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Education

Should You Save For Your Grandkids College?

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grandkids college

With the rising cost of college, many grandparents feel that helping their grandkids over the cost is a good idea. After all, the average tuition price public institutions rose by 4 percent in the 2019-2020 school year alone, and private colleges went up by 3 percent. In-state public tuition hit $10,116 while private colleges cost $36,801 annually. But, even with the cost rising, should grandparents contribute to their grandchild’s college? If you want to figure out if it’s a good idea, here’s what you need to know.

Can You Afford to Contribute?

First and foremost, grandparents shouldn’t save money for a grandchild’s education if they will end up in a financial bind. Unless you are maximizing your retirement savings (or, if you’re retired, have more than enough to sustain you), it’s better to focus on your needs. Otherwise, a financial gift for your grandkid could create a hardship in your end.

The Impact of Your Gift

How a grandparent saves for a grandchild’s college costs can come with certain financial implications. If you stash the money in a regular savings account, you’ll have to pay taxes on the interest. Plus, it won’t grow as quickly.

But it does give you a ton of flexibility, as you aren’t limited on how the money is used. You can also use that money to pay your grandchild’s tuition costs directly to the school. No matter the size of that payment, it won’t be subject to the gift tax for your grandchild, thanks to an IRS exception for qualifying educational costs. However, it might qualify as income for your grandkid, and that might not be ideal.

If you are considering opening a 529 plan, then there are potential drawbacks that you need to examine. While the money can grow tax-free, your gift can impact your grandchild’s FAFSA.

As with a direct tuition payment, the money can count as direct income for your grandkid. That comes penalty when it comes to financial aid. Up to 50 percent of a student’s income is considered available for college costs on the FAFSA, impacting their degree of need.

As a result, they might receive less in free financial aid, essentially undermining the value of your contribution. In some cases, this is a benefit, as it reduces a need for student loans. But, in others, it could also limit their eligibility for need-based grants or scholarships.

You can get around this income issue a bit. Instead of opening a 529 on your own or paying tuition directly, consider contributing to one owned by your grandchild’s parents. The aid eligibility reduction tends to be smaller with parent-owned accounts.

Is Saving for Your Grandkid’s College a Good Idea?

While your heart may be in the right place, you need to make sure that saving for your grandchild’s college makes financial sense for both of you. Consider whether you can actually afford it and examine the potential implications of your gift. That way, you can make a smart choice that doesn’t come with unforeseen consequences.

 

Do you plan to save for your grandkids’ college? Why or why not? Share your thoughts in the comments below.

 

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3 Fun Games About Saving Money

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3 Fun Games About Saving Money

When it comes to personal finance, saving can be the most daunting challenges one can take on. Not only is it a discipline that few come by naturally, throwing 10-20% of your money straight into a lock-box is arguably the most boring wealth building tool available. Unfortunately, though, it must be done. That being said, I have found a helpful tool in getting people started on their journey is recommending some easy games that educate users on saving their money.

Here are the three games I have found most helpful (and fun) to get the ball rolling:

 

Financial Football

A game that defies the usual platform of your average “finance” game, this Madden-esque sport simulator offers elements of traditional gaming tied in with money-saving education. Visa partnered with the NFL to bring you the most gamer-friendly learning tool out there, and I find it very engaging. The game switches between football plays and multiple-choice questions, and keeps a great balance between the two. If you enjoy football and want to learn a thing or two about saving money, this is the game for you.

Pros: Exciting gameplay, broad questions, and available on mobile.

Cons: Some football knowledge required.

google play apple store

Money Metropolis

This computer-only game is a great tool for teens. The player starts with a goal for which they want to save. This could be getting a new pet, going on a trip,  or even a shopping spree. After this, the player can adventure around the town and find ways to make money and keep up on their budget until they eventually reach it. One of the best parts about this game is the map, allowing you to choose where to go and how to get your income. As a result, your child’s creativity can keep this game new and interesting for them.

Pros: Easy, open, and great for early-teenagers.

Cons: Basic and computer-only.

https://www.practicalmoneyskills.com/play/money_metropolis

Peter Pig’s Money Counter

Got to have something for the little ones. Peter Pig will teach your 5-8 year old fun facts about money and how to count and save smaller amounts. Step-by-step your child will learn the value of different coins, how to count change, and how to save it to dress up their pig! I have seen quite a few kids love this one, and it is a terrific starting point (and distraction) for any youngin’.

Pros: Kid-friendly, easy, and one cute piggy.

Cons: Only for kids, and has a very narrow scope.

google play apple store

 

There aren’t many great games about saving money, but these gems are sure to get folks of any age ready to get started! I hope you love them as much as my family has, and pay it forward by sharing this article.

How Expensive Is Education For The Deaf?

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education for the deaf

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.

 

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What Is The User’s Liability For Unauthorized Use Of Total Visa Card?

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unauthorized total visa card

If you have unauthorized use on a Total Visa card, you may be in luck. The most you’ll be responsible for is $50, but it’s more likely to be $0.

Total Visa Card Disclosures

The fine print in the Total Visa card disclosures says, “…You will not be liable for unauthorized use of your Card or Account… Certain exceptions apply, and you may be liable for up to $50.00.”

The disclosures go on to discuss the situation when you should call and how to reach them the fastest, which is the toll-free number. The exceptions depend on how quickly you report the card lost or stolen. If you contact the company before the unauthorized use, you won’t be held liable for any purchases made after that. For example, if you lost the card and call before the unauthorized use, you won’t be held responsible. If you contact the company within two days, you may be responsible for up to $50.

FTC Rules

The Federal Trade Commission (FTC) states that if you exceed those time limits, you may be liable up to $500 or more based on how long it takes for you to report the unauthorized charges or missing Card. If it’s been over 60 days, you might be liable for all of the costs. Although, most of this won’t apply to the Total Visa Card because the limit is $300, and the disclosures clearly say up to $50. You can also check your renters’ or homeowner’s insurance policy for stolen card coverage.

Tips to Avoid Paying a Fee

To avoid owing $50 or more with any of your cards, here are some tips. First, always review your statements for any unusual charges. Also, it is a good habit to keep your receipts until the fees have shown on your statement, and you can compare the final costs. Next, once you have found an inconsistency, immediately contact the bank or credit card company. Make a note of when you called to report the discrepancy. The FTC suggests that you follow-up with a written letter or email and track all correspondence. Ask for a delivery receipt if you mail in your letter.

Next, I’d encourage you to look at your previous monthly statements for any other unusual charges, especially small ones. I recently heard of a woman that had several months’ worth of transactions that she missed because they were so little. Her credit card company dismissed them, but that is not always the case.

Avoid Fraudulent Charges

The best thing to do is to avoid potential fraud before it happens. Protect your cards and PINs. Don’t carry every card with you if you don’t need them. Don’t write your PIN down anywhere. Don’t share your card information or PIN. Avoid giving your card numbers over the phone, especially in public areas. Also, don’t give your card information during incoming calls; it might be a scam call. Mark through any blank spots on your receipts so they can’t be filled in later.

If you are using your account wisely and protecting your information, you will reduce your liability. Report any activity as quickly as possible to minimize your payout.

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5 Financial Tips to Guide You From College to The Real World

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girl in cap and gown with back turned

Nearly 4 million students are expected to earn a college degree during the 2019-2020 academic year. On average, those college graduates will likely earn just over $50,000 annually after they graduate, and that’s usually substantially more than they bring in as income while still a student. As a result, shifting from college to the real world can be a bit of a shock and surprisingly tricky. If you want to make sure you handle the adjustment properly, here are five financial tips that can help you now.

1. Figure Out a Budget (and Live Below Your Means)

Whenever your income or expenses change dramatically, it’s wise to update your budget. Or, if you were a student without a formal budget, now is the perfect time to create your first one.

For many students, their first real-world salary feels larger than it is. Plus, there is a tendency to splurge or live far beyond one means, both of which can lead to financial hardship down the line.

If you want to make sure that lifestyle inflation doesn’t harm your finances, budgeting is a must. Review all of your expenses (including student loan payments that might be on the horizon) and account for them. Additionally, dedicate some money toward an emergency fund, saving for any upcoming large purchases, and retirement. Consider living as frugally as possible and sending more money than the minimum payment toward your student loans, allowing you to rid yourself of the debt faster.

By making smart choices today, you can make sure that you are saving for the future. Plus, by living within your means, you can avoid other forms of debt.

The easiest way to budget is with automated apps that analyzes your spending and automatically saves the perfect amount every day like Digit. Digit is very easy to use. All you have to do is sign up at Digit and share what you are spending and Digit will do the rest. Digit will even alert you with the balance.

2. Get Control of Your Credit

The average graduate with a Bachelor’s degree has $29,200 in student loan debt. Plus, 36 percent of college student have at least $1,000 in credit card debt, too.

If you leave college and start living outside of your means, it’s easy for debt to get out of control. When this happens, your credit score can fall, making it hard to obtain credit in the future, leaving you with higher interest rates, and more.

Monitoring and improving your credit score now is a smart choice. That way, if you absolutely need to finance something (like a home), your score is in good shape.

Make sure you review each of your credit reports every year. At AnnualCreditReport.com, a government-supported site, you can do so for free, allowing you to spot errors or issues.

Always make your debt payments on time, as this can help your score. Additionally, avoid using credit for unnecessary expenses, opening new cards you don’t need, or maxing your cards, as those all have the potential to lead to trouble or lower scores.

3. Build an Emergency Fund

At some point, everyone faces a financial emergency. Whether it’s an unexpected car repair, medical bill, or other expense, having cash set aside gives you a safety net. Plus, if you can get three to six months of expenses stashed away, you can protect yourself against sudden job loss as well.

Start by getting at least $1,000 in an emergency fund. That way, you have a basic cushion against financial surprises. Once in place, only tap that account if you are genuinely experiencing a hardship, and replenish it as quickly as possible. Then, just keep stashing money away, allowing you to build it up over time.

4. Save for Retirement Now

As a recent college graduate, compound interest is your best friend. Since you have a substantial amount of time before you reach retirement age, even smaller contributions today can lead to big gains, all thanks to the build-up of interest or earnings over the years.

Whether you use a plan through an employer or open your own IRA, start saving for retirement now. Even if your initial contributions are small, they’ll add up and grow, making it easier to stash enough away to retire comfortably when the day arrives.

5. Leave (a Little) Room in Your Budget for Fun

If all of your money goes toward not-so-fun things, it’s easy to burn out. By dedicating some of your income towards entertainment or exciting purchases (like new furniture or a vacation), you have things to look forward to that you’ll enjoy.

While you don’t want fun to be a huge part of your budget, it should be in there. After you handle your expenses and savings goals, see how much is left and set aside a part of it for your enjoyment. That way, you can get the occasional reward for your hard work, and that will help keep you motivated.

Following these 5 financial tips can ensure a smooth transition from college to reality.

 

Do you have any financial tips that can help students transition from college to the real world? Share your thoughts in the comments below.

 

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Sorry! You Can’t Actually Start a Business for Free

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You Can't Actually Start a Business for Free

If you have dreams of entrepreneurship, don’t quit your day job just yet. As lovely as it would be, you can’t start a business for free. Here are only a handful of the fees you’ll incur to get started.

Federal Requirements

The Employer Identification Number (EIN) is one of your first steps to starting a business. To request a number for your business, you will fill out an SS-4 on paper or online at the Internal Revenue Services website. Completing the process online takes a few minutes and is free. You will receive an email with an official letter providing your EIN, which you need to keep in a safe place. You need this number to file your federal income taxes whether you’re a sole proprietor or larger entity. This number is also essential when you open a business bank account. Your financial institution will need your EIN to report any income, such as interest earned, to the IRS.

Trademarks and patents are additional costs you have to consider. They can be extremely expensive, primarily because you will more than likely need legal advice. Make sure you factor all of your needs while registering to protect your intellectual property.

State Requirements

Your next step is to register the name of your business with your state. Each state has different requirements, but a good number of them allow online filing. There are fees to register your business name, your tax status, and your trade name – “Doing Business As.” In some states, you need to register with your county for taxes too. If you plan to incorporate as a limited liability corporation, there may be additional fees. Prepare to spend two to three hundred dollars upfront, and around one hundred dollars every year to keep your business active.

You may have additional conditions based on your type of business. For example, if you plan to work in real estate in Florida, you have several requirements. You must apply, get fingerprinted, take the required courses, and pass the licensing exam within two years. These can add on over two hundred dollars, depending on your class format.

Other Costs

Keep in mind that all of these costs are before you started working in your business. We haven’t gotten to the intangibles yet. In our technology-driven world, you will need a website. Domains can run from $3 to $12 per year, depending on the site. Namecheap.com tends to have the best prices over GoDaddy and others. If someone else owns the web address you want, it could cost you hundreds or thousands to buy your specific domain.

Luckily, you can use a template to build your website. When you build your website through Wix or Squarespace, you may end up paying more because you’re purchasing through a third party. However, it is far less time consuming because coding can take a long time. Plus, the templates you can choose are attractive and come formatted for different devices.

Some other intangible costs to consider are marketing and branding. Do you want to have sponsored posts on Instagram? Are you selling insurance by having your face on a bench at a bus stop? Perhaps you want custom t-shirts or polo shirts with your logo and slogan? Your budget and preferred method will determine how much you spend.

I know this sounds like a lot, and it is. However, if you want to own your own business, think of it as an investment. Plus, all of the fees incurred that are directly related to your business are now tax writeoffs. Does that change your perspective?

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