Your Money Questions Answered: Money lessons for kids

Good morning. I am ready to answer your money questions.

Hi Denisa, should I let my child bounce a check once to allow him to realize the ramifications of his actions, or will the costs coming from that hard lesson outweigh the possible benefits?

Hello Denisa! My husband would like to start a DBA doing handyman/property management work. Are there any small business loans to START a business?

Hi Brandon,
I believe that any mistake is a valuable lesson; let them experience it.

Hi Amanda,
I try to contact the local SBA office. They have great resources for biz ownes. Other than that your options are to take out a private loan or borrow from relatives…

Hi Denisa, We have recently incurred in some credit card debt due to several unforeseen circumstances. At this point, I have no way of making good monthly payments to pay the debt fast (about $10,000). We own a completely paid-off SUV that is worth about $12,000 – $14,000. I was considering selling the SUV to pay the debt and then buy or lease a smaller, less expensive used vehicle. Would this be wise? Thank you in advance for your help…

Hi Carlos,
Absolutely!! Great idea. Pay off your debt and get a beater :)

Hi Denisa, what’s a good allowance for an 8 year old?

Hi Julie,
I personally like the idea of tying their allowance to their age.

How is roth ira taxable when I take a loan out?

Hi Gus,
You can’t take “loans” against your Roth IRA (like you can with a 401k) but you have access to the original investment penalty and tax-free.

should I borrown frmo roth to pay off my credit card?

Pls see my response above.

Can I transfer my 401k money into roth?

Hi Paula,
Not without paying taxes. You can only fund Roth IRA with after-tax money and since your 401K funds have not been taxed, you will be taxed on it. Better to transfer it to a Traditional IRA.

What’s a good budgeting site/app?

Hi Mitch,
I like www.mint.com among others.

Denisa, do you know of any good debt consolidation companies and if so, can it hurt your credit rating if you use one?

Hi Guest,
It won’t hurt your credit rating unless the company is making the consolidated payments for you and they are late; or if lender considers consolidated payment as “paying less than the balance” and reports it that way on your credit report.
I would suggest visiting the National Foundation for Debt Counseling.

What is the difference of having your mortgage structured bi- weekly or just paying more per month to equal an extra payment per year?

Hi Guest,
Making an extra payment by switching from making monthly payments to bi-weekly payments (or every two weeks), will allow you to knock approximately six years off a 30-year mortgage, as long as the extra amounts are applied to principal.