Dear Mary: My husband has been handling our finances, but he was recently diagnosed with dementia. I feel so overwhelmed with everything. He has already forgotten to pay some bills. Now he wants to sell our home, but houses aren't selling in our area. We're looking into refinancing. We need to get out of debt. I don't know where to start with any of this. I appreciate anything you can suggest to help me. — Rhea
Dear Rhea: It's time for you to step in and take over the household finances. Make an appointment with a fee-only financial advisor who will charge you a flat fee based on an hourly rate, rather than try to sell you financial products to earn a commission.
Once you have this appointment, gather all of your financial information that you can find or know about, and take it with you. Go to this meeting alone so you're free to speak openly with this counselor. You may also need to speak with an attorney who can work with your husband's doctor to give you power of attorney over future legal and financial matters.
I am so sorry that you are facing this situation, but now is not the time for a pity party. You need to move into the role of family decision-maker, diplomatically and lovingly. The National Association of Personal Financial Advisors has a list of fee-only advisors in your area listed on its website. Or call 888-333-6659. I recommend this organization highly and hope you will contact it soon.
Dear Mary: After my children left for college, I decided to go back to school, too. I am getting my education paid by financial aid, but I also qualify for student loans at a very low interest rate. I don't need the loans for tuition, but I wonder if I should use them to pay off my car and then use the car payments to pay off the student loans? It makes sense to me, but what do you think? — Pamela
Dear Pamela: This might look like a good idea on paper, but be very cautious. Unless you have demonstrated a high level of financial maturity and personal discipline in the past, you could be stepping into a trap. Will you really make the same car payments you're making now to your student debt, even though it's not required? Should something happen that prevents you from working now (I assume you have a job), finishing school or working in the future, how will you make those student loan payments?
A traditional car loan could be repaid or discharged through a variety of methods, from selling the car to voluntary repossession or even bankruptcy. If you move that debt to a student loan, you will lose all of those options. Before you know it, you'll be tempted to consolidate the student debt to a 10-, 15- or 30-year payment schedule, which would be a terrible mistake. I wish you well in making this decision.
Mary invites questions, comments and tips at mary@everydaycheapskate.com, or c/o Everyday Cheapskate, 12340 Seal Beach Blvd., Suite B-416, Seal Beach, CA 90740. 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 "Debt-Proof Living," released in 2014. To find out more about Mary and read her past columns, please visit the Creators Syndicate webpage at www.creators.com.
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