Today’s top story: How your kids can hurt your credit. Also in the news: How to find the best financing when purchasing a new car, why baby boomers need help paying down their debt, and five banking fees that are actually worth paying.
5 Ways Your Kid Can Hurt Your Credit
Intentionally and unintentionally.
Need a New Car? Here’s How to Find the Best Financing Deal
Don’t forget to skip the “undercarriage package.”
Boomer Retirees Need a Hand Paying Down Debt
How to prioritize payments while saving for retirement.
5 Banking Fees That Are Actually Worth Paying
Some fees have long-term benefits.
How to Prepare for a Mini-Retirement
Making the big retirement picture seem less far away.
Today’s top story: AT&T agrees to pay customers over a hundred million dollars to settle claims of false charges. Also in the news: Why you should check your bills for mistakes, mortgage mythbusting, and why it may not be the right time to buy a new home.
AT&T May Owe You a Refund for Bogus Charges
The company will pay out over $100,000,000 to settle claims.
How Often Do You Check Your Bills for Irregularities?
Odds are not nearly enough.
5 Mortgage Myths Dispelled
5 Reasons You May Not Be Able To Afford A New House
Every day choices that could keep holding you back.
Can You Go Solar? Leases, Loans Make It Possible
Your electrical costs could take a nosedive.
Today’s top story: How to build credit faster. Also in the news: Debunking financial planning misconceptions, the dangers of overdraft fees, and why too many people are underestimating post-retirement health care costs.
Will More Credit Cards Help Me Build Credit Faster?
Proceed with caution.
6 Financial Planning Misconceptions — Debunked
Everyone can use a little help.
How to Avoid Paying Your Bank $70 to Borrow $6 for 6 Days
The perils of overdrafts.
Too Many Underestimate Healthcare Costs In Retirement
Planning ahead realistically is crucial.
When To Declare Bankruptcy
When to make one of life’s most difficult decisions.
Getting into an Ivy League school is basically a lottery for smart kids. There are no guarantees. Winning admission at many highly-regarded public universities is easier, but only by comparison. UCLA accepts about a quarter of its applicants, instead of the single digit acceptance rate at Harvard or Yale.
Look outside that privileged circle of “name brand,” well-known schools, though, and it’s a whole different universe. Most colleges are worried about getting enough students to enroll, not about how many they can turn away. The competition is particularly tough for small- to medium-sized private colleges that don’t have fat endowments. You can read “College is a now a buyer’s market,” my Reuters column this week, for more.
Here’s another fact you may have missed when reading breathless media accounts of “how hard it is to get into college”: where you go matters a lot less than your experience while you’re there. Elite schools apparently offer no advantage it comes to success in life.
I attended a small private college in the Pacific Northwest: Pacific Lutheran University. My alma mater recently named me one of its distinguished alumni. I was honored to be part of this impressive group, which included best-selling author Marissa Meyer and Air Force flight nurse/helicopter pilot Ed Hrivnak, who wrote the book “Wounded” about his experiences in Iraq and who was one of the first responders to the Oso landslide disaster in Washington state.
Research indicates a good reason for our success after school was the relationships we had with our professors. They weren’t far away creatures at the bottom of some cavernous lecture hall. They were accessible, they taught in small classrooms and they cared about our progress.
It’s only in the past few years that I’ve fully appreciated my college experience. For years I wondered if I should have attended a name-brand school. (I was accepted as a transfer student to Stanford, but opted not to go, since the financial aid office offered loans rather than the scholarships and grants I got at PLU.) Now I’m really glad I studied where I did.
So my advice to families contemplating college: open your eyes, and look beyond the name brands. There are some real gems out there that will be happy to have your kids and that will give them what they need to succeed.
Today’s top story: Look out for the latest IRS phone call scam. Also in the news: How social spending could be ruining your budget, why millennials should be pressing credit instead of debit, and how to extend the life of your child’s inherited IRA.
Don’t Fall for the ‘Steve Martin’ IRS Phone Call Scam
Watch out for this wild and crazy scam.
Fun And Finances: Is Social Spending Sabotaging Your Budget?
Putting your own financial well being first.
Pssst, Millennials! When You Pay, Choose Credit, Not Debit
How you could be losing out on interest.
Extend the life of your children’s inherited IRAs
Big changes could be in store for 2015.
Use Your Phone as a Piggy Bank: The 10 Best Personal Finance Apps
Putting that shiny new toy to good use.
These events are brought to you by a host of reputable organizations: the Certified Financial Planner Board of Standards, the Financial Planning Association, the Foundation for Financial Planning and the U.S. Conference of Mayors. Kiplinger is the national media sponsor.
Given how hard it can be to find good, un-conflicted advice–let alone getting it for free–these sessions can be a real boon. Even if you don’t sign up to talk to a CFP, you can attend one of the informational workshops on various financial planning topics.
Sound good? Check out this link to see if there’s an upcoming event in your area. LA and OC peeps: your events will be held Sunday Oct. 18, so register now!
Today’s top story: What you should do if you’re late with your credit card payments. Also in the news: How the homes of baby boomers could become liabilities, what 20% of tax payers are doing wrong, and why you should freeze your spending now to save for the holidays.
What to do if you’re late on credit card payment
Communication with your card company is essential.
How Baby Boomers’ Homes May Become Liabilities
A dramatic population shift could spell trouble for Boomers.
What 20% of Taxpayers Are Doing Wrong
Moving into the e-filing age.
How to Freeze Your Spending Now to Save for the Holidays
They’re right around the corner.
Apply All Your Bonuses to Principal When You Have High-Interest Debt
Getting out of debt quicker.
Dear Liz: Our grandson’s stellar high school performance and his family financial situation were such that he was admitted to his state university with grants sufficient to pay all school fees, including room and board, with no loans or work-study. His grandmother and I have a 529 account in his name that has enough money to pay about twice his estimated books and living expenses, given this level of financial aid.
His other grandparents gave him a high school graduation present of a check for four times the annual estimated books and living expenses. Does he need to amend this year’s financial aid form to reflect this generous gift? Should I suggest he put part of the gift aside for future years to diminish the effect on future financial aid?
Because of his unexpected gift, we plan to not use the funds in the 529 account until needed for his undergraduate or possible graduate school expenses. If he doesn’t need the money, we plan to transfer the balance to his younger sister’s 529 account.
Answer: Your grandson won’t have to amend this year’s financial aid forms but he will have to declare the gift on next year’s form. That could indeed reduce his financial aid package, since such gifts are considered to be the student’s income and thus will be counted heavily against him next year.
There’s not much that can be done about it now, but generous grandparents in this situation might think about holding off on their gifts until the student’s final year in college when financial aid is no longer a consideration. Paying that last year’s expenses, or paying down any student loan balances, would be a gift without repercussions.
Dear Liz: How do you prioritize financial goals on a small salary? I am 24 and a college graduate with about $40,000 in student loan debt. Because I work full-time at a nonprofit educational organization, about half of my loans qualify for the Public Service Loan Forgiveness program, so I currently only pay the monthly payment on a private loan and two other small loans. I earn a small salary, but I have always been drawn to jobs in service-oriented, nonprofit fields, and I am perfectly fine with the fact that I’ll never have a career with a six-figure salary. My problem is that after rent, utilities, student loan payments, groceries and other such monthly bills, I have very little money left over to divide among my different financial goals. I make a small monthly contribution to my company-sponsored 403(b) plan, but I’m also trying to rebuild my savings after paying out of pocket for an expensive root canal. I occasionally earn some extra cash from baby-sitting, and I live a fairly simple lifestyle — I own my used car, I walk to work — yet I feel like I’ve barely been making a dent in any of my goals — saving for retirement, rebuilding savings and paying off student loans. How can I leverage what’s left over at the end of the month to reach my goals? Would it be better to focus on one goal rather than all three?
Answer: Many people in your situation focus on a single goal hoping to make faster progress. They don’t fully realize what their single-mindedness is costing them.
Prioritizing debt repayment over saving for retirement is particularly costly. Not only do you give up potential company matches, but the money you don’t contribute can’t earn future tax-deferred returns. At your young age, every $100 you contribute could grow to more than $2,000 by the time you hit retirement age, assuming 8% average annual returns, which is the historical long-term average for the stock market. In fact, the younger you are, the more you give up by not contributing to a retirement fund. Ask any of your older co-workers if it gets any easier to save for retirement. They’ll probably tell you that they wish they’d gotten serious about retirement savings when they were a lot younger.
Building up your emergency savings may seem prudent as well, but you don’t want to do so at the expense of your retirement fund or instead of paying down high rate debt.
So here’s your game plan. Instead of divvying up what you have left after paying bills, start by paying yourself first. Contribute at least 10% of your income to your company retirement plan. Then investigate the possibilities of consolidating your private student loan into a fixed-rate loan, since rates probably will rise in the future. If you can lock in a low rate, it would then make sense to start building up your emergency savings. If you can’t, you might want to divide your money between savings and debt repayment.
It will be tough to swing all this. You may be able to make it easier by finding a roommate or a cheaper place to rent, or looking for more outside gigs such as baby-sitting until your income rises enough to allow you to comfortably pursue all your goals.
Today’s top story: The dangerous trap of online payday loans. Also in the news: How to erase your credit card late fees, the best way to ask for a raise, and how to survive financially when needing time off from work.
Consumers Warned About Pitfalls of Online Payday Loans
An immediate solution can cause long term problems.
Your Personal Finance Weapon Is Within Reach: Erase Credit Card Late Fees
Banks are showing more willingness to forgive.
The best way to ask for a raise
Practice, practice, practice.
3 Ways to Take Time Off Work Without Destroying Your Finances
How to minimize the financial damage.
J.P. Morgan says about 76 million households affected by cyber breach
Another day, another massive security breach.