Chris Farrell is economics editor of Marketplace Money, a nationally syndicated one-hour weekly personal finance show produced by American Public Media. Chris is also economics correspondent for Marketplace, the largest business program in broadcasting and chief economics correspondent for American RadioWorks, the largest producer of long-form documentaries in public radio. He is also contributing economics editor at Business Week magazine. He was host and executive editor of public television’s Right on the Money. He is the author of two books: Right on the Money: Taking Control of Your Personal Finances, and Deflation: What Happens When Prices Fall. Chris is a graduate of Stanford and the London School of Economics.
Posted In: Credit Cards, credit score, debt, credit limit
I received a large bonus, and I'm going to use it all to pay down credit card debt. I have many cards. They all have about the same outstanding balances and about the same interest rates. At one time, most of the cards were "maxed out," which was bad for my credit score. Should I pay off a couple cards entirely, or should I make larger-than-usual payments to all of them, bringing down the outstanding balances substantially below the credit limits? Thanks. Henry, Chicago, IL
Posted In: home, rent, home ownership
Taken altogether, housing market indicators suggest the collapse is over.
Posted In: student loans, retirement savings, debt
I returned to graduate school and accrued about $45,000 in federal student loans. The interest rate on these 10-year loans is 6 percent, with repayment beginning in 2013. I also have a 401(k) worth about $100,000 (roughly $60,000 of my contributions and $40,000 of employer contributions). I realize that an early 401(k) withdrawal would result in a 10 percent early-withdrawal penalty and that any withdrawal would be considered taxable income. This would effectively reduce the amount the 401(k) would need to earn in order to be the better investment. Still, it can't be much less than 6 percent, can it? Is there anything about my assumptions that are wrong, or is there anything I am overlooking? Derek, Chicago, IL
Posted In: Kids and money, kids and investing, Investing, family finances
My 11-year-old son won some money in a math contest at school. He doesn't have anything that he is interested in spending his money on immediately, and I suggested that instead of spending it just for the sake of spending it, he might consider buying stocks and building a little portfolio. He seemed interested in this idea, but I wasn't sure where he should start. He has around $150. Can you help us decide where to start? Thanks! Michelle, South Jordan, UT
Posted In: retirement savings, Retirement, equity, Investing
I am very lost and uncertain of our financial road to retirement. Our company doesn't offer defined payment retirement; it is all up to individual and 401(k). The company does match 3 percent. I am married and we have been working for 14 years now and have combined liquid assets (401(k), outside investment account, savings) of about $400,000, plus home equity of $100,000 on a good day. What shape are we in on our road to retirement? Thanks much. Martin, Chicago, IL
Posted In: Graduate school, law school, retirement savings, rollover IRA, IRA, student loans
My wife and I have taught in Alabama public schools for the past 2 years and have made (forced) contributions to the state retirement system in that time frame. Together, we've got around $8,000 invested in the state retirement system. Realizing the limited income prospects for career teachers, we both applied and were accepted to a top 25 law school on full-tuition scholarship. My question to you is this: For my retirement account, I have the option of either a) taking a lump-sum payment of the $8,000, minus 20 percent in federal income tax, or b) rolling it over into a 401(k), IRA, or similar long-term savings plan. Should I take the money and run, or should I start building a retirement nest egg while I'm financing the rest of my life with borrowed money? Alex, Montgomery, AL
Posted In: credit score, credit report, Credit Cards, family finances
My husband and I gave our daughter $40,000 for a down payment on a condo. She defaulted on the loan and went into foreclosure. Consequently, our credit score has tanked. How can we get our old great credit back? Nobody cares that we were not the ones who defaulted. Please help. Cathy, Redmond, OR
Posted In: rent, homeownership, Housing
An underappreciated factor behind the recent gains in the housing market is higher rents.
Posted In: Investing, stocks, investment advice, stock picking
I'm an individual self-taught investor who has just lost a LARGE sum of money investing in a company whose stock (of course) went immediately downhill after I bought it. Rather than becoming afraid of stocks, I am sure there is a lesson to be learned here. I'm just not sure what it is. What tips could you give for people who lose large amounts of money but want to keep investing? Brian, Miami, FL
Posted In: health care insurance, medical expenses, family finances
For the first time, the total bill for the typical family of four with an employer-sponsored health-care plan (a preferred provider plan with co-pays and deductibles) breached $20,000 in 2012.