

Please consult an estate attorney who can help you draw up the papers legally.

Q: Our homes are being painted by a contractor hired by our homeowners association. The paint job is ruining the wood of the exterior of our home. What can we do?

A: Contact a contractor or reliable painting company for an estimate on how much it will cost to fix the damage and repaint your homes. Then, approach the painter you used. If you paid him to repaint all of the townhomes throughout the years and he didn’t, you may have legal options available to you. If you paid him a little bit to do touch-up work, then you may not. An attorney can guide you further.

Q: Where can we get more information about creating an association for a new subdivision?

A: Try the Community Association Institute. (Look in one of the search engines. I can’t quite remember their web address since it has a dash in it). They might provide you with something to start with. Nolo Press (www.nolo.com) might have something as well. You may want to have an attorney review the documents. It could save you thousands of dollars in legal bills down the line.

Q: Will debt consolidation affect my credit rating if I’m only consolidating to get a better rate?

A: As long as your debt isn’t the maximum (have you maxed out on any charge cards) it could be and as long as you make all of your minimum payments on time, your credit rating should be okay. Consolidating is good, but make sure to cancel the old cards (in writing) so you don’t have too many outstanding cards. Finally, let a little time go by between consolidating your debt and buying your new car. I’d love to see you be able to pay it off before making a big purchase.

Q: What is your opinion about getting a living trust in addition to a will if your assets are below $650,000?

A: You probably don’t need a living trust, although that just helps to bypass probate, which is a good thing. Living trusts don’t do anything to reduce any potential estate taxes. Other kinds of trusts do help reduce estate taxes. But if you’re at $650,000 or less, you don’t have to worry about estate taxes. If you add on a life insurance benefit, then you might need to think about it.


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