Color of Money Live: "Credit freezes should be free!"

Oct 19, 2017

Join Washington Post nationally syndicated personal finance columnist Michelle Singletary for an online discussion.

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So glad you could join me today.

I'm so happy to have author Chris Hogan join me today. His book "Retire Inspired" was the Color of Money Book Club pick for last month. 

So let's get started.

We got our original mortgage back in 2012 with a bad interest rate of 5%. It was an FHA loan because we couldn't afford 20% down and got stuck paying PMI. My husband and I are refinancing with a better rate of 3.5% which I'm much happier about. We are supposed to refinance to a 25 year loan however if I want I can up that back to a fixed 30 year for a much lower payment (about $300/month lower). The interest rate would remain the same and there is no pre payment penalty. Besides having to pay a little more in interest over the entire length of the loan what other disadvantage is there? We're tempted to do the 30 year with the notion of continuing to pay more on it anyways. The additional money that we'd be saving would be to finish paying off debt. Once that's taken care of (1 more year) we'll then through any additional money to the mortgage. It makes sense to me but what am I missing or not seeing?

The 25 year fixed-rate mortgage is better than the 30-year, but the best option is a 15-year fixed-rate. A lot of people intend to pay more on the 30, but life ends up happening and they don't. Get a quote on a 15, and sit down with your spouse to see if this is something you could make work now. It may require you to find extra income and/or scale back lifestyle, but it will save 15 years of payments. To put that in perspective, let's say you have a $225,000 loan at 6%. On a 30-year, your payment would be around $1,300 a month. But on a 15 year fixed, your payment would be around $1,800. So you'd save $500 a month on the 30 year, but over the life of the loan you'd save around $140,000 going with the 15 year. 

After reading your advice to set up a my Social Security account, I did so, and urged my husband to do the same. However, I'm wondering if I should also go ahead and set up an account for my three young children. They don't have credit in their name, does this mean that their information is safe? Thanks for your advice.

I'm going to check with Social Security on this issue since a lot of parents are asking me this. A few things to keep in mind

-- You child won't (or shouldn't) have a credit file so to set up an account you would have to go to the Social security office. Therefore the need isn't great right now to get an account for children. Unless the child is going to receive or is receiving benefits you can hold off on this.

-- The child would need an email account. Not sure for super young kids you want that either. Just one more way for scammers to get to your child. 

So -- and again going to double check with SSA -- you child should be protected from identity theft. Now if you see credit offers coming in the mail, etc. then take action.

Is there an art to this? I'm just assuming that suggesting things that are cheap to do that I like and I think she would like is the way to go. But I am more used to being the less well off person in this dynamic and that is what I would prefer. But I'm not sure that works well for everyone, so I'm wonder if there is anything else that I should be thinking about. When I say less money, I mean fully employed at a professional wage with benefits. And when I say cheap I mean $10 or less for an evening of entertainment. Sometimes free.

Friendship is about spending time, not necessarily about spending money. So identify some things with your friends that are cheap to do but are fun for both of you. Since you've been in this situation before, you understand where your friend is. So that should make it easier for you to be open about what you all can afford. It also gives you a different level of understanding than other friends. This also gives you the opportunity to gift your friend with experiences that she might not be able to afford, without keeping score. 

I've been in both positions -- with and without means to do a lot of entertaining things that cost money. 

Practice what one friends says TTT = Tell the Truth. Be honest with your friend. Say I'd like to do X, can you also afford to do it and if not, cool beans we can do something else.

I always tell people be careful in spending other people's money. So be mindful of trips, events, etc that can cost. Because some friends will still try to hang with you even though they can't afford it. I try to take that pressure off. 

And there are times I can do something they can't and in a few cases, I pay. 

Good friends will understand this all. Just talk about it. 

There is a tiny little bit of chaos going on in DC these days, and a small possibility of a government shut down as of December 8th. Time for folks who could be impacted to take a look at things and see if there is a way to build up a bit of extra cushion between now and then. I'm not seeing it as a serious possibility yet (5%? 10%?), but by the time it looks serious it could be too late to have time to save. And having some extra cushion in early December right before Christmas is *never* a bad thing. It would make doing the holiday with no "January surprise" quite a bit easier. I'm not in a paycheck to paycheck situation, but I remember when I was while paying off student loans, and it is not fun. Not fun at all.

Glad to hear you're not in a paycheck-to-paycheck mode. I would take a hard look at your living expenses and begin to scale them back now, so you're able to build up even more of a cushion for you and your family. Brainstorm some ways to earn extra income now. The reality is, the holidays are about family and spending time with the people that you love. So set an budget on who you're going to buy for and how much you can spend on each. And stick to that budget. Great job on being aware and thinking ahead. Stay focused on your plan!

I got a 20% raise - Yay!! I really want to just let myself loosen the reins a little and spend with a bit less restraint. When I found out about the raise I splurged and booked a $300 plane ticket to visit my little brother. I really want to just bank the money and relax a little bit. However, I'm feeling like I should start an automatic deduction of part of it to a retirement account. I work for state gov't so 7% of my pay goes straight to a defined benefit pension. I max my post-tax IRA and my son's 403(b) each year but I don't have a 401k. However, I did the motley fool retirement calculator and it said I'm fine. I have my life happens, rainy day and 4-6 months expenses buckets in savings. I'm also expecting a $10K check in the near future - I get this once and year usually use that as a cushion for months where expenses out pace income. With the raise, those months won't happen anymore. I don't want or need anything extravagant - I guess I just want permission to hire a cleaning lady and a babysitter and go out once or twice a month . . .

Congratulations on the raise! The key to effectively handling money begins with a plan - the budget. I would encourage you to do some research to find out how much a cleaning lady and babysitter would be, and begin to budget for those items a couple of times a month. The important thing is to give every dollar a name. So being in tune with your budget, will help you stay connected while making progress. 

A friend of mine refuses to do anything about protecting herself after the Equifax breach, she won't even freeze her credit reports. Her reasoning is if something happens, it's Equifax's fault, not hers. How can I persuade her she needs to at least freeze her report? Thanks.

Some folks you just can't help. But you can try by sending stories of the hassle people go through when they become victims of identity theft.

Also realize some people don't want the hassle of freezing and unfreezing their credit files. If you live in a state where it cost to do both -- put it on and lift it off -- I can understand the reluctance. 

So at least see if she will get her credit reports to keep an eye on what's in them. That's free at annualcreditreport.com 

Beyond that nothing much you can do. She's grown and grown folks get to handle their business the way they want. 

This will not cast me in the best light but it will show how unexpected those unexpected expenses can be. I recently traveled to D.C. for a meeting. Flight arrangements had been made by the group that had organized the meeting so I hadn't paid a lot of attention to which airport I'd arrive at, and the last time I'd flown into D.C. was years ago. I saw "Reagan" when I landed, remembered that one of the airports had been renamed. After the meeting, I got a cab to return to the airport for my flight home, took a quick glance at my boarding pass, saw DCA and told the driver "Dulles." (In my defense, that does make more sense than the reality! DCA=Washington National, aka Reagan, IAD=Dulles.) I actually had no idea I was at the wrong airport until security scanned my boarding pass and the message "wrong airport" came up. At that moment, the reason that the cab ride was almost three times the cost of the ride in earlier that day finally kicked in. I checked with the airline to see if I could switch to a flight from Dulles but there was only stand-by available and it was the last flight of the day. Too risky. So I got a cab to Washington National, which meant essentially going back to where I'd started and then going in the opposite direction. I did make my flight, and tipped the driver generously. What should have been a $25 ride to the airport turned into $155. I won't submit that cost on my expenses for the trip because it was entirely my mistake. So this is a "life happens" expense and, in this case, "life" was me!

This is one of those examples of an honest mistake that ends up becoming a financial lesson. So don't beat yourself up. We've all made mistakes. But it helps us be aware of the details as we travel. 

Loved your story. And really, I totally understand how this could happen. 

As for the expense, talk to the organizer. You never know. If it were me, I would submit the expense. It was an honest mistake and you wouldn't have been there otherwise.

Do you have any insights to the Trump tax plan regarding tax bracket ranges. T

I have so many thoughts going through my head after reading your question.

But all I could come up with is Trump doesn't even really know! He says one thing one day and changes it often through a Tweet. 

You can't plan on his leadership.

Just saying.

I keep getting emails from "MyLife" about their supposed database entries on me. I searched how to remove myself, and the articles I found indicate I have to register for an account under every possible iteration of one's name, and request the info be removed. And that even after I do that, there is a likelihood my info will be re-added. Another company requires a copy of my drivers license. I won't even give that to Harris Teeter to get their coupons! Suggestions on how can I reclaim my privacy from these companies forever and for good? And hopefully easier?

Sorry you're having to deal with this! It sounds frustrating! I would look up the corporate address for each of these companies, write them a letter letting them know that you no longer are interested or want to receive anything from them via mail, phone or email. I would ask them to remove you completely from their list. Send this letter via certified mail with delivery confirmation and keep a copy of the letter and delivery confirmation in a file. If they continue to contact you, report them to the BBB. I hope this helps!

Do a google search on how to remove from MyLife. There are a number of articles and Youtube videos to help. You may have to go thru the hoops to remove your information.

Also to help reduce what's out there about you, check what you put out yourself. For example, for Twitter and Facebook I do not include my birthdate (So no birthday notices from friends), I turn off the location sharing button. I try not to include dates such as when I graduated from high school. Some things folks can find out anyway, but I'm not going to make it easy. 

Used the calculator on Chris Hogan's website and $5,550 per month toward retirement is not possible. Even 25% of that would be a stretch. I save more than 10% of my monthly take-home pay and plan to work until age 70 to max out Social Security. I plan expenses, have emergency funds for 3-4 months. The initial number of $5,550 suggests that I will be inspired by post-employment poverty to creatively plan to live on 10%, not 40% of what is available to me now.

Remember, retirement is not an age, it's a financial number. So I want to encourage you to start a plan that's going to help you reach your goals. The plan is to get on a budget, attack all debt using the debt snowball (smallest to largest - not the interest rate), since you already have an emergency fund, then you would invest for your future. I would also encourage you to sit down with an investment professional to have a deeper conversation about your future financial needs. This will help you gain clarity and confidence in the plan you're working now. 

Thank you so much for the links to request freezing of our credit reports with all of the bureaus. My husband and I took this step but when I suggested it to my college-enrolled son, he mentioned that it would affect his ability to apply for a student loan each semester (yeah, I know, I know, I hate that he has to take loans but he has a plan for paying them off as fast as possible when he graduates). Do you have any suggestions for college students in this situation? Thank you for any advice!

 I want to encourage your college student, even though they're further in their college career, to still apply for scholarships and grants. There are also opportunities for work study programs for students to get extra money for school. Being aware of the current student loan crisis and having a plan for getting rid of them as soon as possible is crucial to college graduates' success as they enter adulthood. 

Okay, getting past the loan thing, which for me and Chris is hard, your son is right in that it will take more effort to apply for loans. But a freeze won't prevent him from applying. He would just have to lift the freeze, apply and then put the freeze back on. Depending on where he lives (his home state) that could cost about $20 to lift and refreeze assuming he knows which credit bureau the lender uses. If the lender doesn't tell him or doesn't know he would have to pay that $20 times three for each bureau. 

Can a credit freeze be a hassle? Sure? Will it prevent him from taking out a loan I don't want him to take out, no. 

What are your thoughts on household management's importance on reaching financial goals? Personally, I think that your household can prevent you from reaching many of those ideal personal finance goals. Common tasks like who does laundry, who makes sure that enough food is available to last the whole week, and who does the regular reading required to make the best financial decisions are important in managing available time. Add in a couple of kids and friends and it can be a constant struggle to stay afloat. How do you deal with the execution of those financial plans?

Communication is absolutely crucial. So talking about your goals, understanding you plan and gaining agreement on the plan is necessary. Have a weekly budget and goal review meeting with help you stay connected. Once you're in a good rhythm with your plan, you can scale back to once a month, before the month begins. But getting in the habit of communicating regularly will help keep the goals in view and help you feel connected to your plan. 

After paying off my mortgage this summer and realizing that I am closer to retirement than not, I'm finally meeting next week with a fee-only financial planner (thanks to you, Michelle!). My info was "not impacted" by the Equifax breach but I did sign up for credit monitoring and want to freeze my credit reports (already have the My SSA account). But I hesitate to do that before finding out what recommendations the planner might have. Thoughts on that? Thank you!

Remember you can lift a freeze anytime you want. So I think you have to wait. Besides with you being so close to retirement, any planner that might recommend you take on more debt would make me suspect anyway. 

What types of investments should a retired couple in their mid-60's have? Have about $400,000 in 401k's.

Types of investments are going to vary on a person's age, stage and risk tolerance. I would encourage you to set up an appointment with an investment professional. You can visit my website, www.chrishogan360.com and click on the dream team button to locate a SmartVestor Pro near you. Our team has vetted these individuals. They can review your current investments and goals, and help you make the right decisions based on your needs. 

Millenial fed here and I want to share a story about FREE money I found from my employer through my health insurance. A few years ago, I changed my health insurance to a high deductible health plan. With a HDHP, you can contribute toward a Health Savings Account (different from FSA). But, in some of the HDHP in the federal government, there is FREE money that the employer contributes to an account for you that is yours to keep! It’s called premium pass through. So, every year, I get $900 for single enrollment and I contribute to get to the max $3,400. You can invest it just like you would in a Roth IRA. Note to young healthy people: you should really look into this as a savings vehicle. You still get your free annual check up (thanks to the Affordable Care Act) but for those of you who don’t really use health insurance, you’re pretty much paying premiums for services that you would otherwise not use. The money is triple tax advantaged (pre-tax contributions; earnings grow tax free; distributions to pay for health are tax free). My plan is to NOT use it now but keep investing it and use it when I retire.

Great job understanding and taking advantage of this benefit option. It's really important to understand your needs and options to make the best decision for you and/or your family. 

Good advice. But keep in mind anything can happen. This might work for you but if others aren't saving to pay for the higher deductible and a tragedy happens that's a lot of money out of pocket. 

I was implicated in the Equifax data breach. I put on a fraud alert. Someone did try and open a new credit card account in my name. This has happened more and I decided I needed to put on a credit freeze. Equifax has waived the fee for those implicated in the credit breach, so I was able to do that online. I could do the other two online if I wanted to pay, but I didn't so I called in. I had a very different experience with the other two credit bureaus. Experian were entirely reasonable over the charge situation. Since I've had someone try to open an account in my name they said they'd put the freeze on for free, right then. I should upload poof: police report or letter from bank/cc co. If I didn't do that, the next time I called in to lift the freeze there would be a charge. All this done with a very helpful American at the call center. Transunion gave me a choice: pay now and get the credit freeze now, or send in a police report and get the freeze only when they'd received and reviewed it and decided I deserved a free freeze. So I ended up paying. It's not so much the $10 as the appalling way the victims are being treated. The whole experience was quite difficult. The three people I spoke to had strong South Asian accents that were quite hard to understand (and I have a fair bit of experience with South Asian accents). The first person I spoke to didn't seem to understand that I was looking to get the charge for a freeze waived and I hung up and called back. The second person I spoke to was unhelpful and I then spoke to the Supervisor. He seemed to think I should just keep the fraud alert in the meantime, although I've now had calls from three different cc companies about someone wanting to open an account in my name. He also thought the Credit Bureaus couldn't be held responsible for how your credit report is used. Yes, that's pretty much an exact quote.

Wow! I'm going to recount you story in my newsletter next week. Can you email me at colorofmoney@washpost.com

For you since you have been a victim of identity theft or a near victim, you absolutely should have a freeze at all the bureaus, including Innovis. 

As for TransUnion, if I were you, I would send in the paperwork to get the free freeze. I understand your decision to pay for now, but get the paperwork in and then cancel the service. You shouldn't pay for what you are entitled to get, which is a free freeze if you were victimized. 

I retire next year, barring complete market collapse, and I already feel liberated and light. I hope to do only activities that interest me, and I have a large number. I lived frugally all these years, but managed to travel and buy a house, and now I am feeling the dangerous call of spending (I won't be one of those people who have a problem with spending, in fact the opposite, am a little too eager). Anyway, what are the models for when you want to spend DOWN your money? Anything I have left goes to charity. I am paying for LTC insurance to try to cover that angle. But there must be different approaches to spending down the money, correct?

First of all, great job on preparing yourself for retirement. Now's the time for you to begin to enjoy some of the things you want to do, and also who you want to leave money to - leaving a legacy with your family and/or charities. You'll want to consider who you want to leave to and how much. It's understandable that you'd feel the urge to spend the money you've worked hard to save all these years. But be sure to keep your lifestyle in check. This money is to replace your income when you retire so you'll want to assign yourself a dollar amount every month and stay on budget. I'm proud of you for having a plan and reaching your goals!

I'm 61, have worked and saved for 50 years, and am planning to retire in two or three years. I am risk-tolerant and 80% + of my seven-figure 401K is in actively managed stock market mutual funds. A year or so ago, I took some money off the table and moved $100,000 into a short-term bond fund. We are mortgage-free and have no debt. To continue our lifestyle in retirement, we'd need about $50,000/year. Do you have any tax planning advice for someone like me? Thanks.

Tax planning is very sophisticated and complicated, so I suggest you get professional guidance. You can visit my website, www.chrishogan360.com, and click on the dream team button to find a trusted tax professional in your area. 

Are you aware of any comprehensive living in retirement calculators?

I'm not aware of any online calculators, but you can visit my website, www.chrishogan360.com, and click on the dream team button to find a trusted investment professional. They will be able to look at your situation and help you develop a strategy to manage your money in retirement. 

If you do a search online you can find a number of calculators that can help you manage your money in retirement. Search for "post retirement calculator."

I started to do start the process but my time is more important than the time it takes to freeze/un-freeze and I refuse to pay to have it done. I watch my accounts diligently for fraud already. That will have to be good enough.

You are exactly the type of person Congress needs to hear from. Given the epic data breaches out there, credit freezes should be free!

Just save as much as you can, until it gets absurd. I think that this point I am up to around 40% of my gross salary going to savings (401(k), Roth, savings outside retirement plans of various types). I actually need to relax a little. But there is reason to have a lot put by if there is a chance you could be out of a job and without health insurance for any length of time. I'm just going with a "better safe than sorry" assumption for the time being.

40% is a high percentage of your income to be investing and saving, because you still need money to live on for everyday expenses. So if you feel things are too tight right now, you may need to back that down to give yourself some breathing room. 

Good for you for saving so much. But as Chris says remember to live now too.

For example, lots of experts say you should max out on your 401 (k). Many folks can. But many can't if they are also saving for kid's college fund or trying to pay down a mortgage. Or go on vacations, remodel their home, etc. 

I hear from so many people who saved, saved, saved so much for retirement but then they got there and got sick and couldn't enjoy the money they saved. Or they have regrets that the didn't live a little more. 

I am eligible to start contributing to the "catch up" TSP contribution at work this coming year. I am maxed out of the regular TSP and have done all traditional contributions so far. I am trying to decide if I should do the catch-up contributions under the Roth TSP option or if it will make a difference. I am in the 25% tax bracket now but in 8 years when I am eligible to retire, I may be in the 28% bracket. Is the salary I am making when I retire what I am supposed to be looking at when deciding, but in retirement won't I be making less money then I am now so I'm confused as to what it means when trying to figure if I will be in a higher bracket or not.

On the tax side of things, you may need to sit down with a tax professional to talk that through in more detail. But any opportunity you have for a Roth is a great move because of the tax-free growth. 

I'm at the 17th year of my retirement and enjoying it. Based on my family's history--one parent lived until 95 and was retired for 25 years, I have possibly many years of retirement ahead. Fortunately we have good income. Just saying.

You're absolutely right! Retirement can last a lot longer than people are aware. Great job on being aware and prepared!

My daughter's sink backed up. After trying hard to clear it herself, she called a plumber. The clog turned out to be 30 feet down the pipe, and composed of waste from the previous occupant of the house. She paid from her rainy day fund, so there was no stress involved at all.

Great job on having an emergency fund, because life does happen! It's better to be prepared than to wish you were prepared. 

Love your rainy-day and life happens fund stories. Because it always rains. And life always happens!

I hear you about "life happens," but we have been able to make occasional extra payments toward the principal on our 30-year mortgage, which we have had for 8 years. (Current rate is 4%.) Our youngest child is a college senior, so we will have more funds available next year. How do we know whether it makes sense for us to refinance, versus just making additional principal payments on the present mortgage? Thanks!

The best way to be sure is to get a quote on a refinance for a 15-year fixed-rate mortgage with your current lender or a new lender. Since you've been in the mortgage for 8 years, the rate will be better especially with a 15-year fixed. 

Before you go the route of refinancing and the cost for that, try one of the mortgage principal payment calculators online. Bankrate.com has one. 

I also wrote a column on how to pay down your mortgage without refinancing, which had links to calculators. 

Read Michelle's column: How to pay a lower rate without refinancing

Do you have any tips for negotiating with hospitals? We just got a $1200 bill from the hospital (and yes, that is after insurance--without insurance it would have been $2500!) for my daughter's ER visit. I intend to request an itemized bill and go talk to the billing department in person, but do you think I have any prospect of negotiating some kind of reduction? And if so, how should I go about that? Thanks!

Negotiating is not an easy task, but it's always worth it to ask. If they are reluctant at the hospital, then you could wait to be able to negotiate with a collection company that will eventually take the account over. 

I thought that and only got a fraud alert - until I spent probably an hour talking to cc companies about fraudulent activity - frustratingly trying to explain to people who didn't really undersand, misunderstood that I had put in the request for more credit etc. It might be less agony in the long run just to bite the bullet, do it online and pay any cost. (I'm the person who had a terrible experience with Transunion).

I hear you. But don't let TransUnion get away with making the process so hard that you don't get you free freeze. I know it's a lot of work but, if you can, do it. Because they count on a lot of people giving up. 

I'm not sure how you're going to be able to "watch" for new accounts being made in your name. And even if you do through your once a year free credit check, the damage is done. You're already compromised. And you're already spending the time required to lock the accounts... so it's only the money that you're really worried about. I hated spending the $10/agency to freeze my accounts, but I think your being penny wise & pound foolish. And yes I have contacted my Congresscritters about this.

It is true that credit monitoring only catches stuff in the rear view mirror. 

Folks we have to advocate for ourselves. Every one on this chat should call your representative and demand free freezes. I mean what else they working on .. tax reform, health care, infrastructure -- NOT.

 

Do you recommend that we rent for a year or two instead of trying to buy a home in CA to be near our daughter's family? We own a home in the midwest, but the price of homes in CA are much, much higher. Taking out a mortgage in our 60s seems like a bad idea, right? Just wanting to know what you think. No mortgage now in the midwest -- no loans of any kind.

Good question. If it were me, I would rent first to see if you like the area and help you see if there are other areas where you can afford to buy. 

And also keep in mind, your daughter and her family might move. I've seen this happen. Parents buy to be near, younger family wants to/has to move and then parents can't sell for what they paid. 

If you think you are going to stay longterm then not sure I would keep the house in the midwest. If you have equity, you could use it to offset living expenses in CA. 

I just started reading the chat today, and had to smile at the first post. A 5% mortgage is considered bad now, huh? It's funny how a few years run at certain levels creates a new reality. (To get all "get off my lawny" about it, my first CAR loan back in the day was 8.9%, and that was right in line with everywhere else, if not good, at the time.) Makes me want to buy SEVERAL houses, money's so cheap now!

You are so right!!! I chuckled too. 

Just my luck, I'm coming up on 60 years old, I have to get individual coverage, my current insurer is quitting the market, and in the past 15 months I have developed serious heart problems that aren't fully under control yet. I'm trying to hurry up and get things checked out before year-end but it takes awhile -- and that's if I don't have a major event in the meantime. At any rate, the probability that I will even be able to get any coverage in 2018 is very low, and what I have seen that might be available is almost a 200% increase in premiums (or 1/3 of my take-home, plus any deductible would nudge it close to 40%). My house is worth about $425k, I owe $85k still and have 6 years left on the mortgage. If I can get coverage at all, is it worth it to refi the house to have the funds to be able to cover the premiums until I hit Medicare age?

Visit my website, www.chrishogan360.com, and click dream team to find an insurance ELP that can help you look at your options. I'm sorry to hear about your health problems, but I'm glad to hear you're focused and researching your options!

So you should be able to get coverage even with a pre-existing condition, a feature of Obamacare.

I agree that you should sit down with an insurance agent to explore your possibilities. I'm not sure I would encourage you to get more debt in the form of a home equity loan. That's just one more burden. Maybe sell and downsize and stash the equity in savings to help pay for healthcare. 

But before you decide anything be sure you get quotes for what's out there. 

So, so sorry you are going through this. It's why we need a better healthcare system where folks don't fear going bankrupt when they get sick. 

After finishing grad school almost two years ago I was unable to find regular employment and had to live with my sister. Up until Sept I worked temp jobs, when I took a regular position. Of course, during those months I racked up thousands of dollars in credit card debt. I knew things were bad and did the 21 Day Financial Fast in the summer which has been a huge help—I have a life happens savings, regular savings, paying into my retirement again, tithes and offering, and paying down my credit cards with the quick plan. But now that I have a regular salary job my sister wants me to celebrate a milestone birthday with her, out of the country. The trip is turning out to cost more than I expected and we already bought plane tickets. With the holidays coming up-- which we also have travel plans for—I’m getting really nervous about accurately creating a new budget and not getting out of hand because I have a little extra money in my pocket.

The first thing you should do is figure out exactly how much this trip is going to cost and be aware of the work it's going to require for the debt payoff when you return. In the future, celebrating is good but you want to celebrate within reason and with cash. 

So glad you are back on track. Okay, so you have to do the milestone trip. I get it.

But the one for the holidays? If you haven't paid anything -- stop!

Your being nervous should tell you something. It means your gut says you are doing too much and you need to stop. 

So listen to your gut. It's right. Time to retool and see where you are financially. And the key is to budget. 

Any guidelines to determine if you are financially ready for retirement. Calculators on the web give you different answers. ( I am talking gross amount not net)

Each individual is going to have different financial needs and goals. So the best way to answer this question is to sit down with an investment professional to get a deep look at where you are and what you'll need in retirement. You can visit my website, www.chrishogan360.com, and click on dream team to find a trusted investment professional under SmartVestor Pro. 

I would advise the questioner: if you do not feel you have the negotiation skills to take on the hospital, or their representatives are not cooperating, I would look into getting a medical negotiator to act as your advocate with the hospital. Not sure whether it would be worth it for a $1200 bill, as the negotiator will take a portion of the savings. But it's another option before the collection agency adds 500% to the bill. Don't let it go to collection. AARP has a good article on this--search "Hospital Sticker-Shock Relief". Good info.

Thanks for the tip.

So sorry the time is up, especially if we didn't get to your question. But, as I say every week, I look at all the questions and comments. Please subscribe to my newsletters (Personal Finance on Thurs./Retirement on Mondays) and you may find the answer to your question. Or follow my column because I often use leftover questions there too.

See you next week. 

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Michelle Singletary
Michelle Singletary writes the nationally syndicated personal finance column, "The Color of Money," which appears in The Post on Wednesday and Sunday and is carried in more than 120 newspapers.

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Chris Hogan
Chris Hogan is the #1 national best-selling author of Retire Inspired: 'It’s Not an Age. It’s a Financial Number' and host of the Retire Inspired Podcast.
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