« click here for more Liz Pulliam Weston
By LIZ PULLIAM WESTON
Mother Of Four Is Financially Stretched To The Limit
Dear Liz: I am 40, the mother of four children and recently separated from an abusive husband. The children and I live in a $700-a-month rental home. My income after taxes and deductions is $738 biweekly. My husband earns too little to contribute to child support. I'm also in night school earning a degree in marketing. I'm trying to make ends meet by shopping thrift stores for furniture and clothes and buying store-brand groceries. But I seriously wonder whether I can make it. My biggest fear is that I'll worry about money so much that I have a heart attack and my husband gets custody of the children. I've never been on my own and I just want this to work.Answer: Keep taking deep breaths and reminding yourself, "This too shall pass."
You're in a tough spot because you don't make much money and nearly half of what you take home goes for rent. Typically, you don't want to spend more than 30 percent of your gross income on shelter. You may be able to reduce housing costs by moving in with another single mom, or you may just have to tough it out until you get your degree and a better-paying job.
Given your low income, you may qualify for food stamps that could shave hundreds of dollars off your grocery bills. You'll find the Food Stamp Program home page at www.fns.usda.gov/fsp. The page includes a link to an eligibility calculator that can help you determine whether you qualify.
You should check out food banks in your area as well. An abused women's shelter might be able to get you in touch with other resources, including clothing donations.
If any of your children are old enough, encourage them to look for part-time jobs that can help pay for some of their expenses. You don't want them working so much that it interferes with their schoolwork, but a few hours a week could help ease the burden on your family.
Finally, check out the thrifty-living resources available at your local library (anything by Mary Hunt or Amy Dacyczyn) or on the Web (the Dollar Stretcher at www.stretcher.com is a good start).
Dear Liz: Do I need to notify the credit bureaus about my relative's death so someone can't steal his identity? If so, how do I contact the credit bureaus? I tried to call one and could only get voice mail.
Answer: You don't need to contact the credit bureaus directly. If you're the executor of your relative's estate, you just need to tell his credit card issuers and any other creditors of his death. The creditors will notify the bureaus.
If you're not the executor, then ask whoever is to perform this duty. The executor also should get copies of the relative's credit reports in a few months to make sure the death has been properly reported.
Even if the creditors aren't notified, though, news of your relative's death will eventually make it to the credit bureaus. The bureaus get updates from the Social Security Death Master File that includes the names and Social Security numbers of the recently deceased.
Understand that your relative's estate won't be liable for any charges run up by identity thieves, but dealing with the aftermath is a hassle. Alerting his creditors to his death is worth the effort.
Dear Liz: About 40 years ago, my wife and I bought a house for $38,500 that's now worth about $650,000. We have a living trust, with our four daughters as beneficiaries. Upon our deaths, the proceeds of the house will be divided equally among them. How will the proceeds be handled by the IRS with our daughters?
Answer: Your home's value for tax purposes will be updated to its current market value when you die (or when your spouse dies, depending on who goes last). If your daughters sell right away, they won't owe any tax on the proceeds of the sale or on the rise in value over time.
Whether your estate will incur estate or inheritance taxes is another issue. The vast majority of estates don't, and if your home is your major asset, your estate is unlikely to owe these taxes either. But you should check with an estate-planning attorney just to be sure.
# # #
© 2008, No More Red Inc. Liz Pulliam Weston is author of “Easy Money: How to Simplify Your Finances and Get What You Want Out of Life.” She regrets that she cannot respond personally to inquiries, but questions for possible inclusion in her column may be sent to 3940 Laurel Canyon Blvd., #238, Studio City, CA 91604, or use the “Contact Liz” form at her website, www.lizweston.com.
