Ask Savvy

How Much Should I Put in My 401K?

Savvy Community — Wed, 17 Feb 2010 04:00:46 -0800

This question was shared by member elisabeth in our Ask Savvvy? group.

I know you should try to max out your 401K each year, but I don't make enough to put in the max. I have been out of a college for a few years and feel like I should start contributing as I have a good job and have been able to save quite a bit of money as my rainy day cushion. But I want to retire in 30-40 years - hopefully! It seems so far away, but I know the sooner you start the better. What is a good percentage to put away and how much does the average recent college graduate contribute?

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Question From Newly Engaged

Savvy Community — Mon, 11 Jan 2010 12:00:58 -0800

This question was submitted by member jjasinsk in our Ask Savvy group.

Hi,

My question is in regards to a life event that just happened for me - getting engaged. My fiance and I are pretty young (he is 25 and I am 22) and we will get married in 2010. We feel like we are in a unique position to start saving money early for the things we would like to have (house, new car, etc), but are not well-versed in finance in general. Should we consider making an appointment with a financial advisor, and if so, what type?

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Financial Advisor: Waste of Time or Actually Helpful?

Savvy Community — Tue, 05 Jan 2010 06:00:54 -0800

This question was submitted by member mscales27 in our Ask Savvy group.

I am looking to really get my finances in order in 2010. There are a lot of things that I want to save for but I also have some credit card debt that I would like to manage. I'm considering going to a financial advisor or a service along those lines. Has anyone had any good/bad/neutral experiences with these services? Or am I just wasting my time and even more money by having some help me with finances? Thanks!

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Ask Savvy: How Should I Critique My Co-Worker?

SavvySugar — Fri, 13 Nov 2009 06:00:38 -0800

Dear Savvy,

Today, my manager called me asking me to write up a report about a fellow co-worker. I had mentioned that she was having some difficulties adjusting to the workplace, that she was rude to us, and where she was getting better but that she still often isn't on task. I told her that I would, but I just sat down to write it and have no idea what to say, how to say it, etc. Any suggestions?

Savvy says: Your manager is essentially asking you to put your spoken criticism in writing. See my thoughts on this situation when you read more.

Your manager is taking your co-worker concerns seriously which means they need to be added to her employee file. It's not a test for you; it's simply your manager's job to make sure that all complaints are recorded appropriately, and it's more legitimate to have the report coming from the person that has witnessed reportable behavior.

You obviously had enough to say about the situation when you originally presented the complaints, so just expand on what you've already told the manager. You say that she's having difficulties adjusting to the workplace, so you should state that along with a deeper explanation of why you feel that way. Each judgment should be paired with a real-office observation to illustrate what's going on with your co-worker - this will keep your report sounding professional.

You don't need to go off on tangents about the co-worker, just write enough to get your point across. Also keep in mind that you don't have to include every little imperfection you've seen in the individual. It's better to focus on the big things (like the fact that she's often off-task) rather than her habit of taking an extra five minutes at lunch (or something equally minimal).

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Ask Savvy: Should I Buy a New Car?

SavvySugar — Wed, 11 Nov 2009 12:00:57 -0800

Dear Savvy,

I recently got a letter in the mail from a local car dealership requesting that I trade in my 2001 VW Passat, saying that they are getting lots of requests and stating the blue book value for my car. I wouldn't mind buying a new car, but promised myself I would drive my car until it is unrepairable or I graduate from college, whichever comes first. I still have two more years to go, but if this offer is legitimate, I don't want to let the opportunity go. Any advice?

Savvy says: The car dealership is reaching out to people who aren't in the market for a new car and convincing them to consider busting an auto move. That's a pretty successful campaign on its part, but are your best interests at hand? Find out what I think when you read more.

You have a car that isn't causing you headaches and you're still in school, which makes me assume that you're probably better off without the additional expense of an updated vehicle. While trading in your car would reduce the cost of the newer one, I'd put money on you walking out of the dealership with more bills to pay than when you walked in.

Car dealerships are fantastic at making us think the deals they're advertising right now are once-in-a-lifetime bargains that won't be seen again. They want you to worry that you'll regret not jumping on their current offerings so that you buy now instead of later, and as you put it, you don't want to "let the opportunity go."

Bottom line, a deal isn't a deal unless you're shopping for something in the first place and can afford the terms. And that lost opportunity? Think about the money you'll save by keeping your current ride for the next couple years, and don't be surprised when there are deals to be had when you're in the market for something different.

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Do I compose a new cover letter for an email?

PeachyKeen19 — Sat, 04 Jul 2009 18:51:08 -0700

Or is the attachment enough?

I'm applying for a receptionist job and they are taking resumes through email, there is no mention of a cover letter but I prepared one anyhow. Now I'm not sure what to do...I've converted both documents into PDF files (they requested that for the resume) but I was wondering what do I say in the body of the email?

I did some googling on this and it seems that some people suggest you put the cover letter in the actual body of the email. Is this right? Or should I compose a note simply stating that both the resume and cover letter are attached?

Wouldn't it be redundant to attach my cover letter and paste the content into the body of an email?

Help, I've been deliberating this for some time and I don't want to miss the chance to apply.

Thank you!

Ask Savvy: Can a Lower Limit Affect My Credit Score?

SavvySugar — Thu, 23 Apr 2009 06:30:05 -0700

Dear Savvy,

So, I got a letter in the mail today from my credit card company telling me that they were lowering my credit limit. I don't use this card much, don't carry a balance on it, and definitely don't need a $14,000 limit. I'm just wondering, does it affect my credit score or anything?

To see my answer, read more.

Savvy says: Even though you don't carry a balance on the card, a lower credit limit could impact your credit score. To find out why, read more.

Credit card limits are taken into account when calculating your credit-to-debt ratio, meaning how much debt you have compared to the amount of credit available. If you're carrying debt unrelated to the card, having less available credit lowers your aggregate credit limit, which can bring down your credit score.

Add up all of your existing balances and divide that number by the sum of all your cards' limits. What you end up with is your utilization percentage, and it's best to keep this number under 35 percent to maintain a good credit score.

Credit card carriers are cutting limits more frequently these days so be sure to open your mail, like this reader did, instead of sending it straight to the shredder. Carrying zero balances on your cards is ideal, but be sure you're using them at least every few months so you have a better chance of keeping your limits in tact.

Source

Discontinued Cards

Morenasobuena — Tue, 09 Sep 2008 18:22:49 -0700

I have a few store cards that I don't use very often but upon going to Bebe to try and use one I found out that they had discontinued the card. Does this mean that my credit history associated with the card has disappeared?

Credit Card Question - to Cancel Cards or not

lilv — Thu, 03 Jan 2008 17:16:26 -0800

Hi Savy,
quick question. i recently bought a condo and to buy my furniture did one of those no payments no finance for furniture. Obviously am paying off quickly. I'm wondering if i then immediate should cancel the credit card? I'm not planning to use it again. I also have a store card that i never ever use. My question is I've heard conflicting advice that if you cancel the cards it lowers your credit score. Obviously at the moment am not purchasing a home but want to maintain to credit score I have.

thanks