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Category Archives: WAHM Finance and Business Tips

Upromise: A great way to save for college

This week, we opened up a 529 plan for Max’s college.  In lieu of gifts, we collected money from friends and family at his first birthday party.  We are also contributing monthly from our bank account—very easy to set up!

 

Being a financial planner, I thought I knew all there was to know about 529 plans.  BUT, I learned about something very exciting while doing a little research this week. 

 

I discovered the Upromise program, and I love it!  Basically, it is a company (sponsored by our dear friends at Sallie Mae) that helps parents, family, and friends save for college every time they shop online, or use the Upromise card at accepted retailers.

 

We already have a card we love and use for rewards (the Wells Fargo card that pays back 1% of what we spend directly to the principal on our mortgage).  So, I did not sign up for another credit card through the Upromise program.  But the credit card is only one aspect of the savings program.  The other aspect is easy to participate in!

 

Here’s how it works. 

- You link your 529 account to your Upromise account. (Easy!)

- When you shop online, visit www.Upromise.com first.  From there, select the store you’d like to shop at.   A new window will appear with the store’s website.  Shop from there, and a certain percentage of what you spend will be earned for your 529 savings account.

 

It is basically a rewards program in which companies like Wal-mart, Babies R Us, Target (along with many, many others) reward you for shopping through the Upromise program.

 

I did it for the first time yesterday, and it was very smooth and easy.  We needed a new car seat, and I finally found the one I wanted from Wal-Mart.  So I went to the Upromise website, logged in, then clicked on Wal-Mart.   A new window opened, I went through the process of purchasing what I needed, and 5% of the total cost will be contributed to Max’s 529 account.

 

It was that easy! Upromise is the smart way to save for college!

 

You can also invite friends and family to participate.  For example, my mom signed up with max’s number.  So if she purchases anything online through the program, a portion of HER purchased will also go to Max’s fund…. you see how this works………

 

The financial planner in me is so excited!! This is a great and easy opportunity to earn FREE money for college for anyone that shops online, anyway.

 

I was very impressed with the stores they have agreements with.  Not limited at all!  Stores such as Target, Wal-mart, Apple, Dell, Gap, The Children’s Place, Lowes, etc. etc.

 

As I mentioned, there is also a credit card they offer for additional bonuses.  We opted out of that.  But if you are looking for a good rewards program credit card, this sounds like a good idea.

 

For more information, visit their website by clicking on the banner below:


Join Upromise!

College Fund for 1st Birthday Party

For Max’s first birthday party, we asked our guests for no gifts!  After all, he’s only one year old, and is fortunate to have plenty of toys, clothes, books, and gadgets that any kid can hope for.

Instead, we told friends and family that if they wanted to do something, they could bring lose change or dollar bills to contribute to his college fund.  (With all of daddy’s student loans, we better get started early!!)

 

I wrote this poem and included it as an insert in the guests’ invitations.  I also printed it on a photo and placed it near a bucket for the change at his party.  Some friends brought change and others gave money.  He also got a few checks (our friends and family were tooooo generous!!)

 

I plan to do this for future parties as well.  It’s a great way to teach our children about money—-that they don’t always need more “stuff” and that things like college and saving for your future are so important and necessary.

Checking your Credit Score

You’ve seen the commercials, urging you to “Get your free credit report today!”

 

Though advertised campaigns and not public service announcements, I encourage readers to indeed, review your credit report for free online.

 

Recently, I checked mine out, assuming to find nothing but on time payments and business as usual. However, I was devastated to discover a charge from a credit agency of $70. It was tearing my credit score apart. I did not recognize the company, the charge, nor had I received any types of notices or information from them about this alleged outstanding balance.

 

I followed the dispute process to have it removed, as I encourage readers to do if they feel there is unfair information on your report.

 

You can check out your credit online at http://www.annualcreditreport.com. The law provides one free credit report annually. However, this is for each of the three major credit agencies. Since they are usually very similar, consider checking your report quarterly, each time from a different agency.

 

Be cautious however, of sites that want you to purchase your credit score. More importantly, is reviewing the information on your report to find any errors or ommissions (as I did) that affect your golden score.

 

Read more about:  Retirement & Getting out of Debt

Price of Kentucky Colleges

Paying for higher education can be daunting.  As I wrote in a piece recently regarding student loan repayment, the overall, long-term costs of an education must be consider by students carefully. College tuition is increasing on average much faster than normal inflation, causing a hurdle for those that are considering even in-state tuition.  

 

In our state, not all colleges are created equally—and neither are their price tags.  Here’s a comparison of the price of some of the Bluegrass’ top public colleges and universities for the 2010-2011 academic year:

 

University of Kentucky:   $4,305
University of Louisville: $4,212
Western Kentucky University:  $3,780
Nothern Kentucky University:  $3,564
Eastern Kentucky University:  $3,312
Morehead State University:  $3,246
Murray State:  $2,988

 

All data is for a full time undergraduate student, in state tuition, for one semester.  This includes tuition only (no room and board).

 

FinAid, a website dedicated to providing students and parents with information on financial aid, estimates that tuition will continue to increase at a rate nearly twice of inflation.   According to FinAid “During any 17-year period from 1958 to 2001, the average annual tuition inflation rate was between 6% and 9%…..For a baby born today, this means that college costs will be more than three times current rates when the child matriculates in college.”

 

Even though the cost of college education is increasing drastically, many would argue that the benefits associated with earning such a degree have not.  Thus, each individual should do their own cost-benefit analysis to determine what type of degree (Bachelor’s, Associates, Technical) and what type of college (private, public, in-state) is appropriate for their situation. 

 

The amount of student loans outstanding in this country could decrease, simply by high school graduates taking an honest and realistic evaluation of their potential future income, and planning college accordingly. 

 

Any of these above mentioned schools will provide the education one needs to be almost any profession— a teacher, an attorney, a doctor.  Yet, their price tags vary drastically, and that is something that all parents and students must take into consideration when making college plans.

 

 

Who is Checking my Credit?

 

 

There’s a lot of talk (and commercials) about consumer credit scores. Knowing one’s score has become a common objective of consumers, brought to the fore front by tightening credit and availability of loans.

 
But besides knowing how to check your own credit score and what composes that individual magic number, is knowing who will view, evaluate, and rely on such a score to make important decisions.  And you might be surprised to learn,  it’s not just lenders anymore.

 

 Credit checking has gone beyond credit and lending to include other industries such as insurance companies, landlords, and even employers.

 
Insurance companies may review your score as part of their underwriting process to determine premium rates on auto and home insurance.  Lower score could mean higher rates.  You should ask your agent at time of application if your credit is an underwriting factor.

 
Landlords, just like lenders, rely on a tenant to pay in full and on time.  A credit report is a good indicator of a tenant’s capability to do so. 

 

Even employers have joined the credit checking bandwagon.  Especially as the job market has tightened, employers may review the credit report of a potential employee as a sign of responsibility, or lack thereof.   In certain industries (such as investment brokers) a credit check is mandatory prior to employment.

 

The law entitles consumers to one free credit report annually, from each of the major credit bureaus.  Review yours to ensure there is no false or inaccurate information.  Be weary of companies that make you pay to see your credit score.  Simply reviewing the report’s accuracy is the most important.

Social Security benefits for next generation? Don’t count on it!

Is our Social Security in Jeopardy?

 

My answer would be, “Absolutely.”

 

In fact, the Social Security Administration admits to the same questionable and doubtful view of the future of its program.  Here is what the Social Security Administration itself has to say on the matter,

 

“The financial conditions of the Social Security and Medicare programs remain challenging. Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative modifications if disruptive consequences for beneficiaries and taxpayers are to be avoided. “

 

During the infamous “Debt Ceiling” debate in August, concerns about Social Security and Medicare were again brought to the forefront of the American people’s attention—as they should be.

 

As most know, Social Security is in serious fiscal trouble.  While many experts believe there is no immediate concern for those currently receiving benefits, or to those who may do so in the near future, I don’t feel as confident.  It’s my opinion that Americans will need to rely more on their own income and savings, and less on Social Security retirement benefits to maintain their desired retirement lifestyle.

 

According to the SSA, 94% of American workers are covered under Social Security. 

 

Social Security is mostly funded through payroll tax in which employees and employers each pay 6.2% of wages up to $106,800.  Self-employed individuals pay the combined rate of 13.4%.

 

While disabled workers and survivors receive benefits under the SSA, the majority of beneficiaries are retired workers.  In 2011, $40.7 billion will be paid out as retirement benefits.   The average monthly benefit paid to a retired worker in 2011 is $1,175.

 

As a young individual in this country, I am not relying on any form of Social Security for my retirement.   I encourage readers under the current retirement age to conservatively assume such benefits will be unavailable or greatly reduced in the future. 

 

Yes, I understand that as a taxpayer I am contributing to Social Security.  But I am not naive enough to believe these funds are being set aside for me (or my generations) future needs.  On the contrary, what we are paying into the system now is help funding our parents and grandparent’s generation.

 

Somewhere, the cycle has to stop.

 

While no politician wants to be involved in cutting any type of social security benefits, the truth remains that there is actuarially speaking, not enough funds to sustain the system in its current form.  Changes will inevitably have to be made either to the amount of benefits received, or qualifications for receiving such benefits.

 

Thus, my family and I will work hard to create our own stream of retirement income for our future.  Any social security we receive I will consider a bonus or unplanned addition. 

 

 Will I be frustrated if I never receive a dime of benefits after years of contributing to the system? Of course.  Am I hopeful major reform is made and that Social Security can be sustainable for our generation and those to come?  Sure.  But, realistically do I see that happening?  No.

 

Take your future into your own hands.  Work hard, budget, save for retirement, and accumulate your own wealth and retirement income.

 

4 Estate Planning Documents every Family needs

4 Estate Planning Documents you Need

 

Will:
A will is simply a document which outlines your final wishes.  It can be as simple as a “sweetheart will” in which one spouse leaves everything to the other, or as complex as one which makes considerations for charities, non family members, or trusts.  A guardianship provision, if applicable, denotes your choice of a guardian for your minor children.

 

Living Will:
Also called a health care directive, a living will serves as an outline of your preferences regarding medical treatment and health care decisions.  It may be used by health care professionals or by your family in the event you become incapacitated.  The document also allows you to appoint someone to make decisions and carry out your wishes on your behalf.

 

Power of Attorney:
Similar to a living will, a Power of Attorney appoints another individual to act on your behalf. The powers given can vary drastically depending upon how the document is created.  It is therefore very important to choose your POA wisely, and to consider with great thought the amount of power you wish for them to have.

 

Trust:
Trusts also vary greatly in complexity.  Because of this, they can be a great estate planning tool.  Trusts may be used to reduce estate taxes, provide for minor or special needs children in the event a parent’s death, or simply as a vehicle to reposition assets.

 

Estate planning is complex. Because it is not a one-size-fits-all kind of process, it’s often worth hiring a reasonably priced attorney to have your documents created or reviewed.

Couponing 101

Thanks to TLC’s new show, “Extreme Couponing” an old money saving idea has come back into style.  While most do not have the time or patience that “Extreme” couponing entails, here are some easy ways to get started on the Coupon Craze.  Your budget will thank you!

 

Traditional Cut and Clip:

Some of the best coupons are found the traditional way, just like your mother taught you.  Purchase or subscribe to the Sunday edition of the paper (purchase multiple copies for multiple coupons) and start clipping and filing.  Manufacturer’s coupons are advantageous in that they can be used at multiple stores, and used when stores offer additional promotions such as Double Coupon Days.

 

Online Coupons:

User friendly websites such as www.couponmom.com and www.redplum.com printable grocery coupons at no cost.  Such websites also provide additional grocery saving tips and advice.  Try Kroger’s website to upload coupons straight onto your Kroger Plus card.  The discount will automatically apply during checkout.

 

Be Loyal:

Stores reward loyalty.  So if you do most of your shopping at Kroger, Walgreens, or CVS, consider signing up for their rewards program.  Ask a sales associated what perks you may receive for items besides groceries such as prescriptions or fuel.

 

Subscribe to Email lists and mailings:

While you may receive some junk, you may also receive valuable sale information emailed only to the store’s subscribed users.  Consider setting up a separate email address to avoid receiving “junk” in your personal inbox.

 

Consider keeping track of your coupon savings and allocating it toward an emergency fund, debt payments, or other financial goal.

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