Hope for your financial life and beyond

Here’s What a 529 College Savings Plan Covers

It’s no secret the cost of college has and continues to skyrocket. It makes it very difficult to go to college debt free. This is especially true if you do not start saving early enough. If you can start saving though, you have some options. A 529 college savings plan is one of the smartest investments you can make for your child’s future success.

college savings planA 529 college savings plan is a state-administered plan. The IRS does not tax withdrawals, as long as they are made for qualifying educational expenses. As an added bonus, a 529 plan can be used for a beneficiary’s tuition expenses for elementary through high school, in addition to college, graduate school or trade school.

The rules change however, when a withdrawal is made that the IRS doesn’t consider a qualifying expense. 529 college saving plans are federally taxed, even though they are administered at the state level. If you want to use the plan to pay for a non-qualifying expense, the withdrawal will incur a 10% penalty and receive the federal tax.

That’s why you should be absolutely sure which withdrawals qualify. So here is a brief guide to assist in your decision-making on whether this type of plan is right for you. 

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Secret Advice For Teenagers Who Love to Spend Money

You know who you are – a teenager who loves to spend money like it’s going out of style. You spend money faster than it takes a Snapchat to disappear. Money comes into your hand one minute and flows out like water the next.

spend moneyAnd you like it that way!

If that’s you, I have some special advice today. It’s unusual, maybe even secret advice. I’m pretty sure you’ve never heard any adult say this to you before. In fact, your parents may hate me for saying this because it might go against how they have instructed you to handle money. So I’m actually running a big risk here.

But before I reveal this big secret about spending your money, you have to promise me something.

The promise I’m asking you to make is to read this entire post. You are going to love what I have to say about spending money,  but you can’t take it as stand alone advice without understanding the bigger picture. As they say, the devil is in the details. So I’m asking for five minutes of your time to help you avoid a huge potential failure when spending money.

Ready for the big, secret advice? OK, here goes…

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The 10 Best Summer Jobs for Teens and College Students

Memorial Day marks the official beginning of summer. For teens and college students that means one of three things. Either you are:

a) continuing school by choice (to get ahead) or out of necessity (because you failed)… summer jobs for teens

b) looking for a summer job to earn money or…

c) in for a really boring summer sleeping in and playing video games.

We all know that teens and college students love money. But we also know that some of them NEED money in a bad way. They have lots of expenses, from gas for the car, to eating out with friends, to paying for college tuition and expenses. Many times, parents are unable to fully fund (or refuse to fund) these expense categories. So teens and college students are left to support themselves. And the time to rack up the big money in a paycheck is over the summer when they are out of school.

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Should I Save For Retirement or the Kid’s College First?

I’m a very linear person. My default mode is to move in a chronological order, doing things step by step according to a predetermined plan. So it’s confusing when trying to decide whether to save for retirement first or our kid’s college.

save for retirementOn the one hand, it’s been drilled into me that saving for retirement is important. However, I know the costs of college tuition are increasing every year with no end in sight. I’d love for my kids to graduate from college debt free and feel an obligation as a parent to help with some of my own money to make that happen.

College is a nearer-term goal than retirement. That fits with my linear life narrative. Prepare for the financial situations that are coming sooner and push off financial decisions that can be made later. For most people, college costs will come before retirement costs so shouldn’t we be focusing on that first?

It seems logical to prepare for college first but I’m going to suggest today that we should do the illogical. The exact opposite should happen. Save for retirement first and college second.

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Does God Want Me To Attend College?

Every fall like clockwork, the same ritual happens during the months of August and September – students return to high school. Each year a special group of these students enter their senior year, excited about wrapping up one of the most exciting times of their life thus far. And chief among their thoughts as they start their final year of high school is this question, “Should I go to college or not?”

should i go to collegeFor people of faith, there is an underlying component to this question that sometimes factors into the answer to the college question. That element is this – “Does God want me to go? Does He really care if I attend college or not?” Mom and dad sure have made it clear they think it’s important. They’ve been pounding the table for months to get those applications finished.

But what about God? Does He even have an opinion on college?

To those with no religious inclination this may seem silly. Why consult a higher power at all about a non-spiritual issue like whether or not to attend college? I understand that line of thinking.

However, for those who value their relationship with God, it’s huge for several reasons.

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20 Flexible Part Time Jobs For College Students

Every fall about this time, parents are gearing up to send their kids back to school. In some cases, that means sending them to college. It’s an expensive proposition putting a child through college. But there are so many part time jobs for college students that can help bring in some extra spending money.

part time jobs for college studentsMore than likely, students have figured out how to finance college tuition, student fees and room and board. However, there are so many hidden costs of college for which students don’t prepare. These little incidental items can certainly add up. So, unless an endless stream of cash is flowing from mom and dad, students will need to secure some extra spending money.

The big question though is, what part time jobs can reasonably be done by college students? Yes, you could work a full-time job and attend classes but that’s not what most students are looking for. The average student just wants enough spending money to go to parties, put gas in the car and pay for their books.

With that in mind, here is a list of 20 part-time jobs and activities that could earn a college student a little bit of extra spending money.

Part Time Jobs for College Students: On Campus

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Choosing the Right College Starts by Answering These Questions

Choosing a college at 18 years of age presents a daunting challenge. For most high school students, the decision represents the most difficult one they’ve ever made. With so many choices, it’s easy to lose a few hours of sleep trying to sort it all out.

choosing a collegeOur first child is beginning the college search right now. She’s not losing sleep over it, thank goodness. However, with so many options it’s easy to not know where to start.

Information from the College Board shows there are approximately 4,000 private and public, two or four-year colleges and universities in the United States. Whittling that number down to a manageable few is some task. How can a high school student narrow their list so they can select the right school?

I did it by asking questions.

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The Hidden College Debt Statistics You Never Hear About

The cost of college continues to expand with each passing year. With it, so does the amount of student loans being processed. It’s leading to an alarming amount of college debt that is hamstringing the life of graduates.

college debtBy now I’m sure you’ve heard the alarming student loan statistics. Americans now owe over $1.3 trillion in student loan debt. For the class of 2016, the average borrower will owe just over $37,000, a figure that is up 6% from last year.

But those are just your basic top line college debt statistics. They are the most visible numbers but they don’t tell the whole story. There are some hidden statistics (i.e. not usually reported) that highlight what this college debt is doing to students later in life. They show that virtually every decision in life can be impacted by college debt.

How College Debt Impacts Your Life

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How to Choose A College So You Don’t Waste Money On Tuition

You may have noticed recently the federal government stepped in to help 18-year-olds with one of the biggest decisions of their lives – how to choose the right college. Although you don’t necessarily need a college education to have a successful career, the U.S. Department of Education estimates that a college graduate will earn one million dollars more on average over their lifetime when compared to someone with only a high school diploma. That figure alone makes attending college a worthwhile consideration.

college fund jarBut what college should you attend when there are thousands to choose from? Enter President’s Obama’s Consumer Reports-styled College Scorecard. It’s an initiative headed by the Dept. of Education where, “You’ll be able to see how much each school’s graduates earn, how much debt they graduate with, and what percentage of a school’s students can pay back their loans,” the President noted in a recent radio address.

The scorecard tool offers much more information than that however. Prospective students can input a college name into the site and receive all kinds of useful information about the school’s program. Among other things, potential schools can be sorted by location, size, degrees offered. The site is receiving rave reviews as the latest advancement in helping students choose the right college.

You will have to take some steps to make your college decision an easier one. There is simply too much money at stake for you to make the wrong choice. Here are the three most important things you can do.

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Attention 9th Graders: Some Focus Right Now Will Make You Rich

Thought I would perform a public service announcement today for the freshman out there starting high school this fall. I don’t have any good tips on how to avoid getting stuffed in your locker or fighting off that wedgie as you change after gym class. You might just have to endure those things…such is the right of passage into high school.

dissecction in biology

Focus – Work Hard – Be Rich

What I’d rather do is snap your mind into place as you start taking classes and get you thinking about the future.

Sound boring? Listen, I get it. The last thing you probably want to think about right now is studying for a literature test. And those Algebra I problems…ugh! When are you ever going to use that in real life?

I’m not going to try and convince you of the practical uses of Algebraic principles once you graduate high school. What I do want you to know is that your approach to Algebra (and all your other classes) has huge implications for your future. In fact, what you do right now – this 9th grade year – could eventually make you rich.

The Two Biggest Challenges of High School

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This Is What Happens When You Don’t Pay Back Student Loans

Student loans have helped many pay for the expenses of a college education. Of course you need to pay back student loans those even if you don’t graduate. Fortunately student loans have what’s known as a grace period – a set time after you graduate, leave school or drop below full-time student status before the loan repayment begins. The grace period gives you time to find a job or deal with a difficult life issue before you have to pay back the student loan.

pay back student loansIf you can’t or choose not to pay back student loans, you risk going into default. To default on a loan means you did not pay it back on schedule according to the terms of the promissory note ­– the legal document you signed when you received the loan.

The good news is you don’t have to panic if you miss one payment. Going into default won’t happen right away. If you miss a few payments your student loan will first be tagged with a delinquent status. It won’t officially go into default until 270 days have passed without a payment.

At that point, you will face some serious consequences. The U.S. Department of Education’s Federal Student Aid office lists these possible actions that may be taken if you default on your student loan:

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