Wedding Revelations Amid Financial Crisis
This year's edition features one story that I think all brides-to-be should read: The Anti-Wedding (Sept. 7) by Caitlin Gibson and Rachel Manteuffel.
"We have seen what happens to some intelligent, strong women when confronted by the multibillion-dollar Wedding Industrial Complex: Those few unattractive tendencies, weaknesses generally kept under control -- bossiness, melodramatic romanticism, obsession with looks, agony over superficial details -- coalesce into a toxic distillate" the reporters wrote.
In an effort to help produce a cheap (anti) wedding, these two women decided that they should be wedding planners, free of charge. Problem is, their plan backfires though. Keep reading to see what happens.
So for this week's Web chat, I'm opening the forum to all those brides-to-be, those who may be paying for weddings, engaged couples learning how to merge their finances, and their guests wondering how to manage gifts and travel expenses.
I'll also be happy to answer questions about all the news that's happened since we last chatted.
The biggest headlines, of course, came from the federal takeover on Sunday of Fannie Mae and Freddie Mac, the two government-sponsored mortgage finance enterprises. Although the two companies don't directly make loans to individuals, their presence in the market has helped millions obtain affordable loans to buy their homes. What happens to the companies going forward should matter to you.
For full coverage of the Fannie and Freddie bailout click here.
We also learned this week that the federal deficit could swell to more than $500 billion by the first of the year. Imagine if we all operated our personal budgets like the federal government -- going months, years spending more every month then we earn. Oh, right many people do run their household like that.
Finally, there was the news yesterday that the venerable investment company Lehman Brothers is facing a $4 billion loss (that's billions, with a "b").
So there's a lot to chat about. If you would you like to comment on the latest financial news or if you have a question about your own personal finances join me today at noon ET. If you can't participate live, send your question early. Or read the transcript after the discussion.
Understanding the Takeover
I do hope you are reading the Post's coverage of the Fannie and Freddie bailout. As I mentioned, what happens to them, matters to all of us.
For one, this takeover could cost taxpayers billions.
The Post's Renae Merle put together a nice Q&A to answer some of the following questions:
* What does the takeover of Fannie Mae and Freddie Mac mean for mortgage rates?
* I already have a mortgage. How will this affect me?
* How have Fannie and Freddie's troubles over the past year affected mortgage rates?
Check out "What the Takeover Means for Your Mortgage" (Sept. 8).
Incentive or Cash Crutch
In last week's e-letter I asked for your thoughts about a program by Harvard University and the D.C. Public Schools, that gives money to kids who behave and excel in school. Is it a good idea to let our kids grow up thinking someone owes them something each time they do a good job?
Here's what some of you said:
Tax consultant Deenice Galloway wrote: "I feel it's a great program because it is an incentive for those kids who have the potential but not the drive."
"Lets look at it this way if you went to work everyday and at the end of the week you received an A, B, C or D (and no money), would you be inclined to do better? Or, would you do better if there was money associated with the grade?" said the Bowie, Md., resident.
"It just feels weird to have an outside source compensate students" said David Kirshtein in South Jersey. "I think it's a parent's job."
Rev. Megan Gray of Columbia, S.C., wrote: "If paying kids money to learn works, lets do it. However, I hope that our children grow up to learn that we don't always do things to get money. Sometimes we do things just because it is the right thing to do."
Sonya Stephens in Washington, Va., wrote: "Pay for performance in school is not a new concept, it's only new in the sense that the money's coming from the school rather than the parents. My parents rewarded my brothers and I with cash and other toys for good grades. In the real world one is rewarded for a job well done with cash, be it bonuses or pay increases."
Whether your son or daughter is receiving money through this program or from you for good grades, read the second part of the Kids and Cash series by Kiplinger's Janet Bodnar, which will teach your children how to start managing a savings account.
With help from parents, Bodnar wrote, children ages eight to 10 should open up their own savings account at a bank. It's a good time to teach them how a real bank works and how to save.
Calling all Teen Girls...
In Sunday's column I announced the September Color of Money Book Club selection, "A Teen Girl's Guide to Managing Wealth" by Jessica Blatt with Variny Paladino.
Every month I randomly select readers to receive the recommended book, donated by the publisher. But this month, I'm doing something different.
I'm encouraging teen girls to submit a brief essay -- 200 words or less -- on why it's important to save. And if you're an educator or community leader working with girls, this could be a great project. But get those entries in soon! (Just a note to the parents of boys, many of whom have written to me, I'll write something soon with good book recommendations for your sons.)
The entries for a free copy of "The Teen Girl's Gotta-Have-It Guide to Money" should be sent to email@example.com. All e-mails should include the teen's name, age and mailing address. With parent's permission, I may also print some of the answers in my print column and here in the e-letter.
If you're interested in helping a relative or friend's kid go to college, Upromise, a 529-plan administrator, has made it easier to donate money to the child's 529 college savings plan.
Read about it from Kiplinger's "The Gift of College Savings, Now Made Easy Online" (Sept. 7) by Thomas M. Anderson.
Additionally, if you're looking for a college bargain try to catch the television series "Hidden Gems of Higher Learning" on CBS's "Eye on America" hosted by Greg Gumbel. Folks, I tried to find a link for it on the Web but couldn't, so just check you local TV listings for upcoming episodes.
One school being profiled is the University of Maryland Eastern Shore (UMES), which is the sister school of where I attended, the University of Maryland, College Park. The segment on UMES will air on WPXW, the Washington D.C. area's ION Television network affiliate, at 1 p.m. tomorrow; Friday, September 19; and Friday, September 26. The station broadcasts on UHF channel 66, with a digital signal on channel 43.
The latest release of America's Best Colleges by U.S. News & World Report ranks UMES in the top tier of historically black colleges.
You Asked, So We Answered
Here are more leftover questions from my Web chat with Carolyn Warren, author of "Mortgage Rip-Offs and Money Savers" (John Wiley & Sons), which was August's Color of Money Book Club pick:
Q: I bought a house with an interest only mortgage last year. House was $650,000. After down payment from sale of other house, I owe about $330,000. I have been paying about $250 toward principle with each payment. Should I try to pay more toward principle or refinance to traditional mortgage?
Carolyn Warren: It depends on what your current interest rate is. If you are being charged a higher rate than what you can get now, it could make good sense to refinance.
Q: I've recently had my home equity line of credit reduced, with the mortgage holder citing a decline in my home's assessment. Meanwhile, the county has increased the valued assessment of my home during the same year (2008). How can two different mortgage companies come up with two different assessments?
Carolyn Warren: The county assessor's office is not a mortgage company. If you feel like the county has over-valued your property, you have the right to contest it, as many homeowners are doing now. They even provide you instructions for doing so.
Michelle Singletary: You should also contact your lender to see what you can do if you really need to have that line of credit back. I recently wrote a column about regulators warning lenders about snatching or reducing credit lines without cause (A Wake-Up Call on Home Equity Loans).
Q: My husband and I love our neighborhood and are ready to buy a condo in the area. But listed sales prices continue to stay high, despite the economy. We are scared we'll pay much more than a home is actually worth. Where do we go to research actual sale prices of condos in the area? How much can we trust Wen sites that appraise home values? Do we really need a realtor?
Carolyn Warren: First, you cannot bank on a Web site's guesstimate of a property's value. That is a rough number, at best. So start by contacting a reputable experienced "buyer's agent" in your area. And YES, you absolutely need a buyer's agent to represent your best interests.
Never use the listing agent as your agent, because the seller's listing agent is required by law to get the highest price and all the best terms for the seller. You wouldn't use your opponent's attorney in a lawsuit, would you? It's the same principle here. You need your own advocate looking out for your best interests.
So then, your buyer's agent will do a market analysis to determine the value of the condos in your area. I recommend working with an agent who's been actively in business for several years.
Seen as a safety net, if the agreed-upon price ends up being higher than the appraised value, the lender will require a re-negotiation. That is, they will not lend on more than the property is worth. And the appraiser will inspect the property and do a thorough analysis comparing recent sales, to arrive at the true market value.
By the way, a buyer's agent is free to you, so there is no reason why you wouldn't want to work with one. And in case you're wondering -- no, you won't get a better price by using the seller's agent. You'll most likely end up paying more and you'll overlook other important details in the contract.
You are welcome to e-mail comments and questions to firstname.lastname@example.org. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.
Charity Brown contributed to this e-letter.