Ask Karen Gibbs

Veteran business correspondent Karen Gibbs answers your personal money questions and addresses current topics that affect YOUR finances on a daily basis. Karen is the financial expert in your corner--no question is too basic or too small. Karen boils down the issues simply: here's what you need to know, and here's what you need to do. Send your money questions to and post your comments below.

net worthKaren, what is my net worth and how do I calculate it?
    Oscar, Silver Spring

Oscar, simply put, your net worth is what you own minus what you owe.  If you ever apply for a mortgage, car loan or if you’re thinking of a major life-changing event such as marriage, this is a number you should know.

To calculate your net worth, start with your assets.  List your checking account balance, savings and other cash on hand readily available.  Add to that your investments in stocks, bonds and retirement accounts. 

Now list your property, both real and personal.  Do you own a home?  Subtract the mortgage from the current market value – you want that number to be positive (not underwater).  Add the Kelley Blue Book value of your car, plus the value of items in your home.  Clothes, furs, furniture, jewelry, china, silverware, electronics all count toward your net worth.  Do you have a stamp or coin collection?  Add the after ...

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minimum wageHi Karen, what’s the minimum wage in Maryland? 
    Poor in Pasadena

Be patient, Poor; relief is on the way.  Maryland is one of 22 states and the District of Columbia that will set a minimum wage higher than the Federal minimum wage of $7.25 per hour.

The state legislature passed, and Governor O’Malley signed into law, legislation that will increase the minimum wage to $8/hour as of January 1, 2015.  On July 1, 2015 that rate will rise to $8.25/hour, with annual increases after that which will bring the minimum wage up to $10.10/hour by July 1st, 2018.

Opponents of this legislation fear loss of jobs with the higher rate but a study by the Center for Economic and Policy Research shows that job growth among the 13 states that raised their minimum wage at the start of 2014 had faster employment growth than those states that kept their minimum wage at 2013 levels.

Some companies are going one step further.  If you’re lucky to be employed by ...

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commemorative coinsHi Karen, what do you think about commemorative coins as an investment?
    Carl, Silver Spring

Carl, thanks for your question.  In my opinion, commemorative coin are not a good investment, but are a hobby similar to stamp collecting.

To be a good investment, an asset must have liquidity – a large number of buyers and sellers.  There should also be a quality standard so that you are confident in what you are buying and selling.  Many of the advertisements you see on TV are for coin which have little or no intrinsic value – the value of the components that make up the coin – as opposed to market value.

Coins struck by the United States Mint’s Bureau of Engraving and Printing have intrinsic value as they are made out of gold and silver.  Many other countries issue gold and silver coins.  The quality and scarcity of those coins affect the price along with the intrinsic value.  They are generally called “bullion coins” ...

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marriage & moneyHi Karen, I keep hearing about the “marriage penalty”.  Are there financial pros and cons to getting married?
    On the Fence in Dundalk

Dear On the Fence, you’re not giving me much to go on, but with summer being the most popular season for weddings, I’ll assume you are in love and that this is your first marriage. 
Marriage between two high-income earners can result in “the marriage penalty” or a higher tax bill if joint income pushes you to a higher tax bracket than if you had filed as two singles.  But on the flip side, Uncle Sam rewards married couples who have children with personal exemptions and other deductions for dependents. 

Contrary to prevailing wisdom, most U.S. households are married with children.  Having a family can be an incentive to buy a home.  Owning a home allows you to claim the mortgage interest deduction and save more on capital gains taxes when you sell that ...

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college fundHi Karen, I’m a first time grandmother and want to start saving for my grandson’s college education.  Is it difficult and/or expensive to open and maintain a college savings plan?
    - Jennifer, Jessup, MD

Congratulations Jennifer on the arrival of your grandson!  You’re already showing signs of devotion by thinking ahead for his college education.  

As a grandparent, you can either open a 529 Savings Plan for your grandson, or make contributions to one opened by his parents.  With the rising cost of student loans and how that debt can hold back a newly graduated student, college savings plans are an attractive alternative.  It is not expensive to open and maintain a 529, and the State of Maryland makes it very easy to enroll.

You can invest in any state’s 529 plan, and use it for qualified higher education expenses.  It is transferable, meaning it can be for this grandson, future grandchildren or even yourself if ...

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