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The Web: Personal Finance Frontier

Michelle Singletary
Thursday, July 23, 2009 12:44 PM

Trying to handle your money better in this recession? Perhaps the Internet can help.

My husband and I have long used the Quicken Online personal finance software. (Okay he uses it. I just look over his shoulder.) But I've been getting lots of questions lately about other sites that help people manage their personal finance issues.

I've visited the sites - mint.com and wesabe.com -- but stopped short of joining when I had to give up my passwords and other personal information. Still, the sites are worth exploring, writes Fast Forward columnist Rob Pegoraro.

"In this stagnant market, most of the signs of life lie not in disc-based programs but on the Web. There a few sites provide simpler ways to manage your money -- and do so for free," Pegoraro wrote in a recent column.

Read more of what Pegoraro has to say about Mint, Quicken and Wesabe in Personal-Finance Help Migrates to the Web (July 19).

In A Man's World, Women Rule!

There has been a lot of debate and discussion about whether federal appeals judge Sonia Sotomayor, who President Obama has nominated for the Supreme Court to replace retiring Justice David Souter, should allow her ethnic background to influence her rulings.

In other words, does race matter? Sotomayor, if approved by the Senate, would become the first Hispanic on the U.S. top court.

Along those same lines, does sex matter?

Well some studies say it does report Katty Kay and Claire Shipman in Fixing the Economy? It's Women's Work (July 12).

Companies with more women in senior management roles make more money, according to accounting giant Ernst & Young which pulled together various studies that show "women can make the difference between economic success and failure in the developing world."

Companies with more female board directors outperformed those with fewer women according to a Catalyst research report.

Oh, and the National Council for Research on Women recently unveiled a report making the case for increasing the number of women managing investment funds.

As the council pointed out, women-owned funds significantly outperform funds in general. According to the latest data from Hedge Fund Research Inc., from 2000 until the present, women-owned funds delivered an average annual return of 9.06 percent compared with 5.82 percent among a broader composite index of hedge funds.

So what do you think? Are women better money managers? Send your comments to colorofmoney@washpost.com.

The Same Yet Unequal

Twin brothers Emmet and Jim Rosenfeld have led similar lives in every area except one. Emmet is a dean at a Virginia private school and Jim is a partner at a Manhattan law firm.

It's money that now separates the brothers.

In Family Finances (July 19), Emmet reflects on what it's like to live a middle-income life while his twin pulls down major money.

"I think our differing paths ultimately reflect a difference in temperament more than financial values," he writes.

But Emmet wonders: "Would I be happier with my brother's life?" Jim is tethered to his BlackBerry and works long hours.

Would you be happier?

What does it do to the family dynamics when siblings earn vastly different incomes?

The Color of Money Question of the Week: Does your sibling (or siblings) make significantly more than you (or less) and if so, how does that play out in the family? Send your comments to colorofmoney@washpost.com. Please include your full name and location (city and state), and put "Sibling Economics" in the subject line.

Check out other stories in the 2009 Financial Issue of the Post Magazine.

Leftover Q&A

If you missed last week's chat, take a look at the transcript.

Here are some leftover questions:

Q: I just started a federal job in a field I'm not really interested in. I also am likely to get a job offer from a private firm in my field. The private firm job is more money (about 20 percent more) and comparable benefits, but in this economy I'm thinking it's best to stay with the federal government. I think I know the answer, but what's your advice?

A: Yes, having a federal job in this economy seems like a sure thing. However, not everyone in this country -- despite the jokes -- will have to end up working for the federal government to have job security.

I'm all about financial security so I understand your concern about leaving a good position. So ask yourself some questions:

* Have I done research on the company I want to jump to? Do I know anything about its financial health?

* Have I talked to current employees? What's the inside scoop about job security?

* Does the company have a policy or union rules on who gets fired first should there be a need for layoffs?

* If I leave my federal job, but want to return to the federal government, can I keep my seniority?

If you are as reasonably sure as you can be that the new company is financially sound and you like the work and the pay is good, then yes, consider leaving your seemingly cushy government job. If you do, you may open up a position for someone who needs and would like your good federal job.

Q: What are your thoughts on owning two homes? My space is tiny and my mortgage is about 14 percent of my take home pay. There are some great deals in my neighborhood. Navy Federal will do another mortgage with me as long as the new house is bigger and worth more. I would then rent out my current place. I feel my job is stable but I am a little unnerved at being single and owning two homes. I do not think I could sell my current home without a small loss. I just see the prices and interest rates and want to buy a home I will stay in for the very long term.

A: The question you should really ask is do you want to be a landlord? Do you want to have a side real estate business? Are you prepared for all that goes along with that - late-night calls about a busted toilet; possibly being left paying the rent when the tenant falls behind or moves out unexpectedly, the wear and tear on a home you can't control?

How long could you carry the mortgage on the first home and pay the mortgage on the second should your renter bail?

What would I do?

I would sell the first home. I've been a landlord and hated it. And I did have to carry the mortgage on my old place because my renter lost her job and couldn't pay. I had a tenant from hell before her.

Also, are you buying because you need the space? Because you want a home? Or because there are "just" good deals out there? Buy another home because it fits your needs (and wants you can afford) not because you hate missing out on a good deal.

Q: I don't understand the rationale of paying off student loan debt at a very low interest rate (in my case 2.5%) when I could easily be getting more return for the money by investing it. Can you elaborate?

A: Debt = bondage.

Doesn't matter if the handcuffs are at 2.5 percent or 25 percent. If you lost your job would the interest you pay on that debt really matter? You would be saddled with a debt on top of struggling to cover your basic necessities. Some people tried to play that game - I can get more in the market. In the current market, they lost. Market returns aren't guaranteed. Paying off debt is.

Q: Is it worth lowering one's contribution to 401(k) to pay off $6,000 in credit card debt? I'm currently contributing 10 percent with no employer match.

A: If I were you, I would first try to cut my other expenses. If you've slashed as much as you can from your budget and still can't find the extra money to pay off the credit card debt, then yes I would trim back my retirement savings temporarily to pay off the debt, especially if the interest rate is high.

Upcoming Chat

I'll be hosting a webchat with Jerry A. Miccolis and Dorianne R. Perrucci, authors of "Asset Allocation for Dummies" on Thursday, July 30th. The book is July's Color of Money Book Club pick.

Chat starts at Noon ET next Thursday, but you can submit a question in advance.

Charity Brown contributed to this e-letter.

You are welcome to e-mail comments and questions to singletarym@washpost.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.

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