Jewish World Review March 4, 2004 / 11 Adar, 5764
DEAR MARY: My husband contributes 8 percent of his income to his employer's 401(k) plan. Would it be wise to temporarily stop that contribution to pay off the $50,000 we owe in unsecured debt? Debbie A., Washington
DEAR DEBBIE: Yes, but only until your unsecured debts are paid. Putting your hard-earned money at risk while you are carrying high-interest consumer debt is not wise. No matter how you cut it, money in a 401(k) is at risk. But investing in your debt carries no risk and offers a guaranteed rate of return.
For example, let's say you have a $10,000 revolving credit card balance at 18 percent interest. Each month you are paying $150 in interest ($10,000 times 18 percent divided by 12 equals $150). Great Aunt Gertie dies and leaves you $10,000. You can either pay off the debt or invest the money. Let's say you invest it.
Things don't go well and you lose some or all of it in the stock market. You still owe that $10,000 on the credit card and you're still paying $150 in interest each month. Now let's say you go the other way and use the money to repay the debt in full. Every month you get to keep the $150 you were sending to the credit card company. That is your guaranteed "18 percent return" on the $10,000 "investment" you made in your debt. It's a sure thing regardless of what happens with the economy. Now that's a good deal!
Caution: Even though you may stop making contributions for a season, do not cash in his 40l(k) account. The penalties and tax consequence are too severe.
DEAR MARY: I have a front-loading washing machine that requires low- or non-sudsing detergent. I would like to make my own. Can you help? Elinor E., Ohio
DEAR ELINOR: Here's a recipe that's received excellent reviews from other front-loading machine owners. It has no fragrance and is virtually non-sudsing. Give it a try and let me know what you think. If it works out, you're going to save a ton of money. See below for where to find these ingredients.
Mix Fels-Naptha soap in a saucepan with 3 pints of water, and heat on low until dissolved. Stir in Washing Soda and Borax. Stir until thickened, and remove from heat. Add 1 quart hot water to a 2-gallon bucket. Add soap mixture, and mix well. Now fill bucket with additional hot water and mix well. Set aside for 24 hours, or until mixture thickens. Use 1/2 to 3/4 cup of mixture per load, depending on the hardness of your water. Note: If you need suds to prove your detergent is "working," this is not the recipe for you. This is a non-sudsing, fragrance-free laundry product.
Where to find the ingredients:
Fels-Naptha Laundry Soap Bar: Look for this in the laundry aisle of your supermarket.
Super Washing Soda: Also in the laundry aisle. It comes in a 55-ounce yellow box. Do not substitute baking soda. For more information, see www.thelaundrybasket.com. (Can't find Fels-Naptha bars or Super Washing Soda? Purchase by mail order at www.soapsgonebuy.com, 618-273-9491.)
Borax: One brand name is 20 Mule Team Borax, also found on the laundry aisle of most supermarkets.
Glycerin: Available in drug stores or pharmacies, you'll get a much better price if you buy it at a craft store about $2 for 8 ounces. Find it in the soap-making aisle.
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