This is the holidays; that time of year that so many people love, a few hate and many just quietly endure. The feelings of gift giving obligation drive many people foolishly deeper into debt just so they can either feel better about giving, or avoid the embarrassment of failing to do so. While the thought may count, unfortunately too many people feel that giving an expensive gift counts so much more.
It only gets worse as you age and more relatives have even more children. The obligatory gift exchanges can push even families on the strongest financial footing toward the brink of bankruptcy if a bit of financial restraint isn't exercised. With that in mind, here are some gift giving ideas to keep you on the path toward getting debt free, while retaining that festive feeling that's so fun about the holidays.
Money Saving Holiday Gift Idea 1 -Don't give so many gifts! Too many people feel that they have to give gifts, and expensive ones at that, to every single member of their family, all their friends, and their associates at work. Think about that for a minute! All that adds up in a hurry. Exercise a bit of gift giving restraint. If you're a guy, ease up. Your friends don't expect gifts from you anyway. Hell, for most of us, if our wives didn't push the issue and remember this sort of thing, we'd forget to give anything to our immediate families for their birthday.
For those of you with young families, just give gifts for the kids. The adults will understand. If they don't, too freakin' bad. That cuts a lot of the pressure to not only give so many gifts, but spend so much time shopping for them. See, you're saving money already, and avoiding those ultra crowded parking lots.
Money Saving Holiday Gift Idea 2 -Timing is everything. Get your gifts throughout the year when ever you find a spectacular price on something. Nothing is written that you have to purchase your gifts in the 2 days immediately preceding the holiday in question. If you're shopping for a Christmas gift, you can buy it during the Labor day sale, if that's when you find it. Buy your Christmas gifts for next year at the after Christmas sale this year.
Money Saving Holiday Gift Idea 3 -Avoid the trendy gifts. Who cares if the hot pink iPOD with flames is the hottest gift this year? You don't have to be the one giving it. Those trendy gifts aren't going to be had for a discount, and you'll have to wait in line to get them. Avoid the stress altogether, and get something a bit less in demand.
Money Saving Holiday Gift Idea 4 -Make your gifts. I posted about this last year, and its still great advice this year. For those of you with more time than money, take a trip back a few hundred years, to a time when the holiday season was less a commercial shot in the arm for business, and more a time for joy and family. The time you save shopping and working to pay for presents will free up some time for you to actually make some gifts for people. No, you're not going to be able to give the cousins that latest game for their X-Box 360, but oh, well.
Money Saving Holiday Gift Idea 5 -Try giving some like a magazine subscription. Like a good version of a gift that keeps on giving, a magazine subscription will bring happiness all year long. On top of that, they'll think of you every time the latest issue shows up. There's a magazine available for every interest under the sun. Even better, they're super inexpensive gifts, with subscriptions being had for under $15.00 for nearly any type of magazine you can think of, if you shop online. To top it off, they'll know you thought about the gift a little bit, because you got something just for them.
Money Saving Holiday Gift Idea 6 -There's a trend no toward environmentally friendly, experience based gifts. While some of these aren't as environmentally friendly as those purveying them would have you believe, it's a great idea nonetheless. Why not reduce all that trash we generate during the various gift giving seasons, such as Mother's Day, Hanukkah, and, of course, Christmas? Remember that if you're giving the gift in the spirit of environmental friendliness, you have to take into account all the fuel you'll bur getting to whatever experience you've selected, and all that it will consume.
Money Saving Holiday Gift Idea 7 -Here's a novel idea. If you can afford it, but those who you're giving the gift to are finding money a bit tight, why not give them something that will save them money? If everybody gave gifts that would save the recipient money, imagine how much of their cash that would free up! Most gas saving products for the car are ineffective, and a total waste of money, but how about a new money saving appliance for the home, or a fuel saving product for the car that actually does work. I'm sure the auto enthusiast on your list would love a new intake or exhaust system for their ride. A bit rich, perhaps? Why not a reusable air filter. They'd save money on gas, and the filter would last a lifetime, saving them about $20 a year on replacement filter costs.
A programmable thermostat sure isn't what most people think of when they think “gift”, but with rising energy costs, you can save a bundle using one. According to Consumer Reports, a programmable t-stat can save well over $100 every year. That's a pretty nice gift, $100 a year.
You can give a membership to a discount store, such as Costco or Sam's Club, as a gift. If the shopper can resist the temptation to buy unnecessary items, they'll save big money on most items, such as food. It may cost you $35, but whom ever you give it to will save far more than that in most cases.
These are just a few money saving gift ideas to use this holiday season. Not just for the holiday season, you can use these for Mother's Day, Father's Day and Birthdays too. Spend less money, pay off your debt, and get that much closer to being debt free.
Wednesday, December 12, 2007
Sunday, December 9, 2007
Government Grant Money – How to Get It
If you listen to that question mark suit guy on the late night infomercials, you’d think there was an unlimited pool of government money out there for the taking, if only you’d grab his directory. Well, there is a great deal of government (our tax) money out there that you can get, but usually it’s not just like falling off a log. The government only gives money for special purposes, and typically to specific groups of people. There are almost 1,500 government grant programs and nearly all of them are structured to allow special groups of people to benefit from the grants.
That’s great news, I don’t want just anyone grabbing their share of my share that I worked until May for. However, it also smacks of favoritism, something the Feds excel at. Perhaps the best known government grant programs are for students. If you ever went to college, there’s a good chance you were a beneficiary of a Pell grant or knew someone who was. There are also many grants available for small business; either to start or grow them. In fact, the majority of government money is used for this purpose. Nearly 60% more money is allocated for small business grants than for education grants.
The government also doles out grant money for research and development, minorities, women, and community development. Your first step is to find a grant that offers money for exactly what you’ll be using it for. There are, as I noted above, numerous examples. If you are a n actual 501(3c) non-profit you’ll have the best chance, but you can get money as a plain Joe/sephine also. The key to getting government grant money is to request the grant for a specific purpose that falls within the narrow requirements the specific grant program is looking for. The other factor is to write the grant request exactly as the bureaucrats would like to see it. You need to conform exactly to their expectations, and use the proper language, if you would like to see any money from Uncle Sam.
What goes into writing a government grant request? You’ll need to write a cover letter first. Inside the request you’ll need to demonstrate you, or your organization’s need for the funds. You’ll have to show a use plan to explain exactly how you’ll use the money as well. If you’re really lucky, the agency offering the grant will have an application form for you to fill out. Otherwise, you’ll have to remember what you learned in your creative writing classes back in college. Some of these apps can be real whoppers too, so limber up your typing fingers.
There’ll be a grant application kit you’ll have to get from the government agency offering the grant. In it will be everything they’ll require to give you the best chance of prying the money out of their clammy paws. There may be a template that will be very specific in what the agency is requesting. Some of the more common information required by the template will include who’s applying for the grant, a detailed description of the project the grant will be used for, how much grant money is being requested, a timeline for its completion, what contribution the requestor will make toward the project, how the project will benefit the grantor, and personal/contact information for key members of the team.
There will most often be a list of deliverables the granting agency will be expecting, so you’ll know just what to documents and data include, and how to organize them.
One last thing; don’t be picky. There are often multiple grants available from the same and different agencies that you may be eligible for. You should apply for every last one of them in order to maximize your chances success. It’s easy to be debt free if your money was free, just don’t waste it.
That’s great news, I don’t want just anyone grabbing their share of my share that I worked until May for. However, it also smacks of favoritism, something the Feds excel at. Perhaps the best known government grant programs are for students. If you ever went to college, there’s a good chance you were a beneficiary of a Pell grant or knew someone who was. There are also many grants available for small business; either to start or grow them. In fact, the majority of government money is used for this purpose. Nearly 60% more money is allocated for small business grants than for education grants.
The government also doles out grant money for research and development, minorities, women, and community development. Your first step is to find a grant that offers money for exactly what you’ll be using it for. There are, as I noted above, numerous examples. If you are a n actual 501(3c) non-profit you’ll have the best chance, but you can get money as a plain Joe/sephine also. The key to getting government grant money is to request the grant for a specific purpose that falls within the narrow requirements the specific grant program is looking for. The other factor is to write the grant request exactly as the bureaucrats would like to see it. You need to conform exactly to their expectations, and use the proper language, if you would like to see any money from Uncle Sam.
What goes into writing a government grant request? You’ll need to write a cover letter first. Inside the request you’ll need to demonstrate you, or your organization’s need for the funds. You’ll have to show a use plan to explain exactly how you’ll use the money as well. If you’re really lucky, the agency offering the grant will have an application form for you to fill out. Otherwise, you’ll have to remember what you learned in your creative writing classes back in college. Some of these apps can be real whoppers too, so limber up your typing fingers.
There’ll be a grant application kit you’ll have to get from the government agency offering the grant. In it will be everything they’ll require to give you the best chance of prying the money out of their clammy paws. There may be a template that will be very specific in what the agency is requesting. Some of the more common information required by the template will include who’s applying for the grant, a detailed description of the project the grant will be used for, how much grant money is being requested, a timeline for its completion, what contribution the requestor will make toward the project, how the project will benefit the grantor, and personal/contact information for key members of the team.
There will most often be a list of deliverables the granting agency will be expecting, so you’ll know just what to documents and data include, and how to organize them.
One last thing; don’t be picky. There are often multiple grants available from the same and different agencies that you may be eligible for. You should apply for every last one of them in order to maximize your chances success. It’s easy to be debt free if your money was free, just don’t waste it.
Thursday, December 6, 2007
Debt Cures – How You Can Get Out of Debt
People are scared of debt. In many cases they damn well should be, while in others, debt can be your friend. By a score of 39% to 20%, a recent survey by the National Association for Business Economics found that Americans feel that excessive debt is a greater threat than to the nation than terrorism. Weather or not that's true will never be confirmed, if we have any luck (plus some great intel and a lot of hard work) at all.
If you are one of those that does have excessive debt, weather you fear it or not, a debt cure may be in order. Curing debt is easier said than done in many cases. Sure, it's simple to spout such platitudes as “Just put 10% of your pay toward your debt until it's paid off. You'll never miss the money.” Weather or not you would, in fact, miss the money is academic. To find a cure for your debt, you'll need to analyze it and determine what will be the best course of action to eliminate it.
Debt Cures – Strategy 1 - Step by Step
Debt Cure Step 1 –Get a copy of your credit report from at least one of the three credit reporting bureaus. You need this not only to establish a baseline credit score, but for debt elimination purposes, you need to be sure if all your debts are valid. Your credit report will show you if you have any debts you are unaware that may be invalid. If you have any debts you feel are in error, you can contest these while you move on to the next steps required to cure your debt problems.
Debt Cure Step 2 -List all your debts. Put down the creditor, the type of debt, the balance owed, the monthly payment, any past due balance, the interest rate, and if it is a fixed term loan, the payoff date.
Debt Cure Step 3 – Analyze your debts. Why are you in debt? Determining the root cause of your debt is absolutely essential. You can have debt from a pattern of overspending, or from an extraordinary event, such as natural disaster or medical problem. If your debt is caused by overspending, you must cure the root cause. If you’re spending beyond your income, you’ll be doomed to a life of indebtedness.
Debt Cure Step 4 -When you have all your debts listed and categorized, sort them by the interest rate. Now it's time to plan your debt elimination strategy. Usually you'll work on paying off the highest interest rate obligation first. There are some exceptions to this.
If you have any past due debts, you must satisfy these first. There are two reasons for this. One, they are probably charging you a late fee every month you are late. Second, past due debts devastate your credit score. Lowering your credit score can actually make the interest rate rise on some of your other debts, in addition to making sure any new credit you receive will be more expensive. The farther past due the debts are, the greater the detrimental effect they have on your credit score. So, if you do have past due debt, make sure that is taken care of first. Make the minimum payment on your other debts until you have satisfied all your past due debts.
Once you’ve taken care of any past due debt, it’s time to begin eliminating current debt. Make the minimum payment on all your debts but the one with the highest interest rate. You can use some discretion here. For example, if you have a credit card with a $12,000 balance and a 21.9% interest rate, and another card with a $1,250 balance and a 22% rate, you should probably pay off the 21.9% card first. The amount of interest you’re paying every month on the larger card far exceeds the interest you’re paying on the smaller card, so you should eliminate that debt first.
When that debt is gone, take the money you were paying on the now retired debt, and shift it toward paying off the next highest interest rate debt. You’ll have more money to use for this because you’ll have the minimum payment from the retired debt and the extra money you were using to pay for it as well. You’ll add those two amounts to the minimum payments you had already been making toward debt number 2. When number 2 is gone, you’ll repeat the process with debt number 3, and so forth, until you’re debt free. Yipee Ki Yay Motherf….
Strategy 2 –
Using strategy number one will get your debt paid off, but you will take an interest rate hit. After all, the entire time you’re paying off the debt, you’re also paying interest, and at a fairly steep interest rate. You can use another strategy to pay less in total interest if you do it correctly. There is much more risk with this strategy if you do it wrong, however. Strategy number 2 is to get a debt consolidation loan. Unlike what the shills on the radio will tell you, A DEBT CONSOLIDATION LOAN WILL NOT GET YOU OUT OF DEBT!!! You get yourself out of debt by making payments on the darn thing.
The advantages to this strategy are that you’re only making one payment, so it is much more convenient, and you’re far less likely to inadvertently miss a payment. The interest rate is typically much lower as well, so in theory you’ll pay less in total interest.
The disadvantages are that although the interest rate is lower, the term of the loan is much longer, so if you only make the minimum payment, you can actually pay more in total interest by using a debt consolidation loan, than you would have if you’d just paid the debts off using strategy 1 above. The other disadvantage is, and this one is huge, you must use collateral to get that lower interest rate. What collateral? In the vast majority of cases, it’s not your comic book collection. Typically the lender will want your house as their collateral. Now if you fall behind, you not only screw up your credit, you have to find a new place to live. If you have to do that with no money and poor credit, I imagine it’s no easy task.
The other problem with using a debt consolidation loan is that in many cases, the problem that caused the indebtedness is not fixed. You can easily find yourself in a situation where you are back in debt from credit cards, vehicles, and now, a debt consolidation loan as well. Not a pretty picture, that.
Remember there are debt cures, but no magic potions. Here’s to getting debt free.
If you are one of those that does have excessive debt, weather you fear it or not, a debt cure may be in order. Curing debt is easier said than done in many cases. Sure, it's simple to spout such platitudes as “Just put 10% of your pay toward your debt until it's paid off. You'll never miss the money.” Weather or not you would, in fact, miss the money is academic. To find a cure for your debt, you'll need to analyze it and determine what will be the best course of action to eliminate it.
Debt Cures – Strategy 1 - Step by Step
Debt Cure Step 1 –Get a copy of your credit report from at least one of the three credit reporting bureaus. You need this not only to establish a baseline credit score, but for debt elimination purposes, you need to be sure if all your debts are valid. Your credit report will show you if you have any debts you are unaware that may be invalid. If you have any debts you feel are in error, you can contest these while you move on to the next steps required to cure your debt problems.
Debt Cure Step 2 -List all your debts. Put down the creditor, the type of debt, the balance owed, the monthly payment, any past due balance, the interest rate, and if it is a fixed term loan, the payoff date.
Debt Cure Step 3 – Analyze your debts. Why are you in debt? Determining the root cause of your debt is absolutely essential. You can have debt from a pattern of overspending, or from an extraordinary event, such as natural disaster or medical problem. If your debt is caused by overspending, you must cure the root cause. If you’re spending beyond your income, you’ll be doomed to a life of indebtedness.
Debt Cure Step 4 -When you have all your debts listed and categorized, sort them by the interest rate. Now it's time to plan your debt elimination strategy. Usually you'll work on paying off the highest interest rate obligation first. There are some exceptions to this.
If you have any past due debts, you must satisfy these first. There are two reasons for this. One, they are probably charging you a late fee every month you are late. Second, past due debts devastate your credit score. Lowering your credit score can actually make the interest rate rise on some of your other debts, in addition to making sure any new credit you receive will be more expensive. The farther past due the debts are, the greater the detrimental effect they have on your credit score. So, if you do have past due debt, make sure that is taken care of first. Make the minimum payment on your other debts until you have satisfied all your past due debts.
Once you’ve taken care of any past due debt, it’s time to begin eliminating current debt. Make the minimum payment on all your debts but the one with the highest interest rate. You can use some discretion here. For example, if you have a credit card with a $12,000 balance and a 21.9% interest rate, and another card with a $1,250 balance and a 22% rate, you should probably pay off the 21.9% card first. The amount of interest you’re paying every month on the larger card far exceeds the interest you’re paying on the smaller card, so you should eliminate that debt first.
When that debt is gone, take the money you were paying on the now retired debt, and shift it toward paying off the next highest interest rate debt. You’ll have more money to use for this because you’ll have the minimum payment from the retired debt and the extra money you were using to pay for it as well. You’ll add those two amounts to the minimum payments you had already been making toward debt number 2. When number 2 is gone, you’ll repeat the process with debt number 3, and so forth, until you’re debt free. Yipee Ki Yay Motherf….
Strategy 2 –
Using strategy number one will get your debt paid off, but you will take an interest rate hit. After all, the entire time you’re paying off the debt, you’re also paying interest, and at a fairly steep interest rate. You can use another strategy to pay less in total interest if you do it correctly. There is much more risk with this strategy if you do it wrong, however. Strategy number 2 is to get a debt consolidation loan. Unlike what the shills on the radio will tell you, A DEBT CONSOLIDATION LOAN WILL NOT GET YOU OUT OF DEBT!!! You get yourself out of debt by making payments on the darn thing.
The advantages to this strategy are that you’re only making one payment, so it is much more convenient, and you’re far less likely to inadvertently miss a payment. The interest rate is typically much lower as well, so in theory you’ll pay less in total interest.
The disadvantages are that although the interest rate is lower, the term of the loan is much longer, so if you only make the minimum payment, you can actually pay more in total interest by using a debt consolidation loan, than you would have if you’d just paid the debts off using strategy 1 above. The other disadvantage is, and this one is huge, you must use collateral to get that lower interest rate. What collateral? In the vast majority of cases, it’s not your comic book collection. Typically the lender will want your house as their collateral. Now if you fall behind, you not only screw up your credit, you have to find a new place to live. If you have to do that with no money and poor credit, I imagine it’s no easy task.
The other problem with using a debt consolidation loan is that in many cases, the problem that caused the indebtedness is not fixed. You can easily find yourself in a situation where you are back in debt from credit cards, vehicles, and now, a debt consolidation loan as well. Not a pretty picture, that.
Remember there are debt cures, but no magic potions. Here’s to getting debt free.
Monday, December 3, 2007
College Consolidation Loans – You Could Be Paying Too Much For Your Education; After You’ve Been to College
How many new college graduates enter the world saddled with debt? According to some recent stats on the subject, college loans are a fact of life for most students leaving school. In the decade between 1993 and 2003, student loan debt increased 137%, and that’s adjusted for inflation! According to a study of student loans and debt by Pew Research done in 2005, the average level of debt carried by a college student upon graduation was all over the map, and varied by a number of factors, including the state where they attended college, the college they attended, and the level of education they achieved.
The study had some interesting conclusions; to wit – There isn’t a correlation between the state’s cost of living and the level of debt carried by students when they graduate. In addition, North Dakota, a state with a fairly low cost of living was number 3 in the level of student debt. Iowa, another state with a low cost of living, ended up in the number 2 spot on the list of indebted students.
You’d think that going to a state school would be less expensive and help avoid graduating with a boat load of debt, but no, that’s not always how it works. In some states, North Dakota and Iowa among them, but also Kentucky, Delaware and Tennessee, you could easily end up with greater levels of debt than those who attended private schools, according to researchers.
There is also not a direct correlation between the cost of tuition at a college or university and the debt level of its graduates. Some schools with very high tuition had relatively low levels of debt among graduates. That could be because a large number of students attend the private schools on scholarships and thus pay no tuition, or because they come from relatively wealthy families that could afford to foot most or all of the bill for the student’s education out of their own pocket. In addition, some schools and states with high tuition costs have better financial aid programs to offset some or all of the student’s costs.
Student loan provider Nellie Mae reports that the average undergraduate debt upon graduation is now up to $27,600. If you’re one of these students with crushing student loan obligations what can you do? You can just gut it out and pay off your loans, or you can default and leave your lender hanging. Okay, so you’re probably trying to avoid the second choice in this scenario. The fact remains though, that high levels of student debt can set you back substantially when it comes to building a solid retirement account, buying a home or, ironically, setting up a college account for your own kids.
One way to reduce your loan payments is to consolidate your student loans. Much like any other loan consolidation program, a student loan consolidation program allows you to use a single, large loan to pay off many smaller loans, in theory at a lower interest rate. As with consolidation loans for other types of debt, such as credit cards, you’ll substantially reduce your monthly payment by doing so. You’ll also make your life more convenient by paying a single loan, instead of a myriad of smaller ones.
The major difference between consolidating a student loan and your credit card debt is that you won’t have to put your house on the line when you consolidate a student loan, as you would with credit card debt. This holds true for federally insured student loans, but typically is not the case if you got a personal loan to help pay for your education.
There are some huge benefits to student loan consolidation, such as dramatically reduced monthly payments, but it’s a little different than rolling your credit cards into a single loan. When consolidating student loans, you have a deadline for application each year. In the last few years there have been several changes by the U.S. Department of Education regarding how you proceed with consolidation.
Student loan interest rates are determined by the 91-day T-bill auction. To receive the current year’s rates, and this is important, your completed consolidation loan application must be received by the lender, and they have to confirm the loan before July 1st. If the loan isn’t approved by July 1st, you’ll pay the following year’s rates. In years gone by, there was a grace period that would allow people to skate in past the deadline as long as their complemented application was in the lender’s hands. Now they must have completely processed the loan request and approved the loan by the deadline. You can thank the 109th Congress for that.
Unlike your credit cards, you should almost always consolidate your school loans, if they are federally insured and you can drop the aggregate interest rate. Another difference is that you won’t have to submit to much of the documentation required with other types of loans, such as credit checks or any other such nonsense. Your school's financial aid office can be a big help with your consolidation efforts. One last thing; verify if your lender will give you an interest rate reduction on your consolidation loan if you have your payment automatically withdrawn from your checking account.
The study had some interesting conclusions; to wit – There isn’t a correlation between the state’s cost of living and the level of debt carried by students when they graduate. In addition, North Dakota, a state with a fairly low cost of living was number 3 in the level of student debt. Iowa, another state with a low cost of living, ended up in the number 2 spot on the list of indebted students.
You’d think that going to a state school would be less expensive and help avoid graduating with a boat load of debt, but no, that’s not always how it works. In some states, North Dakota and Iowa among them, but also Kentucky, Delaware and Tennessee, you could easily end up with greater levels of debt than those who attended private schools, according to researchers.
There is also not a direct correlation between the cost of tuition at a college or university and the debt level of its graduates. Some schools with very high tuition had relatively low levels of debt among graduates. That could be because a large number of students attend the private schools on scholarships and thus pay no tuition, or because they come from relatively wealthy families that could afford to foot most or all of the bill for the student’s education out of their own pocket. In addition, some schools and states with high tuition costs have better financial aid programs to offset some or all of the student’s costs.
Student loan provider Nellie Mae reports that the average undergraduate debt upon graduation is now up to $27,600. If you’re one of these students with crushing student loan obligations what can you do? You can just gut it out and pay off your loans, or you can default and leave your lender hanging. Okay, so you’re probably trying to avoid the second choice in this scenario. The fact remains though, that high levels of student debt can set you back substantially when it comes to building a solid retirement account, buying a home or, ironically, setting up a college account for your own kids.
One way to reduce your loan payments is to consolidate your student loans. Much like any other loan consolidation program, a student loan consolidation program allows you to use a single, large loan to pay off many smaller loans, in theory at a lower interest rate. As with consolidation loans for other types of debt, such as credit cards, you’ll substantially reduce your monthly payment by doing so. You’ll also make your life more convenient by paying a single loan, instead of a myriad of smaller ones.
The major difference between consolidating a student loan and your credit card debt is that you won’t have to put your house on the line when you consolidate a student loan, as you would with credit card debt. This holds true for federally insured student loans, but typically is not the case if you got a personal loan to help pay for your education.
There are some huge benefits to student loan consolidation, such as dramatically reduced monthly payments, but it’s a little different than rolling your credit cards into a single loan. When consolidating student loans, you have a deadline for application each year. In the last few years there have been several changes by the U.S. Department of Education regarding how you proceed with consolidation.
Student loan interest rates are determined by the 91-day T-bill auction. To receive the current year’s rates, and this is important, your completed consolidation loan application must be received by the lender, and they have to confirm the loan before July 1st. If the loan isn’t approved by July 1st, you’ll pay the following year’s rates. In years gone by, there was a grace period that would allow people to skate in past the deadline as long as their complemented application was in the lender’s hands. Now they must have completely processed the loan request and approved the loan by the deadline. You can thank the 109th Congress for that.
Unlike your credit cards, you should almost always consolidate your school loans, if they are federally insured and you can drop the aggregate interest rate. Another difference is that you won’t have to submit to much of the documentation required with other types of loans, such as credit checks or any other such nonsense. Your school's financial aid office can be a big help with your consolidation efforts. One last thing; verify if your lender will give you an interest rate reduction on your consolidation loan if you have your payment automatically withdrawn from your checking account.
Sunday, December 2, 2007
Save Money on Organic Foods
More Americans are eating organic and minimally processed foods. A study from Whole Foods in 2004 found that more than half of Americans had tried organic foods, and over 10% eat them regularly. If you can count yourself among that group of eaters, you’ve doubtlessly noticed that these foods command premium prices and are traditionally found at places such as Whole Foods and other specialty markets. Since you’re probably looking to save money on food, that probably causes a bit of conflict in the ole’ melon (if not talking about the cantaloupe you’re holding, either).
Well, you can relax a bit. Recently, due to organic and minimally processed foods increased popularity, many more grocery stores have begun to stock these items. You can even get organic foods and items such as free range chicken and no cage eggs (from chickens not fed hormones or antibiotics) at warehouse stores like Costco and warehouse grocery stores such as Boise based Winco Foods.
So, just because you want to live a healthy lifestyle, and shy away from foods that contain antibiotics, hormones, chemicals, and were raised in cages full of crap, there’s no reason you should have to pay excessive prices for them. Instead of paying huge prices for premium, organic foodstuffs at specialty food markets, trot on over to your local warehouse grocer, Costso, or even check the selection at your local Safeway or Albertson’s. Chances are you can find much of what you’re looking for there, keep eating healthier, and save some money while you’re doing it.
It’s easier to get debt free if you save money any place you can, and stay out of your doctor’s office. Eating better foods, and paying less to eat them, is a big step in the right direction.
Well, you can relax a bit. Recently, due to organic and minimally processed foods increased popularity, many more grocery stores have begun to stock these items. You can even get organic foods and items such as free range chicken and no cage eggs (from chickens not fed hormones or antibiotics) at warehouse stores like Costco and warehouse grocery stores such as Boise based Winco Foods.
So, just because you want to live a healthy lifestyle, and shy away from foods that contain antibiotics, hormones, chemicals, and were raised in cages full of crap, there’s no reason you should have to pay excessive prices for them. Instead of paying huge prices for premium, organic foodstuffs at specialty food markets, trot on over to your local warehouse grocer, Costso, or even check the selection at your local Safeway or Albertson’s. Chances are you can find much of what you’re looking for there, keep eating healthier, and save some money while you’re doing it.
It’s easier to get debt free if you save money any place you can, and stay out of your doctor’s office. Eating better foods, and paying less to eat them, is a big step in the right direction.
Saturday, December 1, 2007
401k Rules – What You Need to Know About Withdrawal, Distribution, and Rollover
Your 401k is one of the most powerful tools in your investing and retirement toolbox. Do you want to live well after you've left the world of the gainfully employed, but before you've left this world altogether? Make sure you max out your 401k. If you made some good employment choices along the way, your employer kicked in some matching funds and you took full advantage of their generosity.
Now it's time for you to begin living, and you need to fund your retirement so you can tool around Arizona and Nevada in the Prevost. Maybe you're still working and you've changed jobs, hopefully to a new employer that has a handsome 401k plan with contribution matching. Either of these two occurrences may cause you to have some questions about 401k rules for withdrawal, distribution or rollover. Hopefully this post can help.
401k Rules for Withdrawal and Distribution-Want to take some money out of your 401k? Here's what you can and can't do if you'd like to withdraw some funds. The first thing you'll want to look at is your age. There are strict rules regarding age for 401k withdrawals. The magic ages are 59-1/2. and 70-1/2. If you're past 59-1/2 years old you can withdraw funds from your 401k without incurring a penalty from the IRS. The IRS will withhold 20% of the total amount you withdraw, however. This will count toward your income tax due for the year. If you're lucky, an planned well, you may have a refund coming. In that case, the 20% will be basically a short term, interest free loan to the U.S. Government, and you'll get some or all of it back in the form of a refund.
The 59-1/2 and 70-1/2 ages refer to April of the calender year in which the plan participant reaches them. You must take your distribution to qualify. If you don't take a distribution in the starting year, the required distributions for 2 years must be made in the next year (one by April 1 and one by December 31).
If you are under age 59-1/2, you can still withdraw money from your 401k plan, but the IRS will ding you 10% for the privilege. The rules here state that there are actually limited circumstances where you can avoid the 10% early withdrawal penalty. These circumstances include total and permanent disability, death (also total and permanent for most of us), medical expenses that exceed 7.5% of your adjusted gross income for the year, ESOP dividends for your employer's securities (in the 401k), and the IRS levy of your plan.
If you're over 70-1/2 years old, you are required to begin taking mandatory withdrawals. You can leave the money in the plan if you have more than $5,000 (otherwise they'll usually just cut you a check), but that's cost prohibitive, as your friends at the IRS will take a full 50% of your minimum distribution. That basically means you have to begin taking that minimum distribution.
401k Rules for Rollover –If you leave the employer who sponsors a particular 401k that you have funds invested in, you may want to move your money into one of 2 other investment vehicles; another 401k (if the plan allows such transfers), or an IRA. Your funds in a 401k aren’t actually owned by you, they’re in a trust owned by your employer. An IRA, on the other hand, is really your asset. This is the reason it’s more complicated to move assets from a 401k plan than it is to transfer them from an IRA.
If you’re moving to a different employer, you may want to transfer your assets from your old employer’s 401k plan to your new employer’s plan. On the other hand, it may fit your financial plan better if you move it to an IRA. The process of transferring assets from your 401k into another one, or into an IRA, is termed “rollover”. Rollover is the financial term for moving assets from one tax protected entity into another.
In order for you to rollover a 401k, you’ll first have to set up an account for the funds to go to, if you don’t have one already. This is not created at the time of the rollover, but before. The primary rules that apply to a 401k rollover are as follows;
Rule 1 - If the money is transferred directly to you, you have a 60 day window to make sure it gets to the other tax deferred account. If you miss the 60 day window, you’ll owe a 10% penalty if you’re under age 59-1/2.
Rule 2 - You can roll it over without the 20% IRS withholding if the dollar amount is greater than $5,000. If it’s smaller than that, you’ll normally just get the distribution check sent to you, less the 20% IRS withholding.
Rule 3 – There are some changes coming for tax year 2008. After 2007, you will be able to roll over your 401k directly to a Roth IRA if you make less than $100,000, and are not married filing separately.
Rule 4 – Although the rollover is not viewed as a taxable event by the IRS, you still must report it on your federal income tax return, so don’t forget to do so.
Rule 5 – There are certain distributions that do not qualify for rollover status. These include required minimum distributions for those older than 70-1/2, hardship distributions, employer stock dividends, life expectancy based payments over a greater than 10 year period, and life insurance payments.
For more information on rules for 401k rollovers, see the IRS, here.
Have a great, Debt Free, weekend.
Now it's time for you to begin living, and you need to fund your retirement so you can tool around Arizona and Nevada in the Prevost. Maybe you're still working and you've changed jobs, hopefully to a new employer that has a handsome 401k plan with contribution matching. Either of these two occurrences may cause you to have some questions about 401k rules for withdrawal, distribution or rollover. Hopefully this post can help.
401k Rules for Withdrawal and Distribution-Want to take some money out of your 401k? Here's what you can and can't do if you'd like to withdraw some funds. The first thing you'll want to look at is your age. There are strict rules regarding age for 401k withdrawals. The magic ages are 59-1/2. and 70-1/2. If you're past 59-1/2 years old you can withdraw funds from your 401k without incurring a penalty from the IRS. The IRS will withhold 20% of the total amount you withdraw, however. This will count toward your income tax due for the year. If you're lucky, an planned well, you may have a refund coming. In that case, the 20% will be basically a short term, interest free loan to the U.S. Government, and you'll get some or all of it back in the form of a refund.
The 59-1/2 and 70-1/2 ages refer to April of the calender year in which the plan participant reaches them. You must take your distribution to qualify. If you don't take a distribution in the starting year, the required distributions for 2 years must be made in the next year (one by April 1 and one by December 31).
If you are under age 59-1/2, you can still withdraw money from your 401k plan, but the IRS will ding you 10% for the privilege. The rules here state that there are actually limited circumstances where you can avoid the 10% early withdrawal penalty. These circumstances include total and permanent disability, death (also total and permanent for most of us), medical expenses that exceed 7.5% of your adjusted gross income for the year, ESOP dividends for your employer's securities (in the 401k), and the IRS levy of your plan.
If you're over 70-1/2 years old, you are required to begin taking mandatory withdrawals. You can leave the money in the plan if you have more than $5,000 (otherwise they'll usually just cut you a check), but that's cost prohibitive, as your friends at the IRS will take a full 50% of your minimum distribution. That basically means you have to begin taking that minimum distribution.
401k Rules for Rollover –If you leave the employer who sponsors a particular 401k that you have funds invested in, you may want to move your money into one of 2 other investment vehicles; another 401k (if the plan allows such transfers), or an IRA. Your funds in a 401k aren’t actually owned by you, they’re in a trust owned by your employer. An IRA, on the other hand, is really your asset. This is the reason it’s more complicated to move assets from a 401k plan than it is to transfer them from an IRA.
If you’re moving to a different employer, you may want to transfer your assets from your old employer’s 401k plan to your new employer’s plan. On the other hand, it may fit your financial plan better if you move it to an IRA. The process of transferring assets from your 401k into another one, or into an IRA, is termed “rollover”. Rollover is the financial term for moving assets from one tax protected entity into another.
In order for you to rollover a 401k, you’ll first have to set up an account for the funds to go to, if you don’t have one already. This is not created at the time of the rollover, but before. The primary rules that apply to a 401k rollover are as follows;
Rule 1 - If the money is transferred directly to you, you have a 60 day window to make sure it gets to the other tax deferred account. If you miss the 60 day window, you’ll owe a 10% penalty if you’re under age 59-1/2.
Rule 2 - You can roll it over without the 20% IRS withholding if the dollar amount is greater than $5,000. If it’s smaller than that, you’ll normally just get the distribution check sent to you, less the 20% IRS withholding.
Rule 3 – There are some changes coming for tax year 2008. After 2007, you will be able to roll over your 401k directly to a Roth IRA if you make less than $100,000, and are not married filing separately.
Rule 4 – Although the rollover is not viewed as a taxable event by the IRS, you still must report it on your federal income tax return, so don’t forget to do so.
Rule 5 – There are certain distributions that do not qualify for rollover status. These include required minimum distributions for those older than 70-1/2, hardship distributions, employer stock dividends, life expectancy based payments over a greater than 10 year period, and life insurance payments.
For more information on rules for 401k rollovers, see the IRS, here.
Have a great, Debt Free, weekend.
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