Everyday Cheapskate

Dear Mary: I am paying off a credit card this month and will not be using it again. Soon, I will be charged the annual $50 fee on that account. You have said not to cancel a credit card because it will hurt your credit score, but do I have to keep paying an annual fee? — Sara A., e-mail

Dear Sara: Congratulations! You've just made a giant leap toward becoming debt-free. If your credit score is less than 700 and this is an account you have had for a long time, you should be cautious about closing it too soon. It might be worth the $50 fee this year to give you time to apply for a new, no-fee credit card account. (Check http://www.IndexCreditCards.com for the best deals.)

You could establish a new, fee-free account before you give this expensive one the old heave-ho. However, if this is one of several accounts that you have, your credit score is greater than 700 and you will not be applying for a mortgage in the next six months or so, I would cancel it if I were you. There are times when good financial sense trumps maximizing your credit score.

Dear Mary: I will be taking a job in a school district that does not prorate salaries. I never have made a budget before. How do I make a budget for 12 months on a nine-month salary? — Beth S., Arizona

Dear Beth: First, you need to open a second checking account. This is the account into which you will deposit your paychecks. Then pay yourself each month from this account. Use this second checking account for no other purpose.

Next, divide your annual take-home pay by 12.

This is the amount you will withdraw from your new checking account each month. For example, let's say your annual salary is $50,000 and, after withholding, your net pay is nine checks of $4,500 each, or $40,500. Divide by 12 to get $3,375. That is the amount you should withdraw each month, not the $4,500 you deposited.

It will require a great deal of discipline for you to manage your paychecks this way, but the result will be enough money for you to pay yourself a steady income, even during the months you are not working.

Dear Mary: Our dishwasher is only 5 years old, but the tines on the rack keep breaking off. Is there any way to buy new racks without paying an arm and a leg? — Jan S., e-mail

Dear Jan: You can purchase parts for just about any home appliance, even those that are many years old. But you need to shop around. First, go to the manufacturer's Web site to see whether it offers parts. Before you buy, contact someone in customer service and press him or her to replace that rack without charge, leaning on the fact that a dishwasher rack certainly should last longer than five years. If that doesn't work, compare the cost to buy a new one at RepairClinic.com and AppliancePartsPros.com.

Do you have a question for Mary? E-mail her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. Mary Hunt is the founder of www.DebtProofLiving.com and author of 18 books, including "Can I Pay My Credit Card Bill With a Credit Card?" To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.

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