Tamila McDonald

How Expensive Is Education For The Deaf?

December 13, 2019 By Tamila McDonald 1 Comment

Many people assume that education for the disabled is expensive. If you have a deaf child, getting them access to the right programs is essential. Most parents would be willing to shoulder any cost to ensure their kid gets a quality education. However, education for the deaf is actually more affordable than you may realize.

What Determines the Cost of Education for Deaf Children

How much schooling for a deaf child costs depends largely on whether the student will attend a public or private school. Public schools are bound by various federal and local laws, including some that govern education for the disabled. Offering suitable services for deaf children is mandatory, to a degree. States have to provide free appropriate public education (FAPE) to students who are deaf.

Private schools aren’t required to be tuition-free. While all private schools may have to accommodate deaf students or provide education for the disabled, they don’t have to do so without a cost. Further, they usually have control over their tuition rates, so the private school decides how much they want to charge. While they might not be able to charge more for students with a disability, as that may be deemed discriminatory, they aren’t required to lower tuition costs either.

Public School for Deaf Children

If you have a deaf child and enroll them in a state-run school, including specialty institutions for deaf students, you won’t pay anything above what a traditional public school student does. For example, there won’t be any tuition costs. However, like the parents of all public school students, you may have to help cover extra costs, like those associated with field trips or certain extracurricular activities.

Public schools are required to align with FAPE requirements. However, what constitutes as FAPE can vary. Schools with deaf students have to make reasonable accommodations to ensure the student can learn. Additionally, efforts usually have to be made to educate deaf students in a regular educational environment, when possible. As long as any supplementary aids and the severity of the disability don’t harm the learning experience for the other students, the removal of a deaf child from a regular classroom by a school might not be allowed.

However, parents may choose to put their deaf child into a specialized school. In some cases, there are state-run schools for the deaf. If your child qualifies for entry, there are usually no additional tuition costs. These are still public institutions, so the educational expenses are covered. Otherwise, parents may have to explore private schools for special education.

Private School for Deaf Children

Private schools for deaf children may charge tuition. How much it costs is determined by the institution. In some cases, the education programs are offered at no cost. Usually, schools that are tuition-free support their operations through donations or endowments alone.

However, not all private schools are free. On average, tuition for a private school costs more than $10,000. However, some private schools (not necessarily specifically for disabled students) charge up to $85,000 annually for tuition alone.

In many cases, there are other expenses to contend with, as well. For example, tuition may not cover room and board, making a private school education even more expensive for students who live on campus.

It’s important to note that many private schools for the deaf do have programs to help lower-income families afford tuition. They may use a sliding scale to reduce the burden based on a household’s income, offer institutional scholarships or grants to offset the expense, or use other approaches to make the cost manageable.

Education For The Deaf Depends on Public or Private Schools

Ultimately, how much an education for a deaf student costs depends largely on whether the child goes to public or private school. With many public schools, there are no costs beyond what any other public school student’s family would have to shoulder. With private schools, it can vary. Some are tuition-free, while others are not. For those that charge, rates can be anywhere from a few thousand dollars a year to tens of thousands of dollars annually.

If your child is deaf, it is vital that you remember that you do have options. You can get a quality education without having to pay for anything. However, there can be benefits to a private school education. Determine what you can afford and what’s best for your child. Then, use that information to make a decision.

Do you pay more money for the education of a deaf child? Do you find the cost hard to manage? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Start The New Year With These Savings Goals

December 12, 2019 By Tamila McDonald Leave a Comment

As 2020 draws nearer, people begin planning their New Year’s resolutions. If you want to focus on financial fitness, having a few savings goals in the mix can be a smart move. That way, you can prepare for what the future may hold and improve your situation. If you aren’t sure where to begin, here are some new year savings goals to add to your list for the new year.

Saving Habit – New Year Savings Goals

If you’ve struggled to save in the past, make 2020 the year you create a new savings habit. Look at your budget to figure out how much you can set aside. Then, use an automatic transfer to shift that amount from your checking into a savings account on a regularly basis, such as once a month or every payday.

Even if it’s only $10 a month, it’s a great place to start. This goal isn’t about putting a specific amount away. Instead, it’s about creating a new habit. You just want to make contributing to your savings account something you always do, making it feel normal. That may make it easier to sustain after a little time passes.

Create an Emergency Fund

Another great goal for anyone who doesn’t have much in liquid savings to build an emergency fund. Having as little as $1,000 in the bank can make weathering financial emergencies easier. You’ll have cash available if you need to pay an insurance deductible, handle an unexpected car repair, deal with a medical bill, or anything else that might otherwise derail your budget. Plus, it can help you avoid debt, which is a bonus.

If you already have $1,000, then take your emergency fund to the next level. Ideally, you want three to six months of expenses covered by an emergency fund. That way, if you experience an unexpected job loss, you can stay afloat while you seek out something new.

Max Out Your Retirement Savings

If you have a 401(k) or IRA, make 2020 the year you reach the contribution maximum. For 2020, you can save up to $19,500 in a 401(k) or $6,000 in an IRA. If you’re age 50 or older, you can also sock away $6,500 or $1,000 more as a catch-up contribution, respectively.

For anyone where maxing out a retirement account isn’t plausible, just aim to save as much as possible. Consider increasing your current contribution by 10 percent. If you don’t have any retirement savings, make 2020 the year you open one. Getting started with an IRA can be fairly simple, and they are available at a range of financial institutions.

Start Saving for Big Expenses

Many people know that they have a big expense on the horizon. If you fall in that category, make saving for it a goal. Whether you want to fund a vacation, plan for a roof replacement, set money aside for a wedding, or get ahead by launching a 2020 Christmas fund, why not start now? Just divide the amount you need by the number of months you have until you need to pay the cost, and set the cash aside on a monthly basis. Then, when the day arrives, you’ll have what you need.

Reduce Your Expenses

If you’re having trouble finding money to support your savings goals, free up more cash by cutting back. Get rid of unnecessary streaming services or cable packages. Use sales flyers to plan your grocery trips. Drive less to reduce your fuel costs. Be mindful of your utilities usage.

By finding ways to cut back, you are creating room in your budget. Then, you can redirect that money toward your goals, allowing your everyday savings to help you achieve your ideal financial future.

Ultimately, creating savings goals can help you stay on target during 2020. Consider what you want to achieve and make an actionable plan. That way, you can make your New Year’s resolutions a reality.

Do you have your own new year savings goals for 2020? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Can An Unused Fingerhut Account Affect Your Credit Score?

December 11, 2019 By Tamila McDonald Leave a Comment

Fingerhut has been around since 1948. The company operates largely by extending shoppers credit lines that can be used to buy items from the Fingerhut catalog or at select partner businesses. Over time, a shopper may even qualify for a credit card that can be used anywhere. But not everyone continues to use Fingerhut. It isn’t uncommon for people to leave their accounts sitting open and unused. If you’re wondering whether an unused Fingerhut account affects your credit score. Here’s what you need to know.

How Fingerhut Credit Options Work

Mainly, Fingerhut targets consumers with less-than-perfect credit histories. Many have turned to the company to make purchases or even try and improve their credit scores. The company offers two main credit options: an installment loan and a store credit card-style account.

With the installment loan, the credit line is somewhat finite in nature. Usually, this account helps borrowers show that they can repay what they owe responsibly. After making a purchase, the borrower repays the principal and any applicable finance charges. Then, once they finish repaying, they might qualify for the store card-style account.

The credit account functions like a store credit card. It’s revolving, so users can make additional purchases whenever there’s enough room on their account. This option comes with a pretty high annual interest rate of 29.99 percent.

If a borrower keeps using their Fingerhut credit account responsibly, they might be able to convert their store card into a regular credit card. Then, they can use it at stores besides Fingerhut.

Fingerhut Credit Bureau Reporting

No matter which kind of account a borrower has, Fingerhut reports the activity to all three major credit bureaus. This means the size of the credit line, as well as other details, like payment history, make their way onto your credit report.

Depending on how a borrower uses or treats their Fingerhut account, they can impact their credit score. For example, making all of your payments on time and not maxing out your credit line could boost your score if you don’t have great credit. In contrast, reaching your credit limit or missing payments could hurt your score.

How an Unused Fingerhut Account Affects Credit Scores

If a revolving credit account is unused but open, it still impacts your credit score. First, the limit on that account is part of your available credit, a number that shows how much credit you can access practically immediately. Second, it affects your credit utilization ratio, a reflection of how much available credit you have, and how much credit you are using.

Both your available credit amount and credit utilization ratio are part of your credit score calculations. In some cases, your available credit amount can harm your credit or, at least, make it harder to obtain new credit. However, that depends on a variety of factors, including how large your Fingerhut credit line is and how much other credit you have available.

The impact of your credit utilization ratio can be fairly dramatic. If your unused Fingerhut account helps you keep your ratio low, say at 30 percent or less, it’s having a positive impact in that area. If, by closing your Fingerhut account, your credit utilization goes up substantially, then leaving it open might be a better choice.

Finally, your Fingerhut account’s age plays a role in your credit score. The average age of your accounts does impact your credit. Usually, the higher the average age, the better. If closing your account lowers the average age of your open accounts, such a move could cause your score to fall.

Should You Close an Unused Fingerhut Account?

Whether closing a revolving Fingerhut account is a smart idea depends on your unique situation. If leaving it open means you are tempted to acquire more debt, you might want to shut it down to avoid that situation.

Otherwise, you need to examine your situation carefully. For example, are you planning on opening a new credit account in the near future? Would closing the account dramatically raise your credit utilization ratio? Is your current credit score good, great, or exceptional, and could potentially weather a slight decrease?

Every person’s credit score situation is different. You need to examine how various factors might raise or lower your score. That way, you can decide if closing the account is right for you.

Do you have an unused Fingerhut account? What about a credit card? Are you worried about how it impacts your credit score? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Here are the 2020 Income Tax Brackets

December 6, 2019 By Tamila McDonald Leave a Comment

While 2019 has yet to formally come to a close, many people still want to look forward. As they begin to prepare their taxes for the 2019 tax year, filers who want to get ahead for the 2020 tax year should start planning. By understanding the 2020 income tax brackets, you can make wise choices regarding your income, possible deductions, retirement plan contributions, and more. Here’s a look at what 2020 has in store.

How Tax Brackets Work

Many people wrongly assume that their tax bracket dictates the rate they pay on all of their income. However, that isn’t how the tax system works. Instead, the rate only applies to the income within that particular range. For example, single filers who have $12,000 in taxable income during the 2020 tax year mistakenly believe that they owe 12 percent on all of it – which would make their owed tax total $1,440 – but that isn’t the case.

In 2020, the person above will pay 10 percent on the first $9,875 of their taxable income, even if they earn more. That $9,875 falls into the first tax bracket, which has a 10 percent rate. They only owe 12 percent on the taxable income above $9,875 up to the $40,125 mark, as the amount above $40,125 goes into the next higher bracket).

A person who earns $12,000 during the tax year will pay 10 percent of the first $9,875, or $987.50. Then, they owe 12 percent on the remaining $2,175, or $225. That makes their total $1,242.50.

This makes tax brackets look fairly complex. However, once you understand how they work, it’s possible to handle the calculations, allowing you to plan.

2020 Income Tax Brackets for Single Filers

If you aren’t married during 2020 and don’t qualify as a surviving spouse or head of household, the following tax brackets will apply:

Income from $0 to $9,875 – 10 percent
Income from $9,875 to $40,125 – 12 percent
Income from $40,125 to $85,525 – 22 percent
Income from $85,525 to $163,300 – 24 percent
Income from $163,300 to $207,350 – 32 percent
Income from $207,350 to $518,400 – 35 percent
Income above $518,400 – 37 percent

2020 Income Tax Brackets for Head of Household Filers

If you aren’t married but provide financial support or a home to a qualifying relative – such as a child or parent – you may qualify as a head of household. This gives you a different filing status, and you’re tax burden will align with the brackets below:

Income from $0 to $14,100 – 10 percent
Income from $14,100 to $53,700 – 12 percent
Income from $53,700 to $85,500 – 22 percent
Income from $85,500 to $163,300 – 24 percent
Income from $163,300 to $207,350 – 32 percent
Income from $207,350 to $518,400 – 35 percent
Income above $518,400 – 37 percent

2020 Income Tax Brackets for Married Filing Jointly Taxpayers

If you are married and you are filing jointly with your spouse, you’ll use these brackets. Additionally, surviving spouses may be able to use these brackets for a period following the death of their spouse:

Income from $0 to $19,750 – 10 percent
Income from $19,750 to $80,250 – 12 percent
Income from $80,250 to $171,050 – 22 percent
Income from $171,050 to $326,600 – 24 percent
Income from $326,600 to $414,700 – 32 percent
Income from $414,700 to $622,050 – 35 percent
Income above $622,050 – 37 percent

2020 Income Tax Brackets for Married Filing Separately Taxpayers

Married couples do have the option of filing separate returns. If you choose this route, here are your tax brackets:

Income from $0 to $9,875 – 10 percent
Income from $9,875 to $40,125 – 12 percent
Income from $40,125 to $85,525 – 22 percent
Income from $85,525 to $163,300 – 24 percent
Income from $163,300 to $207,350 – 32 percent
Income from $207,350 to $311,025 – 35 percent
Income above $311,025 – 37 percent

2020 Trust and Estate Tax Brackets

Not everyone is aware that trusts and estates pay income taxes, but they do. Any retained income (money that isn’t distributed to beneficiaries) are taxed based on the following brackets:

Income from $0 to $2,600 – 10 percent
Income from $2,600 to $9,450 – 24 percent
Income from $9,450 to $12,950 – 35 percent
Income above $12,950 – 37 percent

Why Do Tax Brackets Change from One Year to Another?

There are several reasons why a tax bracket may change. In some cases, they are adjusted for inflation, reflecting the shift in the buying power of a dollar. In others, Congress and the President pass legislation that alters the brackets. For example, the tax reform efforts that happened as 2017 drew to a close are affecting the 2020 tax brackets. That legislation will keep having an impact until the start of 2026 unless new action is taken prior to that time.

Planning for Your 2020 Taxes

By referring to the brackets above, you can estimate your 2020 tax bill. However, if you do decide to perform the calculations, it’s important to remember that these brackets apply to your taxable income, not all of the money you make. You’ll need to account for any deductions you may receive to determine what your taxable income will look like in the coming year to get a more accurate picture.

It’s also possible to use the tables above to see how certain financial moves impact your tax bracket and rates. Certain deductions, like contributing to tax-deferred retirement accounts, reduce your taxable income, and are under your control, at least to a degree. For example, you can see how contributing various amounts (up to the maximum) to a tax-deferred retirement account impacts your tax bill, allowing you to decide how you want to fund that account in 2020.

Ultimately, the brackets above are a potential planning tool. It allows you to make wise choices that could lower your tax burden or understand how certain financial situations will affect what you owe. That way, you can have more control over what you pay or, at least, be prepared for the bill that will inevitably come.

Do you worry about your tax bracket? Why or why not? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Lower Your Tax Bill With These 5 Moves

December 5, 2019 By Tamila McDonald Leave a Comment

While the new year is on the horizon, that doesn’t mean your tax bill is set in stone already. There are certain moves that you can make now that will reduce what you owe. However, you may need to act quickly if you want to benefit from those financial choices this tax year. Here’s a look at five moves that can help you lower your upcoming tax bill.

1. Fully Fund a Tax-Deferred Retirement Account

If you have reached the maximum contribution limit on your tax-deferred retirement account, you still have time. By fully funding your 401(k) or traditional IRA, you are reducing your taxable income, lowering your tax burden.

In 2019, you are allowed to contribute up to $6,000 in an IRA and up to $19,000 in a 401(k). Those over the age of 50 can also make catch-up contributions, essentially increasing the maximum they can sock away in those accounts and the associated tax benefit. For IRAs, the catch-up is an additional $1,000. For a 401(k), it’s an additional $6,000.

By maxing out your contributions to a 401(k) and an IRA, if you’re 50 years old or younger, you could reduce your taxable income by $25,000. Those over 50, you could potentially reduce it by $32,000 by maxing your contributions and adding in the catch-ups.

2. Don’t Overlook Itemizing

While the standard deduction amount means many tax filers won’t benefit from itemizing their deductions, that isn’t the case for everyone. If you want to find out which route is best for you, you’ll need to do the math.

If you’ve had medical expenses that exceed 10 percent of your income, have donated a significant amount to charity, or have enough potential deductions that could push you over the threshold if you itemize, then it’s worth seeing if this approach could benefit you. Additionally, if you realize that you are very close to the standard deduction when you itemize, you could potentially make financial moves to push your itemized total over the threshold (such as donating more to charity or handling a medical issue you’ve been putting off), allowing you to claim a bigger deduction.

This option might be particularly beneficial to those who can handle certain deductible actions for 2020 before 2019 ends. For example, if you usually donate a certain amount to charity each year and you did so in 2019, then consider making 2020’s donation now if it will push you over the line.

3. Claim Every Deductible Business Expense

Many business owners and self-employed individuals have a wide range of deductions they can claim. However, many people miss out on some because they didn’t realize it was an option. Additionally, some filers forgo a deduction because they are worried they’ll get audited, even if it would be completely legal.

As long as a taxpayer is following the rules laid out by the IRS, they should never skip a deduction. If the deduction is legitimate, even if they are audited, they should come out on the other side without a penalty. Just make sure you are ready to prove that you are complying with the laws, which typically isn’t as difficult as it sounds, by being aware of the requirements, preserving the right records, and otherwise having evidence regarding why your action was legit.

4. Unload Losing Investments

If your portfolio is being weighed down by some losing investments, now might be the time to unload them. By selling, you may be able to deduct the losses, effectively offsetting a portion of your taxable gains on your other investments.

It’s important to note that selling an investment solely for a tax deduction isn’t typically a smart choice. If you wanted to get that stock back within 30 days, the IRS could actually take back your deduction, altering your tax bill. As a result, it’s best only to sell investments that no longer work for your portfolio.

5. Stash Cash for College

If you need to save for your education or a child’s future schooling, putting the money into a 529 plan can lower your tax burden on the state level. While there isn’t a federal deduction for investing in a 529 college savings plan, if you live in a state that has an income tax, this can be a smart move for reducing your overall burden.

Just be aware that, if you aren’t the beneficiary, you could encounter gift tax consequences when you contribute to a 529 plan. If the amount you put in the account along with the value of any other financial gifts exceeds $15,000, gift taxes could kick in, creating a different kind of tax burden.

Ultimately, all of the tips above can help you lower your tax bill this year. Consider all of the options above and see if any would benefit you.

Do you know of other ways a household can lower their tax bill? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Why Three Months Worth Of Income Is Required When Buying A House

December 4, 2019 By Tamila McDonald Leave a Comment

Most aspiring homeowners know that you need to have some cash set aside if you’re buying a house. Along with a down payment, earnest money and home inspections mean you typically have to front some cash as the process moves forward. Plus, you might need to cover closing costs. Especially, if you aren’t getting those covered by the seller. However, not all who attempt to walk the path toward homeownership are aware of the need for a cash reserve, too. It isn’t uncommon for banks to want two to three months’ worth of income available after the home buying process is over. If you’re wondering why that is. Here’s what you need to know about the cash reserve requirement.

What Is a Cash Reserve?

When it’s associated with the home buying process. A cash reserve is an amount of money that would be in savings after the purchase is complete. It represents the amount that would still be available in liquid assets after you cover the inspections. As well as down payment, closing costs, and any other expense that comes with getting a mortgage and buying a home that comes out of your pocket.

What qualifies as a liquid asset can vary from one lender to the next. However, this usually includes money in savings and checking accounts. As well as certain investments and select retirement accounts. If the value of an account could be turned into cold, hard cash quickly, it may count as a liquid asset.

How Big Your Cash Reserve Needs to Be

Each lender can dictate the required size of your cash reserve. As long as it follows the rules for your mortgage type. For a VA or USDA loan on a house that will be the buyer’s primary residence, there isn’t usually a cash reserve requirement. If you are getting an FHA loan, it’s generally at least three months of mortgage payments.

With a conventional mortgage, you might see a wider range of cash reserve minimums. Some lenders only require two to three months’ worth of mortgage payments to be available. Others make two to three months of income mandatory. At times, you might even need six or 12 months set aside.

It’s important to note that the kind of property you purchase can play a role. If you are buying a house that you’ll use as a primary residence, you might have a smaller cash reserve requirement than if you purchase a vacation home or investment property.

Additionally, your credit profile may also be a factor. Those with stellar credit might be able to have less in a cash reserve than those with good or fair credit. The loan-to-value ratio is also taken into consideration when a lender set the mandatory minimum, so those who make substantial down payments might encounter a less demanding cash reserve requirement.

Why Lenders Require Cash Reserves

Having a cash reserve after a home purchase benefits both the buyer and the lender. It ensures you have money available to handle the unexpected, decreasing the odds that a financial hardship will cause you to miss a mortgage payment.

Essentially, your cash reserve gives the lender peace of mind. When you secure a mortgage, the lender is taking a risk. With that money stashed away, the risk may seem less daunting as they will be fairly certain that you can keep up with your payments even if a financial emergency strikes.

Buying a House-Cash Reserve May Be Mandatory

While building your cash reserve might be challenging, it’s a necessity if your lender makes it mandatory. However, you might be able to explore other lenders or loan types to bring the amount down, though that isn’t always an option.

Ultimately, it’s wise to learn about cash reserve requirements in advance and work to get some money set aside. That way, you can be ready for whatever the lender requires, ensuring you can move forward when you find your ideal property.

Do you think having three months’ worth of income before you can buy a house is reasonable? Why or why not? Share your thoughts in the comments below.

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.