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The Cons of a 529 Plan

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While there are advantages to using 529 plans as an investment for college funds, there are some huge cons to consider:

While 529 plans are a great idea to help save up for your child’s college, they have some disadvantages too.

You have to use the money for college
If you don’t use the money you invest in a 529 savings plan for college tuition, you will be penalized when you take out the money to use it for something else. Also, both your state and the federal government will tax the earnings on your account in your present tax bracket.

It could affect your financial aid eligibility
Currently, financial aid eligibility isn’t disturbed much by 529 plans, college savings plans or pre-paid tuition plans since these plans are thought to be part of the parents’ assets in the calculation of the Expected Family Contribution (EFC) toward college costs.

Your investment options are limited
Even though your 529 savings plan is tax-deferred, you might give up the chance to change your mind about where to invest your money. Meaning, if you discover a mutual fund that is growing more in interest than your 529 plan and desire to move your money, then you will be subject to a penalty.

Your investing window may be tight

Many plans have an all-in-one fund that’s just like a target-date fund. It’s created to own more stocks when your child is young and more bonds and cash equivalents, such as money market mutual funds when he or she nears college.

If you have a late start, you could find yourself stuck in a close investing time frame.

Put off saving until your child leaves daycare, for instance, and you’ll have just around 13 years to grow a college fund.

Since you’ll need to get into asset-preservation mode six to seven years before the child starts college, you’ll honestly have only around five years on the front end to put in your portfolio higher-yielding stocks or CDs.

 

The Pros of a 529 Plan 

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Before you invest in any sort of college savings plan, you might want to consider the pros and cons that it provides. The information here could help you as you consider using a 529 plan to have college funds for your child.

The benefits of a 529 plan

Here are some good reasons to invest in a 529 college plan for our child’s college fund:

529 College Saving plans are a great way to ensure that your child can get a good education.

529 plans are tax-deferred investments
When you invest in a 529 college savings plan, your withdrawals will probably be tax-free. It’s always smart to check IRS Publication to be sure. Until now, this tax-free provision was made to expire in 2010, but, thanks to current changes to the law, it seems to be an advantage that will be around for years.

Your account grows interest
529 plans work like mutual funds. Some states’ plans might work differently, but most invest your money in stocks and bonds in the chance that it will grow faster than a regular bank savings account. Most plans do a very solid job of managing your money.

An automatic investment option
Many plans provide an automatic investment choice which lets the 529 college plan take out a certain amount of money every month from your checking or savings account. You decide the amount and better yet, you get to enjoy hands-free investing that aids in preventing you from spending your money on something else. You will have money in the bank!

You can contribute as much as you want
College savings 529 plans let you put in as much money as you want. Pre-paid tuition plans, sadly, do not. They limit the amount of money you can put in annually the same as an IRA. While unlimited savings sounds wonderful, be cautious not to put yourself into a corner by saving too much.

 

 

Is Bitcoin Over? 

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The worth of internet cryptocurrencies such as Bitcoin rose in recent years, with bitcoin chalking up a rise of over 1,500 per-cent from around $1,000 per coin to more than $18,000 between January and December. Since climbing to this fever pitch, though, the cryptocurrency market has lost almost three-quarters of its value, losing over $500b (£393bn) in a steep sell-off that puts the recent decline of the Turkish lira in the dark.

Bitcoin is in a downward spiral.

The price of a Bitcoin is now about $6,245, a 68 per-cent drop in recent months. Ethereum, the second-largest cryptocurrency, has suffered a similar slide. It is down over 80 per-cent from around $1,400 to $173 a coin over the same period. Lastly, Ripple, the third-largest, is down 92 per-cent, from around $3.20 a coin to $0.26.

Downward spiral

Experts say numerous factors drove the decline. One of the most critical is the refusal of the US regulators to approve a number of Exchange Traded Funds (ETFs) based on Bitcoin because of concerns over the security of exchanges.

Mark Ward, head of execution at Sanlam UK, said: “A lot was waiting on that ETF approval and it hasn’t come as the SEC just doesn’t think cryptocurrencies are secure enough for the mainstream currency.” This unwillingness was reinforced by the largest cryptocurrency hack on record: in January $534m was taken from Japanese exchange Coincheck, dwarfing the notorious hack on MountGox in 2014. Other raids recently are those on South Korean exchanges Coinrail and Bithumb, which lost £37m and $30m respectively.

Other noted factors for the crypto crash are the increasing price of mining the bigger currencies, many warnings from central banks, and a surge of selling among crypto entrepreneurs. Though, for some money specialists, really what we are seeing is the end of a trend.

Taking a Vacation on a Budget

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Taking a family vacation doesn’t have to make the family broke. If you are willing to be flexible about opportunities and timing, you can get a good deal. From money-saving strategies to bargain destinations, here’s the 411 to creating the perfect budget-friendly family vacation with kids.

The secret to arranging an affordable family vacation is developing a game plan that’s surefire and simple. Here’s how to craft a no-fail plan that will guarantee you are forever able to have a great getaway at an affordable cost.

If it’s May, it’s that time for getaways from the professional travel groups. The spring is the time for travel sales have savings of up to 60% off regular prices. Every year, over 25% of the US top travel brands have teamed up with the U.S.T.A. to provide travel deals not available anywhere else.

Dying to get away but don’t want to spend a lot of money? Get the kids and get to packing. Memorial Day weekend is one of the year’s best secret seasons. Impulsive travelers can get some of the largest savings.

The simplest way to keep family vacation costs low? Choose a place in driving distance of where you reside.

These travel deal websites will hook you up with incredible getaway deals close to where you live. Sign up for alerts and newsletters using a new e-mail account just for vacation info.

For vacations where it makes more sense to fly, sign up for alerts from sites that follow airfares. If you pick just one, make it AirfareWatchdog, which allows you to get alerts based on your home airport. This way, you’re always in the know about which destination is having a great sale and you can be the first to book tickets. This year, make that family vacation dream come true!

Manage Your Finances When You’re Laid Off

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No one is exempt from layoffs. Whether you’re 20 or 50, odds are that sooner or later you will find yourself, usual through no fault of your own, out of a job. So it’s only logic to plan ahead. Many money advisers recommend saving equal to six months’ salary to help you if you find yourself unemployed. You will possibly need more, particularly if you have a family and are the main bread winner.

Some things you can’t plan for

However, most of us don’t think about this scenario until we are really laid off. So what do you do if you haven’t organized your finances?

Determine How You Are Spending Your Money

When times are good, most people don’t consider how they spend money. We know how much the rent, car note, or mortgage is, but we don’t give much attention to daily spending. How much do we spend eat out at restaurants? What is your grocery bill every week? What about insurance and energy costs? Being more conscious of how you spend your money will make you think about spending it more wisely. Especially when you don’t have a check coming in every two weeks.

See Where You Can Cut Back

If you’re going to be laid off, you need to create a plan for reducing expenses. Create a budget that removes most unnecessary expenses, but don’t entirely remove entertainment. You need to keep up your spirits and stay in touch with your contacts. Though, you can reduce these expenses significantly. Find cheap places to go out to drink and eat. Go to budget movies instead of plays, always getting the reduced admissions. Don’t give up the gym but think about joining a less costlier one, unless you use the gym to network. Crank your thermostat up in the summer and down in the winter.

Save on Your Monthly Grocery Bill

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After transportation and housing costs, food takes up a lot of the average household’s budget than anything else. You’ve always seeking ways to cut your transportation and housing. Now let’s look at a couple of ways to trim your food budget. You can do it without having to starve to death.

Set a Budget, and Stick to It

These are the first and last words in trimming your grocery bill. It’s all about setting goals. You will never be successful unless you are clear on what you are attempting to do.

The simplest way to begin with a grocery budget is to save a couple of receipts, figure out how much you typically spend on average, then deduct 10% from that amount. If you easily accomplish this, you can go ahead and reduce your budget even more.

Don’t Shop the Same Store Each Week

Shopping multiple stores is important to paying less for food, but it’s a strategy that many folks balk at because it might be time consuming. Here’s the way it works. You don’t have to shop at three stores every week, wasting time and gas running from store to store. Instead, be smart. When your store sales paper arrives, find the best deals in the stores around you, then pick which store will help you save the most this week.

Coupons

From everyone who does it, you can believe that coupons are worth the time they take to load on a store card, print, or clip. Digital coupon for stores bring around 45% in savings.

You can save more than 50% every week using them. Some stores offer freebies every week too. It pays tremendously to get a store card. Consider this, if you use just five $1 coupons every week on items you frequently buy, you save over $200 every year.

Ways to Lower Your Auto Insurance

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A good way to keep your auto insurance costs low is to have a good driving record. Bet you didn’t know that having one not only saves lives but saves money as well.

Below are some things you can do to reduce your auto insurance costs.

Shop around

Prices differ from company to company. Ergo, it pays to shop around. Have at least three price quotes. You can contact companies directly or get information on the web. Your state insurance department may also offer comparisons of prices by big name auto insurers.

You get insurance to safeguard you financially and give peace of mind. It’s vital to choose a company that is financially stable. Look at the financial health of insurance companies with rating companies like Standard & Poor’s and A.M. Best.

Get quotes from different sorts of insurance companies. A few sell through their own agents. These places have the same name as the insurance company. Some sell via independent agents who provide policies from many insurance companies. Some don’t use agents. They sell right to customers via the web or over the phone.

Don’t shop by price alone. Ask relatives and friends for their suggestions. Call the insurance department of your state to see if they give out info on company’s consumer complaints. Choose a company or agent who takes the time to answer your questions. Make a checklist to help you compare quotes from insurers.

Before you buy a car, compare insurance costs

Before you buy a used or new car, look at insurance costs. Car insurance premiums are based some on the car’s price, repair costs, the safety record and the probability of theft. Many insurers provide discounts for features that lessens the risk of theft or injury. To help you choose which car to buy, you can obtain information from the Insurance Institute for Highway Safety.

Cut Costs and Save Some Money Every Month

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Want to take control of your money? By making a few little changes, you can begin now with a plan to get your spending and savings back on track.

From cable bills to everyday spending habits, these tips will aid you to save more, reduce spending, and get on the right track to financial success!

Have Goals

You might feel that first on our list should be the well-known New Year’s resolutions we’ve become so used to every year. But since New Year’s resolutions tend to flop by January 2nd  every year, goal setting is a much better choice.

Establishing goals is a habit for folks who win with money, and it should become a habit for you as well. Research has shown that just by having a goal for something it gets you closer to that goal instead of not having any goals at all.

A critical part of this equation is ensuring your goals are specific, measurable, attainable, realistic, and time oriented. Yes, SMART! Once you have a goal in mind that has all these attributes, slice your goal into little pieces or milestones that you can hit more simpler. Once you get to each milestone, rejoice. This will aid in encouraging you as you go forward toward your financial goals.

Also, jot down your financial goals and place them in an noticeable place so you see them often, like on your mantle, refrigerator, or front door.

Negotiate prices

Did you know that you can negotiate a price in nearly any kind of buying situation? Make your money work for you the right way!

Though you might have formerly thought negotiation was only for big purchases like cars and homes, you can also negotiate online and at retail stores. You can even negotiate to get your bills reduced.

How to Live Frugal in College

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College life is full of huge fees, like the tuition – that it’s easy to not remember that saving a couple of dollars each

Budgeting during college is critical

day can truly add up and reduce the cost of going to college. Here are some easy habits and the money you can save.

  1. Use free transportation options for students like shuttle buses. This includes free buses on your campus or free buses that run between campuses in your area.  If you use them, you won’t need To have to take cabs, pay for public transportation, or have a car. Results? You could save hundreds of dollars or more each month.
  2. Make your own darn coffee. Do the math. If you spend $4.00 or more a day on coffee house coffee , that can add up to over $120 a month and almost $1,000 each academic year.
  3. Cook your own meals for savings even greater than those in #2. Moreover, pick a dorm that is within walking distance of a low-cost grocery store. There is no better source of good food that fits a student budget.
  4. Share textbooks with other students in your class. With the cost of textbooks climbing over $200, you can save over $1,000 a year with this easy strategy.
  5. Get a work/study job on campus. Many job, like working the check-in desk at the gym or the student health center lets you study while you earn an income. Over the course of a school year, those dollars truly add up.
  6. Find affordable off-campus housing, after matching the costs to college dormitories. Also, consider signing up for reduced meal plans that provide a limited number of meals a week in college dining halls. Remember that the bagel that you put in your pocket at breakfast could become your lunch, giving you two meals for the price of one.

Affordable Places to Retire

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You’ve most likely have been dreaming about retirement since the day you began working. But will your budget let you make those dreams a reality? It has a better opportunity if you choose an affordable retirement destination.

To detect some of the cheapest places in the U.S. where you will really want to retire, we tried to pick a good place to retire in each state. We based our choices on factors crucial to retirees like safety, taxes, health care, cost of living, and lifestyle. Here are the appealing places left that really cheap for retirement. Decide for yourself if any of these destinations could be where you live out your American dreams.

Montgomery, AL

Annual expenditures: $37,000

Akron, OH

Annual expenditures: $36,000

Cleveland, OH

Annual expenditures: $36,000

Augusta, GA

Annual expenditures: $36,000

Brownsville, TX

Annual expenditures: $35,000

Toledo, OH

Annual expenditures: $35,000

Memphis, TN

Annual expenditures: $34,000

Jackson, MS

Annual expenditures: $34,000

Other Cities for Retirement

  • Winchester, VA
  • Portland, ME
  • Gainesville, GA
  • Wenatchee, WA
  • Tulsa, OK
  • Cheyenne, WY
  • Columbus, IN
  • Ithaca, NY
  • Harrisburg, PA
  • Midland, TX

 

If money doesn’t matter, there’d be lots of incredible places to spend your retirement. An all-glass contemporary on the Malibu beach, a small winery in Napa Valley. A house in Paris.

But money really does matter. Even as the financial markets gets out of its recession, many of us are redefining what our “dream” retirement is going to look like.

Absolutely, Honolulu has well-priced pineapples and beaches. But not many of us can afford its average home price of over a half million dollars. Chicago has lake views and first-class dining, though its way over the top, extremely high percent sales tax can put those niceties out of reach. Then again, not many retirees want to relocate, even if it is cheap, to a one-stoplight town either.