New financial aid tool helps families determine whether they will qualify for federal financial aid
May 31, 2007
Last month, the federal government launched a new online tool to help families predict whether they’ll qualify for federal financial aid. Called the FAFSA4caster, it’s modeled on the government’s official aid application, the FAFSA (which stands for Free Application for Federal Student Aid).
The FAFSA4caster estimates a family’s expected family contribution to college costs and notes whether a family will qualify for the federal Pell grant program, allowing families to plan ahead for the cost of college. To use the tool, parents will need to enter their child’s Social Security number, as well as their own tax and financial information.
When you’re ready to apply for aid, you can easily transition from FAFSA4caster to FAFSA on the Web. Much of the information that you enter in the FAFSA4caster will populate your FAFSA on the Web application, making the experience of applying for federal student aid a lot easier.
To see the tool, visit the Department of Education’s website at www.fafsa4caster.ed.gov.
Tags: financial aid, federal financial aid, pell grant, fafsa
10+ Ways to Save on Fuel
May 29, 2007
by Jenny McKinney and Patrick McKinney, Retirement Planning Guides at About.com
With the price of gasoline constantly increasing, we are all looking for ways to save on this necessary liquid. If you own a gas guzzler, you might need to look for all the help you can get just to be able to afford the fuel for necessary trips.
Here are 10+ ways to help save on fuel. If you have some tips you’d like to add, email them to Jenny and Patrick at retireplan.guide@about.com.
1. Be sure your tires are inflated to the correct pressure. Your owner’s manual will tell you how much air you should have in each tire.
2. If you get a discount for using a store card, use it. If you get a discount for a credit card, use it only if you plan to pay off the balance when it’s due. Your savings on gasoline might be lost if you have to pay interest.
3. Keep your highway speed to around 55mph. Faster speeds can consume more gasoline.
4. Don’t accelerate up and down while driving. Try to keep a constant pressure on the gas pedal.
5. Plan your trips. If you have to drive very far to the market, make sure you purchase everything you might need for several days.
6. Have your automobile checked by a reputable mechanic to be sure it is tuned up and running it’s best.
7. When possible, walk instead of driving. It’s healthier and will save gasoline.
8. Carpool whenever possible.
9. Keep your car clean and waxed. Dirt and grime can cause a small decrease in gas mileage.
10. Watch for things that can obstruct the air flow on your automobile. Things such as the car top carriers can reduce gas mileage.
11. Use cruise control if you car is equipped with it.
12. Let the kids ride the school bus insead of driving them to and from school.
13. Never let you car run while you dash into the store, post office, etc.
14. Use your air conditioner instead of opening the windows while driving at high speeds.
It’s hard enough to save money for retirement without having to spend unnecessarily on the necessities of life. Almost everyone has a car and relies on gasoline or some type of fuel so it makes sense to try to economize whenever possible. We should really try to save on fuel even if it weren’t so expensive.
Wondering what prices are at some of the stations across the country? fueleconomy.gov is a handy web site that will answer your questions.
Vanguard changes their fee schedule
April 27, 2007
Vanguard has eliminated several account related fees and replaced them with a single account service fee, effective April 26, 2007.
Here’s a summary of the changes:
The following annual $10 account-related fees have been eliminated:
- The custodial fee on traditional IRAs, Roth IRAs, and SEP–IRAs with a balance of less than $5,000.
- The maintenance fee on index fund accounts with a balance of less than $10,000.
- The custodial fee on education savings accounts (ESAs) with a balance of less than $5,000.
- The low-balance fee on all nonretirement accounts with a balance of less than $2,500.
These fees have been replaced with a single account service fee. This $20 fee will be charged annually for each Vanguard® fund in which you have a balance under $10,000 in an account.
The annual account service fee can be avoided by:
- Signing up for account access on Vanguard.com® and choosing electronic delivery of shareholder materials, including statements, confirmations, fund reports, and prospectuses.
- Consolidating your accounts or investing additional assets to bring all account balances in all funds to $10,000 or more.
- Maintaining total Vanguard mutual fund assets of $100,000 or more.
To learn more about Vanguard’s new fee policy, please click here.
Tags: investment fees
Best Deals on Student Loans
April 27, 2007
I’ve gotten a lot of questions about the FAFSA form lately, as well as the best student loans to get.
Kiplinger.com has a great article on student loans right now. Some tips shared include:
- Determine which type of school your family can afford
- Set a realistic limit on how much debt you can afford
- Stick with the Federal loan programs – Perkins, Stafford and PLUS loans
- After you’ve exhausted your options in Federal loans, get a list of lenders from the school, or from FinAid (www.finaid.com)
This is part of a series of articles on paying for college. Click here to see the full text of this article, Best Deals on College Student Loans. Click here for last weeks article, Smart Ways to Pay for College. Next weeks article will focus on the best loans for parents.
Tags: saving for college, student loans, college loans
Small Ways to Save Big
April 2, 2007
Kiplinger.com has a great article on 20 Small Ways to Save Big by Jessica Anderson.
You’ve heard of the savings crisis in America. You’ve probably even thought, ‘yeah, I should probably save more.’ But eking out an existence is tough on a starting salary and sometimes comfort takes precedence over cutting corners. Besides, if you can only save $50 or $100 a month, is it really worth it? The answer: absolutely.
Tags: saving money, saving crisis
Coping with market fluctuations
March 6, 2007
You’re probably aware that the stock market fell 400 points last week. How did you handle the drop? Did you panic and sell, or did you hold tight?
Market cycles are normal and should be expected. You shouldn’t allow your emotions to influence your investing decisions. Remember these important points when making investment decisions:
Diversify to reduce risk. Spread your investments among various asset classes (stocks, bonds, cash) based on your goals, time frame and risk tolerance. If your portfolio is properly diversified, a decline in one asset type will be balanced out by a gain in another asset type.
Focus on long term goals and your overall portfolio. Short term blips are insignificant if you are investing for 10, 20 or 40 years. In addition, it’s more important how your overall portfolio performs than how each individual investment performs. Remember, 90% of your investment return is determined by how your portfolio is allocated, rather than the individual investments you choose.
Make market fluctuations work for you. If you are in the accumulation phase, take adantage of a market drop to buy investments. Remember the old adage "buy low, sell high"? The best time to buy low is right after a market drop. If you are close to retirement, use market fluctuations to evaluate your portfolio for appropriate risk tolerance and diversification. If the drop in your portfolio was more than you can tolerate, consider rebalancing to an asset mix that is more appropriate for you – however, don’t make any rash decisions; wait a few days and use dollar cost averaging so that you don’t sell low and buy high.
Here are some great articles addressing the market drop last week, and how to handle financial anxiety:
How to cope with financial anxiety
Market misbehavior calls for wary eye, not grounding
Several tax law changes not included on 2006 forms
February 14, 2007
Be careful if you are preparing your own tax return this year; there are several tax deductions, credits and other provisions that are NOT listed on the tax forms.
The Tax Relief and Health Care Act of 2006 was passed in December 2006, after the IRS completed and printed the tax forms for 2006. Fortunately, several tax provisions that were scheduled to expire were extended, and several new tax provisions were created by this tax act. Unfortunately, since the IRS had already printed the tax forms for 2006, these new and extended tax provisions are not included on the forms.
The provisions that will affect most taxpayers are the tuition and fees deduction, teacher-related expenses, and the deduction for sales taxes paid.
Most tax software will have updated information on these tax provisions, so you should use tax software or see a tax professional to have your taxes prepared this year. You should not attempt to prepare your return by hand this year, or you could miss a deduction/credit that was passed after the forms were printed.
For more details, see IRS Notice IR-2006-195, or visit the IRS website at www.irs.gov
Tags: income taxes, tax act, tax preparation
50 Ways to Cut Health Care Costs
December 20, 2006
Just ran across the article 50 Ways to Cut Health Care Costs on CNNMoney’s website.
As fast as health care costs are rising, I think it’s a good idea to educate yourself about your health care costs and how to cut them.
#3 Pay up front, in cash – I have done this several times, and have gotten a 15% discount as a result. If it’s a cost that won’t be covered by insurance (because you have a high deductible), then it benefits you to pay up front to get the discount.
#10 Visit a retail health clinic (such as CVS and Walmart) – I haven’t had any reason to do so yet, but it’s nice to know that I have somewhere else to go for poison ivy, the flu, or other small ailments that’s less costly than a visit to the doctor.
#18 Consider an HSA – although these aren’t right for everyone, I have an HSA and love the savings (lower premiums and a tax break).
Click here to read the full article: http://money.cnn.com/popups/2006/moneymag/healthcare/index.html
Beware the High Cost of Payday Loans
December 16, 2006
I noticed that a payday loan store moved into my neighborhood recently, then I looked around and realized there are several in my area.
This made me wonder… how profitable are these payday loan places, that they are popping up on every street corner? I’ve heard that payday loans charge high interest rates, but I had never really researched this info before now.
Here’s what I found out…
First, if you’re not familiar with payday loans, basically, they are short-term loans, usually in small amounts. Typically, you write a check for the amount of the loan plus fees, and the lender cashes the check on a specified date, usually one to four weeks later.
Here’s an example: you need $100 to pay your bills so you borrow $100 from a payday loan company. You write a check for $115 and leave it with the lender, to be cashed in two weeks. Your fee for that loan is $15 – that is an annual percentage rate (APR) of 391%.
Although the Truth in Lending Act requires lenders to disclose the finance charge, including the APR, many consumers do not understand the true cost of a payday loan. To continue the example above, let’s assume that you can’t pay the $115 when it comes due. The lender allows you to roll the loan over for another two weeks, but you pay another fee each time you do this. If you rollover the loan in the example above three times, your total finance charges would be $60, for a $100 loan. That equates to an APR of more than 1000%!
As you can see from the example this a very costly way to borrow, even when compared to high interest credit cards. If you find yourself in a cash bind, here are some alternatives to payday loans to consider: a personal loan from a bank or credit union, a personal loan from family or friends, a cash advance against your credit card, a cash advance from your employer, etc.
PMI Insurance: New Tax Break Helps with Mortgage Insurance Premiums
December 15, 2006
Uncle Sam is now going to help you pay your mortgage insurance premiums!
Mortgage insurance is typically required when home buyers purchase a new home with less than 20 percent down.
The newest tax legislation allows taxpayers to deduct premiums paid for mortgage insurance. Mortgage insurance premiums typically range from $50 to $150 per month, which could mean a $600 to $1,800 deduction on your tax return.
This deduction is only available to taxpayers who itemize, but many home owners (especially if you’ve just purchased your home) have enough mortgage insurance, real estate tax, and other deductions to itemize.
Prior to this tax law, only the interest paid on a mortgage was deductible.
This deduction won’t help everyone. The deduction will be limited to taxpayers with adjusted gross income below $110,000.
Finally, you’re out of luck if you are already paying mortgage insurance. This deduction will only apply to mortgage insurance contracts issued in 2007, and it’s set to expire on December 31, 2007.
For more information on the mortgage insurance premium deduction and the tax law, please visit:
http://www.mercurynews.com/mld/mercurynews/business/personal_finance/16217445.htm