By John W. Schoen Senior Producer
msnbc.com

This is the time of year when most people lean a little more heavily than usual on their credit cards. Steve in Indianapolis has a different problem: he's trying to figure out how much he needs to save in order to have enough money to retire. Meanwhile, Donald in Niagara Falls is wrestling with the age-old question: just how cold should you keep your refrigerator?

How do I know that I am saving enough out of every check? I have 10 percent withdrawn into my 401(k) bi-weekly, put $100 bi-weekly into my savings and the rest goes into my checking. After my savings gets high, I put it in 4-month CD's. Right now, I have $10,000 split up between five staggered 4-month CD's, about an additional $2000 in savings and $3500 in checking with my major bills being rent ($450 a month) and my car at $300 a month. But I do not know if I should be saving more. I want to make sure I have enough money when I retire. I just turned 24 years old and am pretty sure Social Security won't be around, so how am I sure? Is this enough?
Steve, Indianapolis, IN

Unfortunately, there is no “magic formula” to determine whether you’re saving enough — especially when you’re 24. There are just too many other questions that come first, including: will you have a family? And if so, how big? How much of your savings will you decide to devote to the purchase of a home? Or college education for kids?

But take heart: even older savers have a tough time with these “other” questions, like: how long will I want — or be able — to work? How much will it cost me to live when I’m retired? And, worst of all, what kind of health care costs will I face (in your case 35 or 40 years from now)?

The mistake many people make is giving up before they get started, and assuming “things will work out.”  So 10 percent is a nice round number and a great starting point. As your salary increases, so will your savings. If you can train yourself to live on 90 percent of what you make, you should have no trouble setting aside a substantial nest egg. (As you get older, with more financial responsibilities, that discipline may get harder to adhere to.)

You also may want to reconsider where you put your savings. Stashing your money in CDs is a great starting point. (These days it's also a good idea to keep six months worth of current living expenses in cash, in case of an emergency — like a job loss.) CDs or Treasuries are a good place to put savings for short- or intermediate-term goals, like the down payment for a house.

But if your investment horizon for retirement is 35 years, your savings could be working harder for you if you took on more risk with, say, a mutual fund that invests in stocks. Not all funds are the same: so decide how much risk you feel comfortable with first, then pick a fund that matches your chosen risk level.

No one can tell you how much risk is “right” — what matters most is what you feel comfortable with. But keeping your money in CDs carries a risk too: that inflation will rise again and your savings will slowly be eroded.

And don’t give up entirely on Social Security. Much of the rhetoric about the trust fund’s financial difficulties was overblown by politicians who want to “privatize” the program — which means do away with it entirely. (That’s not true for Medicare, which is in serious financial trouble and will hit the wall much sooner unless some serious changes are made.)

In the meantime, you’re off to a great start. Keep it up!

If zero degrees is the ideal temperature for a freezer, what is the ideal temperature for the refrigerator?
Donald D., Niagara Falls, N.Y.

This one doesn’t come up much in our kitchen, but then we probably don’t take cold temperatures as seriously as you do up there in Niagara Falls. (And if we lived there, we’d likely have the same healthy respect for deep cold.)

To answer your question, we decided to find someone else that takes cold seriously, and we ended up on the General Electric Web site — where they know a thing or two about refrigerators. (GE, by way of full disclosure, owns NBC — Microsoft’s joint venture partner in MSNBC.com)

It turns out that measuring a refrigerator’s inside temperature is not as easy as it sounds. Because “the frequency of door opening plays a large role in maintaining proper refrigerator temperatures,” you need to stick the thermometer in a liquid that’s been sitting overnight, according to the folks at GE. That means you’ll have to find a bulb or candy thermometer that can withstand sub-freezing temperatures.

After the fridge has been sitting closed overnight, stick the thermometer in the cold liquid, and give it three minutes. For sub-freezing temperatures, GE suggests sticking the thermometer in some ice cream or between two frozen food packages, again for three minutes. (But we’d suggest you don’t do this with a thermometer containing mercury: it might crack and spill the mercury.)

GE’s recommendations: For a “no frost” model, the fresh food section should be somewhere between 35 and 40 degrees Fahrenheit. Your freezer section should be between 0 and 8 degrees F. (Manual defrost and compact models will run about 5 to 7 degrees warmer because these models don’t have internal fans, so it takes longer to cool off after you open the door.) For dedicated freezers, expect to get a reading of -5 to 0 degrees F.

Now go have a nice warm cup of coffee.

DIGGING OUT OF DEBT
Help I'm stuck in debt! I don't receive letters from the collection agencies anymore. I don't know who to pay off. I need to clear my credit report. Is this possible? I'm afraid I'm going to get scammed if I ask for help through a debt agency. How should I go about getting financial help?
Misty S., Monticello, Fla.

Your instincts are dead on: most “debt counselors” just roll up your existing debts, pay them off with one big loan, and then charge you more interest on that big loan than you were paying before. One common way to do this is to stretch out the big loan, so your monthly payments go down. It looks like you’re “saving” money — but because that refinanced loan is takes much longer to pay off, you’ll shell out much more interest in total over the life of the loan.

The one agency that we would suggest is the National Federation of Credit Counselors. Here’s a link that will help you find an office in your area.

You may have to pay a small fee to meet with a counselor. They then may be able to negotiate a longer payment period to lower your monthly payments. This group is funded by the financial services industry, which apparently figures it’s better to collect part of a debt than none of it.

But credit problems have gotten a lot tougher to resolve since the bankruptcy laws were changed in October. It’s now much harder to file for bankruptcy, and you’re on the hook for more money if you do.

 

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