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Michelle Singletary
Washington Post Columnist
Thursday, August 31, 2006; 12:00 PM

Michelle Singletary hosted Nolo's Mary Randolph , senior vice president for editorial and Tamara Traeder , legal editor, for a discussion about the August Color of Money Book Club selection -- "Your Little Legal Companion: Helpful Advice for Life's Big Events" -- at Noon ET on Thursday, Aug. 31 .

Michelle writes that this is a trusted guidebook for the many financial dilemmas we often face.

A transcript follows .

Read Michelle's past Color of Money columns .

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Michelle Singletary: Good day everyone. Hope all is well. Looks like we've got quite a few questions already so let's get started.

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Lanham, Md. (the land of pleasant living): Michelle,

I was really feeling your column on school fund-raising. I give the money directly to the school. These fund-raising schemes don't teach children anything. No parent would allow their child to conduct door-to-door sales in these troubled times. So it falls to the parent to shill these expensively-cheap items to co-workers & friends who are adverse to refusing because they know they will be hitting you up for the same stuff in a few weeks.

And all the selling you do results in the bulk of the $$ going to the fund-raising company and pennies actually going to the school. ARRRRGH!!!!

washingtonpost.com: School Fundraising? Phooey!

Michelle Singletary: While I'm waiting for my guest to answer some questions about the book club selection I thought I start off with a response to my recent column on fundraising. Got quite a bit of mail on that one.

I so agree with Lanham.

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New York: Hi Michelle!

This is off-topic from the book club discussion, but just a note to say thanks for your statements about school fundraisers. I shudder when I think about the fundraising I did when I was in school 20 to 30 years ago. (All those magazine subscriptions that my kindly neighbors bought just to help me out.) Even when it's for a purpose, it's still "pushing products."

washingtonpost.com: School Fundraising? Phooey! , Aug. 27.

Michelle Singletary: So far my side is winning!

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North Bethesda, Md.: Just wanted to share a bit about starting to save early in life.

When I started working after college, I maxed out my 401(k) contribution every year. Today, I figured out that if I continue to max out my contributions (assuming no salary changes) and the current balance plus new investments make 8% per year on average AND then when I retire (planning on age 57) I move the funds to a safer investment making only 6% per year on average, I could take out just over $18,000 per MONTH and the funds would not expire until I turn 90 (assuming I'm still alive). And that doesn't include Social Security or work pension etc.

Man, what a benefit from painless savings. Never saw the money hit my bank account so it didn't hurt to save.

Michelle Singletary: Great point. I say follow the example of ants. Store up now for when the winter months.

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West Coast: Hi Michelle, I just got married, and my husband (I love saying that!) and I are in our late 20s. We don't plan to have kids for at least five years, and we're both in a very fortunate financial situation -- great jobs and no debt other than a very small mortgage on our home. Here's the thing... most financial guides I've read say that you should spend about 1/3 of your income on housing. We currently spend about 10 percent on housing. We've got the opportunity to buy a recreation property that we absolutely love. It's a cabin with some land in the mountains that we visit (for camping, fishing, cross-country skiing, hiking) every chance we get. If we were to buy this property, we'd be putting between 25 and 30 percent of our income into our house and vacation house combined. Our parents say we should just keep socking away our money into retirement and savings. It does feels like we're awfully young to own a vacation home. But we've done the math, reviewed our budget and believe it's reasonable. Is this for some reason riskier than, say, selling our house and buying a bigger primary residence? We're satisfied with our modest house and don't really want to "upgrade" to anything bigger. Should we heed our parents' advice and just keep feeding our income into retirement and savings?

Michelle Singletary: I think you know your financial situation better than your parents. Sounds like you've done the math are comfortable with the results. Thank your parents for their loving advice and do what you want with your money with your new husband!

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Washington, D.C.: Future hubby and I both own houses in D.C., neither of which is big enough for us to raise a family in, so we are looking to purchase one together in the near future...rather than sell my house, we've discussed renting it but...I'm scared. Not that I intend to be a bad landlord but I have this fear that I'll have some tenant living for free in my house because of what I've heard are overly friendly D.C. tenant laws. What are your thoughts?

Mary Randolph: Becoming a landlord can be a scary prospect. But you can avoid most problems--and make a profit--if you educate yourself about legal requirements and smart business practices. You do need to know about state and local laws, and you need to follow the procedures they set out carefully. For example, if you have to give a tenant 30 days' notice before raising rent, you'll want to be sure to create a paper trail and follow the time limit exactly.

To get an idea of what your responsibilities would be, take a look at Every Landlord's Legal Guide, by Marcia Stewart (Nolo).

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Severna Park, Md.: Hi Michelle - I got such a kick out of your article about school fundraising, boy do I agree. My children are older now (high school and college), but let me tell you it doesn't get better. When my oldest was a senior in high school, he went to pick up his gown and couldn't even though it had been paid for, because he hadn't "voluntarily" raised enough money. I had to write a $200 check so he could participate in graduation activities. Now, I only buy girl scout cookies (just cause I love thin mints, though). Love your columns!

Michelle Singletary: Thanks. And I love thin mints too...too bad they help in spreading my hips :)

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Anonymous: You should mention Meansfordreams.org for people who want money to go to specific projects at school. And it is local to D.C. schools

The requests are put in by teachers so the materials are things they really want. Although I thought it was crazy for a DC school to sign on for a Algebra project without providing the expensive calculators and software the kids need.

Michelle Singletary: Good tip. Thanks!

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Arlington, Va.: Arlington's HB Woodlawn school limits itself to a "no sweat" fundraiser--requesting a $60 (maybe more now) donation. I was happy to give more to make up for parents who couldn't give as much or any. No candy, wrapping paper, oranges, magazines, ya-hoo!!!

Michelle Singletary: I love that idea!

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Washington, D.C.: Michelle:

Love Sunday's column-- I've moved from a job with a lot of moms to a job with no moms, and am suffering "pizza kit withdrawal." But here's my non-pizza question...

I should be selling my house today. What a relief, since I've been paying a mortgage plus renting an apartment all summer. My plan was to put the money in a money-market account and buy a condo or house next year. But I'm really enjoying apartment life (no lawns to mow!). So I'm trying to get a handle on what the financial consequences would be if I didn't buy another house right away. What pitfalls should I be aware of?

Thanks!

washingtonpost.com: School Fundraising? Phooey!

Tamara Traeder: I don't know all the details of your situation, but the primary financial risks you face are (i) getting a low return on the money you receive for your house, and (ii)losing your mortgage interest rate tax deduction. Money market returns will probably not be as good as your investment in real estate, depending on the market you are in (even in this bumpy real estate market). However, you may be doing a very smart thing if you are "resting" for a bit from the market, as it seems to be cooling a bit, and you might be able to reinvest at more reasonable prices. But I'd recommend looking for a more reasonable returns--if you want to be ultra-safe, check out some CDs at banks in your area--you'll probably find something better than a money market rate. As to your mortgage interest deduction (assuming you had a mortgage), how it affects you depends on your income--if you are not making a lot of income right now, obviously the deduction will not make that much difference to you.

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Rockville, Md.: When is the Washington Post going to hire someone to handle these same issues, but without their entire religious views and down-home homilies on display, time after time?

Without your tired argument of, "But I like her!" and "People read her." You haven't presented us with a choice.

I want someone who delivers the information without airing how she bills her children, how glorious her life is and how naughty! people are for not choosing her path of marriage (conveniently overlooking same-sex couples who are not permitted to wed).

Michelle Singletary: Ah, what would a Color of Money chat be without someone complaining that I'm doing my job.

But I welcome all feedback. I have given financial advice to folks who choose to live together AND my life isn't so great right now. Got cramps like you wouldn't believe.

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Washington, D.C.: Add me to your ever-increasing "Amens" after going thru 1 fundraiser after another for my kids. However, there IS one I enjoy, that is the Penguin "Bookstore" that schools set up for "back-to-school day," you can get books for both kids and yourself, mostly paperbacks, and everyone wins.

Michelle Singletary: Consider yourself added.

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Washington, D.C. : I just wanted to endorse NoLo's Every LandLord's Legal Guide -- unfortunately I found it too late to save me from a nightmare tenant, but with the advice from the book I was able to evict him and get wonderful new tenants into the apartment. The book comes with a CD-ROM with every form a propective landlord could possibly need ranging from lease templates to eviciton notices...

Michelle Singletary: I trust this unsolicited endorsement isn't coming from Nolo :)

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Worland, Wyo.: The additional thing about fundraising in rural towns -- you can't register complaints without getting known as a "non-supporter of tradition," even if you would rather donate the money directly to the schools. It's kind of like saying you can't be supporting the troops if you don't agree we should be in the current war with Iraq.

I just had to sign a document for school saying I understood my kid would be fundraising and working potential advertisers because he's now working on the school's yearbook. I'd sure like to change the situation, but as a senior, my kid would literally die of embarrassment if I were to make a stink at this late stage. So if I'm silent I perpetuate the problem but here you can't do things anonymously.

Michelle Singletary: So sorry. I am planning to write a follow up with fundraising alternatives. Perhaps you can forward the column anonymously.

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Rockville, Md.: Ms. Randolph, there are many personal finance books dealing with relationship and marriage issues, and most have one thing in common -- they're primarily directed at women.

But a spate of Web sites have sprung up recently complaining that finanicially entangling personal relationships (marriage or not-quite) hold little value for men. They make the points:

1. Despite non-sexist language, most family law courts regard a man as an equal partner in a marriage only to the extent of his tangible, measurable contributions, like income, housework or childcare, where women are assumed equal partners no matter what

2. Pre-nuptual agreements are routinely nullified, almost always in the woman's favor

3. Any women living in a man's house can get him thrown out of it (while maintaining the responsibilities of ownership) through a restraining order just by claiming fear of him without any evidence

And we haven't even started on the imbalance caused by the presense of children (even if they're not his).

From a legal-financial standpoint, is marriage only of benefit to women; and if not, what can a man do to balance the outcome of a divorce?

Mary Randolph: The issues surrounding marriage and divorce are very complicated, but those websites you mention make some questionable points.

I don't think it's accurate to say that prenuptial agreements are "routinely" nullified, for example. Judges throw them out only if one party was unfairly taken advantage of, but that has to be proved. And courts do not automatically issue restraining orders "without evidence." (And looking at society as a whole, there's plenty of evidence, as I'm sure you're aware, of violence agaisnt women by husbands and boyfriends.)

Marriage is generally agreed to be of great benefit to both men and women. (Married men live longer, for example.) And from a financial standpoint, most women do poorly after a divorce compared to their ex-spouses--so maybe men don't need to worry so much about "balancing" the financial outcome of divorce.

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Falls Church, Va. : i LOVE www.meansfordreams.org - the "grant requests" on there bring tears to my eyes. i wish i could fund every project.

Michelle Singletary: Thanks.

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College-Bound Parents:: Hi. I love your column. Thank you for talking about school fundraising. Our schools do now direct appeal only. Thank goodness. A child fundraising in our neighborhood was killed a few years ago when he knocked on the door of a stranger who turned out to be a sexual predator.

I am writing about college costs. Our daughter will qualify for merit aid, and we have some savings for her college costs (including in a 529). But she wants to attend a private college, and we will have to contribute from our household expenses in order to make her dream come true. Do you know of good formulas, or good guides we could read, to advise us on how to figure out the "right" amount? We want her to attend a good school but we have other children and we don't want to eat lentils for four years.

Michelle Singletary: You might want to try "Paying for College Without Going Broke"

See if there is a new edition to include recent law changes concerning 529 plans, which I wrote about recently.

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Charlottesville, Va.: Grad school straight-out-of pocket, which would leave me with just enough to get by, or student loan to pay for school and save what I can now to pay off big chunk later? If I do the loan, I know myself well enough that I will not have saved enough to pay off entire thing after school ends. But if I pay it up front now and suffer poorhood, I will graduate without debt.

Michelle Singletary: Debt free is a good path.

Me I would try to suffer poorhood. Wish I could show you the dozens and dozens of e-mails I get from folks loaded down with grad-school loans and are burden because their pay isn't helping them make a dent in the loans.

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Fairfax, Va.: Hi. I believe you are the one that has been warning us not to live together until we are married. I have been living with my fiance for several years and my name is not on the mortgage or deed. We are breaking up and you guessed....I am leaving with nothing. Virginia doesn't acknowledge Common Law Marriage and frowns upon palimony. I wish I would have heeded that advice a lot sooner.

Michelle Singletary: I am.

And I'm sorry.

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To Rockville: Rockville Person:

You have access to the internet. There are many newspapers on the internet. Many of them have finance folks. Go read one of them.

Feel free to tell the Washington Post what you're doing and why.

But me, I like her.

Michelle Singletary: Yup, free country.

And thanks.

P.S. Like me or not my goal is to get folks talking about all these issues in a way most don't. I've been told by many --those who agree with me and other who don't -- that the columns have at least started discussions about a topic -- money -- that many people don't talk about.

That's my job and I'm proud of it.

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Washington, D.C.: I had a perfectly good 30-year mtg with a low LOW rate and payment and I let my father (who needed money because he had been laid off) push me into getting an interest-only optional payment loan (and taking out cash to help him, which I know/knew is wrong because my mantra has always been, money does not help money problems!!). Well, as you know, this loan sucks. This is the first time in 36 years I have ever let anyone "guilt" me into doing something with my money and it has hurt me (emotionally and...) financially as I can make the payments (and I always pay more than enough to cover principal and interest so that I don't end up adding to the loan amount) even if my rate hits the highest point allowed under my loan terms (THANK GOD!), but I can't refinance or sell the house until 2009 without taking a hit! (36-month prepayment penalty) I guess the way to look at it is I have more interest to deduct on my taxes? I dunno. Not really a question, just wanted to vent. Thanks.

Tamara Traeder: I feel your pain, I really do. Money and family can be very sticky, and it is so easy to get into situations that you know (even at the time) are not good for you financially. Too bad we can't take a tax deduction for "life lessons learned." And don't feel alone in this, we have all done things in the name of helping out people we care about (and wanted to kick ourselves later). Good for you for staying on top of the mortgage terms--you are clearly poised to make the situation better as much as soon as you can. Lesson learned, now you can stop beating yourself up.

Michelle Singletary: I so agree. Don't kick yourself too much. You did what you thought was right at the time. It hurts now but as Tamara said we all live and learn (yes, even me). I used to give and make decisions like that.

Oh and folks notice a VERY important lesson in this story...prepayment penalty. Avoid at all costs.

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Silver Spring, Md.: Michelle, I love your columns and chats. Please don't change. If people don't like your slant on things then they can read something else.

Michelle Singletary: Thank you so much.

And don't get me wrong. A columnist is only as good as those who disagree. It means I raised some tempertures. I love that. Also means I made you think.

So seriously I may get a little bruised by the folks who don't like what I write or how I write (I do have feelings) but it's part of the job when you pen your opinion. You are going to get hits.

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Washington, D.C.: Thanks for doing these chats. Not a question, just a comment: Nice updated photo of you!

Michelle Singletary: ooh. I like it too. TV One hired a stylist to help me with the second season of my televison show, "Singletary Says," which debuts next month folks.

Really I'm so homey on my own. Hate shopping or getting my hair did so I just throw anything together. Anyway, stylist shot this doing a taping and I was just getting tired of people who finally meet me in person saying, "Oh my goodness, you look sooooooooo much better in person."

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Fairfax, Va.: I'm not sure if this is more of a question for you or Bob Bruss. But I hope that by writing to both of you, I'll get an answer from one of you.

I have sole title to my condo as a single woman. My boyfriend is considering a new job which would require relocation. This new job would require some travel back here, at least one week a month, so we're considering keeping the condo. Is there a way to consider the mortgage on the condo and the condo fee as tax deductions or business expenses?

Before you say "get married" we cannot do so for another year, otherwise he loses his retirement benefits to which he is entitled from his ex-wife.

Tamara Traeder: Your safest bet in retaining the deductions is to rent the condo to a third party, and have your beau stay elsewhere if he needs to travel to that area. That way you can treat the condo as your rental property/business, and deduct all of the expenses related to it (for instance, the insurance, repairs and condo fees). If he stayed at a hotel, presumably his travel expenses would be deductible business expenses.

Your other choice is to keep the condo as your second home, and so long as it is a far enough distance from your first one, you can deduct the mortgage interest (but not other expenses).

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Worland, Wyo.: I'll be on the lookout for your next column, Michelle, the one that promotes allowing for "alternative" fundraising efforts -- like giving the money in weekly or monthly increments directly to the school, sort of like church tithing. And, thanks for suggesting that I mail it to the school district, anonymously. My kid will appreciate my taking this less-invasive measure to get my point across.

Michelle Singletary: I completely understand. I embrass my oldest, 11 now, just by standing next to her sometimes.

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RE: Charlottsville & Grad School: I had money for grad school out of pocket, but decided to save that money and use it towards a house when I got out, then take out the money for school on loans (a cheap, public school). I am SO GLAD I did!

1. I got to buy a house - which I never could have done w/o the $$ for a downpayment.

2. I am only paying 2% on my school loans, whereas I'm paying 6% on my house - if I had had to do that 6% on the extra if I hadn't had a downpayment I would nto ahve been able to afford to buy.

3. My house has increased in value more than I even owe in school loans

4. My employer pays my school loans, so I've never had to make a payment - $$ I would not have received if I had paid out of pocket.

SO, where I agree that normally debt free is the way to go, for this I disagree with Michelle b/c saving for a downpayment is really hard to do.

Michelle Singletary: Different situation (since your employer is paying for school) but interesting point.

I still say don't take on debt if you don't have to.

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Silver Spring, Md: My husband and I need wills. Our "estate" such as it is, is not complicated and all of our major assets are already arranged so that the surviving spouse gets them. We don't have kids yet. My husband is himself a lawyer, but not for that kind of law, and he would prefer to see a lawyer for this rather than doing our own. I wonder if the fee might be less if we drafted wills on our own and just had a lawyer look over them, or if we should bother.

Mary Randolph: You sound like good candidates for making your own simple wills, without paying an estate planning lawyer to draw them up for you. Because your major assets are already owned in a way that the survivor would inherit them, you could use your will just to handle the "leftover" property and name an executor (the person who will wrap up your affairs when the time comes).

You can get help with a reputable do-it-yourself product, such as Quicken WillMaker Plus. Then, if you have questions or want some extra assurance, you could have a lawyer look over your documents.

While you're at it, you should each make medical directives (also called living wills), which let you set out your wishes for end-of-life medical treatment in case someday you are unable to communicate your wishes. These documents are especially important for young people (we all remember the tragic situation of Terri Schiavo), who can live for a long time after an unexpected accident or illness. It's very unlikely that the document will ever be needed--but it's a very good idea to have it, just in case. Quicken WillMaker lets you make this document as well as a will.

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Philadelphia, Pa.: Ms. Singletary, You mentioned on C-Span's In Depth,(a teriffic interview) your trip to South Africa where you wrote a report for the Post on how African women create and maintain businesses. Is it available to the public? How can I get a copy of that report? Thanks, Irma

Michelle Singletary: Oh my. So sorry. Those articles aren't available. I wrote them as part of a fellowship and actually I traveled to West Africa where I went to various villages and towns (away from cities) and interviewed African women who had started mico-businesses. Wonderful assignment.

I went to South Africa to cover the first free elections. Also wonderful assignment and it made me appreciate my responsibility to vote in EVERY election here.

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The one who got loans instead of paying for grad school..: And just as a follow up, I knew the money was for a down payment for a house, so it was completely off limits until I needed it.

Michelle Singletary: okay.

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Arlington, Va.: We're pulling together a letter of instruction for the executor of our estate, in case that really big event (death) is round the bend. Should we have a full set of everything specifically for him---ss cards, birth certificates, back tax returns (how many years), etc. all in one place? Should he get everything now or should these documents be kept in our home?

Mary Randolph: What a good idea! You're going to make things much easier for your executor. Putting everything in one place is the way to go. Keep the documents--you'll no doubt want to add to the pile--but make sure your executor knows where they are and can get to them quickly when the time comes.

For prompts on what to include and what you can leave out, take a look at Get It Together: Organize Your Records So Your Family Won't Have To, by Melanie Cullen (Nolo). It's designed exactly for the task you're taking on.

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The "Common Law" Marriage myth: In the few states that do allow formation of CL marriages, readers should know it's a lot more complicated than just living together or having kids together.

The poster who noted she had a "fiance", for instance, wouldn't meet the legal definition of a CL marriage in any state that allows its formation.

At a bare bottom minimum, a couple must -agree that they are now married/husband and wife- and hold themselves out to others as such. Sharing a last name and filing joint tax returns would also help establish proof of the marriage. Referring to someone as your boyfriend-girlfriend-fiance-fiancee automatically puts you out of the game.

Michelle Singletary: Interesting. Thanks.

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Va. Suburbs: Our daughter (21) thinks she must buy a car. Which is better --taking out a $3,000 loan (we'd have to co-sign) to cover the diff between what she has and what she needs or borrowing the money directly from us (we'd charge her less interest). She thinks she needs to build a credit history.

Michelle Singletary: First, don't co-sign. Nix that. I say that even though I had asked my grandmother to co-sign on a car for me when I first got out of college. She flatly refused and then have me an hour-long lecture on the dangers of co-signing.

So I caught public transportation until I could buy or rather borrow for a car on my own. So let her wait it out. And it doesn't take long to build a credit history.

I say let her do this all on her own, including saving up the downpayment she needs. Maybe not now but she may appreciate the financial lesson later. I did.

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Washington, D.C.: Hi Michelle. I love your chats. To the Washington DC person who wants to rent their home in DC--can I please offer advise? Make sure you register your house with DCRA as well as get a business license. This is a little known secret in D.C., but you are REQUIRED by D.C. law to do this. I just found out two months ago after six years of renting my home. This is not widely publicized. Also, I recommend that she use a management company to handle the rental, she have a clause in her lease stating that she can evict the tenant for non-payment, she has the right to secure her home within 30 days notice to the tenant and last, she consider receiving her funds through automatic credit to her bank account versus check. DC is tricky but if you use the right avenue (experienced) agents and a good lawyer in DC she will do just fine. I have a D.C. real estate lawyer that I just love. If she needs his information I can get in contact with you and you can put us in contact.

Michelle Singletary: I'll pass this along.

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Washington, D.C.: Michelle,

I've just started working again as a self-employed consultant (in addition to my full time job). I've already checked, and I won't owe the IRS estimated quarterly payments, thank goodness. Since the company I'm working for is not paying my federal taxes as if I were an employee, I'm worried about being hit with a large amount to pay in April. (Last time I did consulting like this, I got hit bad.) Any suggestions on how much of the money I should set aside for taxes? I was thinking somewhere between 1/3 and 1/2. Any guidelines on how much I should expect to pay and therefore save now? (I'm doing this work essentially to pay off credit card debt, so anything I earn that is not saved would go towards that.) Thanks!!

Tamara Traeder: You can estimate how much tax you'll owe (on the consulting gig income alone) by calculating how much you expect to earn as a consultant this year, then multiplying it by the tax percentages (federal and state) that apply to you. Add another 12% of your consulting income for "self-employment taxes" (Social Security and Medicare) that you have to pay on your own behalf if self-employed. (I'm also assuming that you are having the correct amount withheld from your paychecks at your full time job.)

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Crofton, Md.: I live in a condo near my current office. I have an opportunity to work on a project in our Herndon office, and would rather not commute everyday.

I could rent in Herndon for about what I could rent out my condo for, theoretically balancing the two out. But would the rental income be taxable, even if it goes straight out again as my Herndon rent cost?

Mary Randolph: Income you receive from renting out your condo would be taxable. You might have deductible expenses that would reduce the tax bite, but you can't avoid it altogether.

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Chicago, Ill.: Those school fundraising things are a HUGE pet peeve of mine, especially since I'm a single person with no kids. I figure I donate enough money to the schools through my property taxes. The solicitations have eased up a lot since I've switched jobs and there are many fewer women in my current office....

My question, however, is about a credit card I applied for. I am an American Aadvantage member and they send me all their marketing e-mails, which contain an ad for the Miles Rewards card. I applied online for the card since I'm about to buy a lot of furniture, and if I can get miles while I'm buying, so much the better. A few weeks later I got a form letter in the mail saying they could not approve the card because they could not verify the information in my application!! What gives??? Why didn't they call or write me to verify the information? I am so annoyed.

Thanks!

Tamara Traeder: Something smells a little fishy. There may be a screwup up at the credit card company, but there could also be something odd popping up in your credit report (or someone might have tried to use your identity, so the card company has mixed information). Either way, check with the card company, and I'd recommend getting copies of your credit report from all three credit agencies--Equifax, Experian and TransUnion--and make sure all of the info on them is correct.

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Rockville, Md.: A few years ago when I was in the midst of book sales, car washes, wrapping paper, silent auctions etc I came upon a Dave Barry column that really made me laugh. He suggested that schools' financial problems could be solved by a single fundraiser. Let parents buy out of science fair. The sky's the limit on the amount you could charge.

Michelle Singletary: Oh that is funny!

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Washington, D.C.: Michelle, I get so tired of people like Rockville, MD whinning about you....If they don't like your chat then DON'T PARTICIPATE!!! Just that simple. You are helping many of us!!

Michelle Singletary: You are so sweet. Thank you.

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Washington, D.C.: I have been married a month and just finished Your Money and Your man book, great items in there.

My husband and I are trying to figure out how to afford a home in this area. We make a pretty good combined income but it seems that a two-bedroom residence of any type is just out of our reach. A basic mortgage payment would be a lot more than what we pay for a great sized, great location apartment we are in now. If we rent for another year, what are we really missing out on? are there other ways we can invest our money than real estate to get us some security for the future?

Michelle Singletary: First thanks for buying my book. I'm so happy it helped.

Second, take your time if you don't have the money to buy right now. But try to buy eventually if you can. Until then, you're right to think about other ways to help your money grow. Perhaps you might want to meet with a financial adviser who can help you with a plan to make your money grow responsibility. I always like well-balanced mutual funds.

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Minneapolis, Minn.: I read your article a couple weeks ago about paying off a debt. I have a small ($100) debt that went to a collection agency...from what I gather a bill went missing when I moved four years ago and I never paid it. Anywho. I want to pay this debt and asked the credit agency to put in writing that they would accurately report the date of the debt to be 2002, not 2006, and was told that they won't put anything in writing, that they wouldn't guarantee that, and that what I was asking them to do was commit fraud. Did I misunderstand the article? What should have I asked them? I'd like to pay the bill, but I am concerned that this will come back to bite me on the you-know-where. Help!

washingtonpost.com: 'Fessing Up and Settling Up , Aug. 3, 2006

Mary Randolph: You have the right to dispute items you believe are incorrect in your credit file. The agency can give you a form; after your fill it out and send it to the agency, it is supposed to investigate and get back to you within 30 days. You can then file a brief statement with the agency, explaining your side of the story. The bureau must include it with any reort that includes the information you're disputing.

Michelle Singletary: And the company was dead wrong. If you are paying on an old debt they are not supposed to change the information in a way that makes it look like new activity on your credit report. If they do, they are wrong. So before you pay the debt get recent copies of your credit report with the last date of activity to prove it was 2002. Then pay the debt. If your payment is reflected in a way that changes that 2002 complain to the credit bureaus using the copy of your credit report you get.

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Washington, D.C.: "Money market returns will probably not be as good as your investment in real estate, depending on the market you are in (even in this bumpy real estate market)."

On what are you basing this assersion? We just had the largest short-term rise in real estate prices ever recorded in this country (at least in certain areas).

Don't you think that investing in real estate right now has such a significant possible downside that it would be more prudent to invest elsewhere (even money market funds)?

Tamara Traeder: Long term, I think that real estate is a great investment. If you are looking for spectacular short-term turnarounds that we have seen in recent years, that may be harder to come by, and I personally wouldn't do it.

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Auughh on co-signing for a car!: How about telling the daughter to pay cash like Michelle's grandmother would have?! And why do you need to build a credit record? To buy a house, right? Not if you have a mortgage company that uses real, hard-working manual underwriters who use more than the FICO score.

Michelle Singletary: Like this. But Big Mama did borrow for cars. But she paid them off in about half the time. After all she was living on like nothing. But she took that nothing and stayed as debt free as she could. So paid her cars off early and paid off her home before she retired raising five grandchilren with a husband who had a drinking problem.

And your other point is well taken. The 21-year-old should be so worried about her credir right now. The lesson she can get is saving up for what she can afford, even if she has to borrow for the car. By the way there are some great used car deals in which she could find a great older used car and pay cash for it.

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Michelle Singletary: Oh my, where has the time gone. Thanks again to Mary and Tamara from Nolo. Remember this chat was overall about the great book Nolo put out and which was the Color of Money Book Club selection for August "Your Little Legal Companion: Helpful Advice for Life's Big Events."

Thanks again to all who participated today. And sorry to those whose questions we didn't get to in time.

Oh and Rockville, I have no idea who you have been reading but I have NEVER presented my children with a bill for their upbringing. I chose to have my kids so I pay for everything -- and plan to pay fully for their college education with no requirement for repayment other than they get good grades, stay out of trouble, be good human beings and rub my feet when I get too old to do it myself.

Take care all.

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