Your Money Questions Answered: Money lessons for kids

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Certified financial planner Denisa Tova answered your money questions during a live chat Monday, July 9.

This weeks topic: Money lessons for kids. See a copy of the transcript of the chat below.

Denisa Tova:

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

Monday July 9, 2012 7:48 Denisa Tova
8:00
[Comment From BrandonBrandon: ]

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?

Monday July 9, 2012 8:00 Brandon
8:01
[Comment From AmandaAmanda: ]

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?

Monday July 9, 2012 8:01 Amanda
8:04
Denisa Tova:

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

Monday July 9, 2012 8:04 Denisa Tova
8:14
Denisa Tova:

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…

Monday July 9, 2012 8:14 Denisa Tova
8:14
[Comment From CarlosCarlos: ]

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…

Monday July 9, 2012 8:14 Carlos
8:15
Denisa Tova:

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

Monday July 9, 2012 8:15 Denisa Tova
8:15
[Comment From JulieJulie: ]

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

Monday July 9, 2012 8:15 Julie
8:16
Denisa Tova:

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

Monday July 9, 2012 8:16 Denisa Tova
8:16
[Comment From GusGus: ]

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

Monday July 9, 2012 8:16 Gus
8:16
Denisa Tova:

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.

Monday July 9, 2012 8:16 Denisa Tova
8:16
[Comment From GusGus: ]

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

Monday July 9, 2012 8:16 Gus
8:17
Denisa Tova:

Pls see my response above.

Monday July 9, 2012 8:17 Denisa Tova
8:17
[Comment From PaulaPaula: ]

Can I transfer my 401k money into roth?

Monday July 9, 2012 8:17 Paula
8:18
Denisa Tova:

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.

Monday July 9, 2012 8:18 Denisa Tova
8:18
[Comment From MitchMitch: ]

What’s a good budgeting site/app?

Monday July 9, 2012 8:18 Mitch
8:18
Denisa Tova:

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

Monday July 9, 2012 8:18 Denisa Tova
8:32
[Comment From GuestGuest: ]

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

Monday July 9, 2012 8:32 Guest
8:34
Denisa Tova:

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.

Monday July 9, 2012 8:34 Denisa Tova
8:34
[Comment From GuestGuest: ]

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

Monday July 9, 2012 8:34 Guest
8:36
Denisa Tova:

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.

Monday July 9, 2012 8:36

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