DEAR MARY: I’m a stay-at-home mom and haven’t had a paycheck since I was a teenager. Will I be eligible for Social Security benefits? — Emily, Oregon
DEAR EMILY: If you are married, you will be eligible. Your Social Security retirement benefits are tied to your husband’s. You can file when he does, provided you’re at least 62 at that time. Your monthly check will be equal to 50 percent of his, if he waits until “full retirement age” to begin collecting benefits (65, 66 or 67 depending on the year he was born). If he opts to begin drawing early at 62, then your benefit will be reduced to 37.5 percent of his monthly check. (If you’re now single, divorced or widowed, the amounts vary.) We’re not talking a lot of money here under the very best of circumstances, so plan on it as a supplement, not enough to live on.
To get help, go to the Social Security Administration website, SSA.gov, and check out the FAQs. This site is remarkably user-friendly.
DEAR MARY: If my parents die with a lot of debt, will I be responsible for paying it? — Jeb, email
DEAR JEB: You will not be responsible for their debts, unless you co-signed for a loan with them or you are a joint account holder on their credit card accounts. Your parents’ debts will be paid out of their estate (everything they own, including real estate).
Anyone they owe has to get in line to be paid, with secured creditors like their mortgage lender in first position. Then come their unsecured creditors, like credit card companies. Once all their debts are paid from their assets, anything that remains is divided up amongst their heirs. If your parents die with few to no assets, their creditors eat the loss. They cannot come after you.
DEAR MARY: I’m recently divorced. My husband handled the finances; now I’m on my own. Where do I start? — Betty, email
DEAR BETTY: You need a budget. This just means “pre-spending” your money on paper first, before you deposit your check.
Make two lists: Income and Expenses. Under Income, list the sources (paycheck, child support, alimony, savings, settlements, etc.) and the amounts.
Under Expenses, list all of your bills and obligations, starting with your rent or mortgage payment, food, car payment, utilities, clothes, etc.
Add up each list, then subtract your expenses from your income. If your expenses are more than your income, start crossing out things that are optional. Carefully weigh the expenses you believe are essential. Cable TV isn’t essential. Food is vital, of course, but try shopping at discount markets, rather than going out to restaurants. You need a car, but not a gas-guzzler with big payments.
Once your expenses and income are in line with each other, use your budget as your monthly financial road map. Consult it often, and you’ll find yourself in control of your money, instead of the other way around. To get help, type “budget worksheet” into an Internet search engine, and you’ll find many free forms and Excel spreadsheets to develop a spending plan.
Mary invites questions at email@example.com, or c/o Everyday Cheapskate, P.O. Box 2099, Cypress, CA 90630.
This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website and the author of “7 Money Rules for Life,” released in 2012. To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.