Shameless Katrina Scams

* Special-Occasion Freebies: Whoever the first person was who gave a free "birthday" dessert to a patron should be shot. The public has come to expect, even demand, a free dessert for a birthday or anniversary.

And now tips leftover from entries submitted by readers for this year's Color of Money Penny Pincher of the Year Contest:

* Stephen Blais from Arundel, Maine, says that his wife "saves the tiny slivers of bath soap which are too small to grasp. She collects these and puts them in a nylon stocking until she has enough to equal an approximate bar of soap. She then uses it as if it were a bar of soap and then starts the process over again."

* Patricia Hanson of Charlottesville, Va., writes: "When I receive an especially nice greeting card, I cut off the front page, write a message on the back, and send it as a postcard the next time I need to greet someone."

* Donna Kogut from Blasdell, N.Y., says, "I always do my laundry and run my dishwasher at night. Electricity is cheaper in the evening. You'll be guaranteed to save lots of money per year." (For more energy saving tips, visit the Department of Energy's Web site.)

Financial Fact or Fiction

Myth: A reader wrote: "I've been told that the way to work the system is to get an interest-only loan, but dedicate several hundred dollars additional each month to pay down the principal. This method allows you to have a lower interest rate and still build equity. Is that true?"

Financial Fact: The way to work the home mortgage system is to only agree to a loan that is right for you. Trying to "beat" the system can sometimes end up beating you into financial trouble.

Interest-only loans are loans on which, at first, you pay only the interest on what you borrow. An interest-only payment option can come with a 30-year fixed loan or an adjustable-rate mortgage (ARM). The length of the interest-only portion of the loan can vary from three to 10 years. After that, the loan converts to interest plus principal.

In a column back in May ("The Interest-Only Trap"), I wrote about the increasingly popular interest-only loan and what sort of consumers might effectively use this mortgage product. You can build equity with an interest-only loan if you voluntarily make extra payments. But I do wonder how many people who say they will do this, actually do?

In a column in July ("Desperately Seeking Loans"), I pointed out that although interest-only loans can initially result in some savings, they might leave you vulnerable to sharply higher payments when interest rates adjust or principal payments start to come due.

Are you wondering if what a so-called financial expert told you is true? Do you have a co-worker who thinks he knows everything about personal finance and you want to confirm his advice? Send me any "Money Myths" that you want help dispelling. Drop me a line at colorofmoney@washpost.com. Put "Money Myth" in the subject line.

You are welcome to e-mail comments and questions to singletarym@washpost.com. They may be used in a future column or newsletter with the writer's name unless otherwise requested.