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:

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.

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.

5 Ideas for Kids to Learn about Money

5 Ideas to Help your Kids Learn about Money

1. Play Games: Monopoly is a classic board game for a reason. Lessons in real estate, opportunity costs, and cash management transfer well to real world economics. For young family members, consider Monopoly Junior.

2. Take Field Trips: Allow your child to accompany you to the bank. Instead of going through the drive through, go inside and let your child help you fill out the deposit slip. Explain the basics behind a checking account, credit and debit cards, and mortgages and loans.

3: Talk the Talk: Many parents think it’s taboo to discuss finances in front of their kids. On the contrary, an open discussion about family finances allows your child an opportunity to learn important financial topics from the best teachers available—mom and dad.

4: Save Up: As a family, save lose change and dollar bills toward an agreed upon family goal—such as a trip to the circus, vacation, or even a pizza party. Let your kids be part of the end reward to feel the satisfaction of accumulating funds for a goal.

5: Start a Business: Lemonade stands, bake sales, babysitting or lawn care…find your child’s talents and encourage them to start a mini-business.

New Stimulus Idea: Forgive Student Loan Debt? No Way!

So, this has been floating around facebook, and I finally feel like interjecting.

There is a petition circulating from SignOn.org, to encourage lawmakers to forgive student loan debt as part of a new economic stimulus plan.

I have to say (though I’m sure I’m in the minority) that this is an awful idea.

In full disclosure, I will admit that I personally have no student loans (thanks to generous and hard-working parents, a reasonable in-state college, and KEES scholarship money.)

However, David and I are now sitting on ginormous student loans thanks to his attendance at the University of Louisville Medical School. Just like we do with all of our finances, David and I consider this debt to be a burden we both share. Although only his name is on the loans, it is a part of our entire family’s financial plan, and we are both taking responsibilities to tackle the payments.

Therefore, you’d be hard press to find another family that could benefit more than we could from a loan forgiveness stimulus package. And yet, I still think it’s an awful idea.

Why?

First and foremost, I think there is a lesson in responsibility that would be lost should the government honestly consider eliminating student loan debt. A loan is an I.O.U. Not an I.O.U (but let’s forget about the “O” part.)

Those of us with student loans have a legal (and ethical) responsibility to make good on the promise we made when we borrowed the funds. What kind of society are we living in when a student can borrow $100,000 for a private education, never pay a dime of principal or interest, and expect the debt to be magically wiped away with a magical congressional wand?

A post-high school education in this country is a luxury, not a necessity. It is a choice, and it is a privilege. It is a blessing in our country that any one who really wants to receive a college education (or post-graduate education for that matter) has the opportunity and resources available to do that. That doesn’t mean one will receive their education for free, be able to attend any college one desires, or graduate without any ill financial consequences or debt. It just means the opportunity is there, although some will inevitably have to sacrifice for it more than others.

By taking out student loans, you are investing in your future, believing that the education you receive will provide you with enough income to later in life make good on your loans. That’s how loans work. Someone lends you money today, in exchange for the return of the money (and interest) at a later date. Loans are contracts. Loans are promises to pay. Loans shouldn’t be forgivable.

Secondly, as a taxpayer, I have a problem with the forgiveness of student loans, justified only by the fact that they are “student loans.” Most students that borrow for college are not just borrowing money for tuition, books, and fees. Justifiablly so, these students are borrowing money for living expenses, food, shelter, entertainment, computers, clothes, beer, concert tickets, etc… etc….

We live in a college town, and I see this every day. These kids support our town through their plentiful (and sometimes frivolous) spending patterns. David will be the first to admit that it was his borrowed money that paid for everything during medical school—beers while watching the game with the guys, our dates, and even a trip or two now and then. Please tell me why a taxpayer (or anyone other than David or myself for that matter) should be responsible for paying for those types of expenses?

And lastly, beyond the ethical dilemma I think this would cause, is an economically more important point in that I think the idea would fail as a means of a stimulus plan. We’d be “bailing out” those with student loan debt—college graduates, lawyers, doctors–the ones in our country who need to be “bailed out” the least.

I understand some college graduates are having trouble finding a job in this economy and are having difficulty making student loan payments. I do think there could be adjustments to the system, though I won’t go into that in this post (for example, our loans are at an interest rate of 6.75%–well above the rate we pay for our mortgage or car loan). But completely forgiving debt would not hold the millions of students responsible for a promise they made. Nor do I think it would encourage job growth, as there would be even less of an incentive for people to find employment.

If you are a graduate having trouble with your loans, consider Federal programs that qualify you for a portion (or complete) student loan forgiveness through public service. You can find out more about these opportunities by visiting http://www.finaid.org/loans/publicservice.phtml

Online Budgeting Tools

Here are some great online budgeting tools to help you get started on budgeting:

Microsoft Office offers custom budget templates: http://office.microsoft.com/en-us/templates

A great budgeting tool I use and love is Mint. It sends alerts based on personal information and settings. Great Mobile App as well:

www.mint.com

For a small business, I highly recommend the use of QuickBooks. This is what I use for my small business to keep track and send out invoices.

http://quickbooks.intuit.com/

You might also find that a simple Excel spreadsheet, Word document, or old fashion pen and paper works for you. Whatever format you choose is less important than making sure you consistently update, review, and follow your family or business budget.

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