If you have questions about your money in today's economy, you're not alone. Here, TODAY personal finance editor Jean Chatzky tackles reader concerns about complicated financial issues:
Q: We are currently in a house with a 15-year fixed mortgage. Since we are looking into adopting within the next year, we are wanting to purchase a new or bigger home. With the economy the way it is, is now a good time to be buying a new home (and selling the current house)? — Russ
A: It may be — housing inventories are soaring, which means that buyers are in the driver's seat. You have a lot to choose from and a substantial amount of bargaining power. That said, there are challenges as well. First, you have to sell that other house. I've heard too many horror stories from people who bought a second home before they sold the first. Don't worry about missing the opportunity to buy — this downturn is going to last a while. Second, you need a substantial down payment. Gone are the days when you could buy a house with nothing down. Now banks are routinely asking for 10 percent and, in parts of the country where real estate markets have been truly rocked, even more. Third, you need really good credit in order to qualify for a decent interest rate. If your credit score has been damaged by late payments, use the time you spend selling your first house working on it before you get that next mortgage.
Q: Is now a good time to throw money into the stock market? We have approximately 100K in retirement and almost no savings. Should we take our extra cash right now and invest it? That's what our rep at is telling us. — Mandy
A: Before you do, I'd put together an emergency savings cushion of six months’ worth of living expenses that you could turn to should one or both of you lose a job or become otherwise unable to work. That money goes into a competitive money market account at a bank. You can search for the country's best MMAs at bankingmyway.com or bankrate.com. Once that need is satisfied, as long as you don't have credit card debt, I'd turn my extra dollars to investing. Take a look at your age and your risk tolerance and decide what sort of asset allocation — what percentage of your money belongs in stocks, bonds and cash — makes sense for you. Then, I would dollar cost average my way into the market, putting your money in on a monthly or quarterly basis so that you're buying at all levels and not trying to time what may or may not be a bottom.
Q: I'm about to begin my second year in college, which I am financing with a small private loan in conjunction with a substantial financial aid package from my university. After applying for a private loan for the school year, I was awarded an additional $2,000 in the form of a federal direct unsubsidized loan. Soon I will have an extra $2,000 in my student account, and I was wondering where the best place to put that money would be. I have $5,000 in private student loans, a $1,500 Perkins loan, and $3,000 in federal direct unsubsidized loans from the previous school year, as well as about $400 in credit card debt. — Alison, Stockton Springs, Maine
A: Alison, you got that extra $2,000 because of a temporary measure that Congress enacted in May that increased the borrowing limits for the 2008-2009 school year. Here's the deal with loans: You always, always want to max out your federal loan money before you turn to private loans, because private loans are typically more expensive interest-wise and they are often variable-rate loans, which means the interest may adjust on you. So, you learned your lesson for next year. As for what you can do with the money now that you have it, your best bet is to pay off that $400 in credit card debt, then stash the remaining $1,600 in a high-yield savings account. When it comes time to borrow for next semester, you can use that money to minimize or completely eliminate the amount you need to borrow from your private lender.
Q: What is the best credit report company to get a credit score report? I have found many companies that request a credit card number; does that mean they are going to charge me at some point for requesting a credit report? I want one that is free and easy! — Shelley, Tallahassee, Fla.
A: The best way to get a free credit report, without any strings attached, is by going to the Web site annualcreditreport.com. This site was created by the three big credit scoring bureaus, Equifax, Transunion and Experian, because by law you're able to pull three credit reports each year — one from each bureau. My suggestion? Pull a report every four months, so you're always on top of your status and can spot any red flags right away. As for the score, unfortunately you can't get one for free. Those "freecreditreport.com" offers ask for your credit card information because they sign you up for a credit monitoring service that typically runs about $89 a year. It can be free, but only if you remember to cancel before you get billed. If you need your score — and you should look at it a good six months before you apply for a mortgage or car loan — go through the annualcreditreport.com site to one of the bureaus and buy one for $15. You don't have to buy all three.
Q: My second and last child graduated from college in May and I wanted to consolidate my unconsolidated last year's Parent PLUS loan with my previously consolidated Parent PLUS loan, taking advantage of the lower interest rate. When I called Sallie Mae to do so, I was surprised to be informed that they have stopped consolidating loans. I was told that they may offer it in the future, but could get no more specific explanation for the change in policy. Can you provide me with more information about this and whether I have any other recourse? — Cherry, Southington, Conn.
A: Sallie Mae did, in fact, step out of the loan consolidation business, as did many other lenders — because of the credit crunch and budget cuts by Congress earlier this year, it's simply just not as profitable as it once was. But that doesn't mean you're without options —you can consolidate with any lender, not just Sallie Mae. One of the best places to consolidate these days is through the U.S. Department of Education at loanconsolidation.ed.gov. Also, speak to a financial aid counselor at your child's school for more leads.
Jean Chatzky is an editor-at-large at Money Magazine and serves as AOL’s official Money Coach. She is the personal finance editor for NBC’s TODAY Show and is also a columnist for Life Magazine. She is the author of four books, including 2004’s “Pay it Down! From Debt to Wealth on $10 a Day” (Portfolio). To find out more, visit her Web site, .