Reader Mailbag: Looking Forward

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What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Keeping whole life insurance
2. Life choices and student loans
3. Adding spouse to property title
4. Should mom file for bankruptcy?
5. Student loan worries
6. Career balancing money and passions
7. Part-time or full-time schooling?
8. Emergency home repairs
9. Difficult restaurant situation
10. Moving to the United States

A few days ago, I met someone that I knew well about fifteen years ago. This person pretty much avoided talking about the present and spent almost all of our conversation talking about the state of our lives fifteen years ago.

There was perhaps a minute of mentioning what we were doing now (I don’t think I even got the chance to mention that I was married or had children) and no mention of what we were planning on for the future. Just the past.

This conversation troubled me a lot. Yes, maybe that other person’s life didn’t follow the path that (s)he hoped (yes, I’m trying to mention as little as possible about this person) and they didn’t want to mention the present or the future. I was still left with a sense that the person spent an awful lot of their time thinking about the past rather than about today or tomorrow.

It’s very hard to move forward in life if you’re not mentally looking forward. I try to always keep my mind on what I need to do today, where I’m going tomorrow, and what my plans are for the next few years. I don’t know where I would be if I spent my time thinking about my college years, but I doubt it would be a good place.

Think forward, not backward.

Q1: Keeping whole life insurance
I started reading your site a few months ago after a friend recommended it. I am now 30 years old. When I was 22 or 23 I signed up for whole life insurance through a friend at the time. It is about $1150/year for $100,000 in coverage. I am unmarried with no children. At the time the cost was prohibitive but I thought I understood that the cash would grow and could eventually pay for the yearly fees. The most recent statement I got gave a cash value of $4,676.28. I am not excited when the bill comes each year and it is hard to think that I have paid about $8,400 for a current cash value of about 60% of that. Should I get out of this now? Or stay in? If I got out would I be entitled to the full cash value? I should add that this is not a financial hardship to keep paying for this product. I am meeting all my financial goals – I have an emergency fund, I have a good mortgage rate and make extra payments on it, etc.

- Jennifer

What you’ve described is pretty much the nature of whole life insurance.

For one, you’re also getting the benefit of the $100,000 insurance policy out of your annual payment. I tend to look at whole life insurance as an investment package tied in with a term life insurance policy. Some portion of that $1,150 a year is going solely to insure you.

Now, as for the cash value of the policy, the early years of such a policy tend to be rather lean years. Most of the time, the agent gets his or her commission for selling the insurance out of the first few years of you paying into the insurance.

Generally, such policies become better the longer you’re in them. If someone is just starting out with a policy, I’d usually advise them to look at a term policy instead. However, if someone has already sunk several years into the policy, I’d probably encourage them to stick with it. This is, of course, a general rule of thumb that might change with the specifics of that particular policy.

Q2: Life choices and student loans
I will graduate with my Bachelor’s degree Spring of 2013. Throughout my undergraduate career so far, I have managed to avoid accumulating any kind of student debt. I’ve worked and will be able to pay tuition out of pocket for the rest of my undergrad career. However, I want to go to grad school out of state, which would mean paying nonresident tuition along with inevitably taking out loans. I currently still live with my parents because they don’t charge me rent, so food and shelter are free, but I am far from eager to stay here past age 22 (when I’ll graduate). Aside from the hope of finding some amazing scholarships/stipends, I’ll have to take out loans even if I do stay in state, but my question is, am I being stupid? My mom thinks I should just stay here until I’ve finished grad school, but as grateful as I am to my parents for helping me out, my distaste for taking out larger loans than necessary is outweighed by my distaste for living with my parents well into my 20s. Should I just suck it up and stay with the parentals (and in a state I do not want to live in forever,) so as to avoid the loans? I have absolutely no debt thus far in my life, so student loans would be the first, and while I do have a relatively well-paying job for a student, there’s no way it can pay for grad school and living expenses.

- Amanda

The flat-out truth is that you’re going to have to pay for your food and shelter if you move out of your parents home. If you can’t afford to do that out of pocket, that’s going to either mean bigger loans or a part-time job outside of your classwork – and probably both.

Bigger loans are something you’re going to completely regret when you’re done with schooling and ready to pay them back. I can’t say for certain that you’ll regret it worse than living with your parents, but looking back from my perspective, I can certainly say if my options were to live with my parents with free room and board while in college or to have tens of thousands of dollars in additional student loans, I’d far rather have lived with my mother and father.

Some of that may come from maturity, though. I’ve been on my own for long enough that I no longer question my independence from my parents, nor have I for years. It sounds like you’re still in that phase of life where you seek independence from them, which can be a pretty powerful motivator.

I can’t make the call for you. All I can say is that looking back from my early thirties, I would far rather have lived with my parents for a while than have extra student loans.

Q3: Adding spouse to property title
I purchased a home in June 2006 and have been living in it since then. I got married in May 2010, and my husband moved into the house with me. I had my name changed on the mortgage to reflect my new last name. I didn’t add my husband to the mortgage or deed, solely because there was a $200 processing fee for my bank to add him to the mortgage and if the fee was just for the sake of adding him it didn’t seem like something we needed to do. Is there any reason that I would need to add him? We obviously do not plan to divorce but I live in Louisiana, a community property state, so I think he would basically be considered part-owner for all intents and purposes. We have joint acocunts and therefore jointly pay the mortgage.

- Elizabeth

My understanding is that in a community property state, all property owned by either one of you would be split fairly evenly in a divorce and any mortgage would probably have to be refinanced as well to include both of you.

Given that, the biggest impact that adding him to the mortgage and particularly to the home title is that it may affect your insurance rate in a positive fashion, depending on your husband’s credit.

In other words, if your husband has better credit than you do, then I would add him to the mortgage and title. Otherwise, in a community property state, I see no significant reason to take action.

Q4: Should mom file for bankruptcy?
My mother had a serious infection in her knee joint in July 2010 (she had just turned 65 and enrolled in Social Security and Medicare Part A), and after she spent several months in a rehab facility, I realized she could no longer live on her own, so I packed up the things in her house and moved her from her home in Virginia to our home in New Mexico (I have a husband and two children in the home as well). She has serious health issues and is no longer able to work. She receives $895 per month (take home) in social security and $1,000 in long-term disability (currently on hold for medical re-authorization but expected to continue through January 2013). She is on Medicare Part B (which comes out of her social security check) a Medicare Complete Advantage plan (which is free). She is on a LOT of medication and will likely hit the prescription donut hole in August. She also has co-pays (fairly low) for numerous doctor visits as we get her health stabilized. We purchase all food, household supplies, etc., for her as part of our normal grocery shopping.

She has significant debt, and we are trying to figure out a good strategy for dealing with it. The total amount of debt is $69,500, with monthly minimum payments of just under $1,000. The majority of what she owes is a home equity loan (unsure about the interest rate) for $43,000. We are in the process of getting everything we packed up cleared out of the house, and we have been advised by realtors that our best option is to sell the house at auction (because of a problem with the septic system, it’s unlikely to pass inspection). We might get about $50,000 for it (maybe more, you never know!). She has a very old car that is currently being stored at a friend’s house in Virginia. We were thinking about giving it to another friend of hers who could use the car but can’t afford to pay for it.

We doubt the house would sell for enough to pay off all her debts. She clearly can’t afford to pay off the debts on her own. Because mom can stay with us, and she shouldn’t need to secure credit in the future, we are wondering if bankruptcy is a good option for her. We as a family could certainly pay off her debts over time, but that would have obvious negative consequences for our own finances. Is filing for bankruptcy a good idea? If we do this, do we need to handle the sale of her house or car in any particular way (e.g., do we need to “buy” the car from mom and then give it to her friend?)? Are there considerations we need to be aware of?
- Sheila

Given the details you’ve shared here, it sounds like bankruptcy is the best option for your mother. There may be other factors not mentioned, of course.

Before you go making any moves prior to bankruptcy such as selling a car or anything, I would contact a bankruptcy lawyer who can help you determine which steps are legal and which ones are not. There are some items you’re allowed to keep in bankruptcy and there are some maneuvers that can get you into trouble with bankruptcy, depending on the specific state.

This story is an example of the deep challenges that health care presents in the United States.

Q5: Student loan worries
Starting this September, I am leaving my job to return to grad school full time for 2 years to change careers and follow my passion. The program is demanding and time intensive, so we have been told we cannot hold outside jobs. I will be making very little money as a grad assistant (and most goes straight to tuition). We can live off my husband’s salary and have worked out a budget. The budget includes a small amount of savings transfers for travel to see family and other anticipated save-to-spend items, but it will leave almost no surplus after that.

We have an 18k (6 month) emergency fund in a money market. We have about $64k in retirement accounts (401k/Roth IRA), split equally between the 2 of us. We are 28 years old. We are both contributing 6% (plus small company match) to our own 401ks, but I plan to stop contributions when I return to school.

We have $50k saved for a house down payment ($40k in mutual funds, $10k in money market). We are thinking about starting a family and buying a house in 3-6 years. I think we will need a big down payment because houses in the area we live (DC) are typically around $500k.

My husband has no student loans, but I have $26k, and I will be taking on another $40k for grad school over the next 2 years. (11k at 6.8% fixed unsubsidized; 7k at 5% fixed subsidized; 8k at 1.87% variable mostly subidized. Not sure of rate on the new $40k, but I imagine 6.8% fixed unsubsidized.) Although my loans are deferred while I’m in school, I am planning to pay off the interest on the unsubsidized loans as it accrues because paying interest on interest drives me crazy.

We have no other debt. We each own a car.

Questions for you:
1. Should we use the $50k that we had designated for a house to continue saving for a down payment, or would it make more sense to pay down the student loans?

2. When I am in school and not earning a salary, we plan to keep my husband’s 401k contributions at 6% (to take advantage of a company match), but not to contribute anything to my retirement accounts. Is this a mistake? Will missing 2 years of retirement contributions in my late 20’s set me too far back? Would payment I’m planning to make on student loan interest (around $65/month) be better spent on retirement contributions?
- Shannon

If I were you, I’d use that down payment savings to get rid of the higher interest student loan debts. I wouldn’t worry about the one that’s at 1.87% too much, but the others aren’t worth keeping. I’d channel most of the rest to paying for your upcoming studies.

As for delaying retirement contributions, I don’t think that’s a concern. You’re already ahead of the curve with the amount you have saved and contributing while you’re in school just means additional financial challenges that you don’t really need.

I think your plan is solid.

Q6: Career balancing money and passions
Growing up, a lot of pressure was put on me to acquire a practical degree in a field with solid career potential. My desires to become an educator were often belittled. So, I got my BS in Manufacturing Engineering… and while I had some sucess in related jobs, it’s been mostly miserable for me and at this point I have been laid off twice. I have no heart felt desire to go back, but the money was nice. Currently, I work as a Math Educator and absolutly love it. Even with long days and late nights of bring work at home – I can honestly say I feel at home in my field of work. I feel lucky to have the opportunities I do despite my lack of education specific degree however there has been a drop in pay.

In other news, I purchased a large home while engaged to my then (soon to be) job-holding husband. The relationship since disolved, and I’ve been left with a mortgage I can’t afford on a education job. I’m applying for hardship assitance, but if it doesn’t work out… I won’t be able to make ends meet (and I will have to lose the house -ie foreclose). It should be said that I don’t take foreclosure lightly and the shame and sadness of losing my home are hard to deal with emotionally…. but I think I would still rather that then try to force myself into engineering again (despite the fact that the income would be substantial enough).

For what it’s worth I have already tried the sell the home legitimately and that is a no go in this economy. Also, if someone wants to suggest that I could be living leaner – I should probably state that my net income is actually slightly less than my mortgage, taxes and home association and that I rent out rooms to eke by.

I guess I am in an ethical quandry. Does the bank lose out or should I?
- LeAnn

Honestly, I see both sides of the equation.

On one side, it’s simply dishonest to borrow money from someone and then choose not to repay it because repaying it became inconvenient.

On the other hand, the money you borrowed was collateralized with your house and the bank assumed some degree of failure to repay.

If you feel as though your only options are to walk away or declare bankruptcy (both of which are devastating to your credit), I would probably walk away, but only after making sure that I had housing lined up when I did walk away.

Q7: Part-time or full-time schooling?
In college, I majored in financial economics and graduated in 2009. I was unable to find a position in this field and ended up taking a full-time position in a field completely unrelated to my major. I don’t mind the work but I’m very overqualified, the opportunity for advancement is very limited, the pay is low (with regard to other companies in this industry) and the work is fairly repetitive and mundane. I really enjoyed the accounting classes I took in college, so I’ve decided to go back to school and take some extra accounting classes. My ultimate goal is to sit for and pass the exam for CPA certification and begin working at a mid-sized accounting firm. My question centers around how I should take the classes. I essentially have two options:

1. Continue working at my current position and go to school part-time in the evenings.

2. Move back home with my parents (they’ve already given me their full blessing in doing so) and attend school full-time.

Under the first option, I would pay with cash as I go but it would take me between five and six semesters to get the classes I need. Under the second option, I would have to take out a small student loan (~$6,000) to add to the cash I’ve saved to cover tuition and books but I would get the classes I need in two semesters. In addition, I’d be able to go to work in a better-paying field that I believe I would genuinely enjoy.

I’ve been seeking opinions from friends and family alike and the results seem to be fairly mixed. I’d greatly appreciate any opinions and/or advice you could provide.
- Matt

If I were you, I’d work for another half year to a year, bank every dime I could so that I didn’t have to take out loans for education, and go back to school for the fall semester next year full time while living with your parents.

This enables you to get the education debt free in less time than you would doing it part time.

I think that route puts you in the best long-term situation in terms of your money and career.

Q8: Emergency home repairs
We are recently debt free except for the house. We’d been in debt since we married 27 years ago, but 5.5 years ago we got on the TMMO (Total Money Makeover) and started working the plan hard against our $136K non-house debts. We have three years left to pay on our land and six years left on the mortgage. So it is exciting to see the whole snowball effect really working.

We started on Baby Step 3 in May, building our emergency fund. Right now we have ~$8K saved.

Where we live in Central Texas we are experiencing an extreme drought and that has caused the slab of our house to crack. The repairs are estimating to be $20K. It is not covered by insurance, not covered by the builder, only to be covered by my husband and me.

I desperately don’t want to go back into debt, but when a room of your house is shifting almost daily away from the rest of your house it’s not something that you can just wait and save up for by the end of next year. I’m not concerned about cosmetic fixes like the cracks in the drywall, but very concerned about the structural integrity of our home. What would you do?
- Andrea

If your house is falling apart, you need to take care of it as soon as possible.

This is the type of situation that a large emergency fund can really help with, but if you don’t have that, you need to get a loan to take care of the problem.

Fix the problem and make sure that it’s fixed in a way so that the problem won’t recur.

Q9: Difficult restaurant situation
How do you handle situations where you’re paying at a restaurant and the person you’re with doesn’t have the right amount of change and you end up paying. They agree to pay you back. You have to keep nagging them and still you don’t get money back. It’s one thing to turn down someone when they formally ask for a loan. Then your advice makes perfect sense. But what do you do in informal, last-minute situations where it’s just more socially accepted to handle the bill yourself? I’ve even had this happen at a grocery store with a friend, who after putting $100 of groceries in her cart, realized that she forgot her ATM card. I had to nag at her for a long time before getting it back. How could you say ‘no’ in these situations??

- Laurie

By saying “no”?

Simply state that you don’t have the money to cover their bill. If you’re in a situation where covering a dinner bill for a friend is going to cause you financial hardships (which seems to be the case), then you shouldn’t be covering for them.

On the other hand, if you can easily afford it, just blow it off and wait for an opportunity to reverse the situation. Have the other couple cover dinner sometime. Have your friend pick up a grocery tab for you next month.

I don’t like situations where I’m indebted to my friends or they’re indebted to me. I try to avoid them. If there’s a situation where they’re in a pinch, I will often just pick up the tab for them and forget about it, knowing that they’ll return that kind of favor someday.

If I don’t feel confident in that, what kind of friends are these people?

Q10: Moving to the United States
I am moving to the US (San Francisco) to take a new job in a few weeks. I need easily understandable (e.g. low in jargon) advice / information on issues like: leasing an apartment, health insurance, 401Ks, Roth IRAs, finding a cellphone plan, establishing a credit score (will they take into account my great credit in Australia?). THe information on the Simple Dollar is targeted towards people who already have a basic understanding of how things work in the USA. Can you direct me towards any external, easy to understand, online sources?

A related question: What insurances should I consider carrying (excluding health insurance and life insurance). Background: I will be renting an apartment, I have no kids, will have a car, reasonably substantial household assets, reasonably active habits. In Australia I would have renter’s insurance, auto insurance (third party, fire, theft, accidental damage), income protection insurance, long term disability insurance, and that’s about it. With the move, my key concern is public liability – what am I responsible for in terms of accidents that injure third parties and how should I insure against it?
- Erin

I would suggest reading a “personal finance 101″ book or website geared toward American audiences to answer many of your questions. One example of this is the Money 101 section at CNN Money.

As for insurance, you’ll have much the same set of insurance in the United States as you would in Australia, excepting income protection insurance. In the United States, this is usually handled by employers in the form of unemployment insurance that they cover, which pays you for a short period after a job loss.

As for public liability insurance, most Americans really don’t cover this outside of collision coverage on their automobiles. Such insurance is usually sold as “umbrella” insurance and is sold by many insurance companies, but usually only wealthy individuals carry such a policy.

Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.

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59 thoughts on “Reader Mailbag: Looking Forward

  1. I think Amanda should move to the state she would like to live in after graduating. Perhaps she will have opportunities for internships while in grad school, and this will help get her foot in the door when it comes to job hunting after.

    Living on your own is a great life experience. She should see if she can get assistantships, grants, work study jobs, and scholarships. She can make up for the rest in loans. Living with roommates would cut down on rent. Being independent is something she should learn, too.

  2. Q5 – you have $40k of your $50k for a house downpayment in mutual funds? Assuming these are equity funds…um…if you want to buy a house in the next 10 years, you are putting way too much risk. The markets are up and down like a rollercoaster each day going up or down several percents the last month. Why on earth would you put money you need in 3 to 5 years in the markets? And why did Trent not mention this? House downpayments belong in safe, low risk investments because you will need them in the short term.

  3. Q2: First question for Amanda: Are you sure that you’re going to have to pay to go to grad school? In many fields, it’s easy (and expected) for grad students to work as teaching assistants or research assistants, so you pay no tuition and get a small living stipend as well.

    Second question: Why do you want to go to grad school? Do you have a clear (and realistic) career path planned out for which grad school is necessary? Or is it just out of interest or for fun? If you do have to pay tuition and take out loans for the degree you want, that’s a big deal, so I’d encourage you to think hard about whether the degree you’ll be getting is really worth it.

    Third question: You have two years to go with your undergrad degree. Can you take extra classes now to get part of your coursework for your graduate degree out of the way? Even if that means cutting back on the job you have now (and taking out some loans for your undergrad degree), you may find that it saves you money in the long run, if it means you can finish your grad degree sooner.

  4. @Q4: I used to work on a legal hotline for seniors (I am an attorney) and there is probably no reason for your mother to file for bankruptcy because all of her income and assets are exempt. A bankruptcy attorney would likely take your money and do the filing but it will not change your mother’s standing. Most states have free legal hotlines for the elderly; call one and get specific advice (my only concern is if the car has value).

  5. Q3 – Trent is incorrect. In a community property state, any property you or your spouse purchases after the wedding is considered joint property. Any property/possessions either of you solely owned before the wedding belongs to that person only. So your spouse would only get a share if you agree to it as part of the divorce settlement. BTW, I confirmed this by doing a very quick search online for community property in louisiana to pull up what would happen in a divorce.

  6. @Q1:

    First off, Jennifer should cancel the whole life policy immediately. She will unequivocally be in a better financial position.

    Secondly, Jennifer should NOT replace it with a term life insurance policy. She is unmarried with no children. She has no dependents. She has no need for any life insurance at all.

    Cancel the whole life policy immediately and invest the money instead.

  7. Trent, don’t jump to conclusions about your acquaintance’s mental state. Apparently, the only thing the two of you have in common is your past, it is quite normal to reminisce. That does not mean that all that this person can think about is his past, come on! Just that he did not want to share his present with you, for his own reasons.

  8. Q9 – As I see it, in a restaurant when a friend’s bill is more than they have on them & they have no CC on them (not that they don’t have the correct change) is one where someone has to pony up, but the other must accept responsibility for reimbursing ASAP – as long as it’s made clear when you offer to pick up the tab that you expect repayment.

    In the grocery store, you do have the option to say you can’t cover the bill & they’ll have to return the items to the shelves. Or, have the store hold the items while the friend goes home to get the card or checkbook – I know our local store will put bags in the back in the refrigerated storage for a brief time in this type of situation.

  9. Maybe the person just likes to reminisce about the past since they hadn’t seen you in fifteen years. Talk about “the good old days” and such. Maybe that was their common ground with you since they hadn’t seen you in so long…

    Maybe they didn’t feel a need to tell you about their life today because it’s not any of your business. Maybe they were afraid that you’d be judgemental about the path their life took, or they are a bit embarrassed that things didn’t work out as they’d hoped.

    I don’t know Trent, every time you talk about an interaction you have with someone you know/knew, it seems like you’re making an awful lot of assumptions about that person in order to make yourself look and feel superior to them. That shows me that you’re really the one who’s insecure about the choices you’ve made. If you are happy with the life you’ve built for yourself, great, be happy about it, but stop judging people based on what they don’t say and what you don’t know.

  10. Obviously Trent has left out a lot of detail around the conversation with his old friend, so it’s difficult to assess his thoughts on the matter.

    I will say this, though: when I run into people I haven’t had contact with in a long time, our conversations almost always turn back to the “good ol’ days”. I think it’s pretty normal and it certainly doesn’t mean I’m not satisfied with my life.

  11. @Q5 Shannon – I think you’re going to have to seriously consider whether paying off your school loan is more important than buying a home. As a DC metro resident, I feel your pain of home prices, however, depending how far from DC proper, you’re willing to live/what makes sense, you can find townhouses for under 500k. Price varies heavily depending on the school district & proximity to DC (but closer to DC doesn’t mean awesome schools).
    Since you’re planning on kiddies, don’t forget about the school district! Also, hopefully the cost of child-care is a part of your planning.. I’m in the boat, and am surprised to hear that a few of my friends are choosing to have a stay-at-home parent b/c the cost of childcare is close to the amount they would make working (either FT or PT, depending on the job), and after the kids arrive, their priorities (fam vs work) change.
    Maybe think about when the “starting a family” is important to you. Is it closer to 3 yrs away – 1 yr after you finish your masters? Or closer to 6 yrs away – giving you time to reap the benefits of grad school?
    I’m the same age range & I bought a couple years back. Running the #s, I knew that I’d come out ahead if I rented a house in the same neighborhood, but I still chose to buy. So, it’s a personal decision. But agreed, it takes a while to save up a downpayment in this area. But I’ve definitely noticed there are SFH rentals (bigger houses and better areas than mine) for the same amt I’m paying in my mortgage.. makes me reconsider my decisions sometimes.
    Good luck!

  12. Question:

    I dont think Trent will reply, but maybe someone here can . . .

    I know that Trent gets paid per click on his website, he said that once, yes?

    Daily, ss that per click, or per unique click each day? For instance, if I come here multiple times throughout the day to read the answers on Mailbag day, does he get paid each time I visit? Or just once?

    Just curious.

    I would assume that he gets more $ on Reader Mailbag days.

    Thanks,
    Laura in ATL

  13. Q6: I disagree with both sides of Trent’s analysis, actually.

    On the one hand, that the “bank assumed some degree of failure to repay” is irrelevant. Retail stores assume some degree of shoplifting when they price their products. That doesn’t mean that shoplifting is ethical.

    What’s relevant is that the mortgage is a contract in which both parties agreed on what the consequences would be if the contract is broken. Breaking the contract and accepting the agreed-upon consequences is not unethical – not according to me, and not (as I understand it) according to the law.

    Beyond that, I’m troubled by Trent’s characterization that it’s “simply dishonest” to borrow money and then not repay it when circumstances change. Dishonesty is a very serious accusation (basically calling someone a liar), and I don’t think it’s appropriate here. From LeAnn’s story, when she bought the home, she had every intention of paying the mortgage. Then circumstances changed in a way she didn’t anticipate, and now she can no longer pay. Maybe it was unwise of her not to have considered that her relationship might end, but it’s not dishonest. She didn’t lie.

  14. @Laura,

    Trent gets paid both per click and per impression, depending on the ad programs he uses, most click programs will only count unique clicks to combat click fraud. One thing he does not lead on about is how much money this site really makes, as many readers would become jealous, using just conservative estimates this site easily grosses in the six figures per year, that being said I do not know how much Trent has to pay for programmers and/or other support staff.

  15. I’ve said it once, and I’ll say it again. I really enjoy the responses to Trent’s posts. The more in-depth answers and different perspectives are enlightening. Many thanks to all that lend their opinions! I learn so much.

  16. Q. 10 re: Umbrella insurance is not for wealthy individuals only. I am far from wealthy and have a $1 million policy, which adds that figure as an additional amount of protection onto my existing auto and home insurance policies. It costs $150 a year.

    You may think the standard $300,000 / $500,000 liability limits on your auto/home insurance is enough, but you would be wrong. If someone trips on a root in your front yard and injures him/herself, or if you inadvertently cause someone permanent disability through an auto accident, the resulting lawsuits can wipe you out very quickly.

    Umbrella insurance is a really good deal for the peace of mind it can bring.

  17. Q6 – I agree with Johanna @ 14 that the OP did nothing wrong or in bad faith. Foreclosure exists for this type of situation, where circumstances change & the buyer can’t make the payments. You do know, I hope, that you can stop making payments & stay in the house until the bank legally notifies you that you must vacate, which these days could take months, if not years since they have so much foreclosure inventory on their hands. In that case, the ethical thing to do is to stay (putting into savings what you expect to be paying in rent/payments in the future), but keep up a minimum level of maintenance rather than letting it fall apart around you (or intentionally trashing it, as some people do).

  18. @#7 and #9: The other thing that bugs me about his opening story is this: “Yes, maybe that other person’s life didn’t follow the path that (s)he hoped (yes, I’m trying to mention as little as possible about this person)”

    Trying to mention as little as possible, but going out of your way to mention that you’re trying to mention as little as possible? Come on.

  19. Q6: To add to what valleycat said, when the bank shows up to foreclose, you’re allowed to ask them to prove that they actually hold your mortgage and that they have the authority to foreclose. Even if you haven’t been making payments and you know that *somebody* therefore has the authority to foreclose, it’s probably still a good idea to ask for proof, because what if it’s the wrong bank that’s foreclosing? Then the right bank could still come after you later, but you’d no longer have a house to give them.

  20. You might want to make it clear that it is automobile liability insurance, not “collision” insurance, that provides protection against lawsuits from damages caused from your negligence. Collision coverage pays for damage to your own vehicle.

  21. Trent,

    From your comment about your acquaintance, it seems that you got a weird feeling about it. I think he/she was probably trying to avoid talking about something, and so, simply focused on the past. Perhaps he/she is getting divorced, or something equally hard to discuss?

  22. I agree that contract law doesn’t presume morality – i.e., contract law generally provides that for breaches of contract, the remedy to the other party is to make them whole (put them in the position they’d be in if the contract hadn’t been violated) rather than to “penalize” the other party for breach. In fact penalty clauses in contracts are usually specifically enforceable by the courts (e.g., your cell phone provider can’t charge you $2,000 for breaking your contract when you would only have had to pay them $500 if you had just stuck out the length of it).

    I don’t think that defines the ethics of the situation. I suspect there are plenty of things that most of us believe are unethical that aren’t punished by law one way or another. This isn’t an argument about whether it’s ethical to strategically default on your mortgage or anything like that, and I think reasonable people can hold different views on that (and personally, for the person in Q.6, it’s hard for me to see what else she can do). But I think it’s perfectly reasonable to have a discussion about the ethics of something that departs from the legalities of it.

  23. Regarding Q3, I believe Valleycat1 is correct. Property owned by a spouse before their marriage is considered separate property, not community property. Do you have a will? Because in Louisiana, if you have no will, then the laws of succession require that the person’s separate property goes to 1st) children or children’s descendants, or if no one in this group 2nd) brothers and sisters, or 3rd) nieces and nephews, or 4th) parents, or 5th) spouse, or 6th) grandparents, or 7th, collateral relatives, or 7th, state of Louisiana. For community property, the children get first rights, and only 2nd) spouse, then followed by other relatives in this order, brothers and sisters; nieces and nephews; parents; grandparents; grandparents; other relatives and lastly, the state of Louisiana. If you have children under the age of 24, they are “forced heirs.” The forced portion that has to go to the kids is 25% if there is one kid or 50% if there are two or more kids. This forced portion cannot be changed even with a will, I believe. So if either of you have children (poster did not mention children), this is something else to consider.

    Now that you are married, you need to carefully look at your assets and situation and do some estate planning. You may not get divorced, but if you were to die, then your husband may not end up with assets you intended him to have. Just do some searching on the Internet regarding Louisiana inheritance laws and you will see what kinds of problems you can have if you don’t have a will or assets titled properly.

  24. @Katie – #23 – I agree completely. Something being legal does not inherently make it honest or moral. Everyone has their own standards and belief system, and sticking to what you believe is what I feel is most important, even if the law allows you to do more or less in the situation.

  25. Trent’s comment about his acquaintance from 15 years ago talking too much about the past reminds me of people who go to class reunions and complain that the DJ is playing too much OLD music and not enough current music. It’s very likely the friend had nothing to hide or avoid about his current life – he probably just wanted to reminisce about the old days. It’s usually what I do with old friends. I mean, it’s nice to get caught up on families and careers and all, but I find it more enjoyable to share old common memories (hopefully, without being psychoanalyzed).

  26. @Katie (and any other legal-type people who may be reading): In one of the other threads where we were discussing this once, somebody who sounded like they knew what they were talking about said, “Courts decided long ago in this country that there is no such thing as an immoral breach of contract.” Do you (or does anyone) know what exactly this means, if it’s true?

    Also: LeAnn’s case is not about strategic default – or at least, it’s totally different from what people usually mean when they talk about strategic default. This is regular old “can’t pay” default. Maybe it seems strategic because she *could* hold out a little longer – by draining her retirement savings, maybe, or by running up her credit cards or neglecting necessary maintenance. But she may just be postponing the inevitable.

  27. “Courts decided long ago in this country that there is no such thing as an immoral breach of contract.”

    I’m not a contracts lawyer or a legal academic, so I’m just dredging up old law school discussions, but my guess is that comment refers to the idea that people can, well, strategically default on contracts without facing penalties from the courts for it. So whether you break the contract because you just can’t perform or whether you break it because it’s no longer financially to your advantage (and something else is to your financial advantage) is irrelevant to the remedies that will be awarded to the other party. But I don’t remember ever hearing of a situation in which a court ruled on the immorality of contract breaches, per se, nor can I think of a situation in which that would have arisen as a legal question (instead of as philosophical backing for a decision, which I’m sure judges have mused on).

  28. #20 Johanna:

    Even if you haven’t been making payments and you know that *somebody* therefore has the authority to foreclose, it’s probably still a good idea to ask for proof, because what if it’s the wrong bank that’s foreclosing? Then the right bank could still come after you later, but you’d no longer have a house to give them.

    The situation wherein the stars align and the following three things happen -

    (1) The hypothetical homeowner is late enough on his payments to get forclosed on

    (2) The ‘wrong bank’ issues a notice of foreclosure and shows up to foreclose

    (3) The ‘wrong bank’ is somehow actually the bank that the homeowner thinks holds the mortgage

    seems unlikely on a cosmic scale. In fact, I suspect that you can’t name a single instance of (1) and (3) happening at the same time, ever. ‘Wrong banks’ try to foreclose often enough to warrant being aware of the possibility, but usually they err in that they are obviously the wrong bank, or in that the homeowner is up-to-date on their payments.

    That said, if the galactically improbable happened and things went down as you suggest they might, the ‘right bank’s’ recourse would be to go after the other bank that had fraudulently obtained the property, no? When banks foreclose, they show up at the door to the house, they don’t track down the former resident at his new apartment.

    A more understandable reason to ask the bank to prove that they hold the mortgage is that it sometimes works as a stalling tactic and you can hold them off for a few days that way.

  29. MattJ, I think the issue is that some mortgages have been diced and sliced so many times that (a) nobody is really aware who ultimately holds the right to foreclose, and (b) sometimes the entity who does is actually out of business. There are cases of this happening. I don’t know if wrong banks have shown up to foreclose though.

  30. Q9 – at the restaurant ask for separate checks when you order. If the restaurant doesn’t do that and your friend does not have correct change, ask the server to make change. You don’t owe anyone an explantation for this and should not feel awkward, as you are not the one with the incorrect change problem. At the grocery store – or anywhere else – the answer is “No, I really can’t cover that right now.” No further explaining is necessary.

    As for Trent’s friend, I think the message was “Hey Trent, remember when we were important to one another?” The fact that Trent has no idea what is going on with this person indicates this is no longer the case.

  31. #31 Katie

    Yes, there are cases where the ‘wrong bank’ has shown up to foreclose. In every case I’ve ever read about, however, the homeowner was either not behind on his payments (that is, the bank was at the wrong house) or the homeowner didn’t recognize the bank as being the ‘right bank’ (whether it was or not).

    In Johanna’s hypothetical, she offers the vanishingly unlikely events that the wrong bank is at a ‘right house’ and the homeowner believes incorrectly that they the wrong bank is the right bank. In that case she says that the homeowner should make them prove they are the right bank, not to delay or stop the foreclosure, but because if they’re not the right bank, then the right bank will come after the homeowner, rather than show up at the house and conduct a legal, correct, foreclosure.

    It is good advice to make the foreclosing bank show its paperwork. It’s not good advice to do it because you think think Johanna’s described situation might be the one you’re in, or to avoid the consequences that Johanna warns about.

  32. @MattJ: To add to what Katie said, slicing and dicing of mortgages without proper documentation is a serious problem. If we’re going to wring our hands over the ethics of homeowners working within the rules to their own advantage, shouldn’t we be at least a little bit concerned about banks (and other entities) who aren’t even playing by the rules?

    There have been cases of banks/entities showing up to foreclose on properties where they didn’t have the right to foreclose. I agree that it would be a coincidence for a bank to show up to foreclose on a property that was in default with another lender, but that doesn’t mean it can’t happen, or that you want it to.

    I don’t own a home, let alone have a mortgage in default, but if I did, and if the wrong bank foreclosed on the property, I would not be particularly trusting of the right bank *not* to come track me down and try to get something out of me. I mean, isn’t the danger of strategic default (in recourse states, anyway) that the mortgage holder will track you down and sue you for the balance of the loan?

  33. Re: Q4 – If the mother’s house is sold, the proceeds will automatically go to payoff any debt secured by the mortgage on the property. If there is only $43,000 remaining on the mortgage, then there should be about $7,000 left over from the proceeds to go towards the remaining debt. As for the rest, if the woman’s income cannot be attached or garnished, and she cannot afford to make the payments with her income, then I would say that it shouldn’t be paid. Especially it should not be paid by the daughter – it is not your obligation and unless you are independently wealthy, paying it could hurt you financially and make it more difficult to support your family. At the mother’s age and with her apparently precarious state of health, she probably won’t be applying for more credit and the ding to her credit rating won’t matter.

  34. #34 Johanna

    Paragraph 1: I’m both aware and concerned. Why do you think that I am not?

    Paragraph 2: I’m sure you’ll agree that it would be even a further coincidence for the bank that showed up to foreclose to somehow be the same bank that the homeowner falsely believed was the bank that held his mortgage.

    Paragraph 3: If the ‘right bank’ decides to foreclose, after the ‘wrong bank’ somehow got away with it, they will foreclose on the house, where you will no longer reside. If the ‘right bank’ decides to sue you for the balance of the loan, they will do so without regard to the actions of the ‘wrong bank’. In what way do you think that holding off foreclosure by the ‘wrong bank’ protect you from any assault by the ‘right bank’?

    ‘Make them prove they hold the note because if they are the wrong bank, you will stop the foreclosure’ – Good Advice

    ‘Make them prove they hold the note because even if they are the right bank, they are obligated to do so and you may delay the foreclosure while they collect their paperwork’ – Good Advice

    ‘Make them prove they hold the note because if they are the wrong bank, you don’t want them taking the house away from you before the right bank comes after you, because the right bank may somehow punish you extra for letting that happen’ – Not Good Advice

  35. Again to @MattJ: I don’t understand how you can say that this situation is “vanishingly unlikely,” or that it’s “not good advice” to caution people about it. A significant percentage of mortgages are in default, and banks foreclosing without proper documentation is a widespread problem. It’s only a matter of time before one bank shows up to foreclose on a property that’s in default with another bank. In fact, I’d be surprised if it hasn’t happened already.

    But you haven’t heard about it, so it can’t happen? Maybe the reason you haven’t heard about it is that homeowners who are expecting *somebody* to show up to foreclose may not be aware that they need to check that it’s the right bank that’s foreclosing. Or maybe journalists just don’t think “Mr. and Mrs. X were expecting Bank Y to foreclose on them, but Bank Z showed up instead” is as compelling a story as “Mr. and Mrs. X own their home free and clear but came home one day to find a padlock on the door.”

  36. OK, I think we’re splitting hairs here. If we agree that it’s right to tell homeowners to ask for documentation even if they know they’re in default, that’s good enough for me.

  37. Maybe I’m the only one that read Q6 this way, but it seems that LeAnn is trying to ask if she is somehow obligated (morally or otherwise) to use the degree she has to work in a job she hates for the sole purpose of making mortgage payments. That’s a tough question for me. If she can go back into engineering and make the payments, then is it ethical for her to stay in a low-paying job and have the bank forclose?

    Not sure where I’d fall on that one.

  38. Q10 – As another California resident, I can tell you that you will likely be automatically paying into a State-run short-term disability program, so it’s unlikely you will need a separate short-term disability plan. My company offers us long-term disability and a small life insurance policy as part of our benefits, so ask your employer if they do the same.

    I would look into renter’s insurance and also auto insurance. (In San Francisco, you might not need a car, look into Zip car for short term rentals.)

    An umbrella policy can be helpful and they are certainly not just for the rich. However, the only people I know with umbrella policies are also homeowners.

    I personally have no idea how credit scores transfer from foreign countries, so when you figure it out I hope you come back here and tell us.

  39. #37 Johanna

    I don’t understand how you can say that this situation is “vanishingly unlikely,” or that it’s “not good advice” to caution people about it.

    It’s good advice to caution people not to walk around in the rougher parts of town after dark. It’s not good advice to caution people not to walk around in the rougher parts of town because the vampires who haunt those neighborhoods may drain their blood.

    It’s only a matter of time before one bank shows up to foreclose on a property that’s in default with another bank.

    In my original reply to you, that would be the coincidence that (1) and (2), but not (3), happen at the same time. In that case, the homeowner would say, “You’re not my bank. Get lost” This would lead the parties to your desired result, (the bank would attempt to prove they hold the mortgage) without the homeowner ever having read your warning. Only in the extremelly unlikely case that 1, 2, and 3 happen would anyone need your warning, at least for the reason you state. And in that case, the consequence you propose for failing to heed your warning is downright bizarre.

    Keep in mind that our hypothetical homeowner has in his hands a foreclosure notice, and he’s had at least 30 days to read it to determine whether it correctly describes his property, his loan, and the amount of his delinquency.

    But you haven’t heard about it, so it can’t happen?

    “Can’t” is a stronger word than I would use.

    Even if you haven’t been making payments and you know that *somebody* therefore has the authority to foreclose, it’s probably still a good idea to ask for proof, because what if it’s the wrong bank that’s foreclosing? Then the right bank could still come after you later, but you’d no longer have a house to give them.

    The advice is good if you put a period after the word ‘proof’ and eliminate the rest of the what you wrote.

    Do you believe the ‘right bank’ would not get just their house from the ‘wrong bank’?

    How would the ‘right bank’ even know who had possession of it before they foreclosed on it themselves?

    Do you believe that the ‘right bank’ would demand a second house of equal value from the former homeowner?

    What do you think they will go after the former homeowner for, exactly?

    If you can answer those questions, I think you’ll understand my objections to your original post.

  40. #38 Johanna

    OK, I think we’re splitting hairs here. If we agree that it’s right to tell homeowners to ask for documentation even if they know they’re in default, that’s good enough for me.

    Agreed.

  41. Regarding Q3 and whether a home bought by one spouse before marriage but which has mortgage payments made after marriage using income from both spouses, is considered community property. Property is still titled in one spouse’s name.

    I researched this a little more because it seems like because the property is still being acquired with mortgage payments during the marriage. The legal advice I read seems to indicate that probably some of the property value would be considered one spouse’s separate property and another part would be considered community property. The amounts would be based on payments made towards loan principal before and after the marriage. The amounts were be apportioned by a court in a case of divorce and would also depend upon the value of the home at the time of divorce.

    So all of it would not necessarily be considered separate property. But it would be messy figuring this out in case of divorce or death. It would still be advisable to get a will in case of death if you want your husband to inherit all of your separate property portion. Probably best to seek legal counsel on this.

  42. Q1 Jennifer: Cancel it.

    Q7 Matt : How much do you make now? How much do CPA’s make? Figure out how much money you’d make and spend total over the next 3 years with either option and compare the end results. If a (CPA salary – current salary > $6000) then do option #2. I mean if you make $30k/yr today and CPA’s start at $45k then it seems to me that taking on a $6k loan to have 2 more years making $45k instead of $30k should be a good idea. There is risk you won’t get a job as a CPA and you’d only be estimating the future CPA income so keep that in mind.

    Q8 Andrea : Make sure you get multiple quotes. I’d also ask the contractors if there are any effective and relatively cheap ways you can temporarily safely keep the problem from causing damage. (put a bandaid on it) $20k might replace your slab but maybe theres other ways to keep the house from cracking in half without spending a mint today. That would give you time to save up the full $20k if you need to do the full fix yet keep the house safe in the meantime. I honestly don’t know how feasible a bandaid would be but its worth asking. If I asked my dad to look at your house I think its a 50/50 shot he’d say “oh yeah just put a jack under here and here and over there and it will be fine for a while”. He’s not a structural engineer but he hasn’t had a house fall down yet :) I may be way off base here so don’t put too much weight into this but again I don’t think it would hurt to ask.

  43. Q3- having your spouse on your insurance policy (and maybe lowering it) can be done without the spouse being put on the title and or mortgage.

    DH 1st wife left him. I’m glad his house was only in his own name, purchased before they were married.

    You can will it to him in the event of death without putting his name on it!

  44. I agree with the other comments on Trent’s conversation. On #10 I don’t have income protection insurance or renter’s insurance in Australia. I do have car insurance, disability and life insurance though the latter two in a very moderate amount (about 1/4 million) through my employer. I had the same insurances in the US as in Aus. I lived 10 years in the US. From my experience, US banks will pay no attention to your credit rating in Australia and it works vice versa too.

  45. Q1 – cancel this policy immediately. You can get a term life insurance policy for $20 a month for $100k in coverage. You can then invest that extra $800 a year. If you gained 8% for 30 years you have close to $100k when the policy expires. If the economy picks up and you gain 11% like the average has been for 100 years you’ll have $175k at the end of 30 years.

    If you invest that $4k now, an 8% return would give you $138k and an 11% return would give you $268k in 30 years.

    There is absolutely no way the whole life insurance policy returns that value.

  46. Q3-

    You should absolutely check with a lawyer, but I believe that if the house is in her her name only, it can be willed to her spouse, but would need to go through the probate process. From what I understand, that can be time-consuming and expensive.

    Depending on your circumstances, there might be other options to protect the husband if the wife dies–like a trust of some sort. That will almost certainly cost more than $200.

    I think Kathy F is right above when she says that the value of house payments made during the marriage may be considered community property, so he may have a claim to a portion of the house in the event of divorce.

  47. I think it’s perfectly normal, if you haven’t seen a friend for 15 years, to talk about the “old times.” If I was the friend in this case, I would be glad I didn’t see Trent anymore than a 15-year span, because of the judgment against me. Not everyone wants to constantly talk about their goals. And, furthermore, it’s none of your business what his goals are. Just because he didn’t mention them doesn’t mean he has none.

  48. If i ran into a friend from the past and the dwelled on the past, i would ask them “so what are you doing now” what’s new with you, are you married, any kids, what line of work are you in now.. these are normal questions to ask. Trent, I think you should of just brought it up yourself. Maybe he didn’t think to bring it up becasue he rememberd you from the past, it doesn’t sound like you two kept in touch so maybe that is why. I am sure he lives in the future and not the past, he was probably trying to remember all the interactions he had with you in the past. I think you sound like a perfect person. None of the posts i read make you look like you made a mistake, it was always you learned from your past mistakes. It’s almost like your present life is immaculately perfect and everyone should learn from you. You offer really good posts and everyones that comments on the site is very inspiring and has good advice to give. I just hope you are not too perfect… leave some room for improvement.

  49. Q8. Yes, foundation repair is expensive, but estimates can vary wildly. Having been in the same situation myself a couple of years ago, please do what was recommended to me and saved me A TON of money. Get a structural engineer to come to your house and take measurements. That usually costs about $300, but it gives you an unbiased report about what your house actually needs. Then get estimates from a variety of companies to do what the engineer recommends. Apparently, some of the bigger, well-known companies consistently give estimates in the 15-20K range, but when I followed this advice, the final bill was one third of that. Best wishes!

  50. I haven’t read all the comments so this might now have anything to do with the discussion, BUT I do have a story of a right/wrong bank foreclosing…So the man we bought our house from had two mortgages with his bank, each in different states. At the closing, he gave the title company the wrong loan number. The bank took the money and paid off the mortgage in another state (with the wrong amount of money, mind you) and closed that mortgage. Meanwhile, our bank happily took our monthly payments for more than 2 years. One day, the sheriff knocks on the door and gives me a notice of seizure from the other bank. Now, we weren’t behind on our mortgage and we had the resources to secure a lawyer. But what if we were behind on our mortgage? And what if we couldn’t pay a lawyer?

  51. Trent has mentioned before that he is socially awkward (inept?) maybe that is why he didn’t think to ask his old friend what he has been up to recently. Socially awkward (inept) people often don’t think of what to say or do until the opportunity has passed.

  52. Adding the spouse on the homeowner’s insurance, I’d love to know how much that could possibly save someone. Home owners is relatively cheap, $600-$700 a year per my internet search, and I can’t imagine someone with excellent credit is going to lower it enough to justify putting out the exorbitant fee you’ll pay to change the title.

    Oh, and I agree with comment #45, call the insurance company and see if they’ll add him without being on the title. Maybe they will.

    I wish all of Trent’s legal advice came with the precursor “I’m not a lawyer, but…”

  53. Q8: Emergency home repairs / Andrea:

    Another thought: I got the impression that you have two loans for your home, one for the house and one for the property. It may be possible to get a new loan to cover the existing two loans plus the cost of the foundation repair. Kind of like a refinance plus some extra money to pay for the repairs.

    I’m not sure if this is even possible, but it seems reasonable to me.

    Anyway, don’t get too disappointed at your recent misfortune. Even though your emergency fund won’t cover it all, you’re still way better off than you were in the past.

  54. @Amanda – sounds like you may never have lived away from your parents’ home. It might be well worth the cost, depending on where you wind up, to get the experience of renting a place, shopping and cooking for yourself, and learning to live with other people. I don’t know what field you are in, but you may also want to consider taking a couple years off between your bachelor’s and grad school to work full time, during which you can save some cash for grad school. I found that for my field, working before going to grad school not only made me feel much more independent, but also gave me invaluable perspective, especially when school was frustrating. If you plan to be an academic, it may not be so important, but if not, you might want to get some more exposure to how things work “out in the world” – you will at least be better off in your job search after grad school, believe me!

    For undergrad, I went to an in-state public school across the state from home and lived in the dorms and then apartments (supported by a scholarship, graduated with $20k in loans, which is low for this state). Then, after working for two years and paying off about $8k in loans during that time and saving another $8k in cash, I went to grad school and lived with my parents rent-free for a two-year program. It was fun living with them again, but could be really challenging socially, and while I’m so glad I saved that money, I am very eager to rent my own place now that I’m finished. I also had a fellowship for grad school that brought my total loan needs down to $8k, half of which was still in the bank when I finished so I could eat during my job search and pay the move-in costs for an apartment.

    If you think you will be unhappy living with your parents during grad school, listen to that gut feeling. Grad school can be amazing, but also very isolating because you tend to be with a small group of people (even a cohort of 70-100 feels small after two years together!) Living with roommates around your age and having a place of your own might be a really good idea.

    I disagree with Trent that you will definitely regret taking out student loans. Try to keep them low, of course, by looking at in-state schools and applying for fellowships and assistantships. Your education is an investment in your future, both in earning power and in your ability to be fulfilled by your career. Money shouldn’t be your only deciding factor when it comes to your happiness, independence, and dreams.

  55. I think Trent was just miffed that he didn’t get to talk about his wife and kids and how he’s living the dream. Or perhaps the friend heard “I’m a freelance writer and personal finance blogger,” and assumed that conversations about jobs, goals, etc. would lead to a discussion (s)he was uncomfortable having with someone (s)he hadn’t seen for 15 years.

    About Q9 – this isn’t the first time a question like this has been asked here. Who does that to their friends, though? If I were in a position where I owed a friend money because of some slip on my part (like forgetting my wallet), I’d be so embarrassed at the situation that paying them back at the earliest opportunity would take priority over pretty much anything else.

  56. Tom said : “Home owners is relatively cheap, $600-$700 a year per my internet search…”

    The cost of insurance varies widely. National average is around $800 but it varies from state to state. I’m in a cheap area and mine is around $300 a year. Idaho averages less than $400/yr but in Texas the average is over $1400. My understanding is that its mostly dependent on frequency of natural disasters like hurricanes, tornadoes, hail storms, forest fires, etc.

    “I can’t imagine someone with excellent credit is going to lower it enough to justify putting out the exorbitant fee you’ll pay to change the title.”

    I found one source that said that poor credit could cause your premiums to be up to 50% more. So someone in Texas with poor credit could be paying +50% of the $1400 average or $700 more per year. If you have a cheap house in the Northwest on the other hand then the difference could be pretty minor.

    Plus I’m not even sure if the insurance company will lower your rates if one of two people has a good credit score. I think its likely they’d use the lower score between two spouses. But I”m not sure. Its not like you’re co-signing a loan.

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