Handling job stress and financial hardship affects each person uniquely. Many times old templates kick in; maybe Mom and Dad handled stress and money challenges in a way that was counter-productive, yet, you find yourself doing the exact same thing. Or, your spouse has one specific view of money and it couldn't be more different than your approach.
Current reports indicate that 30% of Americans have borrowed against their 401(k)'s, and 70% are on target for NOT being able to pay off those loans. If you lose your job, the loan must be repaid within 60 days, which can only be damn near impossible. By 2014, these numbers may have doubled.
Credit lines may be the better option; while the interest rates are higher, the loan won't be called due immediately and the interest rate is deductible.
If your finances are causing great heartache, spend the scarce $300 and make an appointment with a Fee-based Financial Planner.
I force myself to read the Sunday Los Angeles Times money section. I enjoy Time's Moneyblog, Cheapskate and this Facebook Page, Get Rich Slowly.
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Here are 3 recent questions posed to financial expert, Liz Weston:
Dear Liz: My husband recently was placed on a pricey medication ($20 a day) that is not covered by insurance. Any suggestions to getting help with this added $7,000-a-year expense?
Answer: Doctors can be surprisingly ignorant of the cost of medications, so your first call should be to your pharmacist to see if there are more affordable options, such as a generic drug. If so, call the doctor back to see if your husband can switch.
Either way, start shopping around. Medication costs vary enormously from pharmacy to pharmacy. You also should check to see if a mail-order pharmacy might save you some money.
Be sure to ask about discounts. Pharmacies may offer discounts for cash or with certain memberships, such as with AARP. Prescription discount cards are easy to find — just type "prescription discount card" into an Internet search engine — but steer clear of those that charge fees.
Also check NeedyMeds.org, which lists discounts and assistance programs specific to hundreds of medications. NeedyMeds also has a free prescription discount card.
• Protecting yourself against identity theft
Dear Liz: A copy of my wife's Social Security card and driver's license were stolen recently. I immediately contacted the credit bureaus. The first one tried to sell me a protection product. When I tried another number for that bureau, I got the automated runaround. The second bureau agreed to put a fraud alert on my account, then they too tried to sell me a product! Please tell everyone what will happen when they report issues like this, as you and so many others recommend. I still don't know if I have done everything I can do.
Answer: If she hasn't done so already, your wife should call the police to report the crime and get a copy of the report in case she needs it later to prove she's a victim of identity theft.
Your wife is the one who needs to have fraud alerts placed on her credit reports at all three of the major credit bureaus: Equifax at (800) 525-6285, Experian at (888) 397-3742 and Trans Union at (800) 680-7289. These alerts are good for 90 days and can be renewed. It's unfortunate the bureaus are using these help lines to pitch products, but you don't need to buy anything to get a fraud alert placed on your files. In two or three months, she should use http://www.annualcreditreport.com to get a free look at her credit reports to make sure no one has opened accounts in her name.
Your wife also may want to consider a credit freeze, which locks up her credit reports to make it much harder for someone to apply for credit in her name. Get more information about these freezes, which typically involve fees, at http://www.financialprivacynow.org.
In addition, she needs to call your state's department of motor vehicles to report the stolen license. If she discovers later that someone is using it, she can request a number change.
For more on coping with stolen information and dealing with identity theft, visit the Identity Theft Resource Center at http://www.idtheftcenter.org.
Answer: Doctors can be surprisingly ignorant of the cost of medications, so your first call should be to your pharmacist to see if there are more affordable options, such as a generic drug. If so, call the doctor back to see if your husband can switch.
Either way, start shopping around. Medication costs vary enormously from pharmacy to pharmacy. You also should check to see if a mail-order pharmacy might save you some money.
Be sure to ask about discounts. Pharmacies may offer discounts for cash or with certain memberships, such as with AARP. Prescription discount cards are easy to find — just type "prescription discount card" into an Internet search engine — but steer clear of those that charge fees.
Also check NeedyMeds.org, which lists discounts and assistance programs specific to hundreds of medications. NeedyMeds also has a free prescription discount card.
• Protecting yourself against identity theft
Dear Liz: A copy of my wife's Social Security card and driver's license were stolen recently. I immediately contacted the credit bureaus. The first one tried to sell me a protection product. When I tried another number for that bureau, I got the automated runaround. The second bureau agreed to put a fraud alert on my account, then they too tried to sell me a product! Please tell everyone what will happen when they report issues like this, as you and so many others recommend. I still don't know if I have done everything I can do.
Answer: If she hasn't done so already, your wife should call the police to report the crime and get a copy of the report in case she needs it later to prove she's a victim of identity theft.
Your wife is the one who needs to have fraud alerts placed on her credit reports at all three of the major credit bureaus: Equifax at (800) 525-6285, Experian at (888) 397-3742 and Trans Union at (800) 680-7289. These alerts are good for 90 days and can be renewed. It's unfortunate the bureaus are using these help lines to pitch products, but you don't need to buy anything to get a fraud alert placed on your files. In two or three months, she should use http://www.annualcreditreport.com to get a free look at her credit reports to make sure no one has opened accounts in her name.
Your wife also may want to consider a credit freeze, which locks up her credit reports to make it much harder for someone to apply for credit in her name. Get more information about these freezes, which typically involve fees, at http://www.financialprivacynow.org.
In addition, she needs to call your state's department of motor vehicles to report the stolen license. If she discovers later that someone is using it, she can request a number change.
For more on coping with stolen information and dealing with identity theft, visit the Identity Theft Resource Center at http://www.idtheftcenter.org.
Answer: If you can't pay off your credit card debt, you can't afford your current lifestyle. You never could, really, but that fact was obscured by loose lending practices that didn't punish you for carrying big credit card debts. Times have changed, and you need to change with them.
Carrying credit card debt has always been foolish, of course. It's expensive and a signal that you're living well beyond your means. Furthermore, as you've learned, you're vulnerable to the changing whims of credit card companies, and those whims can have serious effects on your perceived creditworthiness.
Paying down your balances may not boost your credit scores right away if your lenders continue to slash your available credit — an industry practice known as "chasing down the balance." But you need to do so anyway to free yourself of this toxic debt.
Your problems refinancing aren't just due to your scores, in any case. Your current scores won't necessarily prevent you from refinancing (although you would get a higher interest rate than if they were 740 or above). Your bigger problem is the fact that you owe more on your loan than the house is worth. You could explore the federal government's Home Affordable Refinance Program at http://www.makinghomeaffordable.gov to see whether you qualify for an underwater refinance; otherwise, you're probably out of luck.
Liz Weston is the author of "The 10 Commandments of Money: Survive and Thrive in the New Economy." Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon, No. 238, Studio City, CA 91604 or via asklizweston.com. Distributed by No More Red Inc.
