Tips for Minimizing Student Debt

Tips for Minimizing Student Debt

From guidance counselors and parents to your soccer coach and nosy neighbors, everyone seems to be interested in where you’re planning on going to college. And with good reason — there’s a lot to consider when making this important decision, beyond just picking the right university or vocational school and figuring out your major. Education costs money … a lot of it. But with some practical planning, there are ways to rein in college costs even if your college fund hasn’t caught up with your dreams quite yet.

Figure out What You’ve Got to Work With

Have the “money talk” with your parents. Find out if they — or your grandparents — have funds put aside for you like a tax-advantaged 529 college savings plan. If they do, know that the impact on your financial aid is different based on whether your parents or your grandparents started the account. And don’t forget to ask for money toward your college fund for birthday presents and holiday gifts to bolster your savings.

Stretch Your Budget

Rather than going straight to a four-year school, consider spending your first year or two at a community college. Community college can cost much less — plus, you could potentially save on living expenses by commuting. You can then transfer to the school of your dreams in a year or two to dig into your major.

Plan Your Way Out of a Jam

Talk to your college advisor about the feasibility of graduating early. Look into concurrent enrollment programs that allow you to take reduced-cost college classes while in high school. AP testing and CLEP tests can also help you receive credit at a reduced rate and speed up your graduation date. Graduating even one semester early can save you thousands of dollars in tuition, housing and other expenses.

Scholarships Are Free Money

In addition to academic and sports scholarships, there are also community-based, gender and subject area scholarships. Once you’re in college, you can work with your major department or honor society to take advantage of these programs. Look into smaller scholarships as well. Sometimes they’re easier to get, and a lot of small scholarships can add up to more money. And don’t forget about grants if you have financial need. Many states and colleges offer their own need-based grant, research and scholarship programs that you can apply for.

Work-study and Summer Jobs

Instead of taking out more student loans, look for opportunities to participate in federal work-study. These are programs that provide you work during the semester and can help you reduce the need for debt. A summer job can build up your resume and help toward paying your college expenses for the coming year.

Get Ahead of Debt

Make sure you fill out the Free Application for Federal Student Aid each year to take advantage of grants, work-study and some scholarships. Speak with a financial professional to help you take steps now to sidestep serious debt and make your transition into life on your own as smooth as possible.


Your Dream Vacation Shouldn’t Be a Budget Nightmare

Your Dream Vacation Shouldn’t Be a Budget Nightmare

Almost every bucket list has at least one the vacation of a lifetime to a fantastic destination. Whether it’s whale watching on an Alaskan cruise or a romantic escape to Paris for just the two of you, it’s that one special trip you dream of your entire life. It may feel out of reach, but with a little bit of advance planning, your travel fantasy might be closer to reality than you think. Here are a few things you can do to indulge your wanderlust without breaking the bank.

Start Planning Now

Nothing gets done just by thinking about it. So, get out your calendar and to-do list and set your travel goal. Even if it’s five years away, an actual date on your calendar gives you something concrete to work toward. Break up your big goal into smaller steps, like researching your destination, establishing a budget and making reservations.

Invest in Your Dream

The last thing you need after a long vacation is a big credit card bill as a souvenir. Make your budget and then set a savings goal. Open an account dedicated to your vacation fund and decide how much you can afford to save each week or month. Commit to putting cash gifts, bonuses or raises into your vacation account. For family trips, get everyone involved. Start a communal jar for pocket change, or skip other luxuries in favor of contributions toward the big adventure.

Timing is Everything

Scheduling your trip for the off-season can make travel more affordable. While Paris is beautiful in the spring, the same museums, cafés and shops are also open in November and airfare and hotel rates are generally much lower then too. Avoiding tourist season also means avoiding big crowds and premium prices. Booking flights on major holidays, like Thanksgiving Day, can earn you reduced fares and additional open seats for a more comfortable flight.

Research all Your Options

Comparison shop for hotels, airfare, car rental rates and excursion packages. Make reservations early but check for generous no-fee cancelation policies in case your plans change. More research up front can mean more dollars left in your bank account after you unpack your bags at home.

Protect Your Plans

You’ve done all this work to invest in a big trip don’t let an unexpected medical emergency or natural disaster derail your itinerary. Trip Insurance is a relatively inexpensive way to be sure you’re not left out of pocket if things take a wrong turn. You can often buy flight insurance at the same time you book your airfare. Contact your insurance agent for general travel insurance as well as international health insurance if you’re going overseas. Check with your regular health insurance provider to see how traveling to your specific destination affects your coverage.

Don’t Raid Your 401(k)

Whatever you do, don’t trade fun now for a secure retirement later. Refrain from funding your dream trip from your 401(k). Even if you plan on paying yourself back, unanticipated life events can make that more difficult (leading to hefty penalties), and you may face a significant opportunity cost for not keeping your funds fully invested — even for a short time.

Be a Savvy Traveler

Don’t carry lots of cash on your trip. Use your debit card to take out what you need for purchases at shops, restaurants and hotels. If you go overseas, you can take advantage of the lowest available currency exchange rate by making electronic transactions instead of changing money ahead of time. However, know that some credit companies may freeze your card if you make out-of-US purchases without notifying them in advance.

Are you thinking that your big vacation might not be as far off as you thought it was? Contact your financial professional to make sure your trip is on track with your budget — and your retirement plan. And don’t forget to send us a postcard! Bon voyage!

Understanding Life Insurance Basics

Understanding Life Insurance Basics

It’s not a topic anyone particularly enjoys thinking about, but life insurance can be a crucial pillar of financial protection for those who mean the most to you. It helps ensure your loved ones are better able to meet their future expenses — no matter what should happen to you.

In return for your policy premium payments, the insurer promises to pay a predetermined benefit upon your passing. Your beneficiary can use the money toward whatever financial needs they may have at that time — or in the future. Depending on the provisions of your policy, your beneficiary may receive their benefit as a single lump-sum payment, a series of installment payments or by some other means. Here are some things the payout from a life insurance policy could be applied toward:

·         Paying off the mortgage on a family home.

·         Sending your children or grandchildren to college.

·         Supporting a favorite charitable cause.

·         Paying estate taxes.

·         Covering funeral expenses.

·         Helping your spouse pay everyday bills.

·         Providing for long term care.

·         Paying off student, credit card or other debt.

·         Protecting a business.

·         Supplementing retirement income.

But you have a number of decisions to make before you purchase a policy. First, you’ll have to choose between the two basic types of life insurance: term life and permanent life.

Term life insurance provides protection for a predetermined period of time: That could be 10, 20 or 30 years, for example. If the loss occurs within the period you’re covered for, your designated beneficiaries receive the benefit. If not, no benefit is paid out. You might be interested in this type of policy for income replacement prior to retirement or to provide care for your children until they become financially self-sufficient.

And you also have two options when it comes to permanent insurance: whole life or universal life insurance — with either able to provide lifetime coverage. Permanent life generally costs significantly more than term life policies, but it also accumulates cash value that you may even be able to borrow against should the need arise.

Whole life insurance coverage is more predictable as the premiums, rates of return and amount of benefit are guaranteed and fixed. These policies can be useful to help provide for longer term needs such as ongoing care for an adult child. Universal life insurance, on the other hand, can offer an adjustable death benefit as well as premiums, within certain parameters. Cash value growth is dependent on the interest rate climate, so it’s important to consider that potential impact when looking at this type of coverage. Finally, look into fees, no matter what type of policy you select.

Life insurance can be an important foundation of financial protection for your family. And while it may seem complicated, it doesn’t have to be. Your financial professional can explain the options available and help you determine which type of insurance best meets your needs and budget.


Is Buying an Electric Car Worth It?

Is Buying an Electric Car Worth It?

Consumers are attracted to electric vehicles (EV) for many reasons — efficiency, fossil fuel independence, eco-friendliness and the cool factor, just to name a few. Plus, EVs are fast and fun to drive, with powerful engines that are as quiet as a whisper. But are these vehicles truly all they’re cracked up to be? Are there any bumps in the road to be wary of before plunking down premium dollars on that new Tesla Model 3 or Nissan Leaf? Here are several considerations to keep in mind if you’re weighing the possibility of an EV purchase.

Service and Repair

A 2021 study from the U.S. Department of Energy’s Argonne National Laboratory analyzed the cost of vehicle ownership across different engine types. Overall, they found maintenance costs are 40% lower for EVs compared to cars with a gas-powered engine. That’s potentially good news if you’re looking to reduce the time your ride spends in the service center — and the expense that goes with it. But it’s only part of the ownership picture... 

A Less Costly Ride?

Electric cars generally cost more to purchase than their gas-engine counterparts, though government incentives can help offset the additional expense. As of December 2021, the base tax incentive for an EV purchase stands at $4,000. But that amount increases to $7,500 if your EV’s battery capacity meets a defined threshold. At the time of publication, legislation under review in Congress could further reduce costs with additional credit for vehicles made by U.S. companies that employ union workers and are powered by domestically manufactured batteries.

Watts vs. Gallons

One burning question likely on the minds of potential EV buyers is whether they’ll save on “fuel” costs. And according to a recent Wall Street Journal study, the answer is yes — provided you’re charging from home. Fuel costs for a combustion engine are considerably higher than what you’ll pay to “fill up” an EV strictly from a home-based charger. But when charging outside the home, the opposite can actually be true. WSJ says that gas-engine cars win out in this scenario because of the higher cost of using fast-charging stations.

Insurance and More

A car’s purchase price typically affects insurance premiums, so the higher sticker price of an EV would generally mean you’ll tend to pay more for insurance. In fact, a recent ValuePenguin study found that, on average, it costs nearly 40% more to insure an EV over a comparable gas-powered model. The study also notes that more than two-thirds of consumers aren’t aware of this additional cost.

To EV or Not to EV?

There are other factors to consider, including practical issues beyond the impact on your budget. For example, do you often need to drive long distances? Charging stations are becoming more and more common, but making sure they’re available where and when you need them may take a little preplanning. Plus, once you’re there, it takes longer to “refuel” compared to filling a traditional tank with gas.

Weigh the pros and cons of EVs carefully. Just like any big ticket purchase, selecting the car that’s right for you involves a careful review of your budget and resources. A qualified financial professional can help you make a decision that best fits your needs — and your wallet.



Gratitude Can Improve Your Financial Wellness

Gratitude Can Improve Your Financial Wellness

Do you struggle with making impulsive spending decisions that you later regret? Would you like to position yourself better financially for the future? What do you think it would take in order to do that?


·         Hiring a professional financial advisor?

·         Signing up for a personal finance class?

·         Long-term intensive psychotherapy?


The answer could be as simple as cultivating a more grateful mindset. In fact, a study out of the University of California, Riverside, Harvard Kennedy School and Northeastern University found just that. The researchers designed a clever experiment where subjects were offered $54 immediately or $80 in 30 days. Participants were randomly assigned to write about a past event that elicited either happy, neutral or grateful feelings.


The results showed that subjects instructed to write about an event that triggered grateful emotions were more apt to wait for the larger payout. And surprisingly, those in the “happy” group were as impatient as the “neutral” group. Interestingly, those who participated in the study were not instructed to constrain their memory selection to something related to money or even a spending decision — it could be about anything at all.


So, what does this say about real-world investment decisions?


The Cost of Impatience

Much of the success of long-term saving and investing is cultivating the ability to delay immediate gratification in favor of saving for the future, and making steady contributions to your investment and retirement accounts over time.


The “cost” of impatience in the experimental vignette was limited to a $26 difference. But similar decisions in the real world can really add up, from last-minute impulse buys at the grocery store to hitting “buy now” a little too often during late-night online shopping sprees. Additionally, the tendency of not waiting to save up for big purchases and putting them on credit cards instead — while paying all the associated interest charges and fees — can greatly undermine your future financial goals.


An Accessible Option for Everyone

It’s interesting to note that those in the “grateful” group were not required to self-identify as being grateful people in general. The effect was accomplished merely as an experimental manipulation. If this tendency holds true, then it would appear anyone might be able to prompt or prime themselves into a more grateful mindset simply by tapping into the right memories when necessary.


Additionally, fostering a mindset of gratitude may be easier — and more effective — than trying to rely on brute willpower alone to resist temptation. And it’s a habit that could be readily cultivated by maintaining a gratitude journal, keeping those grateful memories top of mind and more easily accessible when you feel the need to call upon them.


So, the next time you’re feeling the “urge to splurge” instead of trying to steel your will by mustering up all the willpower you can, simply try focusing on something you’re thankful for instead.



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