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July – August 2022

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What's in this issue

School Days

As summer begins to wind down many of us will find ourselves getting ready to send our little ones back to school, while some of you may even be preparing to send your children off to college.

 

School is one of the reasons they say it’s so expensive raising a child. Education is important in framing the lives of our children and it’s equally important to get them prepared. Throughout this issue we will feature articles that contain plenty of tips and advice for saving on your school budget.

 

So, let the school bells ring and watch your children grow through another year of education, kick back yourself and read through this issue and you may learn some things yourself.

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Budget Boosters

Time to get the kids ready to go back to school. Here are some great ways for you to save on school supplies.

 

If you have not already received one you will want to get a list that the school provides of the necessary supplies for the upcoming year. This will help you from buying things that you really do not need.

Once you have your list you are ready to get supplied. Chances are you have quite a bit of supplies already. If you have supplies left over from last year they will work just fine to start this school year off. Go through your drawers and grab some extra pens and pencils to stock up with. Things like rulers, pencil boxes, calculators and backpacks do not need to be replaced each year so don’t be afraid to reuse last year’s if it’s still in good shape.

Save promotional supplies that businesses’ hand out at home or at trade shows. Parades and fairs also can be a source of free supplies. Even around election time free pens and pencils are just waiting to be given out by candidates and political parties.

 

The stores are going to help you out and have huge back-to-school savings. They will have big displays with bins full of school supplies. It’s your job to find the best deals for your supply list. Check the weekly ads or hop online to find the store that has your supplies for the best price. If the savings are worth going from store to store to get the best deal on different items plans your trip accordingly. Shop at a store that offers price matching, and you won’t have to burn up extra gas to get good deals at other stores.

 

When prices are really good you can buy some extra supplies and store them so they are available throughout the year. Storing craft items such as glue, glitter, poster board, and construction paper may prevent a late-night run to the store for a project that is due the next day.

 

Buy the large bottle of glue and fill smaller bottles with it throughout the year. Colored glue can be great for projects. Instead of buying the expensive glue, use a little food coloring and mix it yourself.

 

Use brown paper sacks for book covers. This way kids can decorate them any way they wish and it can save you from having to pay fees at the end of the year for any damage the book might sustain.

 

Many schools have programs that provide school supplies for families who simply cannot afford them. A personal meeting with the school or teacher can provide you with more information.

 

Many states offer tax-free holidays around the start of the school year. Find out if your state has one planned; and if it does, be sure to take advantage of it. Shopping on the right day could take as much as 10% off of your back-to-school tab.

 

It may be difficult convincing your child that they only need what’s on the list and that a red-colored folder is just as effective as the one that has the Jonas Bros. on it. So you may need to negotiate. Before you head out shopping let them know that if there is anything additional that they want will have to come from their own pockets. If they want a fancier folder or set of pens then they can pay the difference in price for the ones that you pick out. They may decide they don’t need the lavish supplies after all. In some cases, it may be easier to get the supply list yourself and go shopping without them.

 

Backpacks tend to be on the higher end of back-to-school costs. It’s best to purchase one that you know will last the school year. Garage sales after the previous school year are a good place to find a bargain backpack, but you will want to inspect it to make sure it’s not worn out. Allow your child to have some say in this purchase so they can find one that fits them and is comfortable. It’s not worth buying a cheaper backpack if it’s not going to carry the load or is uncomfortable to carry.

 

The beginning of the school year should come as no big surprise for anyone that has kids. This should allow you to properly budget for the upcoming school year. Continue to keep an eye on sales throughout the year and enjoy your child’s education.

Penny Pinchers Club

Are you the type of person that comes up with terrific ways to Pinch Pennies? If so please email us and share your ideas.

HERE IS OUR PENNY PINCHER FOR THIS MONTH

“Instead of purchasing a lunch ticket, our kids bring their own lunches as we figured out it was cheaper for us to prepare them lunches to take themselves. Leftovers make for a great lunch and we still provide them all the nutrients they need for the day.

 

-Roy L. MS

College Savings

College is expensive, some of these expenses are expected while there are many expenses that you may not think of at first and will begin to quickly add up. As a family you will have to make some decisions that will help ease the costs. Here are a few things to consider before you let them go.

 

Transportation. How far from home are they going to be? If you are taking a vehicle, how reliable is it? How far from campus are they living? Do you even need transportation? These are some questions you will need to ask yourself. As we all know cars are expensive to buy and expensive to keep running.

 

Most campuses are self-contained communities that require very little travel. Of course, there are things outside of campus they will want to go to but if there is a good public transportation system or the town is small enough to get around on a bike you may save yourself some money by leaving the car behind.

 

The farther away a student is from home the more expensive it can be to get them back for holidays and breaks. When visiting schools distance should be considered. Moving away for the first time can make many homesick and it can quickly cost a lot of money if you have to fly them home too often.

Many schools have programs where you can sign up and hitch rides with other students traveling to a certain location. This is a good way to save costs, just make sure they are comfortable with the person offering the ride-along.

 

Set up a cell phone plan that won’t break the bank. You don’t want to open that first cell phone bill while your child is at college and be shocked by the amount since you can’t monitor it as well. There are plenty of family-friendly programs where calls home don’t count or text messaging is free. Shop around different providers to find the best plan for them.

 

Textbook costs can be maddening. The good thing is the internet has provided a more affordable option for buying books. As soon as you can find out what books they will need you can search online for them. You can look up books by title, author, or ISBN (International Standard Book Number). A few of the more popular sites are Craigslist.org, Half.com (run by eBay) and campusbookswap.org. It’s important that you order them as soon as you can so they are available for class use.

 

Other book options are to look online for electronic textbooks. You can usually download the book for a lesser price and can read the text on your computer or print out certain pages as needed.

 

You may even suggest sharing the costs with a classmate and splitting the book. This may cause conflicts if both students need the book at the same time, but can also be beneficial for group studying. For future semesters find friends who have just taken the class and ask to buy the book from them. Chances are they will sell it to you and make more money than what the store would give them and you get it for cheaper than what the store would sell it to them for.

 

Another option is to see if the library has the book available and then check the book out and get it renewed a couple of times during the semester. This tends to work better for literature classes, but there are some libraries that carry a lot of the current textbooks.

 

Here are some options in regards to room and board, which account for a lot of the cost for new college students.

 

The most affordable room and board would be to continue living at home. Obviously, this isn’t an option for those who want to venture away from their hometown.

For those who will choose to live on campus explore your meal plan options. Many times they will require you to buy a meal ticket for 3 meals a day for each day you are in session. You may find that the meal plan is too much for your needs so it’s important to ask what alternatives there are so you don’t spend money on meals you are not going to eat.

 

You don’t need to fill your room with brand new items. Secondhand furniture and appliances should work just fine for them. Spend the rest of summer looking through the classifieds to find bargains on items they can stock their dorm rooms with.

 

These are just a couple of things to keep in mind before heading off to school. If you still have questions you should ask friends and family who have recently sent their kids off to school. They probably have plenty of advice on what they did or what they wish they did to save a little money on their college kids.

Investing in their future

It’s never too early to start saving for your children’s education. 529 College Plans are ways for parents to start saving now to help ease the financial burden that can come with a college education.

 

Each state sponsors its own 529 College Plan. Parents open an account with investment options. The earnings are tax-free and can be withdrawn tax-free when your child is ready to attend college. The money can be used to pay for tuition, books, and room and board. There are two general types of plans, Prepaid and Savings.

 

A 529 Prepaid Plan allows you to lock in the rates of today. Your investment will grow at the same rate as tuition increases. This means that you pay the cost of a year of school at today’s price and when your child goes to college in the future your money will equal a year of school for that year. This is a good plan if you are worried that the increasing rise in tuition will prevent you from helping fund your child’s education. Prepaid Plans work best if your child is planning on attending an in-state college. If they choose a private or out-of-state school you may have to cover the difference in cost.

 

A 529 Savings Plan contains a little more risk than a Prepaid Plan. A Savings Plan is based on market investments. So depending on the strength of your investments you can either hit big returns or be left short of your needs for college tuition. Many plans start with aggressive investing while the child is at a younger age and as the child gets closer to attending college the investments will be more conservative. Some people may not want to risk their child’s future on investments. It’s important to be comfortable with your investment options and to back out if you feel that they are too high-risk.

If your child decides that they are not going to attend college then you do have some options for the money you have already invested. You can hang on to the plan incase your child changes their mind and decides to attend college. You may also transfer it to another member of the family. Some fees may apply depending on your individual circumstances though.

 

You can also cash out the earnings for a fee. The earnings will be penalized twice though, once by the state (usually 10%) and again federally (an additional 10%). There are exceptions to the penalties if the beneficiary has died or become disabled, or if the beneficiary has received scholarships for school.

 

You can choose a 529 Plan in any state but it may pay to explore your own state’s options. You may be saving yourself from fees and allowing yourself certain benefits if you choose an in-state 529 Plan.

 

There are some disadvantages when it comes to a 529 Plan. If you are of a lower-income and can expect to receive financial aid, then a 529 Plan is probably not a good choice for you. A 529 Plan will reduce the amount of financial aid that you will qualify for. There is a lot of financial aid available that has better financial benefits than a 529 Plan.

 

You will also want to consider fees that are associated with the maintenance of your investment accounts. Unless you know your way around investments, you will have to hire a professional to take care of everything for you, and obviously they will charge you a fee. Sometimes fees can eat up all of your earnings, which make it obsolete to invest in the first place. It is best to look for a 529 Plan that has annual expenses of less than 1%.

 

It is important that you research 529 Plans thoroughly as each state has different obligations. There are also many details involved with investing that you need to consult a professional for. You may find that you have the ability and resources to use a 529 College Plan to help secure an educational future for your child.

 

RESOURCES:
Here are some websites that have more information on 529 Plans.

www.savingforcollege.com

www.finaid.org/prepaid.phtml

www.theeducationplan.com/learn/529about.shtml

If you do not have a copy of our FREE “Simplified Guide to Financial Life Skills” workbook, contact us and we will ship one to you at – NO COST! –

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My Financial Journal

t’s hard to believe that I have already been out of high school for over 10 years now and have been out of college for 5. I learned the hard way about saving money while at college. Information that I have been finding and sharing would have helped me numerous times along the way. The one thing I will say is you become very creative and resourceful in finding ways to save money while at school.

 

I was lucky enough to live a half-days drive from home and had hometown friends who also went to school with me. This helped save a lot with travel expenses since we would often carpool back home. I was the recipient of more rides than I gave, due to the fact I didn’t always drive the most reliable vehicles.

I found myself splitting a lot of things with friends and classmates. A few times if I had a class with a friend we would split the cost for a book and each of us would use it. This didn’t always work out that well. When both the people sharing the book tend to procrastinate you find out fast that sharing a book doesn’t work. So, if your kids are thinking about doing something similar make sure the class structure allows for it. If it is a class with a lot of book assignments it may be difficult to share.

 

I recommend not buying books at the on-campus books store. Look online first and you will be shocked how much you can save and how many bookstores markup the required texts. This is something that I wish I had done a lot more of because the price of textbooks is staggering.

 

The other thing that schools seem more flexible with is the meal plan situation. After my freshman year of school I realized that I used maybe half of my allotted meals that I had paid for at the beginning of the year. There were plenty of times that I didn’t choose to go to the cafeteria to eat. They were pretty adamant in not letting me out of the meal program even though I didn’t use them all. I realize they want to let parents know that 3 meals are available to them every day but the reality is many schedules don’t allow you to be able to eat there 3 times a day.

 

When it comes to college there are plenty of things that you can save on and even more that kids will probably waste money on. That’s a part of the experience. There’s a good chance that once your kids graduate they will look back on some of the questionable choices they made in regards to where their money went. At least I hope they will, I know it would make me feel better about myself knowing I wasn’t the only one who wasted money on things while earning my degree. Hopefully though they can learn ahead of time and minimize the financial missteps.

 

I have yet to experience the joy of back-to-school shopping for my kids. I have a couple more years to arm myself with as much knowledge as possible. I’m worried that technology will be so advanced that it will be a requirement that all second graders have a pencil box and laptop computer. Maybe I will have my wife start collecting school items that her students forget. If I’m lucky I won’t have to buy any supplies at all.

 

My wife and I really enjoy hosting parties. Whether it’s a summer barbeque, Christmas sweater party, or Superbowl gathering, we find ourselves inviting people over for food and socializing. Sometimes I wonder why we put ourselves through such torture. Scrambling around last minute to make sure we’ve dusted under the TV and vacuumed the ceiling fan while setting out chips and beverages. We always tend to get stressed out but always end up enjoying ourselves.

 

The more often we host parties the more times we save by not wasting money on things that are not necessary. We tend to have invitees bring something to share and we never run out of food. You’d be surprised how much people are willing to contribute as long as they don’t have to clean up afterward. So we are looking forward to Labor Day but may keep it low-key given our hectic summer schedule this year.

 

One thing that I have been debating about with myself this summer is paying someone to mow my lawn. I do not have a big yard at all and have the equipment to do it; it’s just that I have never really been a fan of yard work. Obviously the most affordable option is for me to do it myself, but sometimes you have to weigh the costs.

 

There are many affordable options in the form of neighborhood teenagers looking for extra dough. Given the fact that I can hardly find the time for yard work and that when I do my allergies go haywire this would be a good investment for me. So, sometimes even the most affordable way has to make way for your best interests. Just make sure you can afford it.

 

I hope you all can make the most of what’s left of summer and until next time, good luck and have fun.

Student Loan Relief

So you’re done with college and you are proudly displaying that diploma on your wall. The odds are you have a wealth of college loans that will have to start being paid back very soon and the economy isn’t doing you any favors. There may be some assistance available for you.

 

There was recently a provision to the College Cost Reduction and Access Act of 2007 that will help make payments more affordable. The provision is an Income-Based Repayment plan. So if you didn’t land the great high paying job right out of school you won’t be expected to make big payments on your student loan.

 

Basing loan payments on income isn’t a new concept. For years, graduates with federal student loans had options to reduce or eliminate their payments, depending on how much money they made. But IBR is intended to be more generous.


IBR caps monthly payments at 15% of earnings above 150% of the poverty line, or $10,830 for a single-person household. Online calculators at the free public service site FinAid.org can help you compare what your income-based payments, income-contingent payments and income-sensitive payments would be.

There are situations in which an IBR payment would be zero. If your payment is so low it doesn’t cover the interest accruing on your loan, the government will pay the interest for three years on subsidized Stafford loans, which are government-backed loans given to financially needy students that do not accrue interest while the borrower is in school.

 

After that period, and for all of the other kinds of unsubsidized federal loans, unpaid interest will accrue but will not compound. In other words, you won’t be charged interest on top of interest.

 

Borrowers who think they could benefit from IBR should contact their lender and ask for an application that will authorize the release of their adjusted gross income from the Internal Revenue Service each year.

 

The news is even more promising for people working in public service jobs: government employees, teachers in public schools and universities, workers at public hospitals, and anyone working for a 501(c)(3) nonprofit would qualify. Anyone working in a qualifying job who borrowed from the Direct Loan Program is eligible for loan forgiveness after 10 years, down from 25.

 

To qualify for forgiveness, borrowers who work in a public-interest position must either have an existing Direct Loan or consolidate a federal loan with a private lender into the Direct Loan Program and make 120 payments after Oct. 1, 2007. The payments do not have to be consecutive, can be made while at different eligible positions, and must be made on the income-based or standard repayment plans.

 

At this point, the burden is on borrowers to document where they were working during their repayment period. The Department of Education is planning to develop a more definitive system to confirm eligibility, but right now borrowers should keep pay stubs and tax documents that verify their work history.

 

IBR and public-loan forgiveness won’t be the best options for every borrower. Some borrowers — those able to make higher monthly payments — would be better served by sticking with a traditional payment plan to avoid accruing years of additional interest. Graduates who financed their education with private loans are ineligible entirely.

 

For more information and details go to:
http://www.nasfaa.org/publications/2007/G2669Summary091007.html

Scam Alert

Facing foreclosure? Scammers are targeting people having trouble paying their mortgages. Some claim to be able to “rescue” homeowners from foreclosures, while others promise loan modifications – for a fee. The Federal Trade Commission, the nation’s consumer protection agency, wants you to know how to avoid scams that could make your housing situation go from bad to worse.

 

 

Don’t Get Hit by a Pitch.
“We can stop your foreclosure!”
“97% success rate!”
“Guaranteed to save your home!”

 

These kinds of claims are the tell-tale signs of a foreclosure rip-off. Steer clear of anyone who offers an easy out.

 

Don’t Pay for a Promise.
Don’t pay any business, organization, or person who promises to prevent foreclosure or get you a new mortgage. These so-called foreclosure rescue companiesÓ claim they can help save your home, but they’re out to make a quick buck. Some may request hefty fees in advance – and then stop returning your calls. Others may string you along before disclosing their charges. Cut off all dealings if someone insists on a fee.

 

Send Payments Directly.
Some scammers offer to handle financial arrangements for you, but then just pocket your payment. Send your mortgage payments ONLY to your mortgage servicer.

 

Don’t Pay for a Second Opinion.
Have you applied for a loan modification and been turned down? Never pay for a “second opinion.”

 

Imitations = Frustrations.
Some con artists use names, phone numbers, and websites to make it look like they’re part of the government. If you want to contact a government agency, type the web address directly into your browser and look up any address you aren’t sure about. Use phone numbers listed on agency websites or in other reliable sources, like the Blue Pages in your phone directory. Don’t click on links or open any attachments in unexpected emails.

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