HLN Money Expert Clark Howard.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

NATASHA:
My husband is 50 years old and a smoker. We are looking to increase our life insurance to $300,000 plus. Should we get term life insurance or whole life insurance?

CLARK:
Term life insurance is almost always my choice for someone, although there can be rare circumstances where another type of insurance would be the right one.

With term insurance you can buy level term that will cover pretty much the rest of a working lifetime, a 15-20 year term is probably appropriate. As a smoker, the rates will be surcharged and you'll pay quite a bit more than you would otherwise, although some companies discriminate against smokers more than others which is why it's really important to shop multiple companies.

Level term is a very simple product. You pay the same premium through the 15 or 20 years and all it does is pay if you die.

Money Coach with HLN’s Money Expert Clark Howard

Having trouble managing money? Do your money goals seem impossible? Clark Howard wants to help you!

We’re looking for individuals or families who are willing to be profiled on HLN. Those chosen will get money advice and information from Clark Howard. This week’s question comes from William Hickey of Arlington, Virginia.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

RONALD:

I had some floors put down in my home for about $7,000. From the beginning, I have had nothing but problems. They sent out a "floor doctor" at their expense, who stated that the floors were installed incorrectly. They then offered to sell me a new floor at cost and the installer would install it for "free." I consulted an attorney who wants $7,500 to begin any action. I wrote my senator who sent it to my state representative who won't get involved. Where do I turn now?

CLARK:

You have to turn to yourself. In a situation like that where you feel that they have failed to deliver, you have a report from an expert that says they failed to deliver, that is made to order for you being your own lawyer, or the equivalent of a lawyer, representing yourself in small claims court.

Now, the limits on what you can do in small claims court vary from state to state. There's a great guide at nolo.com that will walk you through what the rules and requirements and limits are in your state.

Clark Behind The Headlines
From HLN's Money Expert Clark Howard

The best service in the world is yourself. I have believed that for so long.

I remember when the first self-service gas pumps started appearing. For younger people, there's no concept of when you didn't pump your own gas. Oregon and New Jersey are the last holdouts in the United States on not allowing you to pump your own gas. It costs more as a result in those states. And if that’s what they want to do, fine. But it’s so much easier to pump your own gas. And I think about how many things are like that.

If you go into a fast food restaurant, which I'm very familiar with, I'm always annoyed if I can’t make my own soft drink. I want to be able to do my own perfect mix. And when they make it behind the counter, it’s not going to be the way I want it. Now, Coca Cola is testing a new kiosk that is essentially a touch-screen computer that allows you to make your own custom beverage.

The first time people use this type of thing, it can be completely befuddling and overwhelming. Go back a few years when airlines started putting in check-in kiosks, and think about how people were confused by them. And now, more and more people are using them.

Rental car company Hertz installed a check-in kiosk two years ago at the airport in Orlando, Florida, and now 80% of its customers there use it, instead of checking in at the counter with a person. Hotels are starting to roll it in now. And restaurants are the final frontier.

In the next few years, even at mid-priced restaurants, you will most likely place your order and pay for your meal at a kiosk. At mid-prices and below, it’s hard to track and retain servers because there’s just not enough tip income. Or you have a server who has to cover too many tables. And it will be so much easier to have a kiosk where people can place and pay for their orders, and the server just brings you your food and beverage.

I know it’s hard for people that didn’t grow up in the era of the Internet, kiosks and all the rest. But it’s a part of the future. I know there are people who will say, "Wait a minute, what ever happened to service?" Well, isn't it a service if someone puts in a machine that allows you to do something better and more quickly? I sure think so.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

KRIS:

I've fallen into severe debt and am trying to cash out my 401k to satisfy my debts. When I told my investment company I wanted to do so, they told me that since I'm still repaying a loan from my 401k, I can't cash it out. When I asked if I could use the available funds to satisfy the existing loan and have the remainder cashed out and sent to me, they balked. Is there any recourse I have and what steps do I need to take in order to have the funds ASAP?

CLARK:

Well first, everybody's telling you can't do this and I'm telling you not to do it, even if they say you can.

You don't solve a problem by wiping out your retirement funds to deal with the debt.

The real thing that eats you up with that is the tax burden.

A typical person who does a withdrawal from a 401k pays, with taxes and penalties, 40% of that amount of money in taxes.

So if you take out $10,000 you actually only have $6,000 that you can use for debt, you're going to have to have that other $4,000 to pay tax next April.

Instead, attack debt one step at a time.

If you need help negotiating, you need help working out a plan, go to your NFCC affiliate, check them out at nfcc.org, that's the National Foundation for Credit Counseling.

Money Coach with HLN’s Money Expert Clark Howard

Having trouble managing money? Do your money goals seem impossible? Clark Howard wants to help you!

We’re looking for individuals or families who are willing to be profiled on HLN. Those chosen will get money advice and information from Clark Howard.

This week’s question comes from Sarah and Ben Perkins of Decatur, Georgia.

As America’s wobbly economy begins to stabilize, many people with money saved up and good credit should consider buying a home now. Home prices have come down a lot, and interest rates are at historic lows.

Not that the danger signs aren’t still out there: job losses, distressed home sales and foreclosure filings are likely to continue. In fact, a new forecast of real estate prices predicts home values could go down further in 342 out of 381 markets by next summer.

Overall, the national median home price could drop another 11percent by June of 2010, says Fiserv, a financial information and analysis firm. Nevertheless, both home prices and mortgage rates have dropped more than any other time in history.

While you can safely bet that prices still have more room to come down, that bet may not be such a sure thing when it comes to interest rates. Right now a 30-year fixed rate mortgage is hovering around 5 percent, the lowest in half a century. They are low in part due to a flush of cash from the Federal Reserve since last year’s financial meltdown that has kept interest rates low. The problem is the longer we have low rates, the more we risk fueling inflation.

Although we don’t have any hard evidence that consumer prices are going up right now, you can bet the policy makers at the Fed are closely monitoring the situation. Just the fear of inflation may prompt the Fed to start pushing rates up again - and sooner than you think.

What that means for procrastinating home buyers is this: putting off a purchase now could cost you more in the long run. For the sake of illustration, let’s say you close on a single-family home next month at the latest national median home price of $177,500, and you’re able to secure a mortgage rate of 5 percent. Over the lifetime of the loan, you could pay out a total of $378,500 for your home.

Let’s say you put off your purchase to September of next year, but you’re able to get the same home at a lower price of $160,000. That’s a savings of $17,500, right? But, what if the loans on offer have inched up two percentage points higher than what you can get right now? Your total home purchase over the lifetime of the loan could cost you as high as $414,600. That lower priced home at the higher rate of 7 percent will end up costing you some $36,000 more in the long run.

That’s why if you have credit and cash right now, it could be an excellent opportunity to buy a house. Tell us what you think. Call in with your thoughts to the Ali Velshi Show on CNN Radio at 1-877-266-4189, Wednesday starting 11 a.m. EDT.

Clark Behind The Headlines
From HLN's Money Expert Clark Howard

There are new requirements coming for celebrities, radio and TV talk show hosts and bloggers.

Now, if you’re a blogger, you have to disclose that you’re getting paid to review or endorse something.

If you are a celebrity pitch person, you’re going to have to stand behind the product that you’re doing an endorsement for - meaning you’re going to have to have good knowledge that the claims you are making are true.

Well, what if I’m not a famous person? I’m doing one of those ads where I’m saying, “Look at me. I used to wear size 48-inch waist pants and now I’m a size 32-inch waist. And I lost all this weight without exercising, eating as I wish, and I lost it all in 10 weeks!” Then they show the before and after pictures.

Well now, under brand new guidelines, they’re going to have to tell you the truth in those diet ads. I can’t wait to see how they do that, because now they’re going to have to tell you something like, “the typical person loses one pound on this thing in six months.” No more are they going to be able to parade out the most unusual success story that they’ve had with their diet program.

You’ll see the ads change for the diet guidelines before Christmas. You watch them and you think, “Wow, could that really be? Could I really eat this miracle diet or take this miracle pill?” Now, they’re not only going to have to say, “results not typical,” they’re going to have to give the typical result.

I also can’t wait for them to weigh in on exercise equipment. It’s weird when you see those ads for the exercise equipment. At first, the guys look like the only thing they’ve ever done is work out in a gym, and the women are not anatomically correct Barbies. They work out on this miracle piece of exercise equipment that “in four minutes a day, I became like this”. How fun is that!

What’s the real answer? The real answer is really simple. Reduce the number of calories you consume and exercise every day. If you do that.. wow! There’s a true miracle that happens. You get thinner and you get in better shape.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

SALLY:

My husband and I are expecting our first child later this year. We are both in our early 40s now, so we'll be 60 before our son goes to college. Would it be better to save in a 529 plan now, or save more in our current retirement plans which may have better tax consequences when we are retirement age and using the money for his education?

CLARK:

That is a very interesting question.

If you were to put money in a Roth account or instead put money in a 529 account - a 529 is used for college, tax-free, a Roth can be used for any purpose once you reach retirement age, tax-free – you do the Roth.

The reason you do the Roth is that if your child ends up getting a scholarship or, heaven forbid, ends up not going to college, the money in the 529 becomes taxable and is subject to penalty.

The Roth can be used for any purpose.

That's why it's a much higher priority to save the max each of you can in a Roth before you would do one penny in a 529.

Clark Behind The Headlines
From HLN's Money Expert Clark Howard

I want to discuss something delicate with you.

You know we're going to get pushed pretty hard over the next couple of years to not use soft toilet paper. This is the newest environmental deal.

I've seen several newspaper articles with the environmental movement being very concerned about extra-plush toilet paper because it apparently takes old-growth trees to make it.

You know how when you're at an office building or any institutional kind of setting, and the toilet paper they have is not exactly so gentle? Well they're not buying that stuff because they're environmentalists; they're buying it because it's cheaper!

Many times they're buying recycled paper made into toilet paper. Americans prefer soft toilet paper. It's just the way it is.

Consumer Reports did a rating of toilet paper and the soft toilet papers really did well in the survey. Just know that you're going to be getting the guilt trip in terms of the attack on old growth forests.

According to Washington Post reporters' research, 5% of the trees that are chopped down are used to make toilet paper and facial tissue.

So, I love this quote in the Washington Post: "But environmentalists say 5% is still too much."
Here's my take on it: when they can make an affordable toilet paper that is pleasant to use, and is good for the environment because it’s made of recycled paper, fine!

In the survey that Consumer Reports did, the highest ranking of any of these environmentally-friendly toilet papers was 13th place. So for now, my green goes for something that's not green.

Now, I'm all about being environmentally-oriented and doing things to save money that ultimately benefit the environment. But my perspective - and I know this makes me far from a pure environmentalist - is the green I'm about is money green, not the environmental green, even though I've done everything to my house to reduce its energy consumption.

I'm doing all these things, but ultimately it’s a win-win only if it doesn't degrade your life and at the same time saves you money and helps the world.