The Penny Hoarder

Now That You’re Vaccinated, Avoid Falling Back into Bad Spending Habits
Best Savings Accounts for July 2021
Can You Work and Collect Social Security? Yes, with Limits
Dear Penny: My Daughter Guilts Me for Not Co-Signing on $800K Home

Now That You’re Vaccinated, Avoid Falling Back into Bad Spending Habits

Posted: 30 Jun 2021 01:00 PM PDT

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So, you're finally vaccinated against COVID. Congratulations! It's a good feeling, isn't it?

Now that you're vaxxed, you can think about starting to return to something like normal life. You know, the way it was in the Before Times, before you ever heard that cursed word "coronavirus."

But before you do that, think about vaccinating yourself from bad financial decisions, too. You've cut back on a lot of unnecessary spending last year. Now's not the time to get sloppy and fall back into your old spending habits.

Put the mask back on your wallet for now, and consider these six tips for maintaining your financial health:

1. Don't Overpay for Online Purchases

The pandemic moved more of our shopping online, and that might be permanent to an extent.

Wouldn't it be nice if you got an alert when you're shopping online and you're about to overpay? That's what this free service does.

Just add it to your browser for free, and before you check out, it'll check other websites, including Walmart, eBay and others to see if your item is available for cheaper. Plus, you can get coupon codes, set up price-drop alerts and even see the item's price history.

Let's say you're shopping for a new TV, and you assume you've found the best price. Here's when you'll get a pop up letting you know if that exact TV is available elsewhere for cheaper. If there are any available coupon codes, they'll also automatically be applied to your order.

In the last year, this has saved people $160 million.

You can get started in just a few clicks to see if you're overpaying online.

2. Stop Wasting $489/Year on Car Insurance

With our financial margins so tight over the pandemic year, a lot of us took action to trim our monthly bills.

On that note, when's the last time you checked car insurance prices?

You should shop your options every six months or so — it could save you some serious money. Let's be real, though. It's probably not the first thing you think about when you wake up. But it doesn't have to be.

A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it'll show you your options — and even discounts in your area.

Using Insure.com, people have saved an average of $540 a year.

Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.

3. Get Paid Every Time You Buy Groceries

It's a little easier going to the grocery store these days. It makes us less paranoid now.

Still, groceries account for a good chunk of your budget. You may as well earn a little money back while your groceries are being bagged up.

A free app called Fetch Rewards will reward you with gift cards just for buying essentials like toilet paper and more than 250 other items at the grocery store.

Here's how it works: After you've downloaded the app, just take a picture of your receipt showing you purchased an item from one of the brands listed in Fetch. For your efforts, you'll earn gift cards to places like Amazon or Walmart.

You can download the free Fetch Rewards app here to start getting free gift cards.

Over a million people already have, so they must be onto something.

4. Stop Paying Your Credit Card Company

Credit card debt is the most expensive kind of debt you can have, and your credit card company is just getting rich by ripping you off with high interest rates. But a website called AmOne can help you fight back.

If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.

The benefit? You'll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.49% APR), you'll get out of debt that much faster. Plus: No credit card payment this month.

It takes two minutes to see if you qualify for up to $50,000 online. You do need to give AmOne a real phone number in order to qualify, but don't worry — they won't spam you with phone calls.

5. Always Have an Emergency Fund

This past year has taught us the hard way that everyone should have an emergency fund. You never know when you might lose your job or suffer some other catastrophe.

You need a place where you can safely stash your savings away — but still earn money on it. Under your mattress or in a safe will get you nothing. And a typical savings account won't do you much better. (Ahem, 0.06% is nothing these days.)

But a debit card called Aspiration lets you earn up to 5% cash back and up to 16 times the average interest on the money in your account.

Not too shabby!

Enter your email address here to get a free Aspiration Spend and Save account. After you confirm your email, securely link your bank account so they can start helping you get extra cash. Your money is FDIC insured and they use a military-grade encryption which is nerd talk for "this is totally safe."

6. Make Sure You Have Life Insurance; Rates Start at $5/Month

There was a surge of interest in life insurance during the pandemic, as more Americans realized they probably need it. Overall, Americans bought about 10% more life insurance policies in 2020 than they did in 2019 — the largest increase in nearly two decades.

Have you thought about how your family would manage without your income after you're gone? How will they pay the bills? Send the kids through school?

For many people, social distancing mandates and fear of infection have prevented them from going to a doctor for an in-person exam. That's leading more people to seek out no-exam life insurance like the kind offered by a company called Bestow.

Your application can take minutes, and rates start at just $16 a month. The peace of mind knowing your family is taken care of is priceless.

If you're under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He's vaxxed.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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Best Savings Accounts for July 2021

Posted: 30 Jun 2021 11:00 AM PDT

When it comes to savings accounts, where do you even begin?

Do a quick search, and you'll find many different options with varying percentages and minimum requirements. It can get overwhelming, fast.

Keeping this in mind, we've rounded up the best savings accounts — including ones at online banks and traditional brick and mortar — of 2021. We've included top information you need to know before opening or switching an account.

And before we move on, yes, we recommend that Penny Hoarders have a savings account — keeping your cash in a box under your bed is not a solid, or safe, financial plan. We want you to feel empowered so you can get the best proverbial bang for your buck.

We've ranked the very best savings accounts available today to help get you started. But first, here's some background on key terms.

What is a Savings Account?

A savings account is a bank account where you store your money. Typically, you keep it here for long-term goals instead of using it for everyday expenses.. To see a detailed explanation of how it differs from a traditional checking account, visit our checking vs. savings account comparison.

The best savings accounts are secured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. That means if you store your money with a bank and it goes under, you won't lose your money.

Savings accounts are perfect for achieving your savings goals — for a car, a house, a wedding, vacations, you name it. More importantly, they are the best tool to build your emergency fund.

Most experts agree your emergency savings should total six months' worth of necessary expenses in the case of job loss or another unpredictable emergency. Necessary expenses might include rent/mortgage, car payments, insurance, medical bills, utilities and groceries.

However, don't sweat it if you don't have six months' worth saved up. It takes time to build up your savings. Even if you can consistently deposit $50 a month, that's a good start.

One thing a savings account is not is an investment account. Savings accounts have historically low interest rates (or APY — annual percentage yield), but they are inherently low risk.

Common alternatives to savings accounts include certificates of deposit (CDs), where you store your money for a fixed term for a slightly higher interest rate, and money market accounts, which typically offer a higher APY but have significantly higher minimum balance requirements.

So just how much interest will you earn in a savings account? That depends on the amount you've saved and your APY.

Pro Tip

After you have padded your savings account with enough cash to cover emergency expenses and your other savings goals, you'd be better off opening an IRA or 401(k) or investing in stocks.

Online Banks vs. Brick-and-Mortar Banks

Before the advent of the internet, brick-and-mortar banks (and credit unions) were the only place to store your money, if not in your duffel bag.

But over the last couple decades, online banks have transformed the way we think of safely storing our money, and because of their low overhead (fewer staff and few or no physical locations), they can offer much better interest rates on savings accounts.

Two women smile as they withdraw money from the ATM.

Pros of Online Savings Accounts

When online savings accounts first surfaced, bank customers were hesitant to store their money with companies they had never heard of and were fearful of internet security issues.

Today, many of these same customers now see far more pros to online savings accounts than their traditional physical banks.

Higher Interest Rates

This is easily the most important distinction between brick-and-mortar banks and online banks. The national average APY for a savings account is 0.06%, according to the FDIC. But many brick-and-mortar banks offer less than that. Online banks, on the other hand, tend to offer savings rates that are better — sometimes a lot better

Availability

Online banks are always open. The most competitive online banks offer around-the-clock service over the phone or online, and typically have more user-friendly apps and websites.

Some national banks and credit unions may offer 24/7 service, but their physical locations are typically limited to the 9-to-5 business hours.

Pros of Brick-and-Mortar Savings Accounts

There are advantages to brick-and-mortar banks. However, if these benefits do not hold massive weight for you, we highly recommend an online savings account.

Easy Access to Account Funds

Emergencies wait for no one. If you have an unexpected need for $10,000, it would be nice to be able to immediately access that.

Many online savings accounts take several days to get you your funds via ACH deposit or a written check, though wait times for ACH deposits have dramatically decreased in recent years.

(You can also speed up the process by opening a checking account with your online bank or choosing an online savings account with ATM benefits. Prioritize online banks that offer free checking accounts or ATM convenience cards.)

Brick-and-mortar banks, however, can allow major withdrawals at any of their locations. No waiting necessary.

In-Person Support

Some people prefer to resolve their issues over the phone or online, but many others find comfort in face-to-face communication. By opening a savings account with a bank that offers physical locations, you'll be able to get in-person help from financial experts during regular business hours.

… And a Toss-Up

When it comes to access to ATMs, there is no clear winner. Obviously, brick-and-mortar banks and credit unions offer ATMs at all their locations, where you can easily withdraw your money.

Many online banks, however, offer fee-free withdrawals at select ATMs, and the best online banks will reimburse you for fees incurred out of network.

Best Savings Accounts of July 2021, Ranked

So what are the best savings accounts of July 2021? That depends on what you value most.

In determining our top nine, we reviewed more than 20 popular savings accounts and considered what elements seem to be most universally important:

Best savings rates
Stellar mobile app and/or web experience
Convenience of transfers (easy access to funds)

We considered only savings accounts that were FDIC-insured or NCUA-insured and had no monthly fees.

Because physical branch access is becoming increasingly less important, all accounts on our list are online or hybrid (online with some brick-and-mortar bank locations).

So what didn't we consider when making our list that you might also want to look for?

Bonuses: Because banks regularly add, remove or replace their bonuses, we did not include them in our criteria. If you're stuck between two or three comparable savings accounts, see which one offers the best sign-on bonus. We highly recommend checking out our current bank promotions list to help earn bonus cash or incentives when signing up for a new savings account.

Customer service: Quality of customer service is subjective. Read reviews and ask friends and family about their experiences when considering banks.

To truly determine how you feel about the level and quality of customer service, give the bank a call and ask some questions about the account. From that interaction, you should be able to feel out how much each bank values customers and prospects.

1. Synchrony Bank High-Yield Savings Account

We ranked Synchrony's account as the very best savings account of July 2021 because it has the perfect combination of the most important elements of a bank.

APY: 0.50%.

Monthly fees: None.

Minimum balance requirement: None.

Additional fee for withdrawals: None.

ATM card: No fee for in-network ATMs, $5 monthly reimbursement for out-of-network ATM fees

Access to funds: ATM, electronic transfer to an external account, wire transfer or a paper check in the mail.

Mobile app: Yes. At the time of this writing, the app has a 4.8 rating on the App Store and 3.6 on Google Play.

Details: Synchrony Bank High-Yield Savings account.

2. CIT Savings Builder Account

CIT Savings Builder is another solid account option, but you have to meet certain conditions to earn it:

APY: To earn up to 0.40% APY, either your account needs $25,000 in it, or you must make a monthly minimum deposit of $100 to the account. The latter option should be more feasible and is a good incentive to save each month.

Minimum balance requirement: $100.

Additional fee for withdrawals: None.

ATM card: None.

Access to funds: Electronic transfer, wire transfer (free if you have $25,000 or more in the account) or paper check.

Mobile app: Yes. At the time of writing, the app has a 4.6 rating on the App Store and 4.2 on Google Play.

Details: CIT Savings Builder.

3. Ally Online Savings Account

Though savings accounts are different from checking accounts — and thus should not be thought of as a place to quickly and easily get money — Ally does make it easier than most to access your funds when you need them. Just open a free checking account (ranked 5th in the best online checking accounts of 2020), and you can easily transfer your money over.

APY: 0.50%.

Minimum balance requirement: None.

Additional fee for withdrawals: After the six permitted withdrawals a month, you'll pay $10 per transfer with Ally.

ATM card: None.

Access to funds: You can transfer money via direct deposit, electronic transfer, wire transfer or paper check.

Mobile app: Ally's mobile app is highly rated at 4.7 stars on the App Store and 3.7 on Google Play.

Details: Ally Online Savings account.

A woman smiles as she checks her phone at night in her bed.

4. Alliant High-Rate Savings Account

The Alliant High-Rate Savings account is offered via the 100% Alliant Credit Union, so instead of FDIC insurance, it carries insurance through the National Credit Union Administration, but the benefits are the same.

Because it is a credit union, joining Alliant can be a little more challenging. You need to fulfill one of these four requirements:

Be a current or retired employee of a business that is partnered with Alliant.
Have an immediate family member or domestic partner who banks with Alliant.
Be a member of an Alliant-related organization/association.
Become a member of Foster Care to Success, Alliant's partner charity.

APY: 0.55%. You need an average daily balance of $100 for the APY to kick in.

Minimum balance requirement: $5.

Additional fee for withdrawals: Hard limit on six federally regulated withdrawals.

ATM card: Money access is super convenient with a free ATM convenience card that qualifies at more than 80,000 ATMs nationwide.

Access to funds: You can get a savings ATM card if you don't have a checking plan and card with Alliant. More details.

Mobile app: It's got a solid app (4.7 on the App Store and 4.5 on Google Play)

Details: Alliant High-Rate Savings account

5. Discover Savings Account

The Discover Savings account offers a substantial APY and easy access to funds via a rewards checking account.

APY: 0.40%.

Minimum balance requirement: None.

Additional fee for withdrawals: The bank may refuse to pay transactions that exceed the six monthly permitted withdrawals.

ATM card: While Discover doesn't offer an ATM card for its FDIC-insured savings account, you can sign up for the Discover Cashback Debit (it's free!), which earns up to 1% cash back on up to $3,000 a month.

Access to funds: The linked debit account provides an easy way to transfer funds; otherwise, you can rely on electronic transfers, wire transfers and paper checks.

Mobile app: Discover's app has a 4.8 rating on the App Store and a 4.6 rating on Google Play.

Details: Discover Savings account

Learn more: Discover Bank review

6. Capital One 360 Savings Account

While it's certainly not the savings account with the best interest rate, it makes up for it with no monthly fees, easy integration with other Capital One 360 accounts (including a checking account for easy funds transfer) and a killer app.

APY: 0.40%.

Minimum balance requirement: None.

Additional fee for withdrawals: Hard limit on six federally regulated withdrawals.

ATM card: None.

Access to funds: If you don't open a linked checking account for the easy ATM access, you can still access your funds via the traditional (but slower) means.

Mobile app: In 2018, the Capital One 360 mobile app was ranked No. 1 in customer satisfaction in the banking category for the second year in a row in J.D. Power's U.S. Banking App Satisfaction Study.

The app has a 4.8 rating on the App Store and a 4.7 rating on Google Play.

Details: Capital One 360 Savings account

7. Barclays Online Savings Account

Barclays has its cons, like challenging access to funds, but its high APY and strong mobile app earned it a spot on this list.

APY: Barclays is one of three banks on this list to offer the competitive 0.40% APY.

Minimum balance requirement: None.

Additional fee for withdrawals: Withdrawals that exceed the monthly limit will result in a fee.

ATM card: None.

Access to funds: You can deposit and withdraw funds in a number of ways, through direct deposit, an electronic transfer, paper check and more.

Mobile app: Yes, but the Barclays US Online Savings mobile app is not the most user-friendly based on its ratings: a 3.7 on the App Store and a 2.0 on Google Play.

Details: Barclays Online Savings account

Learn more: Barclay's Bank review

A woman works on her laptop while dipping her feet into a pool.

8. American Express Personal Savings Account

You might rely on American Express for your credit card, but the bank offers an online savings account worth your consideration as well.

APY: 0.40%.

Minimum balance requirement: $1.

Additional fee for withdrawals: Hard limit on nine withdrawals, though this is more than most of its competitors.

ATM card: A major drawback of the American Express account is the lack of an ATM card.

Access to funds: Electronic transfer, wire transfer and paper check are the only ways to access your money.

Mobile app: It currently has a 4.9 rating on the App Store and a 4.3 rating on Google Play.

Details: American Express Personal savings account

9. Marcus Online Savings Account by Goldman Sachs Account

Our final online savings account is by Goldman Sachs. It offers a competitive APY and fairly new mobile app.

APY: 0.50%.

Minimum balance requirement: None.

Additional fee for withdrawals: Due to a change in federal law, Goldman Sachs currently doesn't impose a limit on withdrawals.

ATM card: None.

Access to funds: Withdrawals are limited to electronic transfer and wire transfer (you also cannot deposit checks via the app).

Mobile app: Yes. It has a 4.9 rating on the App Store and a 3.8 rating on Google Play.

Details: Marcus Online Savings Account

6 Tips for Choosing a Savings Account

You should be aware that banks can change interest rates, develop better apps and update their bonuses, so it is important to understand how to determine the best savings account for yourself.

Here are a few tips:

1. Consider Your Needs

We prioritized high savings rates, ease of funds transfer and mobile apps in our rankings, but maybe for you, two-factor authentication and customer service are top considerations.

Build your own ranking system based on your top two or three criteria. You won't find a perfect bank that offers everything, but at the very least, you'll find banks that can meet all of your top needs.

2. Stick With Online

Put your money in an online savings account, unless you have a good reason not to, such as a high interest savings account at a brick-and-mortar credit union or a regular need to get in-person help.

3. Save Only With Insured Banks

Do not put your money into any bank that is not insured by the FDIC. Or, if you go the credit union route, make sure it is insured by the NCUA. We did not include any banks on our list that were not insured.

4. Don't Be Tempted by Sign-on Bonuses Alone

Earning cash for starting an account with a bank feels awesome, but don't let the appeal of $100 now prevent you from putting your savings into an account that will earn you $500 over a couple years.

5. Find a No-fee Account

Be wary of accounts with monthly maintenance fees, statement fees or any other miscellaneous charges. You're more likely to find these fees with a brick-and-mortar bank.

Ideally, find a bank that has an associated free checking account for easy and fast funds transfers.

6. Read the Fine Print

Know what you are signing before you sign it.

If an APY sounds too good to be true, it's possible there are strings attached — or that the rate is only temporary.

Ask questions and do research when you are confused by any of the terms and conditions, and don't deposit your savings until you are satisfied with the agreement.

Contributor Kathleen Garvin (@itskgarvin) is a personal finance writer based in St. Petersburg, Florida, and former editor and marketer at The Penny Hoarder. She owns a content-writing business and her work has appeared in U.S. News, Clark.com and Well Kept Wallet.

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Can You Work and Collect Social Security? Yes, with Limits

Posted: 30 Jun 2021 09:00 AM PDT

As simple words go, "retirement'' carries a lot of weight and a lot of baggage.

Now that retirement is bouncing around in your mind, and you entertain the thought of giving up your day job, you ask yourself:

Is my retirement income and Social Security going to be enough for my preferred lifestyle?
What am I going to do with myself every day?

One answer responds to both questions. You can "retire,'' collect Social Security, still work and be productive. The trick is there's a limit to how much you can make depending on your age.

If you are at what Social Security deems full retirement age, you can collect and keep your full Social Security benefits and make as much money as you want.

If you are not yet at full retirement age but are receiving Social Security benefits, you can make up to $18,960 a year without penalty. That's $1,580 a month, or $364 a week. We get into more details later in this post of what happens when you go over that amount.

How You Can Work and Collect Social Security

So let's dive into the particulars that allow you to work while you are retired and collecting Social Security. And then let's consider some types of work you can do in retirement to bring in some extra income.

The Meaning of Retirement

There is no such thing as "officially retired." There is no legal definition, nor is there a legal designation.

You just decide one day you don't want to work at the job or in the field to which you dedicated the first 30 or 40 years of your professional life. Often this coincides with your 65th birthday because that's when you qualify for Medicare.

However, you can start taking Social Security benefits before 65, beginning at 62.

Full Retirement Age

The Social Security Administration website is clear and precise about making money while accepting benefits, but here is what you need to know:

Your full retirement age: If you were born Jan. 2, 1959 through Jan. 1, 1960, your full retirement age for retirement insurance benefits is 66 years and 10 months.

Every year earlier reduces the full retirement age by two months. Born in 1958, 66 years and 8 months. Born in 1957, 66 years and 6 months, and so on.

If you were born after the 1959 date, your full retirement age is 67 years old. If you were born 1943 to 1952, your full retirement age is 66.

The government has changed the full retirement age stipulations because people are living longer.

THIS IS IMPORTANT!: If you have reached your full retirement age and you work, you may keep all of your Social Security benefits no matter how much you earn.

Salary Restrictions

If you are not yet at full retirement age but are receiving Social Security benefits, you can make up to $18,960 a year without penalty. That's $1,580 a month, or $364 a week.

If you make more than that, your benefits are reduced by $1 for every $2 you make over the $18,960.

But get this: once you reach full retirement age, the money that was subtracted from your Social Security benefits previously are refunded to you. You never really lose those funds, they are just held from you until you reach that magic age.

There are special rules depending on whether you receive a salary or are self-employed when you are working, but they differ based on when they are counted (when you earn the money versus when you get paid). The Social Security Administration website can address those particular items for you.

Suggestions for Work Even Before You Reach Full Retirement Age

Here are some suggestions of part-time jobs that can bring in some extra money. They may be more about what you want to do than what you have been doing. Check out these 13 ways to make money you might not have thought about. And more:

A senior citizen woman does book keeping from home.

1. Indoor work

According to the AARP, bookkeeping is the most popular part-time position for workers of a certain age. This makes some sense: it is not physical, requires patience, and is likely not a popular job among younger people.

And if you're so inclined to start your own virtual bookkeeping business you could make up to $69 a hour.

2. Health Care

Perhaps knowing that you may someday require healthcare assistance, it becomes attractive to offer help to those already in need. Older people are encouraged to apply for jobs as assistants to nursing homes and hospitals.

Certainly, certifications will make you more attractive as an employee, but there are jobs specifically for those people who want to help but did not originally work in healthcare and don't have licenses or certificates.

There may also be opportunity in a less structured way. If you have a friend, or a friend who has a friend, with an older family member or neighbor that needs assistance during the day, let them know you are looking for work. You can offer your services to dive them to medical appointments, make lunch or simply provide a few hours of companionship.

Pro Tip

The Penny Hoarder's Work-From-Home Jobs Portal makes the remote-job hunt easy. Our journalists scour the web for the best gigs, vet the companies and aggregate the latest listings in one place.

3. Work with Children

Safety and care are uppermost in the minds of school administrations, and they offer several positions for older people interested in part-time work.

While "crossing guard'' may be the first thing that comes to mind, schools, colleges and universities need staff that can provide some level of security for special events, and older people who may have grandchildren of their own have built-in radar for the well-being of children.

A senior citizen poses for a portrait with an axe and tree behind him.

4. Outdoor Work

Your city or county leisure services or parks department may have work for you. If there's a forestry department in your area, contact them.

From cleaning parks to walking through wooded areas looking for environmental concerns (downed trees, unexpected flooding, etc.), being paid to take a walk in nature is not a bad way to spend a day.

5. Helping Other Seniors

Many communities have Senior Centers that provide activities and services. Yes, there are people at Senior Centers playing bridge, canasta and chess.

But Senior Centers are also one of the first places employers turn when looking for people to fill paid positions that require attendance and attention. Consider your local Senior Center as a resource for finding a position that suits your interests.

Kent McDill is a veteran journalist who has specialized in personal finance topics since 2013. He is a contributor to The Penny Hoarder.

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Dear Penny: My Daughter Guilts Me for Not Co-Signing on $800K Home

Posted: 30 Jun 2021 07:00 AM PDT

Dear Penny,

My 25-year-old daughter moved back home while I was taking care of my mom, who has Alzheimer's. Because I wasn't staying there, she never paid rent, but she did pay for internet and gas.

Well, now things are progressing, and I will be selling my mom's home. I am currently having a room built at my home, since she will be staying there as well.

I have always helped out my kids as a single mom. But my daughter listens to her paternal grandmother, who sadly told her to have me co-sign on a mortgage for her even though she just started working and wants an $800,000 house. I told her NO.

I then said her grandmother knows that this is an unrealistic request. I'm about to retire in three years, if not sooner, and still have my own very manageable mortgage. I'll have a pension and Social Security with only a leased car to pay for.

Now they are thinking of asking me again in a year or so to co-sign. Am I wrong to tell her no? I'm also thinking about selling the house and moving with my mom back East where she grew up to be closer to her aging brothers and sister.

Now my daughter is upset and says she won't have anywhere to go if I don't help her get a mortgage. Am I wrong to focus more on me and my mother at this time in our lives?

I've done all I can for my daughter, but I don't like the guilt trip she and her dad's mom are trying to put on me. I know she can't afford an apartment by herself in California, but that's not my fault either.

-Frustrated Mom

Dear Frustrated,

Your daughter isn't the only person struggling with the cost of housing these days. No one knows what the solution is. But I'm pretty sure it's not for moms to swoop in and co-sign so that their grown children can buy overpriced homes.

If you think you're frustrated now, imagine how you'll feel when you're on the hook for an $800,000 mortgage. I say "when," rather than "if," because of the high likelihood that your daughter can't afford payments on a loan of this size. Not many 25-year-olds can afford that much house on an entry-level salary.

I'm not sure what the deal is with your daughter and her grandmother. Maybe Grandma wants to set you up as the bad guy. But it's also possible that Grandma doesn't understand how serious the consequences can be when co-signing goes awry.

It really doesn't matter what your daughter's grandmother thinks. It's your money and your credit on the line. Of course, that won't stop her from having an opinion about how you use your money and credit. But you really shouldn't spend any of your energy worrying about whatever nonsense she's telling your daughter.

In case you need affirmation of your decision, here's why you're making the right call by saying no: Obviously, a liability of this amount could jeopardize your retirement. But even if your daughter makes the payments as promised, co-signing her mortgage could make it harder for you to borrow money. Lenders consider your debt-to-income ratio in their decisions, and this mortgage would count as if it were your own because you're legally on the hook for it.

But this isn't just about your retirement. You'd be doing your daughter a big disservice by co-signing on a home she can't afford. We build grit by not getting whatever we want whenever we want it. Plus, learning to live on less is far easier at 25 than it will be at 35 or 45.

I'll give you permission to have this discussion one more time to make sure everything's crystal clear. Most importantly, be sure you've told your daughter that your answer will still be an all-caps "NO" one year from now. Tell her this is the last time you're having this discussion.

If she brings it up again, tell her, "I'm not going to discuss this with you." Repeat again as necessary, even if that means you have to walk out of the room.

As for what to do about your living situation, make your decision based on what's right for you and your mother. Your daughter has plenty of options for finding a place to live. If she's still living with you, she can start saving part of her paycheck while she's not paying rent. She could also get roommates, take on a side hustle, or move to a less-expensive state.

Your mother's care and your own impending retirement should be your focus right now. Your daughter doesn't need an $800,000 house. What she needs is to learn how to act like an adult. She'll get there faster if you focus less on her needs right now, not more.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com.

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Wednesday, June 30, 2021