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How to Reduce Future College Debt

Posted on Mar 17, 2019 with No comments

It is coming to be increasingly difficult for children to have much better lives than their parents. The high price of education and the shrinking middle class are just two of the reasons. Not too long ago you could make plenty of money at a part-time employment to pay for nearly all of your college schooling. And when you finished you can get a really good career without much debt.

Some youngsters still may do that. However there are 42 million Americans that owe $1.4 trillion in student loan financial debt. That's more than $33,000 per person. Just think of if you were marrying, striving to start a family and purchase a home with this debt. Life is difficult enough without starting out in a large hole.

I can not solve this situation in a brief column, but I can offer you 2 suggestions on just how you as parents can help monetarily.

The 1st is the 529 College Savings Plan. It is an excellent method for moms and dads, grandparents and family members to support a youngster's education. The 529 is an unique account you can set up where you as the account holder can assign a beneficiary. All earnings on the money you put in this account is tax free as long as you use it for qualified education expenses.

The account owner is in control of the account. The owner invests the cash and disperses the money. They even can modify the recipient. One more attribute is that the owner can encourage other individuals to add to the account. So Aunt Millie can place a $25 birthday gift in the 529 instead of purchasing a present or a savings bond.

Every state has one or more 529 plans provided and you can invest in any state's 529 and use the money anywhere so it makes good sense to have a plan that has great investment choices and low expenses. The 529 plans that financial advisers promote are all a bad deal. They are pricey with limited high cost investment choices. The direct 529 plans with the state are almost always the way to proceed.

The second method parents can really help is rarely used, although I have been suggesting it for several years as a way to save, grow wealth and teach kids about investing. And that is the ROTH IRA for youngsters. There are 2 points you need to remember. Minors can not open a ROTH IRA account. An adult have to function as custodian till the minor becomes an adult at which time the money comes to be theirs. The other point is that there are restrictions to just how much youngsters can invest in the ROTH IRA

The 2019 ROTH IRA contribution limitation is $6,000. Any youngster who has acquired earnings can add as much as the amount they earned or $6,000, whichever is less. So if a youngster earns $100 trimming lawns, babysitting, working around your company or a real job, $100 can go into a ROTH IRA. The cash that in fact goes into the youngster's ROTH IRA can originate from parents or grandparents.

It is worth doing because $100 saved in a ROTH at age 10 and earning 9 percent per year till that kid retires becomes $11,400, tax free. If you string a couple of those contributions together while your children are young you can truly help them in the future.


Saving and Spending: Why it’s So Important to Manage Monthly Bills In College

Posted on Feb 26, 2019 with No comments
We all know that money doesn’t grow on trees. That’s exactly why it’s so indispensable to keep your monthly bills in check. Good spending and saving practices can go a long way in contemporary society. If you fail to take charge of your bills, you can end up with all sorts of financial concerns that can take a toll on everything.

Credit Score

Losing track of your monthly bills can do a number on your credit score. If you want to avoid wreaking havoc on your credit rating, then you need to take control of all of your monthly bills, zero exceptions. Paying your bills late can be disastrous. Failing to pay them entirely can make it harder for you to get a mortgage, purchase a vehicle, and get a credit card.


Not handling your monthly bills can also interfere greatly with all of your budgeting goals. It doesn’t matter if you’re saving up for a new home purchase. It doesn’t matter if you’re saving to go on a trip to the Caribbean, either. Confusion about monthly bills can make it impossible for you to budget and save like a champion. That can lead to chaos all around.

Mental Clarity

Taking charge of your monthly bills can also be beneficial for your clarity of mind. If you flounder in the financial management department, that can make your brain feel foggy and out of sorts. Mental organization can do a lot for the order of your existence in general. Rock-solid financial management abilities can help you with all different facets of your life.

Other Essential Expenses

If you handle your monthly bills well, then it can help you figure out how much you have to set aside for other costs. Home AC maintenance service is an expense that many homeowners have. Routine cooling system maintenance can keep breakdowns and problems of all kinds at bay. If you want to protect your air conditioner from airflow troubles, odd smells, and more, then you need to make sure that you can cover routine maintenance work.

People who have comfortable and pleasant lives tend to be capable financial planners. If you want to join their ranks, then you need to figure out how to control your monthly bills. You need to grasp how much you have to set aside for everything from utilities to wireless high-speed Internet access. Outstanding financial management abilities can help you soar.


Why College Arts Students Should Protect Their Portfolios

Posted on Feb 11, 2019 with No comments
As a college arts student, improving your skills and creating an impressive portfolio may be at the top of your list of goals until you graduate. These are essential in order to move on to the next step after graduation and land a great job with significant growth potential in your desired field. The last thing that you may be thinking about is protecting your portfolio but there are a few critical reasons why this should be a top priority throughout your college career and beyond.

Intellectual Property Theft

When you apply for a creative arts job immediately after graduation or even many years down the road, hiring managers understandably will look at your educational background and previous work experience. More importantly, they want to see what type of creative work that you can produce.

A job applicant with a stellar resume may have trouble landing a great creative arts job without a portfolio or if it appears as though that portfolio includes another person’s artwork. Intellectual property theft is a significant problem for individuals in this field, so you must take every step possible to protect your work. Consulting with an intellectual property lawyer early in your college career about the best way to protect your work is a smart idea.

Physical Damage

While you understandably do not want anyone to steal your work and claim it as their own, this is not the only way that your portfolio of work may be unavailable when needed. If you do not actively safeguard your portfolio, the work can be damaged.

This may be related to a fire in your home, water damage or even a pet getting hold of it. Protecting your portfolio from physical damage is easy to do when you understand the importance of doing so. For example, you may simply store your portfolio in fireproof lock box or safe. This consequently also protects your portfolio from theft.

From a professional perspective, there are few things that are more important to a creative arts professional than their portfolio. You will begin compiling a portfolio of your work early in your college career, and this is the time when you should begin protecting it against theft and physical damage.

Now that you understand what the risks associated with portfolio loss are, you can take action to protect your work going forward. Keep in mind that you will need to continue to protect your expanding portfolio throughout your career.


How to Make Utilities Affordable on a Strict Budget in College

Posted on Jan 31, 2019 with No comments
When you’re on a tight budget, it’s so important to stay within the lines. When you don’t, it can lead to debt and more negative financial scenarios. It’s one thing to cut down on your expenses for food. There are food banks, coupons and other ways to make food stretch. However, this same concept doesn’t apply to your utility bills. Thankfully, there are ways you can make your utilities more affordable when you’re on a tight budget. Consider the following four ideas.

Limit Energy Consumption

This doesn’t mean that you’re supposed to sleep in a cold home during the winter. However, it does mean that you need to be intentional with your usage. Keep the thermostat at a consistent temperature like 69 degrees during the seasons. Use space heaters with timers for rooms that you’ll spend a lot of time in.

Wear a layer or two as well. Try to cook meals no more than twice a week. When you cook major meals ahead of time, you won’t have to heat up the stove for longer periods of time. Turn off the lights once you leave a room. Unplug your items when you’re finished watching television or using the toaster. These small tips add up.

Find an Affordable Internet Service Provider

It might be a wise idea to let go of your cable and internet package. There are many an internet service provider to choose from, so make sure you find one that works for you and your needs. Plus, you can also watch your favorite shows through inexpensive subscription programs online.

Implement Ways to Cut down on Water Usage

Check to see if there are any leaks. If water is continuously running in one of the toilets, make sure the issue is fixed quickly. Take shorter showers. It’s also a good idea to use a low-flow showerhead. It’ll help you conserve water, get clean and keep your water bill low.

Talk to Your Utility Providers

Always remember to talk with your utility service providers. Ask about any potential programs they offer that can help you decrease your monthly bill. Sometimes, it’s just about making a phone call to inquire. In other cases, they might send someone to your home in order to give a free consultation. Many utility companies will provide free consultations so that you can learn more about ways to conserve energy and spend less.

As you implement these tips and become used to them, you might find yourself preferring this way of living. When you do get some financial margin, these tips aren’t bad to maintain. After all, you can still live comfortably. The bills will be paid and you’ll get to put more money into other areas like savings or travel.


4 Plans to Save For Private Education Expenses

Posted on Jan 20, 2019 with No comments
Preparation and saving for private school tuition now is possible and more economical than financing the cost from future cash flow. While some restrictions may exist, there are tax advantaged ways of making the costs more budget-friendly and more efficient with your overall financial planning.

529 Plan

The most largely employed education savings account. Contributions are non-deductible inside a 529 plan, however they grow tax free inside the account. The contribution limitation for 2018 is $15,000 annually per contributor or $75,000 per contributor as a 5 year "pre-paid" gift. 

If applied toward qualified secondary and post-secondary education costs, distributions are tax free. There are distribution limitations for K-12 costs. The adult retains full control as the owner of the account.

Coverdell Savings Account (ESA)/ Education IRA

The non-deductible additions grow tax free inside the account. If the funds are employed for qualified education costs, distributions are tax free given they are used for qualified costs relating to private schools, but they can be utilized for both secondary and post-secondary academic expenses.

Contribution restrictions contain several factors including amount ($2,000 annually for 2018), income limits, and age limits of the minor. Contributions are deemed a gift to the child and effectively become the property of the beneficiary if they are not used for qualified educational expenses.

Regular Custodial Accounts (UTMA/UGMA)

This account is similar to the ESA in that contributions are a gift to the college student. At age 18 the student takes possession of the account. The tax benefit is different from 529s and ESAs. Distributions do not carry additional taxes as the earnings are taxed throughout the duration of the account. 

The taxation of UTMA accounts have shifted for 2018, making it very necessary to understand how this account would be taxed for you. This account usually has a dual-purpose because the goal is to pay for education with the intention that the child will receive the balance as a "graduation gift" once he/ she has completed school. The contribution limit into an UTMA is $13,000 annually per donor for 2018.

Pre-paid State Tuition Plans

Although not available in every state, some have particular plans for resident students attending an in-state university that allows for a parent to pre-pay college expenses. The adult pays for tuition at a reduced rate and can "secure" the tuition cost for that child, years in advance. This plan is seldom used, nevertheless, because of the restriction on where the child can attend. Each state program is unique and requires further study, if being considered.

As with retirement, it is important to prepare for college costs as early as possible to take advantage of long-term growth opportunities. Any one of these options will assist in saving for those costs and relieve the pressure of tuition expenses when they come due. It is recommended that one look for the advice of a Certified Financial Planner ™ expert or tax expert when deciding which plan is best for each unique circumstance.


Side Hustle: 4 Easy Ways to Make Extra Cash in College

Posted on Jan 16, 2019 with No comments
Getting money can seem like one of the hardest things in the world. It doesn’t have to be that difficult for anyone, however. If you’re clever and resourceful, earning spare cash shouldn’t be too complex for you. There are all sorts of options out there for ingenuous folks who don’t want to take “no” for an answer in life.

Throw a Garage Sale

Organizing a yard sale can help you earn spare cash rapidly and easily. All you have to do is browse through your belongings. If you find things that you no longer want or use, then you should consider selling them. Putting together a neighborhood garage sale can be excellent for people who want to unload and make money simultaneously.

Sell Your Possessions on the Internet

Selling belongings on the Internet can be suitable for people who want to easily and rapidly score spare cash. There are so many websites online that are fitting for the sales of old items. There are many auction sites that are fitting for them, too.

Create comprehensive listings for any items you wish to sell. If you want to sell an old acoustic guitar, write about it in great detail. Include clear photographs of it from numerous angles as well.

Look for a Part-Time Position

Part-time work can be helpful to people who need spare money. You don’t have to get a part-time job at a boutique or a grocery store, either. If you’re unable to find the time to squeeze in a conventional part-time position, you can think about starting a pet walking or sitting business in your neighborhood. You may be able to feed cats that are alone while their owners are away on business or on vacation. You may be able to walk dogs that have busy owners as well. Be sure to explore all of your available job paths.

Recycle Scrap Metal

Scrap metal recycling can be a superb option for people who are in need of more money. Be on the lookout for scrap metal services that are accessible to your household. You can even look around your community. Scrap metal recycling can help people simply and confidently make money. It doesn’t call for a substantial time commitment in any way, either.

Earning extra cash can make you feel smart. It can help you save for all kinds of essential purchases as well. Resourceful people can explore all sorts of money-making avenues nowadays.


Withdrawing Money From A 529 College Savings Plan

Posted on Jan 11, 2019 with No comments
Parents who've been saving for years know the benefits of putting dollars into a 529 college savings account. They get huge tax breaks on the cash. However what goes on when it's eventually time to take the money out? Financial experts at Money Magazine say there are smart techniques to accomplish it.

If you don't spend the money on a valid 529 expenditure, you'll pay income tax on the gains in the 529 and a 10 percent penalty on the amount you saved. Legitimate 529 expenses consist of common things, such as tuition and supplies, like books and personal computers. You can additionally use the money towards room and board if the trainee is registered in school at least half-time.

As you spend, be sure to keep all your receipts. The IRS may have questions later. Know that when you spend the money also make a difference. You need to spend it in the corresponding year that you make the withdrawal. That means the fiscal year, not the academic year.

If you're lucky enough to have left over 529 funds, you can avoid taxes and penalties by saving it for graduate school, moving the money to another child, a family member or perhaps apply it to advance your own education.

- Managing Your Strategies For 529 Plan Withdrawals -

Money Magazine says that in some cases you can even use 529 money towards education expenses for kids in kindergarten through the 12th grade, but only up to ten thousand dollars per child, per year. Simply be sure to get in touch with your plan administrator to find out what's covered.


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