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The College Investor Audio Show | Investing | Student Loan Debt | Entrepreneurship

Robert Farrington | America's Millennial Money Expert

The College Investor podcast is a daily audio show that’s dedicated to bringing you the best of TheCollegeInvestor.com. We discuss a variety of topics, all relating to millennial money. Robert Farrington, the founder of The College Investor and a Millennial Money Expert, shares how to get out of student loan debt so that you can start investing and building wealth for the future. Instead of cutting expenses and living a frugal life, he advocates side hustling and entrepreneurship to earn extra money to achieve your financial goals.

Episodes

Do You Have To Pay Back Grants? (Usually No, But…)
9:23
2018-01-14 01:36:14 UTC 9:23
Do You Have To Pay Back Grants? (Usually No, But…)

With the rising cost of college education, students pay for school using a combination of scholarships, family contributions, grants, and loans. 

When you’re applying for financial aid, every dollar helps you get closer to your goals.

Whether you’re attending college for the first time or returning to complete your education, take advantage of the financial aid options that are readily available to you based on your situation. 

Do You Have To Pay Back Grants? (Usually No, But...)

The U.S. Department of Education awards about $120 billion every year to help millions of students pay for college. This federal student aid is awarded in the form of grants, work-study funds, and low-interest loans. 

Financial Aid Options

When it comes to federal aid, there are three main types: grants, scholarships, and loans. Grants and scholarships are at the top of the list for the most attractive financial aid options. 

Each category has its own terms for repayment. Eligibility for federal and state grants is determined when you fill out the FAFSA.

If you aren’t eligible for grants or scholarships, you might have to turn to federal or private loans for help with college tuition. 

There are three types of federal student loans currently offered are Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct Plus Loans.

If you’ve gone through all of your federal student loan options, you might need to apply for private loans to close the remaining gap for your education expenses. Private lenders will extend loans based on income and credit information.

However, private loans don’t offer the same benefits as federal student loans, such as forgiveness, fixed rates, and income-driven repayment plans. Explore your options for grants, scholarships, federal loans, and THEN private loans.

Loans consist of money that the student borrows to help pay for college, and must be repaid with interest. Unlike loans, grants do not have to be paid back under most circumstances. Explore all of your “free” options to avoid taking out too many loans and making these student loan mistakes.

If you are fortunate enough to receive a grant, do you have to pay it back? The answer might surprise you!

What Is A Grant?

According to the U.S. Department of Education, grants are sometimes known as “gift aid”, or free money to put towards your college education.

Grants are typically awarded on the basis of need and generally do not have to be repaid as long as you meet all of the obligations. You are eligible for grants based on your family's ability to pay, the cost of your education, and certain merit criteria. 

There Are Four Types Of Federal Student Grants:


Federal Pell Grant

Originally named the Basic Educational Opportunity Grant, Pell Grants are distributed to students through their college, and colleges are given enough grant money to properly award all qualifying students.

A Federal Pell Grant is monetary aid from the U.S. federal government to undergraduate students who have not yet earned a bachelor’s degree. For 2017, the maximum Federal Pell Grant award for the 2017-2018 award year is $5,920. 

The actual award amount is based on the college’s cost of attendance, student’s enrollment status, the length of the academic year, and most importantly, the student’s financial need.

Students can receive the Federal Pell Grant for up to the equivalent of 12 semesters. As of 2017, low-income undergraduate students working toward a bachelor’s degree can receive up to $5,920 per year to pay for school.

The U.S. Department of Education determines need using a formula established by Congress. When determining need, the following factors are taken into consideration:

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    The student's income, if any
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    The income, assets and financial obligations of the student's family
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    The student's family size and number of siblings in college
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    Whether the student plans on attending school full-time or part-time
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    Cost of the institution the student plans on attending

Federal Supplemental Educational Opportunity Grants (FSEOG)

These grants are awarded to undergraduate students with exceptional financial need up to the amount of $4,000 per year. The amount of the award is determined by the college’s financial aid office, and depends on the student’s financial need and the availability of funds at the college you attend. 

Teacher Education Assistance for College and Higher Education (TEACH) Grants

Teachers pursuing a bachelor’s or graduate degree can receive up to $3,736 per year in grants provided that they agree to teach at a low-income school for four consecutive years.

Otherwise, the grant will covert into a loan, which must be repaid.

Iraq and Afghanistan Service Grants: If your parent or guardian was a military member of the military that passed away during their service in Iraq or Afghanistan, you could receive up to $5,529.28 per year. This grant is only available if you are otherwise ineligible for Pell Grants.

State-Issued Grants:

Aside from grants from the federal government, you may also be eligible for state funded grants.

How Are Grants Different From Scholarships?

Although grants and scholarships share similar characteristics, grants are usually based on financial need, whereas scholarships are based on merit.

While there are some federal scholarships based on need, most states, colleges, and other private organizations provide scholarships based on merit.

Grants and scholarships are the most sought after options because they are considered “free” financial aid”, meaning you don’t have to pay it back as long as you meet all of the conditions.

Once you take full advantage of grants and scholarships, you will have take out fewer loans to cover your education.

Like most college students, you will probably not receive enough grants and scholarships to cover all of your costs. To close the gap, students get a job, borrow or accept money from their family, or take out loans.

Loans provide a convenient way to cover any gaps, but you must repay them, so consider grants and scholarships first. Read and understand your award letter so that you properly follow the terms and conditions for all aid. 

Scholarships

 Like grants, scholarships are a form of “gift “aid that does not have to be repaid as long as you meet all of the obligations associated with the scholarship.

Scholarships can be based on your major, athletic ability, scholastic ability, religious affiliation, or other criteria.

A huge range of organizations, including schools, employers, individuals, private companies, nonprofits, communities, religious groups, and professional and social organizations offer scholarships.

Scholarships can range from small amounts to large awards that cover the cost of your tuition. Unlike grants, many organizations usually award scholarships based on merit, such as good grades or athletic excellence, rather than financial need.

For this reason, scholarships will not hurt your overall financial picture under most circumstances.

While you can receive scholarships from your school, receiving awards from other organizations requires more effort. 

To find potential scholarships, see your high school counselor or a TRIO counselor if you are still in high school. You can also visit your state’s grant agency and check out your library’s reference section. Certain business groups, community organizations, and interest-related organizations are great resources as well.

Although most scholarships don’t have to be repaid, some scholarships require you to meet certain conditions, such as maintaining a minimum GPA, otherwise, your risk losing your award. 

Student Loans

Unlike grants and scholarships, loans are money that you borrow and pay back with interest. In most cases, you must repay your loans even if you don’t complete your degree, or run into financial difficulty. This is why grants and scholarships are recommended as your first choice over loans. 

Federal student loans are awarded based on the information you submitted on your FAFSA. Federal loans have benefits such as access to forbearance, deferment, and income-driven repayment plans. They also tend to have lower interest rates.

Circumstances Where You Have To Pay Back Grants

Pell Grants don’t need to be paid back as long as you follow the government’s requirements. However, you would have to repay a Pell Grant under three circumstances:

1. Withdrawal From The Program Or School

If you receive a grant and drop out before 60 percent of the semester is over, the government will ask you to return 50 percent of the “unearned’ portion of their money. This unearned portion depends on when in the semester you drop out. 

For example, if you get a $2,000 Pell Grant, but you drop out halfway through the semester, you did not earn half ($1000) of your grant, and the government will want 50% of the grant (in this case, $500) paid back. However, if you drop out at 60% of the semester, the government believes you have earned your full Pell amount and do not have to pay it back.

2. A Change In Your Enrollment Status

If your enrollment status changes after you receive your Pell funds, you have to pay back the difference. For example, if you go from full-time to part-time, you have to pay back the difference. Otherwise, you will get a “Pell Overpayment” on your record, which disqualifies you from receiving future federal aid.

3. Your Financial Need Is Reduced By Other Aids Or Grants

Although this is a rare occurrence, it’s worth mentioning. If you submit your FAFSA, get a Pell Grant, and then get additional non-federal grants and scholarships that reduce your need for the Pell Grant, the government could ask for some of the money back.

By law, your total financial aid cannot exceed the cost of attendance by more than $300. Your additional grants and scholarship usually affect campus-based aid first, not the Pell Grant. Also, be sure that you are treated fairly by colleges in determining your financial need. 

Final Thoughts

When it comes to financial aid, read the fine print and meet all of the terms and conditions. As long as you don’t change your enrollment status or withdraw, you should be fine. 

Although you don’t normally have to repay grants, there are some exceptions. For example, if you withdraw from a program or change your student status from full time to part time, you might have to repay your entire grant or a portion of your grant.

Remember, when it comes to college tuition, select the option that leaves you with low or no debt. 

Did you receive grants while you were in college? Did you ever have to pay them back due to special circumstances? Tell us in the comments below!

The post Do You Have To Pay Back Grants? (Usually No, But…) appeared first on The College Investor.

How To Fill Out The FAFSA And Why It Matters
4:12
2018-01-14 01:36:14 UTC 4:12
How To Fill Out The FAFSA And Why It Matters

FAFSA

College students need all the financial help them can get.

Even if you think you have enough money to pay for college, you should fill out a Free Application for Federal Student Aid (FAFSA) to avoid missing out on grants, scholarships and low cost financial aid.

It's important to know that beyond grants and scholarships, filling out the FAFSA is what's required to get Federal student loans. That's why you should also make sure that you're filling out the FAFSA every year you attend school.

Why Do I Need To Fill Out The FAFSA?

Many students and parents don’t fill out the FAFSA because they think federal grants are only available to families earning less than $50,000. The truth? You could qualify for other financial despite your income or your family’s income. Why should you fill out a FAFSA? To maximize your chances to receive grants, scholarships and avoid student loan debt, and much more!

To qualify for grants, financial aid, and scholarships, you must fill out a FAFSA form. If you don’t meet the requirements for need-based scholarships, the college could award a merit-based scholarship instead. 

When some schools have tuition over $65,000, need-based financial aid is even available to students from middle and upper-middle class income brackets. 

Once you fill out a FAFSA form, you automatically qualify for low-interest and forgivable federal student loans, which are the best kind of student loans. The FAFSA form is also required to qualify a parent for a federal parent PLUS loan. 

How can completing a FAFSA form improve your chances of getting into a particular school? If a student fails to submit a FAFSA form to an institution, they are less likely to enroll. Aside from qualifying for grants, scholarships, and other forms of financial aid, filling out a FAFSA form indicates that you are interested in that institution, making it more likely that the institution will try to entice you to attend by offering financial aid.

How To Fill Out The FAFSA

Whether you’re a student filling out a FAFSA, or a parent of a student, the steps below will help you fill out the FAFSA the right way and qualify for maximum benefits. Remember, you must complete a FAFSA form for each school year.

Now that you understand how your FAFSA form can affect your future, we’ll walk you through the process step by step.

Gather Your Basic Personal Information

Expect to provide personal information such as your name, date of birth, address, and social security number. Depending on whether or not you’re a U.S. citizen or tax returns filed, you may need to provide additional information. Either way, have the following information ready when you begin filling out your application:

  • Your Social Security number and your parents’ social security numbers if you are a dependent student.
  • Your driver’s license number or state issued ID if you have one.
  • Your Alien Registration number if you are not a U.S. citizen.
  • Federal tax information or tax returns for you and for your parents if you are a dependent student.
  • Nontaxable income records for you and your parents if you are a dependent student.
  • Checking and savings account balances; investments, including stocks and bonds and real estate (aside from your primary residence).

Step 1: Create Your FSA ID

Create a FSA ID, a username and password combination that allows you to sign your FAFSA form electronically. Your FSA ID also can be used to sign loan contracts and to access certain information online.

  • Student: Get your FSA ID is a username and password to sign the FAFSA form online. If you don’t have an FSA ID, get an FSA ID here ASAP. If this is your first time filling out the FAFSA form, you can use your FSA ID and to start filling out your FAFSA form. If you are renewing your FAFSA, you may need to wait a few days to get your account verified before using your FSA ID to renew the FAFSA form. 
  • Parent: If your child is required to report parent information on the FAFSA form, you need to create your own FSA ID in order to sign your child’s FAFSA form online.

Important: Be careful not to mix up parent and student FSA IDs, otherwise it can delay the process!

If you log in with your FSA ID, your personal information will be automatically populated in your application, which prevents errors if you accidentally enter your parent’s FSA ID instead of your own, or when the FSA ID does not match the information on your FAFSA form.

Step 2: Fill Out Your FAFSA Application

Since some states and schools have limited funds for financial aid, you should get a head start and complete your FAFSA form as soon as possible and stay update on changes to the FAFSA requirements.

Students should enter their FSA ID username and password, and click “Next” to proceed with the form. Parents should select “Enter the student’s information”, then enter the student’s name, social security number, and date of birth, and then click “Next” to continue filling out the form.

Next, select the FAFSA form to fill out based on the time period you will be attending college. The 2017 – 2018 form is for July 1, 2017 – June 30, 2018. The 2018- 2019 form is for July 1, 2018 – June 30, 2019.

If you are attending college during both time periods, fill out a FAFSA form for the first period, wait until it processes, and then fill out the second form. 

If you are renewing your FAFSA form, your information from last year will roll over to the current year, so make sure that your information is correct. 

If the application requires parent information, you can create a “save key”, or a temporary password that allows the parent and child to “pass” the FAFSA form back and forth.

This feature is especially useful if the parent and child are in different geographic locations.

Step 3: Fill Out Your Student Demographics Section

This is your full name, date of birth, social security number, and other personal information. If you are renewing your FAFSA, your information will be carried forward from the last application, saving you time. Enter your name exactly as it appears on your social security card. 

If you are a parent entering information on a student’s FAFSA form, remember that the questions are for the student. If you are unsure, check the banner on the left side to see whether you’re on the student or parent page.

The FAFSA form asks you a set of questions that will determine whether you are a dependent student or independent student for federal student aid purposes.

If you qualify as a dependent student, you are required to report parent information in addition to your own information on your application. 

Find out here to see whether you qualify as a dependent student.

Step 4: Select The Schools To Receive Your FAFSA Information

Add every school you are considering in the “School Selection” section. You can add up to 10 schools at a time. You can also remove schools at any time to make room for new schools.

If you don’t apply to or get accepted to an institution, they can disregard your FAFSA. Keep in mind that the schools you list will use your FAFSA information to determine the type and amounts of aid available for you.

Some schools suggest that students list schools in a particular order, where you list state schools first. Check if your state has a requirement for the order to list schools on your FAFSA form.

Step 5: Answer The Dependency Status Question

Now, you will answer questions to determine whether you need to provide parent information on your FAFSA form. 

These questions will determine whether you are considered a dependent student to determine the extent of eligibility for federal student aid. If you qualify as a dependent student, you will have to report parent information. Otherwise, you will skip to Step 7.

Step 6: Fill Out The Parental Demographics Section

If you qualify as a dependent student, you will need to fill out the parent demographic information. 

Step 7: Supply The Required Financial Information

The FAFSA form asks for financial information, including information from tax forms and balances of savings and checking accounts.

Importing tax returns can be tedious, but The IRS Data Retrieval Tool (DRT) will allow you quickly to import your IRS Tax information to your FAFSA form.

If you are a dependent, your parents will provide their financial information into your FAFSA form. 

Step 8: Sign And Submit Your FAFSA

Once you complete the FAFSA form, you can sign your FAFSA form online with your FSA ID. If you are a dependent, your parent must sign the form as well.

Final Thoughts

Don’t pass up your chance to get your college tuition paid, or to get competitive forgivable student loans. While you may not qualify for financial aid for one year, don’t be discouraged, because your situation could change for the next academic year.

To get started with filling out your FAFSA form, go to fafsa.gov.

Now it’s your turn:

​Did you qualify for grants and scholarships to your surprise because you filled out your FAFSA? Did you miss out on financial aid because you forgot to fill out your FAFSA, or thought it didn’t matter? 

Tell us in the comments below.


The post How To Fill Out The FAFSA And Why It Matters appeared first on The College Investor.

What Does It Mean To Be Financially Stable?
10:26
2018-01-14 01:36:14 UTC 10:26
What Does It Mean To Be Financially Stable?

What exactly does it mean to be financially stable?

That question draws out as many answers are there are hues of colors in the rainbow.

Financial stability means different things to different people.

And especially now that we have entered a new year, there are a lot of us who have set goals on what our version of financial stability is.

What Does It Mean To Be Financially Stable?

Additionally, if we are being completely honest, even when we do know what it means to be financially, getting started and getting there can seem like moving a mountain.

We’ll tackle all of that in this post.

Before we get all technical though, we decided to ask a few folks what being “financially stable” meant to them.

Here are some of those answers.

Jummy from Good Naija Girl had this to say:

“For me, being financially stable means I make enough money to cover all my bills and then have enough to cover any unexpected costs - like a car breakdown - without panicking and wondering where the extra cash will come from.”

Bay Simpson from Entrepreneurs Nook said:

“Becoming financially stable means that my family and I have all that we need to thrive now and in the future. By “thrive” I mean, beyond the basics, I want to have enough to cover things like vacations and educational experiences that will help my family and me live fuller and richer lives.”

Queenette, a mom of three and relationship blogger said:

“Once my assets and investments - not my work income - can cover all our family’s living expenses each month plus the extra , we are financially stable.

Fred, a San Diego local who is married with one child chipped in:

“Becoming financially stable means being completely debt-free, being able to pay your monthly living expenses with extra money left over. It means having the freedom to do whatever, whenever, without worrying so much about getting back home because you are going to get fired for taking more time off than you should have.”

As you can see, the answers are varied but a recurring theme in all of them is the idea of being able to cover the “basics” while having some extra money left over.

But is that all?

Depending on how you look at it there are 5 major components to living financially free - this is not a rigid framework but one you can adapt to fit your own financial situation.

Here Is What Being Financially Stable Looks Like

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    All basic needs met/bills paid monthly
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    Have a buffer of money left over each month after basic needs are met - this could be any amount but to start out it can range between $500 - $800
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    Pay off any debt you might have - student loans, credit card debt, mortgages, car loans. Any debt that is taking money away from your account each month qualifies here.
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    Save 2 - 5% of your income
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    Invest 2 - 5% of your income

Since we will all have to retire at some point, if you are participating in a work-related 401K retirement plan this is even better since you will have that in addition to whatever savings, plus interest accrued on your savings, you make and any income you make on your investments.

But I Don't Make Enough Money...

Perhaps you are reading this blog post and thinking to yourself “But I hardly have enough to cover my basic needs let alone have a $500 buffer !”

A simple solution to that particular problem is for you to start a side business.

We have written extensively about side businesses/side hustles on the blog.

Check out these posts on the subject.

50+ Ways to Make Money Fast by Side Hustling

27 Passive Income Ideas You Can Use To Build Real Wealth

It is possible for you to start a side hustle pretty much anywhere in the world these days.

From driving for Uber or Lyft to renting your spare bedroom on AirBnB to starting a freelance business.

No time for a side hustle ?You could also negotiate a higher salary at your current job.

All of these can be used to answer the question of creating a financial buffer each month so you are not scrambling to make ends meet let alone save 2% of your income.

Paying Off Debt 

When it comes to paying off debt, it always helps to look for programs and opportunities to pay the debt off faster.

With student loans for instance, a number of forgiveness programs exist if you work in certain professions of if you are a member of the military or Peace Corps.

Look for such and take full advantage of them.

We have also talked about how making 2 payments per month on your student loans can be helpful.

Scholarships are also another area to look if you would like to fund your education or your child’s without taking out so many loans.

Here are some posts on how to become debt-free.

Student Loan Forgiveness Programs By State

The Top Ways To Get Student Loan Forgiveness

Savings And Investments

When it comes to savings and investments, you have everything from high-yield savings accounts like certificates of deposit to government bonds to very affordable stocks.

The habit of saving and investing although it seems slow and undramatic, has made many millionaires over the decades.

Posts to check out on how to start saving and investing in earnest and regardless of your income level.

Investing 101 with The College Investor

How to start investing after college for 22-29 year olds

Getting started investing in your 30’s

Final Thoughts

The new year is always a great place to start with the goals of becoming financially free.

It does not matter how many financial mistakes you’ve made in the past. Each new day is an opportunity to start over and this tips can help you get there.

Question for you: what does it mean to you to be financially stable? Your thoughts and comments are welcome below.

The post What Does It Mean To Be Financially Stable? appeared first on The College Investor.

Stockpile Review: Stock Giftcards and Fractional Shares
7:09
2018-01-14 01:36:15 UTC 7:09
Stockpile Review: Stock Giftcards and Fractional Shares

Stockpile Review

Stockpile puts a unique twist on purchasing stocks. Instead of buying stocks directly, you purchase a stock gift card.

This is better than giving a toy or something else your son or daughter will eventually outgrow.

Owning fractional shares in popular companies like Amazon, Coca-Cola, Netflix and more will let them watch their value grow over the years.

To encourage younger people to participate, Stockpile has gamified the process of buying stocks. If you aren’t familiar with gamification, it’s simply a way of providing incentives for people to use different parts of a website or app. 

For example, LinkedIn provides progress indicators that show how much of your profile has been filled out. You can’t ever reach 100% though, which keeps people trying to optimize their profiles.

Instead of giving someone stock, which can be difficult, you simply give them a stock gift card. In this article, we’ll see how the process works.


Stockpile Review

Quick Summary

  • Allows users to buy stock g​​​​​iftcards
  • Low cost fractional share investing
  • Flat transaction fees of just $0.99 per trade

How To Purchase A Stock Giftcard

If you want to give a stock gift card to someone, you’ll first need to open an account with Stockpile. Once your account is open, you’ll need a way to deposit funds into it. 

This can be done by linking your bank account or by using a credit card or debit card.

Next, purchase a stock gift card. E-cards have face values of $10, $25, $50, $100 or any other amount. You can purchase a physical, plastic card, which cost a little more than an e-card.

If your giving the card as a gift, a physical card is probably better than a e-card. They also look cool, as shown below.

Stockpile Review

After giving your gift card to the recipient, to use it, they’ll need to create a Stockpile account as well. This is where the process could go a little smoother since you are basically opening a brokerage account. 

If the recipient is a minor, they’re parents or legal guardian will need to open the account for them, since a custodian is required for minors. The minor’s name can be on the account and they can still use it.

When the time comes, if the recipient wants to sell the stock, they’ll pay a small fee of only $0.99.

Buy Fractional Shares

Rather than paying over $1,000 for a share of Amazon, you can buy it for only $50. You’ll then own a fractional share of Amazon stock. 0.05 of a share to be exact. 

While your stock won’t go up as much as someone who owns whole shares of Amazon, it will still increase in value. You can also diversify by buying other shares.

Transaction Fees

Fees with Stockpile are fairly competitive. Cheap trading fees aren’t a main selling point for Stockpile. It’s the use of a gift card to buy stock. That being said, let’s look at the various fees involved.

The purchaser incurs the most fees. After all, if you are receiving a gift card that has a face value of $50, you’d be disappointed if $5 was taken right off the bat for various fees.

The e-card or e-gift fee as Stockpile calls it, is $2.99 for the first stock. There is also a 3% credit/debit card fee. On a $50 gift card, the 3% amounts to $1.50. That's a total of $4.49. The higher the face value of the gift card, the more you’ll pay in fees because of the 3% fee.

Physical cards cost more than e-gifts. For the same $50 face value stock, the cost is $56.95. That’s $4.49 for an e-card vs. $6.95 for a plastic card. Physical cards are restricted to three dominations:

  • $25 ($29.95 after fees)
  • $50 ($56.95 after fees)
  • $100 ($107.95 after fees)

Shipping is also charged for physical cards. If you buy three or more cards, shipping is free.

For physical cards, fees are on the higher side compared to other low cost brokerage firms. But it’s all about the novelty of giving stocks as a gift card.

Plus, physical cards wrapped in a box are sure to have a more positive impact than an e-gift in someone’s email inbox or printed out on paper.

Investment Education

Stockpile offers a number of ways to learn about investing. From resources available on their website to actual use of their apps (available on the iPhone and Android).

When using the app, you can watch your investments grow, see trends and choose from top growth stocks, top dividend payers, upcoming earnings and more. All meant to help you become a better investor.

Stock Availability

The number of stocks available on Stockpile is a little restrictive. From their website, “Our universe includes more than 1000 stocks, ADRs, and ETFs, including every stock in the S&P 500.”

That might seem like a lot but there are thousands of stocks and ETFs available on the exchanges. Bonds and options aren’t available with Stockpile.

Also, Stockpile isn’t real-time trading. Trades are instead executed near the end of the day.

Final Thoughts

The focus is Stockpile isn’t to be the best discount brokerage. Instead, it is all about gifting stocks through gift cards. You can even purchase them in a limited number of physical stores.

The idea of giving someone a stock gift card is great for younger people who are use to such simple concepts, rather than wading through the process of opening a brokerage account.

Additionally, they’ll learn to be better investors through all the investment education Stockpile provides.

Would you ever purchase a Stockpile gift card?

The post Stockpile Review: Stock Giftcards and Fractional Shares appeared first on The College Investor.

Tools To Find Out How Much Your House Is Worth
5:59
2018-01-14 01:36:15 UTC 5:59
Tools To Find Out How Much Your House Is Worth

Tools To Find Out How Much Your House Is Worth

Home prices fluctuate more than you might think.

Algorithms are constantly chewing through mountains of housing data and spitting out home values all the time. 

In this article, we’ll see which tools are available to catch some the results produced by these algorithms, letting you see how much your house is worth in near real-time.

While not 100% accurate, these online tools still do a good job at giving you an idea of your home’s value. The more data they can pull about your home, the accurate the estimate will be.

Zillow

Zillow is one of the top real estate websites. They have a feature called the Zestimate that provides an estimate of your home’s worth.

You can type in your address at Zillow’s home page. It will find your home and display everything it can pull in about the home from various data sources.

From this information, Zillow creates an estimate or Zestimate.

Depending on how much data Zillow can pull and how accurate it is, the Zestimate can likely be improved by you. To do this, create a free Zillow account. Now claim the home as yours. You’ll see how to claim the home from the home’s details page.

Once you have claimed your home, click Edit Facts. Make any corrections or add missing information. This can be a correction to square footage, bedroom count, upgrades and more.

Once you have completed your updates,  the Zestimate will recalculate using the new information. The Zestimate may or may not change. It depends if the updates you’ve made provide any additional value.

Redfin

Refin is another popular real estate website. Although their services are not available in all areas of the U.S.

You can check this page for the latest updates on availability or sign up from the same page to get an email notification when they are available in your area.

You can quickly find out if Redfin is available in your area by typing in your home address on their homepage. If your home is found, you’ll be brought to a home estimate page. 

If not, you’ll get a notice to visit the above availability page.

On the home estimate page, click your address. This will bring you to another page that lists all the details about your home, including a historical estimate.

Similar to Zillow, if you want to make any updates to the home facts, you’ll need to claim it as the owner. There’s a big red button on the same page that you can’t miss.

Trulia

Trulia is another real estate website that offers estimates. While there is some variation across these different websites, you’ll find their estimates are fairly close to each other.

Also, getting estimates from all the mentioned sites in this article will provide you with an accurate estimate range.

Ok, back to Trulia. Just like the other sites, you can type in your address on the homepage and Trulia will search for your home. Once found, you’ll be presented with a detailed page of your home, including an estimate.

In comparison to Zillow and Redfin, Trulia’s home details seems a little lacking.

The page includes many photos of other homes and square images with a link to map view, schools, crime, and other items about the area.

To claim a home as yours, it will need to be off market and, you’ll need to create a Trulia account. Once the home is claimed, you can edit its details, which may improve your estimate.

Realtor.com

realtor.com is another popular real estate site. They are available across most of the U.S. This means the majority of home owners should be able to find their home on the site. To do this, type in your address on the site’s home page.

Once your home is found, click its pre-populated address to reach the home details page. The estimate is clearly displayed on the details page. Besides basic home facts such as size, there isn’t much else displayed there.

One of the reasons why the home details page doesn’t have much info is because realtor.com wants you to connect with an agent. In fact, on the right side of the page, there’s a box to fill out to get in touch with a local agent. 

If you click “MY HOME” in the top menu, this will bring you to a page where you can again enter your home address.

From there, you’ll be presented with a graph showing the historical estimate of your home - a little more useful than the initial home view from earlier. 

From this page, you can sign up to receive email updates when your home’s estimate changes. You can also update your home’s details. Both will require creating a realtor.com account.

Final Thoughts

Getting an estimate on your home is a quick and easy process. You can get a more accurate estimate by visiting several real estate websites. If you find a site you like, consider creating an account and claiming your home. 

You’ll be able to provide additional home details such as upgrades and receive an even more accurate estimate.

Have you used any of these sites to find out what your house is worth?

The post Tools To Find Out How Much Your House Is Worth appeared first on The College Investor.

Your 1098-E Interest Statement: Does It Matter Now?
5:25
2018-01-14 01:36:15 UTC 5:25
Your 1098-E Interest Statement: Does It Matter Now?

Your 1098-E Interest Statement: Does It Matter Now?

In the wake of the new tax reform bill, many people with debt are starting to wonder whether or not they can take the student loan interest deduction in 2018. 

For the most part, the answer is yes.

Next year, people receiving their 1098-E Student Loan Interest Statement will still qualify to deduct student loan interest. If you have significant student loan debt, this could yield up to a few hundred dollars in savings for you.

Today, we break down what the 1098-E is, and how it impacts your taxes so that you can potentially claim the student loan interest deduction.

How Does Tax Reform Affect The Student Loan Interest Deduction?

For a long time, it seemed that the student loan interest deduction would be eliminated with the tax reform bill. However, in the final version of the bill, the student loan interest deduction remained in tact.

This means that student loan borrowers can take an “above the line” deduction on student loan interest payments into next year.

Unlike most tax deductions, you do not need to itemize your taxes to take the student loan interest deduction. That means that even with the higher standard deduction, you may still qualify to take this deduction in 2018.

Who Qualifies To Take The Student Loan Interest Deduction?

To take the student loan interest deduction, you must pay at least $600 in student loan interest in 2018. You can only deduct up to a maximum of $2500 in interest paid. 

The student loan interest deduction is an adjustment of your gross income. So if you paid $2500 in student loan interest, and you earned $60,000, you’ll only pay taxes on $57,500.

For the purposes of the deduction, it doesn’t matter whether your loans are federal loans or private student loans. Both qualify for the deduction.

The student loan interest deduction goes to the person who is legally required to pay the student loans. That means, if your parents took out loans for you, they get the deduction. This is even true if you make the payments for the loans.

Married borrowers must opt to file taxes as married filing jointly if they want to qualify for the deduction.

The student loan interest deduction is also affected by your income. It is a deduction with a “phase out period” which means as your income grows, you may have a lower deduction. The table below shows how your income affects your ability to take a deduction:

Filing Status

Deduction Relative to Earnings

Single

Less than $65,000- Full Deduction

$65,000-$80,000- Partial Deduction

More than $80,000- No deduction

Married Filing Jointly

Earning less than $130,000- Full Deduction

$130,000-$160,000- Partial Deduction

More than $160,000- No deduction

Since the deduction is based on a Modified Adjusted Gross Income (MAGI) you need to do a bit of math to determine your income. All the major tax software packages will appropriately calculate your student loan interest deduction.

How Do I Know If I Qualify For The Student Loan Interest Deduction?

If you meet or exceed the $600 interest requirement, your student loan servicer should mail you a copy of a 1098-E form. Box-1 of the 1098-E form contains the total interest you paid on your loans in the previous year.

People with multiple student loan servicers may not automatically receive their 1098-E forms if they paid less than $600 in interest per servicer. In those cases, call your loan provider for more information and to ask them to issue you the form. While you don’t need the form to complete your taxes, it’s a lot easier than trying to figure out the amount of interest you paid on your own.

How To Use The 1098-E Form?

The 1098-E form is a very basic form that contains your personal information and the amount of interest you paid to the lender. If you receive multiple 1098-E forms, you will need to add the amounts in Box-1 of the forms to determine your total amount of interest paid.

Remember, you can deduct up to a maximum of $2500.

If you’re using a tax software to do your taxes, the software will automatically calculate your deductions. However, if you’re hand filing your taxes, you’ll need to enter your total interest paid on your form 1040. 

If you’re using a form 1040A, you’ll enter your interest on line 18. For a standard 1040 form, you’ll use line 33. People using the 1040NR-EZ will enter their deduction on line 9.

Since the student loan interest deduction is an above the line deduction, you don’t need to worry about an entire itemization schedule.

Have you ever claimed the student loan interest rate deduction?

The post Your 1098-E Interest Statement: Does It Matter Now? appeared first on The College Investor.

ChangEd Student Loan Payment App Review
5:10
2018-01-14 01:36:15 UTC 5:10
ChangEd Student Loan Payment App Review

ChangEd Student Loan Payment App Review

Putting extra change in a jar can accumulate into some real savings surprisingly fast.

But then you have to wrap all those coins, bring them to the bank and cash them in. 

Banks must have been paying attention.

Many have recently started providing a way for customers to round up transactions in their bank account or credit card and apply to them to a savings account. A new spin on the change jar.

ChangEd takes this concept even further by applying unused change to your student loans. By using the ChangEd app, it rounds up each transaction to the nearest dollar and applies the difference to your student loans once $100 is reached.

In this article, we’ll do a review of the ChangEd app.

The Idea Behind ChangEd

ChangEd’s mission is to save you thousands in student loan interest and cut years off your loan. All this simply by rounding up your transactions and putting the difference into a ChangEd account that eventually gets sent as a student loan payment.

To give you an idea of how much interest you can save, we’ll use an example from the ChangEd website:

  • check
    $36,000 student loan
  • check
    $30,000 interest
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    Over 25 years

On the above loan, that’s $66,000 total that you’ll pay on the loan with principal and interest factored in.

Using ChangEd, you can cut five years off the loan and save $10,000.

ChangEd is the brainchild of two brothers - Nick Sky and Dan Stelmach. The idea was hatched when Dan became discouraged with the interest and payments on his student loans and thought to himself, “Man, something needs to change. Boom!

Change — spare change. What if I rounded up the spare change from my transactions and sent that to my student loans?”

Dan brought the idea to his brother, Nick. Nick said, "I thought it had a lot of potential. A lot of people are struggling. I have student loans. All of my friends have student loans. It's something I felt would be impactful to a huge market.”

From those conversations, ChangEd was born.

The ChangEd App

The ChangEd app is the key to making the entire process work. Currently, the app is available only for iPhone. An Android version is in the works. You can enter your email here to get a notification once the Android version is available.

The first step in signing up for a ChangEd account is to download the app from the Apple App Store. Then follow these steps in the app to create your account:

  1. Enter your email and choose a password
  2. Enter your student loan info
  3. Enter your personal info
  4. Link your spending account
  5. You’re done!

The app is secure. Your bank account login info isn’t stored within ChangEd.

After you have completed setting up your ChangEd account, the app will start analyzing your spending. As an example, when you spend $2.54 for coffee, the app will save $0.46. Once you get to $5 in savings, it will send the money to your ChangEd FDIC insured account.

Once your ChangEd account reaches $100, the money will be sent to your student loan account as a payment.

ChangEd does charge a $1.00 per month fee.

Tracking Your Progress

One of the best parts about using ChangEd is the ability to see your progress. The app does a great job of this. As your extra change is applied to your student loans, the app displays the number of years and interest you’ve cut off your loans. 

You can also see all of your transactions and the rounded up amounts within the app.

Below are several screenshots of the app interface showing transactions on the left and impact to loans on the right.

ChangEd Student Loan Payment App Review

Is ChangEd For Everyone?

ChangEd is a novel take on the saving through spare change. If you have difficulty sending extra payments to your student loans or do it inconsistently, ChangEd can certainly make a difference. The app automates the entire process, so you never have to think about it.

However, if you do make consistent extra payments, you are likely doing a better job than ChangEd. ChangEd will only send a payment when your savings hit $100. Depending on how many transactions you have within a month, you might not hit $100 for a few months.

If you could instead send smaller payments such a $20 or $30 at a time, it would have more of an impact on interest than waiting to send $100.

Also, the app will link to your bank checking account. That means you’ll have to use a debit card. You can link to a credit card but it will need to be with the same bank. If this is a credit card you use infrequently, it will take even longer to accumulate the $100 loan payment trigger amount.

Final Thoughts

ChangEd can certainly help with shaving off time and interest on student loans. How much time and interest depends on how many transactions someone has within each month.

For those of us who have a difficult time making extra payments on our student loans, the automatic payments of ChangEd is a welcome feature.

Do you have trouble finding the money in your budget to make extra student loan payments?

The post ChangEd Student Loan Payment App Review appeared first on The College Investor.

What Are The Best Alternatives To Quicken?
6:26
2018-01-14 01:36:15 UTC 6:26
What Are The Best Alternatives To Quicken?

What Are The Best Alternatives To Quicken?

Anyone sticking to a budget and wanting to know where their money is going most likely uses financial software. In fact, I've rarely seen someone be successful with their money without using some type of software tool to help (even if it's just Excel).

Often this means Quicken. But Quicken isn’t the only game in town. In fact, over the last several years we've seen some struggles with Quicken (especially Quicken for Mac), and other awesome tools come onto the market.

In this article, we look at several Quicken alternatives that offer interesting features and can cost less.

 

Mint

What Are The Best Alternatives To Quicken?

Mint is made by the same company that created Quicken - Intuit. 

Mint comes in two forms - website and mobile app. It’s an incredibly simple app to use. Your monthly spending and income are front and center when you log in. This lets you know right away if you are spending more than you should.

To setup a budget, you’ll want to sync your accounts. Once you’ve synced various accounts with Mint, it will begin pulling in transactions from these accounts.

All transactions are located in one place. Mint does a good job of sorting your transactions into categories. You’ll want to go in periodically and tweak them in case something has gone into an incorrect category.

With your accounts synced and transactions categorized, you can begin setting budgets on broad categories. Next time you log in, you’ll see each category with color codes, letting you know if you’ve gone over your budget and by how much.

You’ll find that Mint is very easy to use and reliable. It’s also free.

You Need A Budget (YNAB)

YNAB stands for You Need A Budget. Budgeting is it all YNAB does. It’s also very good at it. YNAB makes you give every dollar a job. This means you assign each dollar of income to a category, virtually cutting out any chance that you’ll spend money spontaneously.

Categories are setup to group expenses. If you happen to go over in one category, you can take from another category to cover the difference.

Eventually, the goal with YNAB is that you are living off of the previous month’s income. The way you get there is through consistent use of YNAB and making sure you follow its rules, which is difficult not to do.

YNAB can be installed as a desktop app on Windows or Mac, mobile app on Android or iPhone or simply run it from the web. It offers a 34-day trial and thereafter will cost $83.99/yr. YNAB is able to justify this cost through the amount you’ll save by using the software. 

The following is from their website, “On average, new budgeters save $600 by month two and more than $6,000 the first year! Pretty solid return on investment.”

EveryDollar

What Are The Best Alternatives To Quicken?

EveryDollar is the budgeting app created by Dave Ramsey’s company. Similar to YNAB, EveryDollar follows the zero-sum budgeting concept, which is the same as “give every dollar a job”.

EveryDollar has free and paid versions. The paid version has a 15-day trial and cost $99/yr. Without the paid version, you can’t sync your accounts, which means you’ll have to manually enter in every transaction. The paid version pulls them in automatically.

If you are familiar with Dave Ramsey’s Baby Steps system, EveryDollar follows them. You’ll be able to automatically see which step you are on.

EveryDollar focuses on budgeting. That’s all it does. If you follow the Baby Steps and want a way to track them through a budgeting app, EveryDollar is for you.

EveryDollar is available online and on mobile.

Personal Capital

What Are The Best Alternatives To Quicken?

Personal Capital is a focused on investment management rather than budgeting. It does include budgeting, net worth and a great looking dashboard of your financial life.

But its budgeting feature isn’t as strong as the above three apps.

If you are wanting to view your investments and understand how well they are performing, this is where Personal Capital shines. You can sign up for free and sync your investment accounts. Or sync all accounts if you want to see your net worth.

Personal Capital has strong analysis tools and helps you discover hidden fees in your investments. You’ll be able to look at various retirement scenarios and understand if you are on track or not.

Personal Capital can manage your money and provide access to financial advisors for a 0.89% fee up to the first $1 million. There after, the fee continues dropping to 0.49% once you are over $10 million.

Personal Capital’s app is available via web and mobile.

Conclusion

Quicken has been around for a while and use to be one of the only financial management app worth using.

With the rise of so many fintechs offering great alternatives, Quicken is no longer king of the hill.

For those who are focused on budgeting, Mint, YNAB and EveryDollar are great apps. Of those, Mint is free and EveryDollar offers a free option. Although, you’ll likely want to pay for the upgrade to avoid manually entering in all of your transactions. 

While Personal Capital isn’t as strong on the budgeting side, it makes up for it in investment analysis.

Linking your accounts doesn’t cost anything and you’ll have all of Personal Capital’s investment tools at your disposal.

The post What Are The Best Alternatives To Quicken? appeared first on The College Investor.

Point Review: Selling Your Home’s Equity vs. Getting A HELOC
11:29
2018-01-14 01:36:15 UTC 11:29
Point Review: Selling Your Home’s Equity vs. Getting A HELOC

Point Financial - Using Your Home's Equity Vs. Debt

What if you could sell shares in the equity of your home just like you can sell your shares in stocks like Apple or Google ?

Owning a home is supposed to be the ultimate asset for every American who buys one and owns equity in it. But what if, instead of getting a mortgage (i.e. taking on debt), you could sell a piece of the equity - just like a stock.

Well, that's what Point is doing, and it has some intriguing uses - including being used as a "bridge loan" to cover the costs for buying a new house, to paying off high interest debt.

Check out why we find Point and selling equity in your home so interesting.

How It Worked For Decades

Typically, until you have paid off your home completely, you cannot cash out on any of the equity in your home.

And yet, the dream of your home as an asset is the story that is sold to everyone who wants a slice of the American dream.

See a house you like.

Tell a bank you like the house,

Get the bank to give you money to buy the house.

And then pay the bank back every year for decades until you can realize the actual wealth on what should be your own home.

Want to enjoy some of that equity in your home? You have to refinance or take out a home equity line of credit.

The problem is that with both those options is that you will increase your debt.

Alternatively, what if you could receive a lump sum of money that is a portion of the equity in your home for much-needed financial expenses ?

That is what Point seeks to do and in today’s post we will go in-depth into how you can use Point to extract cash from the equity of your home without going into severe debt.

When Point allows you to extract cash from the equity of your home, you do not have to pay them back in monthly payments unless you sell your house within 10 years or decide to buy back your shares. If your home appreciates, you will pay Point back the lump sum you were given as well as a certain percentage of the home’s current value.

On the flip-side, if your home drops in value , Point will take a loss.

Unlike the traditional home-equity line of credit you can take from your bank where you have to start paying back immediately, receiving a lump sum of cash from Point does not require you to pay back immediately.

When you sell shares in your home equity to Point, they actually become a “co-homeowner” with you except they do not move in and are not even added to the title of your probably.  

So far, Point operates in select areas in California, Oregon, Washington, Colorado and Massachussets.

How Point Sells Equity In Your Home

To qualify for Point’s program, you first and foremost have to have equity in your home.

If you do in fact have equity, you can then go over to Point’s website, enter in your information as well as answer a few pre-qualifying questions.

A pre-qualification decision will be provided within 5 minutes of you entering in your information.

If you pre-qualify, Point will give you a initial cash offer just based on the information you entered into their system of between 5-10% of the current equity in your home.

So, if you currently have $500,000 equity in your home, you could receive up to $50,000 in cash from Point.

Next, an appraiser will have to come over to your home to verify the value of your home. If everything checks out, you will receive your cash from Point within four business days as an electronic payment into your bank account.

Do You Have To Pay Point Back?

Yes.

You will have to pay Point back but unlike traditional bank products, Point promises not to take any monthly payments from you until:

  • check
    You sell your home
  • check
    You reach the end of the term you signed up for 
  • check

    Or you decide to buy back your equity from Point at any point during the term you signed up for. 

As mentioned earlier, when you sell your home, you will pay back Point the money you were given for shares in your home and up to 3% of the appreciated value of the home - that is how they make money.

Since Point is a Fintech company, it uses several algorithms that allows the company to know how much your home is likely to appreciate over the next 10 years.

It is likely that you will be denied if you don’t have enough equity in your home or if per their algorithm, Point decides that your home is less likely to appreciate in the next one to ten years.

How Much Will It Cost You?

There are a few fees associated with Point.

  1. You will have to pay for the home visit with the appraiser. This costs between $500 and $1000.
  2. You will pay an escrow fee for between $450 and $650 according to Point’s website.
  3. Point also collects a 3% processing fee for transactions (taken when the electronic transfer from Point is made into your bank account)

Thus, there will be at the very least a $950 upfront cost when it comes to working with Point. And it's important to remember that these fees are comparable to what you'd pay to take out a HELOC as well.

I can see how this could deter anyone from continuing with the process of cashing out with Point but it could be well-worth the cost for you if you own a substantial amount of equity in your home and could really do with the cash.

How Would This Work In Real Life?

Let’s take an example.

Say for instance you currently have $425,000 equity in your home.

But there was a huge leak in your basement and it is now essential that you repair the leak as well as replace the washer and dryer in the basement.

Plus, you realize it is high time you actually built out and finished that basement.

If you qualify for Point, you sell shares in your home and receive between $21,250 and $42,500 (less 3% transaction fees bringing the actual amounts you will receive to between $20, 612.50 and $41,225).

You now have cash that you can use to make those much needed repairs.

Great thing: you are not required to pay back immediately.

Every Point Homeowner Agreement comes with a 10-year term. So you technically have up to 10 years to pay Point back.

You can pay back the money at any point during this 10-year term without a penalty based on a current fair-market appraisal of your home.

If you sell your home during the term, Point is automatically paid from escrow whatever cash you received plus a percentage of the home’s appreciated value as determined by Point.

Point even has an online calculator that allows you to input the specifics of your homeowner situation so you can get a good idea of how much you will pay back at the end of your term.

Real Life Use Cases

We just talked about a basic use case above, where you could use equity in your home to pay for repairs (versus taking out a HELOC). But let's dive into two scenarios where Point could really make sense.

Using Equity Like A Bridge Loan

Let's say you're looking to buy a home in a hot housing market. You currently have a $500,000 mortgage, and a $1,000,000 home. You have about $50,000 in cash, but that's not enough to make a "good down payment" for your offer on your new home. Remember - it's a hot housing market.

You could take out a HELOC and get more cash out of your house - you have $500,000 in equity. But the problem? Taking out a HELOC will negatively impact your debt-to-income ratio, and could jeopardize getting your new mortgage.

That's where Point comes in. If you sell the equity in your home, you walk away with cash that you can use for the down payment on your next house. But since it's equity, it doesn't show up on your credit report, there are no monthly payments, and you don't impact your debt-to-income ratio. 

When you sell your old house, Point takes their equity back in escrow. This is a great scenario for using Point to sell equity.

Using Equity To Pay Down Debt

Another great use case for Point and selling equity in your home is to pay off high interest debt. For example, say you have high interest credit cards or student loans and you're looking for a way to get rid of them. Beyond saving interest payments, you want to improve your debt to income ratio (maybe to buy a future home) and improve your credit score (to qualify for better rates and terms).

Selling equity in your home is a great use case for this versus alternatives like refinancing the debt, or taking out a personal loan to pay of credit cards

With both refinancing and a personal loan, you still have the debt on your credit report, and you're still paying interest on the debt - likely high interest too even in the best cases. 

If you used equity in your home, you could literally be debt free (or at least consumer debt free). Once again, since equity doesn't show up on your credit report or require monthly payments, the savings in interest alone could be substantial. Plus, you'll likely boost your credit score significantly in the process.

Final Thoughts

Point has been around for two years now and from their press releases appear to be growing with each year.

If you’ve been denied a home equity line of credit from your bank and really do need the cash to meet a dire financial need, checking Point out might be an alternative for you.

Yes, there is an upfront cost but if you play it all the right way, you can end up benefiting massively from selling shares in the equity of your home.

Do you have equity in your home? We'd love to hear your thoughts on in the comments below. 

The post Point Review: Selling Your Home’s Equity vs. Getting A HELOC appeared first on The College Investor.

The Basics Of Spousal Consolidation Student Loans
9:29
2018-01-14 01:36:15 UTC 9:29
The Basics Of Spousal Consolidation Student Loans

Spousal Consolidation Loans

Spousal student loan consolidation is something you might be considering, or perhaps it’s something you’re keen to get out of.

Either way, there are some key details about this particular loan situation that are important to know. I’m going to briefly outline what spousal student loan consolidation is, why you might want to do it, why you might want to avoid it, and ways to change it if you have this kind of loan.

What Is Spousal Student Loan Consolidation?

Spousal student loan consolidation is when you combine your student loan or loans with that of your spouse into a joint loan that bears both of your names. This process was previously offered by the government for federal loans. While it’s no longer possible to federally consolidate your student loans with your spouse, a lot of people did so when the program was available and are still paying off those loans, for better or for worse.

However, some private lenders will consolidate a married couple’s loans, though the procedure would technically be considered a refinance. The two loans would be paid off by a single new loan in both your name and your spouse’s name. Some lenders may include federal loans in the consolidation; however, remember that refinancing federal loans into private ones sheds the myriad borrower protections — repayment and forgiveness options and deferment, forbearance, and interest benefits — that federal loans carry.

If you have federal student loans and are considering consolidating your and your spouse’s loans into a private joint loan, check out your other options first. If you need lowered payments, you might want to keep your federal loans and enter into a different repayment plan that is better suited to your income level. For help with that process, we recommend Ameritech Financial. You can also call them at (866) 863-3870. They help borrowers navigate all their repayment options and help them apply to maximize their chance of getting into the payment plan they need the most.

The Benefits

A private spousal consolidation loan may simplify your life if you and your spouse have a confusing or unfavorable student loan landscape. By this, I mean you and your spouse:

  • check
    H​ave high interest rates on some or all of your loans
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    H​ave loan terms that aren’t working for you
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    Deal with multiple, possibly problematic servicers


If some or all of these are true, consolidating your loans into a single loan might seem attractive. However, you might want to consider refinancing your loans separately before you decide on a spousal consolidation loan. 



Only if your combined credit scores and incomes would give you the most favorable loan terms and savings on interest should you consider a spousal consolidation loan.

The Drawbacks

A spousal consolidation loan locks you into a financial obligation with your spouse that may be very difficult or costly to get out of, especially if you decide to get divorced. If you have a true joint loan, both you and your spouse are equal borrowers in this debt and are equally responsible, no matter how much of the debt was originally yours.

You cannot release the name of someone on a joint loan. If you and your spouse have a loan where one of you co-signed, you can theoretically release a co-signer, but lenders are not always willing to do this. 

The main drawback is the unpredictable nature of your financial situation and your relationship. If one or both change, you will need to negotiate with your spouse on how to repay this combined debt.

Changing Your Spousal Consolidation Loan

Many of you reading might feel like a warning is a moot point because you already have a spousal consolidation loan and want to split it—now. Maybe you are desperate to take advantage of a loan forgiveness program that’s impossible to access with a joint loan; maybe you’re getting divorced and the prospect of sharing debt with your ex for years to come is a very unpleasant one. Whatever the reason, you are in a tricky situation.

Here’s what we know about making changes to federal spousal consolidation loans.

First, if you want to convert your federal spousal consolidation loan into a different kind of federal loan, there are few, if any options. At least one expert says that there is not necessarily a law forbidding making a FFEL spousal consolidation loan into a Direct Consolidation loan. However, the Department of Education has been known to deny applications attempting to do so. It might take a change in law for the Department to change their practice, which is no small feat. 

It’s also not clear if lenders are willing to refinance a federal spousal loan into a private loan. Refinancing an individual’s federal loans into private loans is definitely possible, but the spousal loan is a different story. If a lender is willing to do this, you and your spouse’s individual incomes and credit histories will be the determining factors in your ability to get a new private loan or loans to pay off the federal spousal one. If you find a lender you like, it can’t hurt to ask them about their refinancing options in regards to spousal loans.

When refinancing, if you do find a lender who will split up the loan into private loans, you have to make sure you’re getting a good deal not just in terms of the portion of the debt you’re receiving, but the terms and rates of the new loan. While freedom from the spousal loan is the main goal, highly unfavorable terms may present a new unwanted challenge. The same goes for if you have an already-private spousal consolidated loan and decide you want to refinance it. 

Whether you find a lender to refinance your loan and break up your debt or not, breaking up with your spouse will mean the debt needs to be apportioned somehow. If you’re getting divorced, a lawyer will likely have to hammer out the details with your ex’s lawyer. Whoever you choose to use to help you negotiate, it’s important to get in writing and in a legally binding document the responsibilities of each party in paying back the debt.

What To Do In The Meantime

If you’ve hit a roadblock with your spousal consolidation loan—perhaps you have not found a way to split it, or the payments are too high—you need to do what you can to stay in good standing. Delinquency or default on the loan would just exacerbate current problems.

If you have a federal spousal loan, you may be able to enter into an income-driven repayment program, based on both partners’ incomes and family size, and potentially get your monthly payment reduced. This is especially helpful if both you and your partner or ex-partner’s incomes are low.

For help with income-driven repayment, you can contact Ameritech Financial. They help you navigate your options and do all the paperwork for you once you’ve decided which option to go for.

The post The Basics Of Spousal Consolidation Student Loans appeared first on The College Investor.

What To Do If Your Child Forges Your Name For A Parent PLUS Loan
10:43
2018-01-14 01:36:15 UTC 10:43
What To Do If Your Child Forges Your Name For A Parent PLUS Loan

Child Forges Name Parent PLUS Loan

Parenthood is full of ups and downs, but throughout it all there is the hope that you’re raising your children right. That comes with a desire to help set your child up for a successful future. When it comes to college, that may mean taking out Parent PLUS loans to help cover the high costs of higher education.

Taking on PLUS loans is a big decision. With high interest rates and essentially no borrowing limit, parents can get themselves into trouble easily. Especially when they should be focusing on their retirement savings, parents should think long and hard before taking out loans for their kids’ college education.
But what if your child takes that into their own hands? It’s not unheard of for kids to sign up their parents for PLUS loans.

In this article, we’ll cover how that can happen and what to do if it does.

If you need some quick help in lowering student loan payments for any reason, we suggest giving Ameritech Financial a call at (866) 863-3870. The reps there can help you determine if you would benefit from applying for one of the Department of Education’s repayment plans.

How You Get A Parent PLUS Loan

There are two ways to get Parent PLUS Loans: by accepting them as part of a school’s financial aid package or by applying for them separately through the StudentLoans.gov website

After a student fills out the FAFSA and gets accepted into a school, the school sends the student a financial aid award letter that outlines all of the financial aid the student is eligible for, including scholarships, grants, and loans. Parent PLUS loans may appear on that list.

The letter will have instructions on what to do to accept the aid. However, each school’s letter may be different, despite some effort from the Department of Education to standardize them. The instructions for how to accept or decline aid may also differ. Some schools require students to manually accept or decline each type of aid offered, while others assume students will accept all offered aid unless they call the financial aid office and decline any of it. 

Students may be able to accept Parent PLUS loans without requiring their parent’s signature, but that money wouldn’t be disbursed before the promissory note is signed. For federal loans, it’s customary to sign a master promissory note (MPN) before the first year of the student’s higher education. That MPN is active for 10 years, meaning you may not need to sign another for the second, third, and so forth years of school for which you take out loans.

So, if you sign the promissory note for your child’s first year, you may have also signed off on future loans that your child may accept without your documented approval or knowledge.

The promissory note is usually completed virtually through your FSA account, but schools may alternatively accept a paper copy through their financial aid office.

Getting A Parent PLUS Loan Without The Parent's Knowledge

Whether loan application documents are submitted online or on paper, certain personal information is required. Besides your FSA account login and basic personal information, you need to provide your Social Security number and birthdate. Without those, you can’t get a Parent PLUS loan.

Therefore, if your child submits it all without your knowledge, it means they stole your identity to obtain a student loan. Done online, your child would need your FSA account login information and potentially your Social Security number. Done on paper, your child would need your Social Security number and to forge your signature.

Using your personal login information or Social Security number or forging your signature are all considered identity theft.

What Can You Do?

You have two options: apply for discharge of your PLUS loan due to identity theft or work with your child to pay off the loans.

It’s not impossible, but it’s difficult to get your loans discharged due to identity theft. To start the process, you must contact your servicer for instructions. But keep the following in mind:

  • You may need to provide proof of legal action against the identity thief — your child — in the form of a police report or even proof of conviction by a judge.
  • You may be denied the discharge if your child benefited from the education the loan paid for.

If you’re unwilling to take legal action against your child, you likely only have one option: pay the debt. How you do that is up to you, but we suggest trying to get your child to help since they got you in this situation. U.S. News advises working out a deal with your child to pay back the loans in exchange for not reporting identity theft — that is, if your child needs the incentive to take responsibility.

There are some options to help you with your Parent PLUS Loans. If your payments are overwhelming or take up precious funds you’d prefer go toward retirement or other financial goals, look into the federal repayment plans available. If you work in the public sector, you may be able to get the loans forgiven after 10 years through Public Service Loan Forgiveness. Otherwise, you may benefit from the income-contingent repayment plan.

If you need help understanding your options or applying for one of the repayment plans, call Ameritech Financial at (866) 863-3870. They focus on improving bad situations by helping borrowers make their payments affordable using the options offered through the Department of Education.

The post What To Do If Your Child Forges Your Name For A Parent PLUS Loan appeared first on The College Investor.

What’s The Difference Between A W2 and W4?
3:35
2018-01-14 01:36:15 UTC 3:35
What’s The Difference Between A W2 and W4?

What's The Difference Between A W2 and W4?

Have you ever wondered about some of these tax docs you have to deal with? One of our readers asked about the difference between a W2 and W4.

When it comes to filing taxes, all the forms you need can certainly sound like an alphabet soup.

W4.

W2.

1040EZ.

Eventually they all begin to sound like the same thing.

But they are not.

In this post, we will look at the differences between a W2 document and a W4 document.

What's The Difference Between A W2 and W4?

Let's break it down!

W4

If  you are an employee of a company,  a W4 is the  legal certificate which allows your employer to know the amount of federal income tax to withhold from your paycheck based on:

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    Your income level
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    Your marital status
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    The number of people who depend on your financially (dependents
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    Your child/dependent care costs and 
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    Income from a second job or spouse

Depending which side of the spectrum you fall on any of the above factors, a score is given and that total score is entered on your W4 form and ultimately will determine how much tax will be withheld from each paycheck you receive from your employer.

The secret to paying your fair amount of taxes  and making sure you get the breaks you deserve lies largely on what you put on your W4.

The 2017 W4 starts off with lines A through H.

If nobody can claim you as a dependent, you will put the number 1 on the box at the end of Line A.

If you are a college student currently being supported by your parents, it is important to verify with your parents that they will not be claiming you as a dependent during tax season as conflicting information could cause you (and your parents) some trouble with the IRS. If they won’t be claiming you as a dependent on their taxes you are free to enter 1 on Line A.

Lines B and C have to do with your marital status and whether or not your spouse works. This is usually easy to determine.

Line E is another crucial line  on the W4.

This is where you will state whether you will file taxes as the “Head of Household”.

You will enter a 1 here if you are unmarried or if your income accounted for more than 50% of the costs of keeping up a home for yourself and/or your qualifying dependents. This is something you don’t want to get wrong either. If you but currently separated, it is important to discuss with your spouse who the Head of Household will be as there can only be one Head of Household (or you may opt to file as “married filing separately.

Make sure to seek the help of a certified tax professional here so you can stay legal.)  If you have children, same goes for who will claim the children as dependents on Line A.

Line F is for daycare expenses of at least $2000 while you were at your job and if you plan to claim credit for it on your taxes.  If you made less than $70,000 (single parents) or less than $100,000 for married couples, you will qualify for a tax credit called dependent care expenses credit for up to 2 children. If this scenario defines you, you will enter a 1 on this line.

Line G is for parents who have children within a particular income bracket. If you make less than $70,000 as a single parent, or $100,000 for married parents, you will write down 2 on this line for each eligible child. If you make between $70,000 and 84,000 (single parents) and between $100,000 and  $119,000 for married parents, you will enter  1 on this line for each.

You can get back up to $2000 for up to 4 children you list as dependents on your tax returns. This is not chump change at all.

Finally on  Line H, you add up all the numbers from the previous lines and enter the total.  This number will determine your tax level.

Filling out the W4 form correctly, will ensure the right amount of taxes are taken out so take time to fill it out correctly so you don’t face any avoidable questions from the IRS later on.

W2

A W2 document on the other hand is a form which reports the wages an employee earned and taxes and deductions withheld  in the course of the year. This is filed by an employer for the employee even if the employee is related to them.

The employer is required to send one copy to the employee and one copy to the IRS. The employer must have the W2 available to the employee latest by January 31st of the next year for tax filing purposes.

Box 1 on your W2 shows your gross income. So if Mr. John made a gross income of $21,000 during the year it will go in Box 1.

Box 2 will show how much of your gross income was taxed, so if Mr. John was taxed $2300 during the year it will show here. This amount directly reflects the information you entered on your W4 form.

Everything else on your W2 is fairly straightforward and gives you information on deductions taken out for Social Security and Medicare as well as what came out as state and local income tax.

Wrapping It Up

So that, in a nutshell, is the difference between a W4 and W2.

One document allows you to essentially dictate how much you should be taxed whereas the other one gives you a report of how much money you made and how much you were taxed during the course of a given year.

You fill out a W4 form when you start a new job  you can contact your HR office to update it at any time of the year should your circumstance change) and you will receive a W2 at the beginning of the year so you can file your taxes and not get in trouble with Uncle Sam.

Your thoughts and questions are welcome below.

The post What’s The Difference Between A W2 and W4? appeared first on The College Investor.

YNAB Review: The Best Paid Budgeting Software
7:39
2018-01-14 01:36:16 UTC 7:39
YNAB Review: The Best Paid Budgeting Software

If you can’t figure out where your money is going, you need a budget! YNAB, an acronym for You Need A Budget, is an app that “gives every dollar a job” so that you can make each dollar work for you.

Just fill out the categories, and you’re ready to go!

Think you DON’T need a budget? Think again. According The Associated Press-NORC Center for Public Affairs Research, 66% of Americans would have trouble coming up with $1,000 for an unexpected expense because they don’t have an emergency fund.

YNAB Review

The study further reveals that families with income above $100,000 would still have trouble coming up with $1,000 for an emergency.

How Does YNAB Work?

YNAB allows you to automate your budget. This is the perfect choice if you are looking for a system that solely focuses on budgeting rather than investing and other bells and whistles.

With YNAB, you can deal with debt and set priorities for upcoming expenses and other financial goals. 

If you follow the “YNAB Rules”, you will see improvement in your spending, spend less than you earn, and be ready to save for the future. The goal is to cover this month’s expenses with last month’s income.

This process is called “aging your money”, where your money has to be at least 30 days old before you can spend it. 

YNAB Rules

YNAB Rules are the building blocks to help you live within your means. 

If you follow these steps, you will be able to save efficiently, get out of debt, and most importantly, stop living paycheck to paycheck.

Rule #1: Give Every Dollar a Job

Each dollar should be used for a certain expense. Rather than spending on whatever comes your way, you will have more organization and order with your spending. 

Rule #2: Embrace Your True Expenses

Most people say they had expenses that just “came up”, but the truth is that many of these expenses should be anticipated, such as birthdays and holidays. Your budget needs to be accurate, or you will constantly struggle with sticking to your budget.

Other expenses include larger expenses that occur less frequently, such as vacations, holidays, routine car repair, and annual medical expenses. YNAB advocates budgeting money for these expenses and allocating funds to pay for them on a monthly basis. This concept is referred to as the “sinking fund.” By spreading these expenses across the year, you will have less stress and more control over your finances.

Rule #3: Roll With the Punches 

Certain expenses will creep into your life and catch you off guard. You will also have certain months where you overspend in certain categories. By embracing this principle, you will be able to make necessary adjustments when you overspend or have unexpected expenses. Just move money from one category to another, and keep going. Don’t let small setbacks get you off track - keep the momentum going!

Rule #4: Age Your Money

When you spend money that you earned last month, you will have this month’s income to roll forward to the next 30 days. You will not stress when there are delays with your cash flow. To successfully “age your money”, you should be spending money that is at least 30 days old. 

The YNAB website also offers live online courses for members, including guides and blog posts that cover transitions, long term planning, and dealing with debt.

How Much Does It Cost?

Priced at $6.99 per month (billed annually at $83.99), YNAB will give you a high return on investment when you see how much you save with this budgeting program. YNAB offers a 34-day free trial so that you can see for yourself if it’s a good choice. The best part? They don’t even ask for your credit card information!

The Good

There are so many great things about YNAB. From budgeting guidance, useful how-to guides covering topics like how to prioritize and deal with debt, YNAB is user friendly and easy to update. 

Extremely User Friendly And Easy To Navigate/ Comprehensive budgeting With App

YNAB takes a simple approach to setting up your budget - just connect all of your accounts and start budgeting. All you need to know is how much you have right now, and how you plan to spend your money until you get paid again.

When you apply the concept of “aging your money”, you won’t have to live like you’re living paycheck to paycheck. 

Customize Your Categories

YNAB automates your spending while letting you customize your categories, budgeted amounts, the names and order of all categories. You can make manual entries, but with YNAB’s secure account linking, it is much easier to import your transactions. 

If you connect your accounts, YNAB will analyze your spending habits, and even guess categories for you. If transactions are bold, that means they are new, and haven’t been categorized yet.

Some categories might change, especially with stores such as Target, Wal-Mart, Costco, and Sam’s Club. You might be buying groceries, or you might be buying furniture, camping gear, or a new barbeque grill.

Change the categories as they apply to each transaction. 

Rather than just assigning categories like Mint, YNAB gives you suggested categories, and you just review and approve. You are forced to know what is going on with your money.

Not only does this hold you accountable, you will also be able to quickly identify and report any fraudulent activity on your accounts.

Split Transactions For Laser Focused Budgeting

On that note, if you go to Target and buy a bunch of items that fall under different categories, you can even split transactions. If you went to Target and bought groceries, power tools and beauty products, you can easily split the transactions by category. 

Accurate Starting Balance

Whether you’re going to use the software manually or connect it to your accounts, you just start with whatever amount of money you have right now, and go from there. Say you have $225.00 in your bank account, then $225.00 is the number you will start out with to allocate your expenses. 

If you budget more money than you have, it’ll turn red.

Conveniently Link All Accounts

YNAB offers the option to securely connect all of your bank and credit card accounts, or enter everything manually. Then, all you have to do is import your transactions into budget categories. 

Easy To Set Up Sinking Funds

With YNAB, you can set up a sinking fund and never be stressed about larger expenses again. What is a sinking fund? It is similar to a “rainy day” fund, except you are setting aside money for a large future expense, whether you know the exact amount or not. You could have a sinking fund for things as small as renewing your annual $258 vehicle registration. Just add a category for vehicle registration, budget $21.50 for each month, and you’re set! 

Easy To Make Adjustments For Overspending And Moving Extra Money

If you overspend in one category, that may be a sign that you need to budget more money for that category. If you have extra money in one category, you can move it to another category. Move it to a category for entertainment, use it to pay down debt, or roll it over to the next month.

Quick Budget and Spent Last Month Category

The “quick budget” box on the right of the image below helps you fill in your monthly budget quickly using the “spent last month” category.

The “spent last month” category is helpful for the fixed categories for easy reference and side-by-side comparison. You can see what you spent last month and plug the number in. 

Aside from that, the “quick budget” feature lets you see exactly how much you spend in each category, and then make necessary adjustments.

Prompt Customer Service

You can search their detailed help center for easy-to-understand explanations or quick video tutorials. If you need extra help, you can send a message to customer service by clicking on the question mark in the corner. 

Mobile App

YNAB has a mobile app feature available through the App Store or Google Play. You can use the same login credentials for the mobile app that you do for the desktop version.

Blog and Forum

YNAB has several detailed blog posts and topics that are updated regularly. They discuss habits, behavior, and other mindset shifts needed to stick to your budget. 

If you want to see how other people are using YNAB, you will also have access to other YNAB users who share their budgeting strategies, questions, and helpful tips. Get support and encouragement from other YNAB users, and share your stories in the forum.

Site Security

YNAB doesn’t mess around when it comes to security. Since your financial data is in the software and app, you can rest assured that data is encrypted, and they use multiple iterations of a key derivative function for passwords. 

The data is encrypted, and when you terminate your account, your data is wiped from their system. 

Cons

Like anything, there are a few minor drawbacks, but definitely no deal breakers. 

App Limitations

If you only want to use YNAB on your phone, you may have a problem, since you cannot set up your budget on a mobile device. You must set up your budget from the desktop. After that, you can use the app. The app is especially useful to check your budget from anywhere (especially before shopping), and it also syncs with your account. 

Treatment of Credit Card Transactions

You can connect your credit cards to YNAB, but when you spend on a credit card, YNAB automatically moves the money from the category to the credit card. Then, when you pay your credit card payment from your bank account, the transaction is treated as a transfer.

It takes a while to get used to, and some people are confused. Once you get past the learning curve, this is easy.

Is It Worth The Money?

If you are having trouble sticking to a budget, and you find yourself in debt with little savings, YNAB will help you get smart about your money and get back on track.

Most people don’t have the discipline to budget without some extra help. Take advantage of the 34-day free trial and give it an honest try- you’ll be surprised.

Have you used YNAB? If not, what budgeting apps and tools do you use? Leave a comment below and let us know!

The post YNAB Review: The Best Paid Budgeting Software appeared first on The College Investor.

Hulu vs. Hulu Plus Live TV – Do You Need It?
4:01
2018-01-14 01:36:16 UTC 4:01
Hulu vs. Hulu Plus Live TV – Do You Need It?

To get or not to get: Hulu versus Hulu Plus?

Do you even need it?

Well strictly speaking you don’t necessarily “need” TV but it sure is nice to be able to enjoy some good entertainment from our homes.

Hulu is an online television service that has been around for just under a decade.

Hulu vs. Hulu Plus - Do You Need It?

When Hulu started out, it was called Fancast and you could watch replays of your favorite television shows online if you happened to miss the actual broadcast.  

This service was available completely free until the middle of 2016 when Hulu switched to a paid subscription only service.

Their repertoire of programming has been expanded since then to include not just replays of your favorite TV shows but Hulu-bred originals and hit movies.

If all you are interested in is the ability to watch replays of your favorite shows or stay in on Friday nights to watch last year’s Oscar winning movies, you can get Hulu for $7.99 per month streaming on your phone, tablet or computer.

Not a bad deal at all.

More recently Hulu has come up with Hulu Plus - now called Hulu with Live TV - a service which is still in beta.

This Hulu plan is priced at $39.99 per month.

What Makes The Two Packages So Different?

1. For starters, Hulu promises that their Live with TV version allows you to watch content  with limited commercials. This language is a little confusing as the regular Hulu plan is supposed to come with limited commercials as well. From what we can tell, it appears there are fewer commercials with this version as compared to the $7.99 version.

2. With Hulu Live with TV, you can stream over 50 live and on-demand channels. These channels include of the the premier news, entertainment and sports channels like ESPN, MSNBC and National Geographic - a feature absent on regular Hulu.

3. Something that is pretty cool about this particular package is that you can also stream live and on-demand content on your phone or other mobile devices while you are on the go. Even though you can watch  regular Hulu on your phone, the difference is that live and on-demand content will not be available to you.

4. With Hulu Live with TV, you can stream via any of the popular streaming devices - Roku, Chromecast, Apple, Android TV, Fire TV and XBox as well select Samsung models. 

5. Streaming on unlimited devices is an add-on for Hulu Live with TV .Enhanced Cloud DVR  is also an available add-on to this service where you can save live shows you missed and watch them later.

There is certainly a lot to love about Hulu Live with TV.

Should You Get It?

It all depends on your particular situation.

Cable TV is notoriously expensive these days with plans running hundreds of dollars if you want to watch premium channels like ESPN and National Geographic.

Secondly, regular cable television will require that a work technician from the company come to your home to do an installation.

Sometimes, owning the cable box is an additional cost that can add as much as $20 per month to your bill ($240 per year is a lot of money.)

Cable companies are also well known to start you out with an “introductory” price which shoots up significantly once you cross the one year mark with them.

All these costs add up and can make having cable TV a hassle.

Alternatively, Hulu Live with TV is $39.99 per month.

Plus, there are: 

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    No extra hidden fees
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    No extra equipment - you will just need a Roku, Chromecast , Apple TV device or a Samsung Smart Tv to start streaming. These can be bought very easily at reasonable prices at Walmart and Target and you can use them for life.
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    No cable guy to come who has to come and hook your cables up. This means you will not have to take a day off just to wait for the company guy to show up.
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    No contracts
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    You can cancel at any time with no penalties or consequences
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    Access to the same channels the cable companies will charge hundreds of dollars for

My recommendation here therefore is that if you are looking for a cheaper alternative to regular cable TV, Hulu Live with TV is worth the the investment and in the long run will save you a lot of money.

On the other hand, if all you want is to be able to watch binge watch seasons of currently-running shows on your phone, tablet or computer, the regular Hulu plan for $7.99 will more than suffice.

Closing Thoughts

Hulu versus Hulu Plus? What has your experience been?

Your thoughts are welcome in the comments.

The post Hulu vs. Hulu Plus Live TV – Do You Need It? appeared first on The College Investor.

3 Ways To Minimize Your College Debt
7:46
2018-01-14 01:36:16 UTC 7:46
3 Ways To Minimize Your College Debt

3 Ways To Minimize Your College Debt

If you’re reading this, you probably either have student loan debt or you’re about to incur student loan debt.

With student loan debt balances on the rise, your best bet is to pay off your student loan debt as quickly as possible, or better yet, stop the debt from piling up by taking the preventative measures. 

Many graduates have to put their life on hold because of common student loan mistakes. Avoid making these mistakes and get rid of your student loans in 3 easy steps!

According to USA Today, up to 68% of college graduates enter the workforce with student loan debt. The Institute For College Access and Success reported that students graduate with $18,000 to $37,000 in student loan debt in the last year. To minimize the impact, follow these 3 simple steps to avoid unnecessary debt from accumulating. 

Step One: Pick The Right College And Fast Track Your Graduation

Selecting The Right College

Find out how much tuition will cost, and also estimate all the other costs, such as textbooks, materials, living expenses, and additional costs if you are living on campus.

Out of your top college choices, closely look at cost, lifestyle, and career opportunities. Weigh the pros and cons of each college before making your selection.

If you’re trying to narrow down your choices for which college to attend, look at your top choices, and rank them by tuition. Also do some research to find out whether classes fill up quickly, and what alternatives are available.

The last thing you want is to prolong graduation and deal with half full semesters because your required courses are not available, and there are no alternatives. 

Regardless of whether or not you got accepted into your dream college, you can also start out at a community college and then transfer to your dream college.

A couple of years at a community college will help you get your grades up and increase your chances of getting a good scholarship or grant. As a bonus, this option will save you two years of high cost college tuition right there. 

If you’re still not sure about whether you can realistically pay off your student loan upon graduation, a good rule of thumb is that the loan balance should not exceed your expected starting salary. 

Research Scholarships, Grants and Fill Out Your FAFSA

Before you get overwhelmed about the cost of tuition, research all the grants and scholarships available from your top college choices.  Find out how much you need with and without grants and scholarships. 

Next, explore your options for financial aid. Before you turn to student loans, make sure you know all of your options for grants and scholarships. Fill out your Free Application for Federal Student Aid (FAFSA) and start looking for scholarships and grants right away.

Finally, figure out how much you would need to close the gap, and whether having a job would have an impact. A job at the college coffee shop might save you a few thousand dollars, but it could also adversely impact your grades.

If you prefer not to work while in college, start planning your career so that you can have a cushy job that supports you once you graduate. Private loans should be your last resort for closing the tuition gap. 

A word of caution about student loans: know what you’re getting into before you take out student loans. You’ve read horror stories about people not being able to afford everyday expenses as their student loan piles up.

Know what you’re getting into when you borrow money for school. First, make use of federal student loans, and then look at private loans as a last resort. Remember, private loans usually don’t offer the same benefits as federal student loans, such as deferment, forbearance or forgiveness.

Plan To Graduate Efficiently / Create An Efficient Plan For Graduation

Figure out your graduation requirements and determine whether tuition is calculated by semester/quarter or by unit. If tuition is calculated by semester/quarter, you can graduate fast with the right planning and discipline.

Take summer classes and transferrable units at a local community college to cut back on costs and also make up for issues with course availability. For example, some colleges will permit students to take language classes that easily fill up at community colleges. That way, you are making the most of your time, and also saving money, especially if your school charges tuition per unit.

Step Two: Budget And Save To Minimize Student Loan Debt

Create a Realistic Budget For Your Life Right Now

You want to enjoy the college experience, but you don’t want to go broke in the process. For nights out, find places where you can get good deals on food and drinks to cut back on expenses while dining out.

While you’re in school, cut back on your living expenses by either living at home or renting an apartment off campus rather than living on campus. Decide how to plan your meals and live well ahead of time. Put away money while you’re in school, whether it comes from a job or financial aid. 

To get started, create a realistic budget. List all of your income, including financial aid, income from jobs, or contributions from your parents.

Next, list out your expenses, starting with necessities such as tuition and fees, books, rent or room and board, groceries, utilities personal items, transportation, and health insurance. Include all minimum payments for credit cards and debt in your budget.

Use most of the money leftover to pay down your student loan. If you have a negative number, you will have to redo your budget so that your income covers all of your expenses.  Your budget should plan for emergencies, car maintenance (if you have a car), and larger expenses such as a new laptop or a vacation.

If you’re already out of school, figure out how much you need to pay off, and then create a budget. Calculate your income and expenses, and see how much you have leftover. Include the minimum payment in your budget. Use most of the extra money to pay off your loan.

Save Up For The Future

Whether your income consists of student loans, help from your parents, or your salary, you need create good financial habits from the start. Begin by putting away at least 10% per month. 

Saving each month will help you create good financial habits that will benefit you in your adult life and beyond.

If you’re really serious about getting your finances in order, Personal Capital will not only help you analyze your budget, it will also help you with your investments. Check out our review of Personal Capital if you’re still on the fence. 

Step Three: Increase Your Income And Aggressively Pay Down The Balance

Pay Tuition In Installments While In School

If you’re able to pay tuition, pay it in installments to avoid losing money at all once. Even the set up fee or convenience fee will probably be far less than the interest rate for student loans.

Work To Minimize Debt

If you can get your hands on a paid internship, you can get credit for working while having some money to pay off student loan interest. 

If you’re still in school, a part-time job can be used to replace or reduce loans. Certain jobs can even cover your living expenses in addition to your salary. For example, a job as a resident assistant can help cover living costs, such as room and board. However, if you’re not careful, working while you’re in school could take up the time you need to study and live a balanced college life. 

If you’re out of school, look for opportunities that will further your goals.

Jobs That Pay Off Your Student Loans 

Look for jobs that provide student loan forgiveness or concessions that are in line with your profession. Certain professions will even pay off your student loans if you stay there long enough. If you are willing to put in a few years, this is a good choice.

Prepay loans

If you get a hefty tax refund, bonus, or pay raise, don’t spend it! Use the money to prepay your student loans, or pay them down if you’re already out of school.

If you have smaller student loan balances, don’t fall into the trap of procrastination. If you prepay your student loans, you are more likely to pay off your student loans at a faster pace. 

Pay the interest

Although you don’t have to pay student loan interest while you’re in school, you students with unsubsidized Stafford loans aren’t required to pay loan interest while they’re in school, there are potential savings if you pay interest.   

If you don’t pay down your student loans fast enough, you may have to consolidate your eligible student loans and make arrangements for the rest. Don’t put yourself in that position - start taking preventative measures now.

In Closing

Begin with the end in mind. Decide on a college, estimate the costs, and find a way to graduate as quickly as possible, especially if your school tuition is calculated by semester or quarter rather than per unit.

Explore all of your options for grants and scholarships, and then find out how much you need to close the gap. Explore financial aid and calculate how much you can earn if you get a job.

Weigh the pros and cons, and you will have a plan. Also, check out our FREE 5-day course to get out of debt and start living your life. 

Have you used any of these tips to keep your student loan debt piling up while in school? If you’re a graduate, have you used any of these strategies to pay off your student loans? Tell us in the comments below!

The post 3 Ways To Minimize Your College Debt appeared first on The College Investor.

What’s The Difference Between a 401(k) and 403b?
5:05
2018-01-14 01:36:16 UTC 5:05
What’s The Difference Between a 401(k) and 403b?

It is never too early to plan for retirement.

As a matter of fact, since the average age of retirement is 66 in the US, it is not bizzare to start planning even if you are in your early twenties.

Think about it - if you are 25 years old right now, you have less than double the number of years you have already lived life to reach retirement.

Those 41 years will come by really quickly!

So where do you start?

403b vs. 401k: What's The Difference?

For most working adults in the US, the plan to retire with financial stability usually starts with a 401K plan that you contribute to and can roll-over when you switch jobs.

But is that all there is? 

In today’s post, we will compare and contrast the popular 401k retirement plan with its’ lesser known cousin but equally important cousin, the 403b plan.

403b vs. 401k: What's The Difference?

The 401k plan is a retirement plan offered to employees of for-profit organizations.

On the other hand, the 403b plan is the retirement plan that is offered to employees of tax-exempt/not-for-profit organizations like public schools, certain churches and hospitals.

There are a few similarities between the two plans.

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    Both retirement plans have limits on how much you can contribute

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    Since they are retirement plans and not savings accounts, you cannot easily withdraw money from it and in the rare occasion that you do, you will be taxed on the money you withdrew.
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    With both plans, your employer will match your contributions.
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    For both plans, you will pay if you withdraw money from the account before the age 59.5
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    In case of an emergency, you can take out money from either account but you will have to pay it back if you want to avoid significant tax consequences.
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    Compensation and contribution limits are subject to annual-cost-living adjustments.
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    With both plans you can start withdrawing regularly from your account after age 59.5 without any tax implications.
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    With both plans, at age 70 you are required by the government to receive monthly payments from your 401k or 403b plan or face severe tax consequences.

That is where the similarities between a 401k plan and a 403b plan end.

Differences

By nature of who provides it (tax-exempt organizations), the 403b  plan requires lower administrative costs.

Secondly, the contribution limits work differently for the 403b plan as compared to the 401k.

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    There is the basic contribution of $18,000 per year for all employees.

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    Employees 50 years and older can opt to contribute an additional $6,000 per year if they want to play catch up bringing the total amount to $24,000 per year.

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    In addition, there is an IRS rule called the “15-year rule”. According to this rule, if an employee has worked with the same eligible 403b employer for 15 years, an additional $3,000 can be contributed to the retirement plan.

The 403b plan also comes with limited investment choices. However, it does not mean, it is less powerful than the 401k plan.

The most important thing is that you are actively contributing to it.

On the other hand, the 401k plan has higher administrative costs for your employer.

Unlike the 403b plan, you will have access to number of investment options.

There is no “15-year-rule” with the 401k.

The only contributions that can be made are the first $18,000 and the additional “catch up” $6,000 for individuals over the age of 50 years.

Although rare, some 401K plans will require that your contributions are stopped for the year once your salary reaches $270,000 for the year.

In this instance, even if you have not reached the $18,000 contribution to your 401K for the year,  as long as you have received $270,000 in compensation , you still will not be able to put money into your 401K account until the following year.

I Have A 403B Or 401K Plan. How Else Can I Save For Retirement?

Like I mentioned at the beginning of this post, saving up for retirement is not some far-away luxury.

And as you can see, saving up to $24000-$27,000 per year ($48,000-$54,000 when matched by your employer) may not be enough to support you during retirement.

On top of that, if you encounter an emergency and try to take money out of either account, you face the possibility of being taxed heavily.

This is why it is best to also be putting some money in other types of savings accounts.

A Roth IRA is a good place to start.

You may also want to consider high-yielding savings account or even decide to invest some money in the stock market on your own.

The idea here is that it is never a good idea to put all your eggs into one basket.

Closing Thoughts

Which of these - 401k or 403b - do you participate in?

If you are older, what has your experience been?

Your thoughts are welcome in the comments.

The post What’s The Difference Between a 401(k) and 403b? appeared first on The College Investor.

How To Get A Student Loan Debt Consolidation Loan
7:30
2018-01-14 01:36:16 UTC 7:30
How To Get A Student Loan Debt Consolidation Loan

Getting rid of student debt is high on the radars of everyone who has it.

And especially so when you have your loans scattered between different loan servicers.

In such instances, it may be worth it to consider a student loan debt consolidation loan (a mouthful isn’t it?)

How To Get A Student Loan Debt Consolidation Loan

It seems like a roundabout way to go about paying your debt  : I mean, you are taking out a loan to pay off another loan. Where is the sense in that ?

But the reality is that, if you are currently having trouble keeping up with payments or digging yourself out of debt quicker, a debt consolidation loan may be just the solution for you.

How Does It Work?

As mentioned above, debt consolidation will allow you to combine multiple loans into one easily manageable bill.

Apart from rolling everything up into one bill, another feature of debt consolidation loans is that there is usually the opportunity to get a lower interest rate on your monthly payment which will save you thousands of dollars each year.

Although, a debt consolidation loan helps to simplify and streamline your payments, a downside to getting it is that your new lower monthly payments could also lengthen the amount of time you will have to pay off your loans by.  

Tip : You could easily offset this by paying a little more each month.

Here’s an example.

For instance, if your payments currently come to a total of $250 across multiple accounts and you apply for a debt consolidation loan, that payment could come down to say $120.

Now you are paying just one payment of $120 per month (plus any applicable tax) instead of twice the amount like you were paying before.

If you can manage to add, say, an extra $30 and pay $150 each month, you could in fact offset the time disadvantage that is introduced by paying less money towards your student loans.

How Can I Get A Student Loan Debt Consolidation Loan?

Since student loans cannot be discharged when you file for bankruptcy, it is one of those debts that is considered less risky.

Thus, it is also one of the easier loans to get a debt consolidation loan for.

You can first of all start by looking at the federal student loan consolidation program.

The following loans are eligible for debt consolidation under the Federal program.

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    Subsidized Federal Stafford Loans
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    Unsubsidized Federal Stafford Loans
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    PLUS loans from the Federal Family Education Loan (FFEL) Program
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    Supplemental Loans for Students
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    Federal Perkins Loans
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    Nursing Student Loans
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    Nurse Faculty Loans
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    Health Professions Student Loans
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    Loans for Disadvantaged Students
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    Direct Subsidized Loans
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    Direct Unsubsidized Loans
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    Direct PLUS Loans
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    FFEL Consolidation Loans and Direct Consolidation Loans - this is dependent on certain conditions

You can only consolidate your loans after you have graduated, left school or dropped below half-time enrollment.

 Additionally you need to be current on your payments. 

If your loan payments are in default, you will be required to make at least 3 consecutive monthly payments before you can apply for the federal debt consolidation loan.

Once you meet all the above criteria, you can begin the application process.

To apply for the Federal Debt Consolidation Loan, you go through the StudentLoans.gov website.

Once you have completed the application process, the student loan debt consolidation loan servicer you selected while applying will complete the actions necessary for getting your loan disbursed to you.

If you have any questions along the way as you apply for this program, you can contact the Loan Consolidation Information Call Center at 1-800-557-7392.

Private Institutions Offering Student Loan Refinancing

Consolidating your private student loans, just like the federal program, is also dependent on your credit score.

This can be a double-edged sword especially if you were struggling to pay up in the first place - a situation which could undoubtedly wreck your credit.

If your credit is low, you may consider debt consolidation programs that have a low credit score minimum or one with no minimums on credit at all.

Another option maybe to get a co-signer willing to vouch for you. It can be hard to get a private student loan with no cosigner.

Otherwise, you will have to do a little more legwork to get your credit to the level where you qualify for consolidation (we have a list of side hustles that could help you bridge the money gap).

Companies like Credible are great because they allow you to shop around for student loans and see what they best interest rates and fees are. Plus, College Investor readers can get a $200 bonus when they sign up. Check out Credible here.

Closing Thoughts

In full disclosure, student loan debt consolidation is not for everyone. 

While there is the great benefit of having lower payments and lower interest rates, the flip side of that coin is that you probably will be paying for your student loan longer than if you had not consolidated.

However, if you are currently in a tight financial spot and handling multiple payments to multiple loan servicers is truly causing you a headache, a student loan debt consolidation loan will greatly relieve that pain.

Ultimately, it depends on your particular situation.

Have you ever thought about thought about consolidating your student loan debt? Let us know what you think in the comments below.

The post How To Get A Student Loan Debt Consolidation Loan appeared first on The College Investor.

FreeTaxUSA 2017 Review – Great Bargain Tax Software
6:09
2018-01-14 01:36:16 UTC 6:09
FreeTaxUSA 2017 Review – Great Bargain Tax Software

FreeTaxUSA

FreeTaxUSA (and it’s partner company, TaxHawk) have emerged this year as a top contender for best bargain tax software. 

The tax software still costs money (unlike the totally free tax software from CreditKarma), but it’s a cheap solution with enough usability for all but the most complex filers.

Looking for a decent software that provides audit assistance protection at a low cost? FreeTaxUSA may be the right software for you. Here’s what you need to know about the software.


Quick Summary

  • Easy Navigation and Inputs
  • Very Little Guidance, Best For Self Directed Filers
  • Great Pricing

Navigation

FreeTaxUSA has both a semi-guided and self navigating option. For the most part the semi-guided option uses a question and answer style navigation that allows users to quickly determine whether a section applies to them.

The questions aren’t quite as well phrased as H&R Block, TurboTax or Credit Karma Tax, but the questions still get the job done.

FreeTaxUSA 2017 Navigation

Where FreeTaxUSA really shines is their top of the page navigation system where you can dig into and edit personal information, income, deductions, credits, miscellaneous, summary, and state information. The navigation system uses green and unfilled checkmarks that help users see which parts of the software they haven’t addressed.

FreeTaxUSA Info

Users can also review (and navigate through the software using the hyperlinks) using the section summaries. This is also where users can compare this year’s return to last years to catch major errors.

FreeTaxUSA Summary

If you ever get caught in the navigation, FreeTaxUSA has a “Where do I enter?” widget on the sidebar. This widget provides a list of every retirement investment plan, business expenses, deduction or credit that you can think of. Anyone who wants to enter information as they get forms from employers, banks, etc. will appreciate this feature.

Ease Of Use

FreeTaxUSA is loaded with help icons, well written articles, and straightforward information. This makes it easy to dig into details and figure out the technical details that other tax software systems gloss over. FreeTaxUSA is especially appropriate for landlords and business owners who need to use the depreciation and amortization schedules will especially appreciate the information that the software provides.

Unfortunately, FreeTaxUSA still doesn’t have any form importing options. This makes the software unusable for active traders (and possibly some dividend income investors too). People who own more than two or three rental properties may find the interface cumbersome.

Likewise, some business owners (including side-hustlers) may deem that the lack of importing is a deal breaker. In those cases it makes sense to choose a more expensive software like TurboTax or H&R Block.

Knowledge Articles

FreeTaxUSA does a great job integrating their concise and helpful knowledge articles throughout the software. Without fail, it is easy for users to find relevant information on the sidebar or in a question mark bubble in the software. For more complex topics FreeTaxUSA links out to the IRS website. Linking out to the IRS website is a small weakness in the otherwise high quality knowledge article area.

In addition to articles, all users can access a tax specialist using chat support during standard business hours (10AM-7PM Monday through Friday).

Pricing And Plans

FreeTaxUSA has just two pricing tiers. Their “Free” service costs $0 for Federal and $12.95 per state filing. The Deluxe tier costs $6.99 plus $12.95 per state filing. The free service includes all the major tax forms and access to email and chat support.

However, the Deluxe tier provides “priority” chat support (which could come in handy during busy season), unlimited phone support, and Audit Assist Protection. Audit Assist Protection means you’ll get one on one attention from an audit specialist if the IRS audits you. This could be a helpful insurance plan for people that are filing complex taxes for the first time.

Plan

Free

Deluxe

Best For

All Filers

Anyone Seeking Audit Assistance

Federal Pricing

$0

$6.99

State Pricing

$12.95

$12.95

Total Cost

$12.95

$19.94

Who Should Use FreeTaxUSA 2017?

I recommend FreeTaxUSA Deluxe to many business owners, side hustlers, and small landlords. People in these groups will appreciate the low cost, easy to use interface and the Audit Assistance Protection. People who have a lot of information to enter (especially active traders and dividend investors) will find the software too cumbersome to use.

Outside of Credit Karma (which does not offer live chat support), FreeTaxUSA is the best bargain for complex filers.

Simple filers may want to use H&R Block’s More Zero Plan for a better user interface at a lower cost.

In 2017, FreeTaxUSA should be on the short list for consideration for most tax filers.

Have you used FreeTaxUSA? Let us know your thoughts!

The post FreeTaxUSA 2017 Review – Great Bargain Tax Software appeared first on The College Investor.

Ultimate Guide To State Income Taxes: How Much Do You Really Pay?
10:44
2018-01-14 01:36:16 UTC 10:44
Ultimate Guide To State Income Taxes: How Much Do You Really Pay?

The Ultimate Guide to State Income Tax

Like most people in the US, you probably feel like you pay tons of taxes without ever seeing a refund. Especially if you live in one of those "high tax" states - like California or New York.

Do you ever wonder how your state stacks up against other states? Did you know that if you make under $50,000 per year, you're probably paying more taxes in Alabama than in California...

Taxes matter, but most people get the argument around state income taxes wrong. And with everything going on in the country today, we decided to look at what income taxes look like in all 50 states.

If you're considering moving to pay lower taxes, or relocating to another state for career opportunities, you need to know what differences you can expect to pay nationwide.

Not All Taxes Are Created Equal

Did you know that 43 states have wage and salary taxes, while two states only tax dividends and interest income?

Of these 43 states, most of them have tax brackets and tiered tax brackets with taxes varying by each income bracket, while others have one rate applying to all taxable income.

7 States have no income tax at all:  Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Don’t get too excited, though - when a state has no income tax, it generally makes up for lost tax revenue with higher sales or property taxes.

Also, some states have different tax rates depending on your filing status, whether you are single or married. Many states expand the tax brackets for married couples to avoid the “marriage penalty” which otherwise penalizes married couples with dual income by taxing them in the same brackets as single taxpayers.

If income up to $5,000 is taxed 2% for married and single taxpayers, married taxpayers would pay more because there is the likelihood and potential for two people to earn money instead of one, resulting in a higher tax rate.

Other filing statuses, such as married filing separately or head of household, have their own set of advantages and disadvantages with federal and state income tax. Most of the time, married filing separately means splitting married filing joint status in half, and foregoing certain credits permitted to married couples that file jointly.

Head of Household often allows a higher standard deduction than filing single, along with federal and state credits that may help lower taxes if you meet head of household requirements. For the purpose of simplicity, we have included all the state tax information you need for single and married filing joint returns. 

How Do Tax Brackets Work?

States that follow the tax bracket method give you one tax rate applicable to the bracket your taxable income falls under.

If you are a single person in California with a taxable income of $15,000, we look up your taxable income bracket on the following state tax table:

Income

Tax Bracket

$0.00 - $7,850

1%

$7,851 - $18,610

2%

$18,611 - $29,372

4%

$29,373 - $40,773

6%

$40,774 - $51,530

8%

$51,531 - $263,222

9.3%

$263,223 - $315,866

10.3%

$315,867 - $526,443

11.3%

$526,442 and up

12.3%

If your taxable income is $15,000, you would think you'd just owe 2% of $15,000, which is $300. But that's not how it works.

In the United States, tax brackets are tiered (or progressive). You are not just paying taxes within your income bracket. Instead, you are paying all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

So, in California, if you make $15,000, you'd pay about $221.50. This is, of course, before deductions and tax credits.

How did we get that?

You pay 1% on your first $7,850 = $78.50.

You pay 2% on the money from $7,850 to $15,000 = $143

That makes your total tax $221.50.

If that makes your head spin, let’s take another example.

If you are a single person in Alabama with a taxable income of $15,000, we look up your taxable income bracket on the following state tax table:

Below $500 = 2%

$500-$3000  = 4% + $20

Above $3000 = 5% + $110

If your taxable income is $15,000, you owe 5% of $15,000 ($750) plus an additional $110, giving you a total tax of $860.

How Do Flat Taxes Work?

Several states utilize a flat tax for their income tax. For example, Illinois and Indiana both charge a flat income tax to their residents, based on their Federal income tax.

For example, in Illinois, the flat tax is simply 4.95% of Federal taxable income, regardless of the amount. 

What Is Being Taxed?

Usually, state tax is very similar to the calculations for your federal taxable income. However, many states offer credits and exemptions that will often reduce your federal taxable income. Otherwise, taxable income normally falls into any of these categories:

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    Salaries, wages, and other compensation
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    Retirement income
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    Unemployment compensation (to the extent it is taxable for federal purposes)
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    Income earned in other states or countries by Arizona residents
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    Pensions (to the extent they are taxable for federal purposes)
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    Capital gains (included in federal adjusted gross income)
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    Government bonds

What Is The Income Tax Rate In My State?

Your adjusted gross income (AGI) is not necessarily going to be the same for federal and state. Some states add back certain deductions from your federal tax return, and other states allow deductions for items not included in your federal tax return. In order to accurately calculate your tax, follow the instructions on your state tax return.

State

Rates For Single Filers

Rates For Married Filing Jointly 

Other Useful Information

Alabama

Below $500 = 2%


$500-$3000  = 4% + $20


Above $3000 = 5% + $110

 Below $1000 = 2%


$1000-$6000  = 4% + $20


Above $6000 = 5% + $220

Alabama follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Alaska

No State Income Tax In Alaska.

No State Income Tax In Alaska.

Alaska does not tax personal income. Instead, both children and adults receive a payment each year from the Alaska Permanent Fund Corporation. There are still local sales taxes from 0% - 7.5%, as well as property taxes.

Arizona

Up to $10,000 = 2.59%

$10,001 - $25,000 = 2.88%

$25,001 - $50,000 = 3.36%

$50,001 - $150,000 = 4.24%

$150,001 and up = 4.54%

Up to $20,000 =2.59%

$20,001 - $50,000 = 2.88%

$50,001 - $100,000 = 3.36%

$100,001 - $300,000 = 4.24%

$300,001 and up = 4.54%

Arizona follows the tax bracket method, but you only pay the tax included in your tax bracket. This means that the marginal rate only applies to earnings within the applicable marginal tax bracket.

Arkansas

$0.00 - $4,299 = 0.9% 

$4,300 - $8,399 = 2.5% + $38.69 

$8,400 - $12,599 = 3.5% + $141.19 

$12,600 - $20,999 = 4.5% + $288.19 

$21,000 - $35,099 = 6% + $666.19 

$35,100 and up = 6.9% + $1,512.19

$0.00 - $4,299 = 0.9% 

$4,300 - $8,399 = 2.5% + $38.69 

$8,400 - $12,599 = 3.5% + $141.19 

$12,600 - $20,999 = 4.5% + $288.19 

$21,000 - $35,099 = 6% + $666.19 

$35,100 and up = 6.9% + $1,512.19

Arkansas follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

California

$0.00 - $7,850 = 1%

$7,850 - $18,610 = 2%

$18,611 - $29,372 = 4%

$29,373 - $40,773 = 6%

$40,774 - $51,530 = 8%

$51,531 – $263,222 = 9.3%

$263,223- $315,866 = 10.30%

$315,867 - $526,443 = 11.30%

$526,444 and up = 12.30 %

$0- $7,850 = 1%

$0.00 - $15,700 = 1%

$15,701 - $37,220 = 2%

$37,221 - $58,744 = 4%

$58,745 - $81,546 = 6%

$81,547 - $103,060 = 8%

$103,061 – $526,444= 9.3%

$526,445 - $631,732 = 10.30%

$631,733 - $1,052,886 = 11.30%

$1,052,887 and up = 12.30 %

California follows the tax bracket method, but you only pay the tax included in your tax bracket. This means that the marginal rate only applies to earnings within the applicable marginal tax bracket.

Colorado

4.63% of federal taxable income

4.63% of federal taxable income

Colorado has a flat tax rate of 4.63% on your federal taxable income.

Connecticut

$0.00 $10,000 = 3% 

$10,001 - $50,000 = 5% + $300

$50,001- $100,000 = 5.5% + $2,300 

$100,001 - $200,000 = 6% + $5,050

$200,001 - $250,000 = 6.5% + $11,050

$250,001 -  $500,000 = 6.9% + $14,300

$500,001 and up = 6.99% + $31,550

$0.00 - $20,000 = 3% 

$20,001- $100,000 = 5% + $600

$100,001 - $200,000 = 5.5% + $4,600

$200,001 - $400,000 = 6% + $10,100

$400,001 - $500,000 = 6.5% + $22,100

$500,001 +  $1,000,000 = 6.9% + $28,600

$1,000,001 and up = 6.99% + $63,100

Connecticut follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Delaware

$0.00 - $2,000 = 0%

$2,001 - $5,000 = 2.2%

$5,001 - $10,000 = 3.9% + $66.00

$10,001 - $20,000 = 4.8% + $261.00

$20,001 - $25,000 = 5.2% + $741.00

$25,001 - $60,000 = 5.55% +$1,001.00

$60,001 and up = 6.6% + $2,943.50

$0.00 - $2,000 = 0%

$2,001 - $5,000 = 2.2%

$5,001 - $10,000 = 3.9% + $66.00

$10,001 - $20,000 = 4.8% + $261.00

$20,001 - $25,000 = 5.2% + $741.00

$25,001 - $60,000 = 5.55% +$1,001.00

$60,001 and up = 6.6% + $2,943.50

Delaware follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Florida

Florida Has No State Income Tax

Florida Has No State Income Tax

Florida has no state income tax, making it an attractive option for retirees who want to save money on taxes. 

Georgia

0 - $750: 1%

$751 - $2,250 = 2% plus $7.50

$2,251- $3,750 = 3% + $37.50

$3,751-$5,250 = 4% + $82.50

$5,251 - $7,000 = 5% + 142.50

$7,001 and up = 6$ plus $230

0.00 - $1000: 1%

$1,001 -  $3,000 = 2% plus $10.00

$3,001 - $5,000 = 3% + $50.00

$5,001 - $7,000 = 4% + $110.00

$7,001 - $10,000 = 5% + 190.00

$10,001 and up = 6$ plus $340

Georgia follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Hawaii

$0.00 - $2,400 = 1.4%

$2,401-$4,800  = 3.2% + $33.60

$4,801 - $9,600 = 5.5% + 110.40 

$9,600 - $14,400 = 6.4% + $374.40

$14,401 - $19,200 = 6.8% + $681.60

$19,201 - $24,000 = 7.2% +$1,008.00

$24,001 - $36,000 = 7.6% + $1,353.60

$36,001 – 48,000 = 7.9% + $2,265

$48,000 and up = 8.25% + $3,213.60

$0.00 - $4,800 = 1.4%

$4,801- $9,600  = 3.2% + $67.20 

$9,601 - $19,200 = 5.5% + $220.80      

$19,201 - $28,800 = 6.4% + $748.80

$28,801 - $38,400 = 6.8% + $1,363.20

$38,401 - $48,000 = 7.2% + $2,016.00

$48,001 - $72,000 = 7.6% + $2,707.20

$72,000 - $96,000 = 7.9% + $4,531.20

$96,000 and up = 8.25% + $6,427.20

Hawaii follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Idaho

$0.00 - $1,452 = 1.6%

$1,452 - $2,940  = 3.6% + $23.23 

$2,941 - $4,356 = 4.1% + $76.80      

$4,357 – $5,808 = 5.1% + $134.86

$5,809 - $7,260 = 6.1% + $208.91

$7,261 - $10,890 = 7.1% +$297.48 

$10,891 and up = 7.4% + $555.21

$0.00 - $2,904 = 1.6%

$2,905 - $5,808  = 3.6% + $46.46 

$5,809 - $8,712  = 4.1% + $151.01      

$8,713 - $11,616 = 5.1% + $270.07

$11,617 - $14,520 = 6.1% + $418.18

$14,521 - $21,780.00 = 7.1% +$595.32

$21,781 and up = 7.4% + $1,110.78

Idaho follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Iowa

$0.00 - $1,554 = 0.36%

$1,554 - $3,108  = 0.72%

$3,108 - $6,216 = 2.43% 

$6,216 – $13,896 = 4.50%

$13,986 - $23,310 = 6.12%

$23,310 - $31,080 = 6.48%

$31,080 - $46,620 = 6.80%

$46,620 - $69,930 = 7.92%

$69,930 and above = 8.98%

$0.00 - $1,554 = 0.36%

$1,554 - $3,108  = 0.72%

$3,108 - $6,216 = 2.43% 

$6,216 – $13,896 = 4.50%

$13,986 - $23,310 = 6.12%

$23,310 - $31,080 = 6.48%

$31,080 - $46,620 = 6.80%

$46,620 - $69,930 = 7.92%

$69,930 and above = 8.98%

Iowa has nine income brackets, with marginal rates between 0.36% and 8.98%. In addition to that state income tax, there are local income surtaxes collected by nearly every school district in Iowa. 

Illinois

4.95% of federal taxable income

4.95% of federal taxable income

Illinois has a flat tax rate for your federal taxable income.

Indiana

3.23% of federal taxable income

3.23% of federal taxable income

Indiana has a flat tax rate for your federal taxable income.

Kansas

$0.00 - $15,000 = 2.7%

$15,001 and up = 4.6% + $405.00

$0.00 - $30,000 = 2.7%

$30,001 and up = 4.6% + $810.00

Kansas follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Kentucky

$0.00 - $3,000 = 2%

$3,001 - $4,000 = 3% + $60

$4,001 - $5,000  = 4% + $90    

$5,001 - $8,000 = 5% + $130

$8,001 - $75,000 = 5.8% +$280

$75,001 and up = 6% + $4,166

$0.00 - $3,000 = 2%

$3,001 - $4,000 = 3% + $60

$4,001 - $5,000  = 4% + $90    

$5,001 - $8,000 = 5% + $130

$8,001 - $75,000 = 5.8% +$280

$75,001 and up = 6% + $4,166

Kentucky follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Louisiana

$0.00 - $12,500 = 2%

$12,501 - $50,000 = 4%

$50,001 and up = 6%

$0.00 - $25,000 = 2%

$25,001 - $100,000 = 4%

$100,001 and up = 6%

Louisiana follows the tax bracket method, but you only pay the tax included in your tax bracket. This means that the marginal rate only applies to earnings within the applicable marginal tax bracket.

Maine

$0.00 - $21,049 = 5.8%

$21,050 - $37,499 = 6.75% + $1,220.84

$37,500 and up = 7.15% + $2,331.22

$0.00 - $42,099 = 5.8%

$42,100 - $74,999 = 6.75% + $2,441.74

$75,000 and up = 7.15% + $4,662.49

Maine follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Maryland

$0.00 - $1,000 = 2.0%

$1,000 - $2,000 = 3.0% + $20

$2,000 - $3,000 = 4.0% + $50

$3,000 - $100,000 = 4.75% + $90

$100,000 - $125,000 = 5.0% + $4,697.50

$125,000 - $150,000 = 5.25% + $5,947.50

$150,000 - $250,000 = 5.50% + $7,260

$250,000 and up = 5.75% + $12,760

$0.00 - $1,000 = 2.0%

$1,000 - $2,000 = 3.0% + $20

$2,000 - $3,000 = 4.0% + $50

$3,000 - $150,000 = 4.75% + $90

$150,000 - $175,000 = 5.0% + $7,072.50

$175,000 - $225,000 = 5.25% + $8,322.50

$225,,000 - $300,000 = 5.50% + $10,947.50

$300,000 and up = 5.75% + $15,072.50

Maryland has a tiered tax model, so you pay a marginal tax on higher incomes. You can see the model here.

Massachusetts

5.1% on federal taxable income

5.1% on federal taxable income

Massachusetts has a flat tax rate of 5.1% on federal taxable income.

Michigan

4.25% of federal AGI with modification

4.25% of federal AGI with modification

Michigan has a flat tax rate of 4.25% of your federal AGI (adjusted gross income) with modification.

Minnesota

$0.00 - $25,180 = 5.35%

$25,181 - $82,740 = 7.05% + $1,347.13 

$82,741 - $155,650 = 7.85% + $5,405.11

$155,651 and up = 9.85% + $11,128.55

$0.00 - $36,820 = 5.35%

$36,821 - $146,270  = 7.05% + $1,969.87 

$146,271  - $259,420 = 7.85% + $9,686

$259,421 and up = 9.85% + $18,568.37

Minnesota follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Mississippi

$0.00 - $5,000 = 3%

$5,001 - $10,000 = 4% + $150

$10,001 and up = 5% +$350

$0.00 - $5,000 = 3%

$5,001 - $10,000 = 4% + $150

$10,001 and up = 5% +$350

Mississippi follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Missouri

$0.00 - $1,000 = 1.5%

$1,001 - $2,000 = 2% + $15.00

$2,001- $3,000 = 2.5% + $35

$3,001 - $4,000 = 3% + $60

$4,001 - $5,000 = 3.5% + $90

$5,001 - $6,000 = 4% + $125

$6,001 - $7,000 = 4.5% +$165

$7,001 - $8,000 = 5% + $210

$8,001 - $9,000 = 5.5% + $260

$9,001 an up = 6% + $315

$0.00 - $1,000 = 1.5%

$1,001 - $2,000 = 2% + $15.00

$2,001- $3,000 = 2.5% + $35

$3,001 - $4,000 = 3% + $60

$4,001 - $5,000 = 3.5% + $90

$5,001 - $6,000 = 4% + $125

$6,001 - $7,000 = 4.5% +$165

$7,001 - $8,000 = 5% + $210

$8,001 - $9,000 = 5.5% + $260

$9,001 an up = 6% + $315

Missouri follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Montana

$0.00 - $2,900 = 1%

$2,901 - $5,100 = 2% + $29.00

$5,101- $7,800 = 3% + $73

$7,801 - $10,500 = 3% + $154 

$10,501 - $13,500 = 5% + $262

$13,501 - $17,400 = 6% + $412

$17,401 and up = 6.9% + $646.00

$0.00 - $2,900 = 1%

$2,901 - $5,100 = 2% + $29.00

$5,101- $7,800 = 3% + $73

$7,801 - $10,500 = 3% + $154 

$10,501 - $13,500 = 5% + $262

$13,501 - $17,400 = 6% + $412

$17,401 and up = 6.9% + $646.00

Montana follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Nebraska

$0.00 - $3,060 = 2.46%

$3,061- $18,370 = 3.51% + $75.28

$18,371 - $29,590 = 5.01% + $612.66

$29,591 and up = 6.84% $1,174.78

$0.00 - $6,120 = 2.46%

$6,121- $36,730 = 3.51% + $150.55

$36,731 - $59,180 = 5.01% + $1,224.96  

$59,181 and up = 6.84% $2,349.71

Nebraska follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Nevada

Nevada is one of the seven states with no personal income tax.

Nevada is one of the seven states with no personal income tax.

Nevada is one of the seven states with no personal income tax.

New Hampshire

New Hampshire does tax personal income. However, investment income is considered taxable.

New Hampshire does tax personal income. However, investment income is considered taxable. 

New Hampshire only collects income tax on qualifying investment, dividend, and interest income. No taxes are imposed on personal income from wages or income reported on a W-4 Form. 

New Hampshire levies an income tax on the following types of income: 

  • Dividends from corporate stock 
  • Interest payments from bonds or notes 
  • Interest payments from a fiduciary or trust fund 
  • Capital gains distributions from certain mutual funds 

New Jersey

$0.00 - $20,000  = 1.4%

$20,001 - $35,000 = 1.75% + $280

$35,001 - $40,000 = 3.5% + $542.50

$40,001 - $75,000 = 5.53% + $717.50

$75,001 - $500,000 = 6.37% + $2,653.00

$500,001 and up = 8.97% + $29,725

$0.00 - $20,000  = 1.4%

$20,001 - $50,000 = 1.75% + $280

$50,001 - $70,000 = 2.45% + $805

$70,001 - $80,000 = 3.5% + $1,295

$80,001 - $150,000 = 5.53% + $1,645

$150,001 - $500,000 = 6.37% + $5,516

$500,001 and up = 8.97% + $27,811

New Jersey follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

New Mexico

$0.00 - $5,500  = 1.7%

$5,501 - $11,000 = 3.2% + $93.50

$11,001 - $16,000 = 4.7% + $269.50

$16,001 and up  = 4.9% + $504.50

$0.00 - $8,000  = 1.7%

$8,001 - $16,000 = 3.2% + $136

$16,001 - $24,000 = 4.7% + $392

$24,001 and up  = 4.9% + $768

New Mexico follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

New York

$0.00 - $8,450  = 4%

$8,451 - $11,650 = 4.5% + $338

$11,651- $13,850 = 5.25% + $482

$13,851 -$21,300  = 5.9% + $597.50

$21,301 - $80,150 = 6.45% + $1,037.05

$80,151 - $214,000 = 6.65% + $4,832.88

$214,001 - $1,070,350 = 6.85% + $13,733.90

$1,070,351 and up = 8.82% + $72,393.88

$0.00 - $17,050  = 4%

$17,051 - $23,450 = 4.5% + $682

$23,451 - $27,750 = 5.25% + $970

$27,751 - $42,750  = 5.9% + $1,195.75

$42,751 - $160,500 = 6.45% + $2080.75

$160,501 - $321,050 = 6.65% + $9,675.63

$321,051 - $2,140,900 = 6.85% + $20,352.20

$2,140,901 and up = 8.82% + $145,011.93

New York follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

North Carolina

5.75% federal taxable income

5.75% federal taxable income

North Carolina has a flat income tax rate, which applies to both single and joint filers.

North Dakota

$0.00 - $37,450  = 1.1%

$37,451  - $90,750 = 2.04% + $411.95

$90,751 - $189,300 = 2.27% + $1,499.27

$189,301 - $411,500  = 2.64% + $3,736.26

$411,501 and up = 2.9% + $9,602.44

$0.00 - $62,600  = 1.1%

$62,601 - $151,200 = 2.04% + $688.60

$151,201 - $230,450 = 2.27% + $2,496.04

$230,451 - $411,500  = 2.64% + $4,295.02

$411,501 and up = 2.9% + $9,074.74

North Dakota follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Ohio

$0.00 - $5,200  = 0.5%

$5,201  - $10,400 = 0.99% + $26

$10,401 - $15,650 = 1.98% + $77.48

$15,651 - $20,900 = 2.48% + $181.43

$20,901 - $41,700 = 2.97% + $311.63

$41,701 - $83,350 = 3.46% + $929.39

$83,351 - $104,250 = 3.96% + $2,370.48

$104,251 - $208,500 = 4.6% + $3,198.12

$208,501 and up = 5% + $7,993.62

$0.00 - $5,200  = 0.5%

$5,201  - $10,400 = 0.99% + $26

$10,401 - $15,650 = 1.98% + $77.48

$15,651 - $20,900 = 2.48% + $181.43

$20,901 - $41,700 = 2.97% + $311.63

$41,701 - $83,350 = 3.46% + $929.39

$83,351 - $104,250 = 3.96% + $2,370.48

$104,251 - $208,500 = 4.6% + $3,198.12

$208,501 and up = 5% + $7,993.62

Ohio follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Oklahoma

$0.00 - $1,000  = 0.5%

$1,001  - $2,500 = 1% + $5

$2,501 - $3,750 = 2% + $20

$3,751 - $4,900 = 3% + $45

$4,901 - $7,200 = 4% + $79.50

$7,201 and up = 5% + $171.50

$0.00 - $2,000  = 0.5%

$2,001  - $5,000 = 1% + $10

$5,001 - $7,500 = 2% + $40

$7,501 - $9,800 = 3% + $90

$9,801 - $12,200 = 4% + $159

$12,201 and up = 5% + $255

Oklahoma follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Oregon

$0.00 - $3,350  = 0.5%

$3,351  - $8,400 = 7% + $167.50

$8,401 - $125,000 = 9% + $521

$125,001 and up = 9.9% + $11,015

$0.00 - $6,500  = 5%

$6,501  - $16,300 = 7% + $325

$16,301 - $250,000 = 9% + $1,011

$125,001 and up = 9.9% + $22,044

Oregon follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Pennsylvania

3.07% flat rate on taxable income

3.07% flat rate on taxable income

Pennsylvania has a flat tax rate of 3.07% on all taxable income.

Rhode Island

$0.00 - $60,850  = 3.75%

$60,851  - $138,300 = 4.75% + $2,281.88

$138,301 and up = 5.99% + $5,960.75

$0.00 - $60,850  = 3.75%

$60,851  - $138,300 = 4.75% + $2,281.88

$138,301 and up = 5.99% + $5,960.75

Rhode Island follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

South Carolina

$0.00 - $2,920 = 0%

$2,921 - $5,840 = 3% 

$5,841 - $8,760 = 4% + $87.60

$8,761 - $11,680 = 5% + $204.40

$11,681 - $14,600 = 6% + $350.40

$14,601 and up = $525.60

$0.00 - $2,920 = 0%

$2,921 - $5,840 = 3% 

$5,841 - $8,760 = 4% + $87.60

$8,761 - $11,680 = 5% + $204.40

$11,681 - $14,600 = 6% + $350.40

$14,601 and up = $525.60

South Carolina follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

South Dakota

South Dakota has no personal income tax

South Dakota has no personal income tax

South Dakota has no personal income tax.

Tennessee

Tennessee does not tax personal earned income. However, Tennessee does tax certain investment income.

Tennessee does not tax personal earned income. However, Tennessee does tax certain investment income.

Tennessee only taxes the following types of investment income:

  • Dividends from corporate stock 
  • Interest payments from bonds or notes 
  • Interest payments from a fiduciary or trust fund 
  • Capital gains distributions from certain mutual funds

Texas

Texas is one of the seven states with no personal income tax. 

Texas is one of the seven states with no personal income tax. 

Texas does not tax personal income.

Utah

5% tax rate

5% tax rate

Utah has a 5% flat tax rate on all taxable income.

Vermont

$0.00 - $39,900 = 3.55%

$39,901 - $93,400 = 6.8% + $1,416.45

$93,401 - $192,400 = 7.8% + $5,054.45

$192,401 - $415,600 = 8.8% + $12,776.45 

$415,601 and up = 8.95% + $32,418.05

$0.00 - $69,900 = 3.55%

$69,901 - $160,450 = 6.8% + $2,481.45

$160,451 - $240,000 = 7.8% + $8,638.85

$240,001 - $421,900 = 8.8% + $14,843.75 

$421,901 and up = 8.95% + $30,850.95

Vermont follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Virginia

$0.00 - $3,000 = 2%

$3,001 - $5,000 = 6.8% + 3% + $60

$5,001 - $17,000 = 5% + $120

$17,001 and up = $5.75 + $720

$0.00 - $3,000 = 2%

$3,001 - $5,000 = 6.8% + 3% + $60

$5,001 - $17,000 = 5% + $120

$17,001 and up = $5.75 + $720

Virginia follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Washington

Washington Is one of the seven states with no personal income tax. 

Washington Is one of the seven states with no personal income tax. 

Washington does not tax personal income.

West Virginia

$0.00 - $10,000 = 3%

$10,001 - $25,000 = 4% + $300

$25,001 - $40,000 = 4.5% + $900

$40,001 - $60,000  = 6% + $1,575

$60,001 and up = 6.5% + $2,775

$0.00 - $10,000 = 3%

$10,001 - $25,000 = 4% + $300

$25,001 - $40,000 = 4.5% + $900

$40,001 - $60,000  = 6% + $1,575

$60,001 and up = 6.5% + $2,775

West Virginia follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Wisconsin

$0.00 - $11,150 = 4%

$11,151 - $22,230 = 5.84% + $446

$22,231 - $244,750 = 6.27% + $1,093.07

$244,751 and up = 7.65% + $15,045.08

$0.00 - $14,820 = 4%

$14,821 - $29,640 = 5.84% + $592.80

$29,641 - $326,330 = 6.27% + $1,458.29

$326,331 and up = 7.65% + $20,060.75

Wisconsin follows the tiered tax model. This means that you pay all of the marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

Wyoming

Wyoming is one of the seven states with no personal income tax.

Wyoming is one of the seven states with no personal income tax.

Wyoming does not tax personal income.

Final Thoughts

It's important to note that while income taxes rates vary from state to state, so do the services you receive. While you pay more taxes in California and New York (on average), you also get a host of benefits, including paid family leave, better unemployment insurance, better schools, a top notch higher education system, and more.

While these won't matter to everyone, they do go a long way in continuing to boost the economy. It's a cycle - you spend on infrastructure and education, you improve the economy in your state, you create more jobs, and get more tax revenue.

While taxes suck, it's important to note what you get for what you pay.

The post Ultimate Guide To State Income Taxes: How Much Do You Really Pay? appeared first on The College Investor.

The Best Online Banks For Your Money In 2018
6:16
2018-01-14 01:36:17 UTC 6:16
The Best Online Banks For Your Money In 2018

The Best Online Banks For Your Money

Are you tired of waiting in long lines, and dealing with too many fees and minimum requirements? Opening a checking account with an online bank could be your solution.

Today, almost every bank offers online banking options, but did you know that there are banks that solely operate online, with no actual branch locations? These banks offer most of the products you find at traditional banks- checking, savings, CDs and money market accounts. A few even offer mortgage products!

Without the overhead of physical locations, online banks can pass the savings to their customers, who will enjoy lower fees and added benefits, including protection from bank fraud. The APY will also be higher than traditional banks.

Why Select Online Banks Over Traditional Banks?

Many have no bank fees, and most offer reimbursement for other bank fees. Just make sure the bank is FDIC insured, usually $250,000 in coverage at traditional banks. Consumers love the convenience of doing their banking from anywhere with a few simple clicks. 

Most online banks offer the same banking products that you can find at traditional banks. Most online banks include checking, savings, CDs, and money market accounts. 

Advantages Of Online Banks

Due to the nature of online banking, there are some distinct advantages that online banks can offer over traditional banks. Here are a few:

  • check
    High Rates: Generally, online banks tend to offer bank account and CD rates of 0.5% or higher, which is more than what most traditional banks currently offer.
  • check
    Low Fees: Because of reduced overhead costs, there are usually low fees, or even no fees. 
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    User FriendlyMost online banks also have mobile apps, and a user-friendly interface, so you don’t have to be super tech-savvy.

Disadvantages Of Online Banks

Of course, making the switch to online banking presents some challenges as well, although they are minor. Here are a few disadvantages of online banks:

  • check
    Difficulties with Depositing Cash: Customers who regularly deposit paper checks or cash may face some inconveniences. You can get around this by depositing funds in a traditional bank, and then transferring funds to your online bank to take advantage of high APY rates. If you usually go to the bank to deposit paper checks, you will save yourself a trip by making mobile deposits via smartphone, where you take a picture of the front and back of the check. Withdrawing money is easy; just go to the preferred ATM locations for your online bank.
  • check
    Limited Product Offerings: If customers are looking for home loans, personal loans, or brokerage accounts, the choices are limited.
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    No Personal Interaction: This is not a problem for most people. You save a trip to the bank, and if you need customer service, you can contact an agent by phone or chat.

Finding The Highest Yield

If your goal is only to have the highest yielding products, then check out this list:

The Best Online Banks

Below, we’ve put together a breakdown of some of the best online banks. Make sure you check out each one based on your situation. Our favorites include Aspiration and USAA.

All rates and APY were last updated on December 14, 2017.

Ally Bank

Ally is an award winning online bank that charges no ATM fees. Ally bank offers 1.0% APY on savings accounts, and a $10.00 reimbursement on ATM fees. For checking accounts, you can earn 0.10% APY on balances less than $15,000, and 0.60% APY on balances of over $15,000.

American Express Bank

American Express Bank provides online banking customers with access to online savings accounts and CDs through the American Express Personal Savings online bank. There are no monthly fees or minimums associated with the online savings account. The account links with your 3 of your current bank accounts, so there is no need to completely switch banks.

Aspiration – The Summit Account

​Aspiration is a great online banking option with no monthly fees, unlimited ATM reimbursement, and no minimum deposit.

The Summit Account will also give you a rate of 0.25% on balances up to $2,500, and 1.00% APY for daily balances more than $2,500. Aspiration has also free bill pay.

Bank 5 Connect

Bank 5 Connect has a rewards program where Bank 5 Connect debit cardholders earn rewards points for every $2 spent. Bank 5 Connect lets you write checks for free, and provides ATM reimbursements.

With a high interest rate of 0.76%, low minimum deposit requirements, and no monthly maintenance fees, Bank 5 Connect is a great choice with rewards to cash in for gift cards and other merchandise.

Bank Of The Internet

Bank of Internet USA Rewards Checking has flexible requirements to earn a high APY and also provides ATM fee reimbursement. Instead of requiring you to meet 3 requirements, you get 0.4166% APY for each requirement you meet: a monthly direct deposit of $1,000 or more, using your debit card 10 times per month, using your debit card 15 times or more per month, with a maximum 1.25% APY based on account activity. 

Barclays

Based in the UK, Barclays offers clients in the U.S. access to online savings accounts and CDs. Online savings accounts through Barclays feature no minimum balances to open and no monthly maintenance fees.

The online savings account 1.30% APY, Barclay 1 year CD 1.50% APY, Barclays 5 year CD 2.35% APY as of December 14, 2017.

Capital One 360

Capital One 360 was acquired and rebranded by Capital One. Formerly known as ING Direct, Capital One 360 offers online checking, savings, CDs, business savings, and children’s accounts, many with no minimum balance requirements or monthly fees.

In addition, Capital One 360 also offers brokerage accounts, IRAs, and mortgages. 

Charles Schwab

Charles Schwab is geared towards investors who travel frequently and hold accounts with high balances. With the High Yield Investor Checking Account, there are no fees for ATM use anywhere in the world.

There are also no foreign transaction fees, and ATM reimbursement for any international ATMs that have fees. The account offers a 0.15% APY and no minimums or monthly service fees. If you have a linked Schwab brokerage or savings account, there are no fees to cover overdrafts.

Consumers Credit Union

The Consumers Credit Union is a credit union open to all members. It offers free checking and up to 4.5% APY if you meet certain conditions.

In order to join, you just have to pay $5 for membership with their sponsor, the Consumers Cooperative Association. Now, you will be eligible for a free checking account. 

To get unlimited ATM reimbursement and 3.09% APY on balances up to $10,000 you need to make at least 12 debit card purchases per month without using the 4 digit pin code, at least one direct deposit or online payment per month, log in at least once per month, and sign up for paperless statements.

If you open a Visa credit card with the Consumers Credit Union and spend at least $500 per month with the card, they kick your interest rate up to 3.5% APY on balances up to $15,000. If you spend at least $1,000 per month, enjoy 4.59% APY on balances up to $20,000. Yes, the requirements are extensive, but the APY is substantial. If you fail to meet the requirements, you only get 0.01% APY with no ATM reimbursement.

CIT Bank

CIT Bank has become known as a bank that loves to give incentives to people for opening an online account. Make sure you check out what promos and incentives they are currently running - you might just get some free cash!

If you’re interested in fixed options, CIT Bank has options for 6-month terms at 0.72% all the way to 5-year terms at 1.70% for a minimum $1,000 deposit. 

Discover Bank

Discover Bank is one of the "oldest" online banks - one of the first to offer high yield savings accounts and more. However, most people only think of Discover for their credit cards.

In addition to offering competitive credit cards, Discover Bank offers savings, money market, CDs and IRAs. Online savings offers 1.20% APY, and a 1-year CD with 1.50% APY.

EverBank

If you’re able to make a long term commitment with your savings, take advantage of high APY on your savings with EverBank with their 2.28% APY for a 60-month CD and Yield Pledge that guarantees the best rates. 

However, EverBank also offers a lot of great deals on savings and checking accounts as well.

Fidelity Cash Management Account

Fidelity’s Cash Management Account is structured similar to a brokerage account rather than a regular checking account. With a 0.07% APY and no monthly fees or overdraft fees, you can rest assured that your savings are growing at a steady rate.

There is a $1,250,000 limit with no required minimum balance. There are no ATM fees, and ATM reimbursement is available for ATMs located in the US. Read our full Fidelity review here.

FNBO Direct

First National Bank of Omaha currently offers a competitive APY for its online savings account, with a minimum deposit of $500. Even more impressive, it offers an interest bearing checking account that currently pays 0.65% APY and an online savings account that pays 1.15% APY with minimum requirements.

MemoryBank

​MemoryBank will give you up to 1.5% APY for the first year on balances up to $250,000 for the first year as long as you meet the following conditions: receive at least one electronic deposit every month, payroll deposited into the account, and select the paperless statement option.

If you have a large balance and want to find the best liquid account, MemoryBank has a good offer. You need at least $50 to open the account. You will get access to AllPoint ATMs.

Synchrony Bank

Synchrony is widely recognized as one of the best banks around, and they have the best interest rates. Account holders enjoy a 1.05% APY, no minimum deposit or balance, and no fees or service charges.

Synchrony also rewards member loyalty with travel rewards such as car rentals, and hotels. Loyal customers can also take advantage of perks such as ATM fee reimbursements, travel rewards, and discounts on theme parks, car rentals, and hotels. 

USAA Federal Savings Bank

USAA is a unique bank in that it limits it's membership to current and former service members, as well as their families. However, if you can become a member, USAA is hands down our favorite online bank.

They offer free checking, decent yields on their savings accounts, and a variety of perks that every online bank should offer. These include free checks, ATM fee refunds, mobile check deposit, and more. You can read our full USAA Bank review here.

The Bottom Line: It Comes Down To Your Priorities

We have established that most of the accounts offer a higher APY than traditional banks. If a high APY is your top priority, Bank 5, Bank of the Internet, Consumer Credit Union, and Everbank are some of our top picks. If you want an account that offers rewards and perks, Synchrony is your best bet. 

For higher returns on higher balances, Charles Schwab may be your first choice. Whatever you decide, base your decision on how much you can afford to put into the account, and how you plan to use the account.

Have you opened a checking or savings account with an online bank?Do you enjoy the benefits of an online bank over a traditional bank? Tell us in the comments section below!

The post The Best Online Banks For Your Money In 2018 appeared first on The College Investor.

How To Give Kids The Gift Of Stock
7:34
2018-01-14 01:36:17 UTC 7:34
How To Give Kids The Gift Of Stock

How to Give Kids the Gift of Stock

When you ask a parent what their kids want for Christmas, they’ll likely start with a long sigh followed by, “Well… She really likes Ninjago and Dress Up.”

If you press further, you’ll find out that the parent is overwhelmed by the toys that the kid has, and they really aren’t all that excited about giving more plastic crap to their kid.

Enter, the gift of stock. Giving a share of stock to kids is a fantastic way to avoid stressing out parents, help prepare a kid for their financial future, and teach a few lessons along the way. These are the best ways to give a share of stock to a kid.

Ask To Contribute To A 529

In my opinion, the single best way to give stock to kids is to contribute to their 529 or ABLE accounts. Many parents have a few hundred or a few thousand dollars invested for their kids future, and they will appreciate every extra dollar that can be invested on behalf of their kids. If you plan to give thousands of dollars to a special kid, you can set up a 529 account on your own and name the kid as a beneficiary, but for most people that’s an excessive gift.

A more practical way to contribute to a 529 plan is to ask the parents if they have one set up. If they respond positively, you can ask them to invest your $20 or $50 gift on your behalf. This sounds like a measly gift, but it adds up over time. I have two kids, and they both have 529 plans that we’ve funded through cash they received for birthday and Christmas gifts. Their accounts each have several thousand dollars in them.

A great way to give the gift of college via a 529 plan is to use a service like CollegeBacker. CollegeBacker makes it easy to setup and contribute to a 529 plan! Check it out here.

Buy A Fractional Share

If a contribution to a 529 plan isn’t a realistic option, consider giving an actual share of the kid’s favorite stock (or an ETF) through a fractional share platform. There are a number of websites dedicated to this exact option.

Stockpile offers the ability to buy fractional shares in custodial accounts. StockPile charges just $0.99 to buy a share. Both of these platforms make it easy to set up a custodial account for a kid. Plus, you can buy stock shares or ETFs (which give kids a more diversified portfolio).

Right now you can gift $5 of stock FOR FREE! Check out Stockpile here and gift your free stock. (It makes for an awesome stocking stuffer).

Another cool thing about Stockpile is that you can give stock gift certificates. That way you can actually give the kid something physical they can redeem and see the process for themselves.

Stockpile Gift Certificates

Right now, there are a growing number of fractional share companies, but most of these companies don’t offer custodial accounts or they have high maintenance fees for people with small account balances.

Set Up A DRiP Plan

Another way to buy a share of stock for a kid is to buy a Dividend Reinvestment Plan (DRiP) directly from a company. FirstShare has a curated list of companies that offer fee free DRiPs, and they make it easy to set up a custodial plan for kids.

To set up a DRiP, you have to buy a share of the company stock, and then sign up for automatic reinvestments of dividends. Plenty of kid-friendly companies like Hershey’s and Hasbro offer no-fee DRiP plans for shareholders.

Furthermore, most of our favorite free places to invest, such as Fidelity or TD Ameritrade, offer free dividend reinvestment within your account.

Don't Forget The Teaching Opportunities

Giving a share of stock is a good way to help a kid get on solid financial footing, but the lessons that come with it are even more important. When you give a special child a share of stock, consider giving them tools for financial literacy too.

If you feel comfortable with it, you could teach them how to evaluate a stock on Yahoo Finance, or you could give them a book that would teach them age appropriate lessons.

These are our top financial books by age range:

Age 0-4 Money A to Z by Scott Alan Turner

Age 5-8 A Chair For My Mother by Vera Williams

Age 9-11 The Secret Millionaires Club by Andy and Amy Heward

Age 12-14 The Young Entrepreneur's Guide to Starting and Running a Business by Steve Mariotti

Age 15-17 The Money Savvy Student by Adam Carroll

Age 18+  I Will Teach you To Be Rich by Ramit Sethi

Are you planning (or have you in the past) given the gift of stock to your kids?

The post How To Give Kids The Gift Of Stock appeared first on The College Investor.

How To Find Free Money: These Companies Will Give You $100s
8:26
2018-01-14 01:36:17 UTC 8:26
How To Find Free Money: These Companies Will Give You $100s

How to Find Free Money

Free money? Our parents used to say “money doesn't grow on trees” and “there is nothing that is free”.

But is this entirely true? NO!

In fact, there are several ways that you can get free money online.

The first is looking for unclaimed money that might be rightfully yours, and the second is to find companies that are giving away free money as incentives.

If this sounds unbelievable - it's not. If you spend 10 minutes and go through these companies and websites, you'll find yourself amassing a nice amount of free money before you know it!

Let’s break it down, and we'll start with finding unclaimed money that might rightfully be yours.

How To Find Unclaimed Money

According to one report, in 2015, there was 42 billion dollars in unclaimed money.

Where does this money come from? Sources include:

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    Closed Bank Accounts that have been forgotten
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    Security Deposits that were never claimed
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    Store credit that was never used
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    Credit card overpayments
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    State treasury - You will have to get in touch with the tax body in your state to determine what the claims process will be.
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    Internal Revenue Service - You can claim any tax money you have not received for up to 3 years following when the filing of your W2 was due. So for instance, for the upcoming 2018 tax season, you could still file and claim money from 2015 and 2016.)
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    Unclaimed Pensions

Think you might have some free money sitting for you somewhere?

Finding and claiming this money is not that hard to do.

Two websites that will help you get started are Missingmoney.com and Unclaimed.org.

MissingMoney.com

On MissingMoney.com, you can enter your first and last name and resident state to find out if there is any money due you.

Don’t worry if you have moved states multiple times.

You can enter information for the state you currently live in and the database will scan all archived records and approximately how much is due to you, which company owes you the money and in which state that money is owed.

You will not have to worry about entering your social security number unless you find some unclaimed money in your name and you have to verify your identity.

MissingMoney covers approximately 38 states.

Unclaimed.org

Unclaimed.org covers records of unclaimed money records from all 50 states, all the provinces in Canada, the US Virgin Islands, Puerto Rico and Kenya.

On Unclaimed, you simply will select a state from the interactive map on the first page of the website. This will lead you to state/province-specific websites where you can search and put in claims for any money you might find may be owed to you.

Unclaimed Pensions

Interestingly, there is free money in unclaimed pensions as well!

If you or an older friend or relative worked with a company that closed down/went out of business but had participated in their pension plan, there might be unclaimed money waiting for you.

For this, a person would have to visit the Pension Benefit Guaranty Corporation - a US government organization - to claim the money.

Companies That Will Give You Free Money

Apart from finding money that is owed to you via the above-mentioned websites, there are several companies out there that are happy to give you free money in exchange for your business.

Many of these free money deals are promos to get you to take action with a company. Some of these deals allow you to do them over and over again - so think about how you can maximize your free money!

TD Ameritrade Bonus Offer

TD Ameritrade is one of our favorite brokers because they offer a ton of free tools, great commission free ETFs, and have incredibly low fees. Furthermore, they're currently running a promotion that will give you up to $600 if you fund an account with at least $25,000.

Check out TD Ameritrade's bonus offers here. Make sure you read the terms before you apply.

RealtyShares Bonus Offer

RealtyShares is my favorite crowdfunded real estate platform, where you can invest in real properties online, for as little as $5,000. You can read the full review of RealtyShares here.

If you use the promo code Partner100 when you sign up, you'll get a $100 bonus on your first investment. You can sign up for RealtyShares here.

Credible Student Loan ReFi Bonus Offer

If you have student loans, one of the best ways to save money is to refinance and get a lower interest rate on your loan. Lowering your interest rate by 1% could save you thousands! But beyond that, simply refinancing through Credible can give you a $200 bonus!

We love Credible, and you can read our full Credible review here. But College Investor readers can get the special bonus of $200 when they refinance through this link.

Ebates Signup Bonus Offer

Ebates is a cash back rebate site where you can earn cash back bonuses simply for doing your online shopping and clicking through Ebates link. I love Ebates, and earn about $100/mo in rebates simply by going through their website before I do any online shopping.

You can earn a $10 signup bonus when you make your first purchase through our referral link here.

Ibotta Signup Bonus Offer

Ibotta is an online grocery money saving app that will give you a bonus for signing up. Right now you can earn a $10 bonus, plus $5 for each friend you refer.

You can read our full Ibotta app review here, and check out this link to claim your $10 signup bonus.

Swagbucks Signup Bonus Offer

Swagbucks is an online survey and rewards site that will give you $5 just for signing up. Once you’re signed up, you can earn even more by searching the internet or taking surveys. It’s an easy way to earn.

It's one of the easiest ways to earn, and while the dollar value may seem low - it's still free money. Sign up and get your $5 signup bonus and more!

Inbox Dollars Signup Bonus Offer

Inbox Dollars is very similar to Swagbucks, in that you can get a $5 signup bonus just for opting in. Once you're signed up, you can earn even more money by taking surveys, doing email promotions, and more. It's a very easy way to earn a little extra money.

You can read our full Inbox Dollars review here, and signup here.

Stockpile $5 Free Stock Signup Bonus Offer

Stockpile is one of our favorite new brokers because they allow you to buy fractional shares in many companies for as little as $5. They also make investing fun and easy, especially for children.

They are currently doing a signup promo for new customers where you can get $5 in free stock just for signing up. Check out the bonus offer here.

Credit Card Bonus Offers

Several credit card companies will give you extra money for signing up and using a certain amount on your card in a specified amount of time.

For instance, you can get an extra $150 when you sign up to receive Chase Freedom Unlimited card. This can be a great deal since you only have to spend $500 in the first three months. Learn more about this offer here.

On top of the cash rewards, you can get paid between 1-3% cash back on your purchases with your credit card.

If fact, if you are going to get a credit card, you might as well do your research and get one with both incentives.

Final Thoughts

It is time to stop leaking money. $42 billion in unclaimed money is a lot of money.

For most the the options we listed above, it takes very little time and effort to earn free money that is rightly due you.

Did you try any of the methods above to find some extra money? Did you find any money that was due you?

The post How To Find Free Money: These Companies Will Give You $100s appeared first on The College Investor.

Ethos Life Insurance Review
9:14
2018-01-14 01:36:17 UTC 9:14
Ethos Life Insurance Review

Life insurance is a necessity for any young family. Have you ever wondered what would happen to your family if you weren’t there to provide an income? Their life would change completely. The current style of living they know would vanish in an instant.

Term life insurance can ensure that doesn’t happen to your family. You might be thinking term life insurance is another expense you can’t afford. However, you’ll be surprised at the cost of life insurance offered by Ethos Life Insurance (hint: it's a great deal).

Ethos Life Insurance Review

In this article, we’re going to review Ethos Life Insurance. They’re what’s called an insurtech (not to be confused with fintechs). This means Ethos makes heavy use of technology to process life insurance applications and keep costs down. Their close competitor, Haven Life, also plays in this space.


Ethos Life Insurance Review

Quick Summary

  1. Low cost term life insurance
  2. Online application process is very easy to use
  3. No medical checks required and instant approval in some cases

Determining Your Insurance Need

Ethos can be found at getethos.com. The first thing you’ll see on their homepage is a section to get a quick quote. Ethos has made the process of receiving a quote extremely simple with only four fields (as of this writing).

Their quote will give you a fairly accurate number of how much insurance will cost you. But the question remains: How much insurance should you get?

In general, you want 10X your income. If you are making $50,000/yr, you’ll want $500,000. This provides for an additional ten years of income for your family. It also assumes you are the bread winner and have children.

For most applicants, they’ll likely find the monthly cost to be well below $100. The more life insurance you need and the older you are, the more costly it will be.

Only Term Life Insurance

Ethos offers only one type of insurance - term life insurance. This means fixed monthly rates for the term of the insurance.

Because they are focused on one type of insurance, it also means no upsells to other insurance products. If you’ve ever gone through a traditional insurance company, you know what we mean here.

One of their favorite upsells is whole life insurance, which is a completely different product.

This leads to the question: Why no other products? Ethos has such a streamlined process because it focuses on a single, simple product. If it tried to sell whole life, which is a very complex, commission driven product, Ethos wouldn’t be able to provide the same level of service and pricing.

The Application Process

Etho’s outlines their application process like this:

Ethos Life Insurance Review

Ethos’ application process is entirely online, unlike Haven Life who also offers an 800 number, chat, and even a clearly displayed email address to send inquiries to.

After getting your quote, you’ll start moving through the application process. There is an outline on the left side of the application page showing the section of the application you are in and how much has been completed. The application sections include:

  1. Basic info
  2. Your lifestyle
  3. Your health
  4. Payment info
  5. Confirmation

Is Ethos Reliable?

Like Haven Life, Ethos has high-quality backing by some of the largest insurance companies, including Munich Reinsurance America, Aon, Assurity, and RGA. 

Policies are issued and guaranteed by Assurity, which is rated A (excellent) by A.M. Best.

In the event you need to file a claim, you can send an email to concierge@getethos.com. Once again, this is unlike Haven Life’s contact options. You’ll need to be comfortable with the lack of opportunities to speak with any one on the phone.

Additional Questions

Q.) Will I be approved? 

While the Ethos application process is simple and fast, it doesn’t necessarily mean you will be approved. In some instances, a medical exam may be required. Even if you have health issues, Ethos encourages everyone to apply.

This is the starting point for your application regardless.

Q.) When are payments due?

Ethos will let you know when payment is due each month. There is a 30 day grace period. But you don’t want to go past the 30th day because it will result in your policy being canceled.

You can also cancel your policy anytime, but you’ll need to email concierge@getethos.com to do so.

Q.) Is Ethos available in my state?

Ethos is available in all states except: 

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    California
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    Delaware
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    Florida
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    New York
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    North Dakota​​​​
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    South Dakota
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    Washington D.C.

However, from talking to their team, it sounds like Ethos should be available everywhere very soon!

Conclusion

Ethos isn’t a traditional insurance agency, and it shows. By focusing on a single, simple product, they’ve been able to cut cost and offer extremely competitive pricing to customers.

While there isn’t a front facing phone number or chat, you can contact them through email. You’ll just need to be comfortable with the lack of contact options. This doesn’t mean you should avoid Ethos because you think they are a fly-by-night company. That isn’t the case at all.

But if phone and chat are contact options you need, you might want to try havenlife.com. 

Do you have term life insurance yet or could your current policy be better?

The post Ethos Life Insurance Review appeared first on The College Investor.

Student Loan Interest Deduction – Savings or Scam?
7:02
2018-01-14 01:36:17 UTC 7:02
Student Loan Interest Deduction – Savings or Scam?

Student Loan Interest DeductionIt's almost tax time, and if you're a college student or young adult, one of the most common tax deductions that you receive is the student loan interest tax deduction.

And even more so with all the dialogue going on in Congress with reducing or eliminated this deduction – what will happen.

The real bulk of the argument is this: is this tax deduction actually helpful, or does it encourage poor behaviors?

Let's look at whether the student loan tax deduction is really helpful savings, or more of a scam…

Student Loan Interest Deduction

You can deduct up to $2,500 of student loan interest that you paid.  The great thing about this deduction is that it is an adjustment to income, so you don't have to itemize.  This is very helpful for young adults and college students, since many of them don't itemize.

You can claim the student loan interest deduction if you meet the following criteria:

  • You paid interest on a qualified student loan
  • You are legally obligated to pay interest on that student loan
  • Your adjusted gross income is less than $80,000, but phases out starting at $65,000 (or $160,000 if filing jointly, but phases out starting at $130,000)
  • You cannot be claimed on someone else's return

You can read more on the specifics in IRS Publication 970.

The Benefits of the Student Loan Interest Deduction

Like all deductions in the tax code, the goal is to incentive something.  In this case, the goal is to incentivize education, by making it more affordable for individuals to get student loans to pay for their education.

Here's the premise.  If you want to get a higher education, and you can't afford it, you don't have many options.  You can check out my Student Loan Debt eBook for more information, but your main option is going to be student loans.

Since you have to get student loans, the government wants to make it more affordable.  Since they can't control the cost of education, they can lower the cost of the student loans.

Since most student loans are subsidized or insured by the government, it doesn't hurt the government at all to give a little incentive to students.  Here's some math on the deduction.

The maximum student loan interest deduction is $2,500.  This means that you can lower your taxable income by $2,500.  If you're a recent grad at an entry level job, chances are you make about $40,000 per year.  You probably stil rent an apartment, and don't have many investments.

To keep things simple, if you were debt free, you'd just get the standard deduction $5,950.  That means your taxable income for the year would be $34,050.  So, you would owe about $4,600 in taxes.

However, if you have student loan debt and have paid interest on the student loans, you get to claim up to $2,500 of interest paid.  So, instead of just the standard deduction, you'd get to add on an additional $2,500, bringing your total deduction to $8,450.  That would reduce your taxable income to $31,550.  With that extra deduction, you'd also lower your total tax due to $4,300.  That's a $300 savings.

Why It's a Scam

I mentioned above how the government is attempting to subsidize education and make it more affordable by offering this deduction.  However, a big side effect of this policy is that they are also incentivizing debt.  Instead of looking for ways to pay for school, the mantra is “go get student loans because your high paying job after graduation will make it easy to pay off“.  But that just isn't the case anymore.

Last year, the average salary 10 years after graduation from an Ivy League school was $137,000.  Why 10 years?  That's how long it will take to pay off your loans on the standard repayment plan.  But $137,000 doesn't sound too bad, right?  That means you've probably earned close to $1,000,000 over those 10 years, and you probably took at $150,000 to $200,000 in student loans.

But what about the average student?  The average salary for a college graduate is only $46,000.  Depending on your major, your 10 year mid-career salary averages from that $46,000 to $96,000.  Now, imagine if you took out $100,000 in student loans?  Could you really afford to pay it back?

Now, ask yourself this – what is the student loan interest deduction really going to do for you to make college more affordable?  You may have thought you were going to get a break, only to find out you're in a heap of debt.

This is the key problem with deductions – it rewards debt (without regard for consequences), and punishes saving and fiscal responsibility.

In other words, if you paid for college in cash (either by saving money or working through school), you don't get any breaks from this deduction.  So, being smart and busting your ass gets you nothing, but taking on a heap of debt gets you a break?  Sounds like a scam to me.

Alternatives to Student Loan Debt

I've already extolled on the perils of student loan debt hundreds of times.  Heck, I wrote an eBook on it.  But since it is tax time, I want this to be a reminder that receiving a tax deduction for your debt, while nice, doesn't really help with the problem.

On the government side, it doesn't really help with education – costs keep rising, and students are just getting into trouble.  On the personal finance side, a few hundred dollars in savings is nice, but it doesn't make up for the thousands of dollars in interest you will pay, or the fact that you may have trouble repaying your student loans at all.

At the end of the day, the best thing to do is look for alternatives to student loan debt:

  • Scholarships and Grants
  • Employment
  • Lower Cost Universities

And finally, just remember what your return on the investment will be.  Student loans are an investment in your own future, since what you make in the future will decide your ability to repay the debt.

What are your thoughts on incentivizing debt and punishing savers?  Does the student loan interest deduction make sense?

The post Student Loan Interest Deduction – Savings or Scam? appeared first on The College Investor.

H&R Block 2017 Online Review – The Best Option For Free Filing
7:14
2018-01-14 01:36:17 UTC 7:14
H&R Block 2017 Online Review – The Best Option For Free Filing

HR Block Logo 2018

For 2017, H&R Block has made a value play. H&R Block tax software offers its typical easy to use imports, enhanced integration with popular business apps (including Uber), and unlimited tax and tech support via chat and email.

The prices are still close to the top of the market, but they are well below TurboTax’s prices. However, H&R Block really sets itself apart this year with it's More Zero free filing option - offering a lot more value compared to other competitors - and making it the best free filing option we've seen.

Does the value play make H&R Block a worthwhile software for your taxes?

As a quick note - Amazon is offering a great deal on H&R Block, as well as a 5% refund bonus if yo get an Amazon giftcard. Check out the H&R Block deal on Amazon here.


HR Block 2018

Quick Summary

  • Best option for free filing due to inclusion of EITC
  • Easy navigation, great import and connections
  • Higher priced, but not top of market

H&R Block 2017 Video Review

H&R Block Navigation

H&R Block uses a “semi-guided” navigation system which I think is a great way to streamline tax prep without making it overly complicated. Using options selected at the beginning, the H&R Block software guides users through questions and answers followed by opportunities to import forms at the appropriate time.

At the end of each guided session, H&R Block gives users the opportunity to review the entire section and opt into sections that the software missed. 

H&R Block 2017 Navigation

For example, I imported my W-2, completed my self-employment income, and entered rental income using the guided session. Upon review, I realized that I missed importing my 1099-INT.

H&R Block Income

H&R Block Ease Of Use

In 2017, H&R Block has greatly improved its ease of use by increasing the ease with which you can import various forms. On top of easily importing W-2 forms (via picture or pdf), 1099-INT and 1099-DIV forms from many financial institutions, H&R Block is now integrating the software with a number of expense tracking apps (including the Uber App for side-hustlers).

When it comes to tax prep, entering information can get tedious and lead to mistakes. H&R Block does as much as any competitor to reduce tax prep fatigue by making it easy to get into and out of the software.

On top of that, H&R Block’s excellent search function and 24/7 chat service make the product easier to use compared to it’s competitors.

H&R Block Expert Chat

H&R Block Knowledge Articles

H&R Block’s robust, easy to understand, and easy to access knowledge articles are a distinguishing factor for the software. The in software articles tend to be short and to the point. They include just enough information to point you in the right direction. However, people who need more detailed information will enjoy the longer form articles that are easily accessible through the search feature.

It’s also important to note that H&R Block’s paying customers do not have to rely on the articles alone. Paying customers get unlimited access to both tax and tech support via chat or phone. Right now, representatives seem knowledgeable and easy to access. During the tax season, the H&R chat support is available 24/7, but some customers have reported long queues in the past. 

H&R Block 2017 Pricing And Plans

All H&R Block plans come with free technical support using the chat function. The paid plans also include tax support with experts (either certified tax preparers or CPAs). It’s also great to see that H&R Block has created a More Zero plan that allows users with just W-2 income to claim a number of credits and deductions for free.

Unfortunately, H&R Block only offers audit support as a paid upgrade with their online plans. H&R Block audit support (includes in-person representation) can be added to H&R Block Online products for $19.99 (and online clients also can add Tax Identity Care for $14.99 – these products bundled together cost $24.99 for online clients). People who are worried about audits may want to consider a software like TaxHawk or TurboTax.

You can also get $20 off of H&R Block by using your American Express card. There is a $20 Amex Offer available to most cardholders - simply login to your account and choose the offer. Make sure you do this before paying for H&R Block.

Amazon is offering a great deal on H&R Block, as well as a 5% refund bonus if yo get an Amazon giftcard. Check out the H&R Block deal on Amazon here.

Plan

More

Zero

Deluxe

Premium

Self-Employed

Best For


W-2 wage earners (including homeowners, people claiming childcare expenses, student loan interest deduction or charitable deductions and recipients of the earned income tax credit) 

People itemizing deductions

Investors & Rental Property Owners

Business Owners, Side Hustlers, Contractors

Federal Pricing

$0

$39.99

$59.99

$89.99

State Pricing

$0

$36.99

$36.99

$36.99

Total Cost

$0

$76.98

$96.98

$126.98

Who Should Use H&R Block 2017?

For 2017, I remain a fan of H&R Block for dividend investors, active traders, and landlords. It offers an excellent user interface, easy imports, and a lower price compared to the more high-end software, TurboTax. 

Likewise, the More Zero option for people with simple tax returns is one of the best free options on the market. H&R Block is one of the few free software services for people claiming the Earned Income Tax Credit, Child Care Tax credit, Mortgage Interest, Traditional IRA contributions, student loan interest and charitable giving.

Some self-employed people may want to opt for H&R Block Self-Employed, but I think some software services (like TaxSlayer, TaxAct, and Credit Karma Tax) offer similar interfaces at lower prices.

The bottom line is, if you qualify for free pricing, H&R Block is your best choice. And for those that don't, H&R Block is on par or better than most of the competition.

Try H&R Block 2018 and let us know what you think!

The post H&R Block 2017 Online Review – The Best Option For Free Filing appeared first on The College Investor.

Quicken For Mac 2018 Review – A Big Improvement For Mac Users
6:48
2018-01-14 01:36:17 UTC 6:48
Quicken For Mac 2018 Review – A Big Improvement For Mac Users

Quicken For Mac 2018

Quicken was traditionally known as one of the best personal finance software options for desktop users. However, the Mac version had traditionally lacked the features found in the PC version, and that was disappointing to many users. Last year, Quicken 2017 for Mac, was more disappointing than ever before.

After our terrible review, the CFO of Quicken, John Eichhorn reached out to me and said: "We do have more work ahead of us - and we take all feedback seriously. We have our work cut out for us, but I do believe we provide a tremendous amount of value to our customers and we are here for the long-haul and will be with our customers as their lives become more multi-faceted – so please do stay tuned with us."

So, how did Quicken for Mac 2018 do? Honestly, it's a great improvement over 2017. However, it does still have some drawbacks, and one major change this year might have some long time Quicken users concerned.


Quicken for mac 2018

Quick Summary

  • Big improvement over 2017
  • Much better investment tracking and loan tracking
  • Change to subscription model and price still a concern

Video Review

Key Features Of Quicken For Mac 2018

Quicken For Mac continues to build on the many traditional features that Quicken users expect. As always, it comes with great spending tracking (compared to other online options like Mint and Personal Capital), it has investment tracking, and budgeting.

For 2018, they have improved the usability of the platform, but the navigation is still a little challenging. Even after using Quicken for about a week, I still find it hard to get to different reports. It's not intuitive. Here's what the home screen looks like:

Quicken For Mac Overview

Instead of being under reporting, most of the things you'll care about are actually available by clicking on the "Acccount" sidebar - for example, your income and spending isn't viewable under "Reports", but it's actually visible under "Banking".

Here's an example:

Quicken For Mac banking

Quicken for Mac dramatically improved their investment tracking for 2018. This was one of my biggest areas of concern in the 2017 version, and it's greatly improved.

However, there are still issues here. When I imported my accounts, some positions transferred the cost basis, while others didn't. Not a huge deal, but very odd. Also, it's still missing key reports that I valued in the Windows version - most notably the asset allocation and ability to play with your allocation in the program.

See the investment screen here:

Investment Screen

Also, Quicken touts that you can now see investment performance, but it consistently showed "N/A" for every account. My guess is that Quicken calculates this in the program, versus using historical data. That is a good thing in that you get a real snapshot of your performance, but a bad thing in that you need the Quicken app to consistently update to make it happen.

Here's what the screen looks like:

Investment Performance

Overall, the software is a big improvement over 2017, but there are still some bugs that could get annoying over time.

Quicken For Mac 2018 Pricing

The pricing for Quicken For Mac 2018 is one of the biggest changes. Quicken changed their pricing model this year to a subscription-based model, instead of a one-time fee. I see this as both good and bad.

It's bad, because many Quicken users kept their software for years, and never upgraded. For users, this was fine - because you could avoid bad rollouts like Quicken for Mac 2017. However, to continue to receive updates and banking information, you had to update every few years anyway or Quicken would cut you off.

It's good, because my hope is with more recurring revenue, Quicken can continue to improve their software and ensure banking connectivity. 

Quicken For Mac 2018 has three price points this year (which is also a change). I think 90% of users would benefit simply using the Deluxe version, which is $49.99/yr at full price.

Here's what the pricing looks like:

Starter

Deluxe

Premier

Best For:

Basic budgeting, no investments

Users with investments and loan tracking

Users who want BillPay or Premium Support

Price:

$34.99/yr

$49.99/yr

$74.99/yr

It's hard to say if Premier is worth the huge additional price. I think Deluxe is the best value, for the added features of investment and loan tracking. But I've never used BillPay, and I highly recommend that most people don't use a service like BillPay because not only does Quicken charge more, but many banks charge for the service as well.

Special Promotional Pricing

As you probably already know, Quicken is notorious for running promotional pricing all the time. Recently, they were offering 40% off their prices - which I think is a fair price for the product.

I would have a hard time paying $49.99 per year for Deluxe, but paying $29.99 per year makes much more sense - especially considering that I would typically upgrade every 2-3 years, this aligns much better with the pricing I'd expect.

However, in our search for deals, we found that Amazon.com is offering a 27-month subscription of the Deluxe version for $89.99. Given the $49.99 price is $4.17 per month, Amazon's deal is $3.33 per month - a savings of roughly 20%. Still not as good as Quicken's own sale, but the second best deal we've found.

Check out the deal on Amazon here.

Pros And Cons Of Quicken For Mac 2018

As you can see, there are some definite improvements in Quicken for Mac 2018 versus the prior year. However, it's still not perfect and it still has a lot less features than you'll find in the Windows version.

Pros:

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    Improved Investment Tracking
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    Improved Loan Tracking
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    Spending Tracking Categories and Reporting

Cons:

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    Poor Navigation And Not Intuitive
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    Still Lacking Some Key Investment Features Like Asset Allocation
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    New Subscription Pricing Isn't Worth It At Full Price

Final Verdict

The final verdict is that we're giving Quicken for Mac 2018 four stars. It's hard to compare Quicken because the alternatives are free - notably Personal Capital and Mint.

However, for those that want desktop software, AND if you can get it at a discounted price, Quicken for Mac is a much better piece of software than before. 

Have you tried Quicken for Mac 2018? What are your thoughts?

The post Quicken For Mac 2018 Review – A Big Improvement For Mac Users appeared first on The College Investor.

How To Get Proof Of Your Student Loan Debt Balances And Ownership
5:40
2018-01-14 01:36:17 UTC 5:40
How To Get Proof Of Your Student Loan Debt Balances And Ownership

You have graduated college and are getting ready to start paying off your student loans.

You are getting the check ready to start the process of paying off your student debt when it hits you that you don’t actually know who owns your student loans or how much you owe exactly?

What to do?

The first step to becoming financially free is figuring out the exact amount of debt you are carrying so you can work towards paying it off.

How To Get Proof Of Your Student Loan Debt Balances And Ownership

And since student loans are a debt that affect lives greatly, it is important to know who owns those loans and how much you owe.

How you do that is the topic of this post.

How to get proof of your student loan debt balances and ownership

Private Loans

If your student loan is from a private institution you borrowed from directly, finding out how much you owe as well as the loan servicers can be as simple as calling up the bank and getting that information. 

It is less straightforward if the bank you borrowed from is bought, merged with another institution or has sold your student loan debt to another company.

In this instance, you will have to turn to your credit report to find out who your current loan servicer is and to get proof of your student loan debt balance.

Grab your credit report for free by visiting annualcreditreport.com. Banks like Capital One also allow you to monitor your credit report for free if you own a credit card issued by them.

Lastly, you can reach out to your school’s financial aid office to help you identify who owns your debt so you can reach out to them to find out how much you owe.

Federal Student Loans

Federal student loans originate from the government but are in most cases handled by an outside loan servicer.

Since most of these loans are disbursed to your school, it is hard to place a finger on who owns it and the exact dollar amount you owe.

Finding your student loan debt balance and your loan servicers for federal loans however, is relatively easier than finding that information for private loans primarily because of the existence of the National Student Loan Database.

The National Student Loan Database is managed by the Department of Education and contains all the information you need to know about your federal student loan debt.

Follow the steps below to retrieve all essential information regarding your student loan debt.

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    Make sure your have your FSA ID handy. This is the same username and password you used when you were filing for your FAFSA. Note : The FSA ID replaced the Federal Student Aid Pin on May 10 2015. If you have not signed into any of the Department Education’s websites (FAFSA.gov, StudentLoans.gov etc) since May 10 2015, you will have to create a new FSA ID - you can create a new FSA ID here. One of the pieces of information you will be asked to enter which are both optional are a mobile number and your email address. Although these are optional, I highly recommend that you enter this information as your create your FSA ID and verify it so that should you forget your FSA ID, prompts can be sent to your phone or email to retrieve it.
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    Go to the National Student Loan Database
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    Once here, select “Financial Aid Review”
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    Once you have agreed to their terms and services, you will be prompted to enter a few pieces of information - your name,  Social Security number , date of birth and your FSA ID.
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    Once you submit everything correctly,  information on who your loan servicers are  your exact student loan debt amount, interest rate and loan repayment status will be displayed to you.

What If I’ve Forgotten My FSA ID ?

Not to worry.

If you entered and verified an email address and/or cell phone number when you signed up for your FSA ID originally, a code will be sent to either one to help you retrieve it.

Alternatively, you will have to answer a few challenge questions to verify your identity.

The last resort if neither of the two processes above work will be to call Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243; TTY for the deaf or hard of hearing 1-800-437-0833).

Now That I Have This Information, What Should I Do With It?

Now that you know how much your student loan balance is and who owns it, you can use this information to plan better when it comes to paying off your debt. 

This information is also a legal document you can download , keep and present as proof where necessary.

You will find more recommendations on how to eliminate your student loan debt here.

Have you gotten proof of your student loan balances and ownerships yet?

 

The post How To Get Proof Of Your Student Loan Debt Balances And Ownership appeared first on The College Investor.

Should You Use A Balance Transfer Card Or Personal Loan To Pay Off Debt
8:28
2018-01-14 01:36:17 UTC 8:28
Should You Use A Balance Transfer Card Or Personal Loan To Pay Off Debt

The post Should You Use A Balance Transfer Card Or Personal Loan To Pay Off Debt appeared first on The College Investor.

The 2018 Discover Cashback Categories
7:33
2018-01-14 01:36:17 UTC 7:33
The 2018 Discover Cashback Categories

Discover Card offers a great 5% Cashback Bonus in selected categories. But knowing how and when to use those categories along with their limits is key to getting the most on your Cashback Bonus.

Cashback Bonuses can result in high ROI (return on investment) from spending. Maureen Powers, Vice President of Rewards for Discover, had this to say about Cashback Bonus ROI,  “One of the easiest ways to spend smarter is by using a cash back credit card for everyday purchases. Instead of using cash, or a debit card, which typically offers little-to-zero rewards, opt for using a credit card that offers cash back perks.”

The 2018 Discover Cashback Categories

In this article, we’re going to show you how to get the most from your Discover Cashback Bonus categories. 

Rolling Calendar Bonus

Discover Cashback Bonus categories run on a rolling, quarterly calendar basis. For 2018, the  categories breakdown like this:

JAN-MAR 2018: Gas Stations & Wholesale Clubs

APR-JUN 2018: Grocery Stores

JUL-SEP 2018: Restaurants

OCT-DEC 2018: Amazon.com & Wholesale Clubs

The way Cashback Bonus categories work is that you get 5% cashback starting on the first day of the mentioned quarter until the last day. For JAN-MAR 2018, that means January 1–March 31, 2018. Specifically for that category, you’ll earn 5% cashback only at gas stations and wholesale clubs.

Each category mentions where the bonus applies. Also, each category is capped at $1,500 in purchases.

It’s important to note that you’ll need to activate the bonus for each quarter before you can start taking advantage of it. You’ll have plenty of notice as each quarter bonus is announced in the previous quarter.

If you’re late to the party on the current quarter bonus, don’t worry. You aren’t left out. You can still activate the current quarter’s bonus. Of course, the full quarter amount of time won’t be available to spend up to the $1,500 maximum.

Best of all, your Cashback Bonus has no expiration date. If you don’t use it after 18 months, Discover will apply a credit for the Cashback Bonus amount to your account.

Cashback Bonus Dollar Values And Category Qualifications

Not every Cashback Bonus dollar is created equal. For example, you can pay for Amazon purchases using your Cashback Bonus. For Amazon, each Cashback Bonus will equal $1 to spend. A one-to-one ratio.

For gift cards, the return is much higher, as we will see later in this article. There are also differences with Discover Deals, depending on the actual Deal.

In regards to qualifications, what does “Gas Stations” or “Wholesale Clubs” mean exactly? Discover Card’s Program Details can be found here. But here are a few of those definitions:

Gas Stations - Stand alone. Purchases made at Gas Stations affiliated with superstores and supermarkets may not be eligible.

Wholesale Clubs - Check with your Wholesale Club to make sure your Discover card is accepted. Certain Wholesale Club services, such as travel and cell phone purchases may not be eligible in this category.

You’ll want to go through the fine print from the above link. It isn’t that much and it will be well worth your time to ensure you’re making only qualified purchases that will result in a Cashback Bonus.

Discover Deals

Discover Deals let you earn Cashback Bonuses on top of your other Cashback Bonuses from categories. In other words, the two are independent.

Unlike Cashback Bonus categories, Discover Deals don’t require activating. Just go to the Discover Deals section of the Discover website and start shopping. Deals are clearly marked.

Some deals are ongoing while others show expiration dates. Deals are used with specific merchants. But many of them are the same ones you are likely already using. They include:

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    Walmart​
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    Macy's
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    BestBuy.com
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    Amazon
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    Walgreens
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    Target

To name just a few of the many merchants available.

Earn 25% More With Your Cashback Bonus

An additional way to earn even more using your Cashback Bonus is with gift cards. Here’s how it works:

After spending and earning a Cashback Bonus, you can take $20 off the Bonus and get a $25 gift card. That’s a 25% immediate return on your Cashback Bonus.

There are two categories of gift cards: traditional plastic and eCertificates (digital gift cards). Plastic cards have to be mailed to you. You’ll receive eCertificates immediately. eCertificates can be printed out right after you purchase them.

There’s a large selection of merchants to choose from and a broad range of categories, which include:

  • check
    Restaurants
  • check
    Home & Auto
  • check
    Fashion
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    Department Store
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    Entertainment
  • check
    Health & Beauty
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    Sports & Recreation
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    Gifts
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    Travel & Vacations
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    Best Value

Not all gift cards have a 25% return. Some are $45 Cashback Bonus for a $50 gift card, which is still over an 11% return.

Final Thoughts

Knowing how to utilize Discover Cashback Bonus categories can put extra savings right into your bank account. With some opportunities providing a 25% return, you’ll have a difficult time trying to find a better deal anywhere else.

Don’t forget to mark your calendar and be sure to activate each quarterly Cashback Bonus. You’ll then always be ready for great savings!

Do have you have a Discover card? Are you planning on utilizing the cash back categories in 2018?

The post The 2018 Discover Cashback Categories appeared first on The College Investor.

Problems with Aspire Loan Servicing
9:35
2018-01-14 01:36:18 UTC 9:35
Problems with Aspire Loan Servicing

Aspire Resources Inc. is one of the smaller servicers and has a bit of a complicated history. They may be your loan servicer or maybe they used to be your loan servicer. Aspire is a for-profit subsidiary of the nonprofit company Iowa Student Loan and services loans as Aspire Service Center. The company was contracted with the federal government to service loans from the Direct Loan program.

Despite what they describe as high customer satisfaction ratings as reported from their Department of Education evaluation, they could not accumulate enough accounts to warrant the cost of operating, per their 2015 statement on the matter, and ceased their Direct Loan servicing.

Problems with Aspire Loan Servicing

The Department of Education confirmed in a statement that Aspire initiated the end of the contract to service these loans. All Direct Loan accounts with Aspire were transferred to MOHELA. However, Aspire is still servicing other kinds of loans.

Despite that aforementioned high customer service rating from the Department of Education, Aspire has not been immune to complaints. We took a look at complaints posted in the Consumer Financial Protection Bureau database, on the Better Business Bureau website, and other places around the web to get an idea of possible issues with Aspire loan servicing.

Here are some issues that stood out:

Phantom Student Loan​ Balances

Paying off your student loans can be a thrilling experience. However, the excitement can dull when you think you’ve completely paid down your debt only to discover that somehow you still owe something.

An Aspire borrower experienced this precise situation. To be sure, the amount they still owed was quite small: they paid off their loan and then later logged into their Aspire account to make sure nothing was wrong.

 They found 5 dollars of unpaid interest there, somehow left over from the now-paid loan. Whatever the reason it was there, they had not been informed they still had that amount left. Had the borrower never looked, it would have sat there accumulating more interest until Aspire decided to let them know.

 

A similar incident occurred when one borrower paid off her loans and then reviewed her balance, surprised to find over 20 dollars still remaining. She received a bill that confirmed she owed that amount, too. After calling and inquiring about the issue, and being told the balance would be waived after a system error was corrected, the balance remained unchanged.

 The balance sat there for several weeks accruing interest and the borrower kept getting billed for an even larger amount. Eventually, according to Aspire’s response, the error was fixed and the account corrected. While in the end the borrower was not on the hook for this erroneous balance, it is unnerving to watch your loan balance go up and up over a period of weeks when you had, in fact, already paid in full.

 

Auto-pay Agonies

Auto-pay can be a huge boon to both borrower and servicer. For the borrower, auto-pay means they don’t have to remember each month to pay their loan, and it reduces the risk of being late with a payment. Additionally, depending on the type of loan and the servicer, borrowers may get a discount on interest rates for enrolling in an auto-pay feature. For the servicer, auto-pay is as close to a guaranteed payment as they are likely to get.

But when auto-pay goes wrong, it can be frustrating to the borrower and antithetical to the reason it’s there in the first place: easy payment process. One Aspire borrower describes in a complaint how they switched bank accounts and informed Aspire via the proper form to update their auto-pay. In the process of setting up the payments to the new bank account, that month’s payment was canceled, and the borrower was deemed to have missed a payment.

 The borrower had not requested that cancelation and lost the interest rate reduction they had with Aspire at the time; the borrower felt it was unfair they were punished for a missed payment when they had not requested it.

 

Duplicate or Triplicate Payments

Getting overcharged on a payment is one thing. Getting your payment tripled is even worse. This happened to at least one Aspire borrower. And while the incident could have been a one-off error, it may have caused a lot of short-term distress for those affected. The borrower in question felt that Aspire’s handling of the situation left much to be desired.

The borrower logged into their checking account and saw that three loan payments had been taken out instead of one, sending them into overdraft. When the borrower called Aspire to resolve the issue, Aspire said they knew of the problem and were working to rectify it. When asked why they had not notified borrowers of the issue if they had known about it for several days, no answer was given.

 The borrower also had to wait at least 5 days for the refund process to be completed. The borrower emphasized that they felt like the customer service reps did their jobs well, but the policy itself was outrageously burdensome on borrowers given that the error was made by Aspire.

 

Another borrower noted what might’ve been the same incident, except their account got charged double instead of triple. They also had to wait at least several days for the problem to be fixed, and while they reported being satisfied with the company’s response, it was distressing they had to go through it in the first place.

 

Looking For Help Beyond Your Student Loan Servicer

Dealing with a student loan servicer whose service or policies fall short of your expectations or needs is a frustrating experience. And while you will need to contact your servicer for a variety of problems like technical issues, looking beyond your servicer for help may ease some of your frustration or at least give you perspective on your experience.

One of the biggest issues people face with their servicers is getting into a payment plan that makes their monthly payments affordable. Your servicer may not be communicating with you well about all your options. Sometimes the servicer is at fault; however, the servicer may just be carrying out the inadequate policies of your lender. If you’re a borrower of private student loans and can’t work out a feasible repayment plan with your current lender, you might want to consider refinancing. While there is no guarantee of better options, another set of loan terms or even another lender might give you the options you need to stay current and successfully pay back your loans.

If you have federal loans and are having issues paying your loans, we recommend talking to Ameritech Financial at 866 863 3870. There are a number of repayment plans offered through the Department of Education and Ameritech Financial helps you find the plan right for you, assists you in applying, and if you’re accepted, they will work with you for the life of the loan to make sure you stay in the plan or program you need.

Have you ever had any of these problems with your student loan servicer?


The post Problems with Aspire Loan Servicing appeared first on The College Investor.

How Honest Financial Advisors Should Disclose Their Fees
22:49
2018-01-14 01:36:18 UTC 22:49
How Honest Financial Advisors Should Disclose Their Fees

Honest Financial Advisors Should Disclose Their Fees

Two weeks ago, I was chatting with a reader who was researching low cost index funds. I was so excited because he wanted to learn about expense ratios, commissions, fees, and more. Although I talk about finance all the time, it's still rare to have someone interested for long periods of time.

After chatting for a bit, I got around to asking him what made him so interested in the topic. He seemed like he was doing well enough. He definitely had some investable funds, was on his way to retirement, and everything seemed good.

He told me - "I feel like my advisor isn't steering me in the right path based on what I read online on sites like yours."  I asked him to elaborate a little bit for me.

He said - "My advisor consistently talks about how he's the top performer in North Carolina. However, everywhere I read online says to invest with low cost Vanguard funds. When I mention that to him, he changes the subject or diverts to other topics. It makes me feel off..."

Beyond the fact that you shouldn't feel this way with a financial advisor, I firmly believe that your financial advisor should be very transparent with costs for you. When this reader shared his portfolio with me, I was so sad...

How This Reader Was Getting Shafted By Fees

This reader had his account and financial advisor at one of the biggest two name financial firms in the country. For this privilege, the reader was paying a fee of $40 per year for the first account, $20 per year for the second account, and $48 per year for his retirement account. 

On the surface, paying a financial advisor just $108 per year is a good deal. My reader was annoyed by these fees, especially since his financial advisor would "blame them on the DOL Fiduciary Rule and Big Government", but when realizing they were pretty low, he felt better. But the fees don't really stop there.

Where he was really getting shafted in fees was in his portfolio. This advisor put him in the following funds:

Fund Name​​​​​

Symbol

Expense Ratio

Front-End Load

Dealer Commission

Hartford Balanced Fund - Class A

ITTAX

1.14%

5.75%

4.75%

Hartford Dividend & Growth Fund - Class A

IHGIX

1.03%

5.75%

4.75%

Hartford MidCap Fund - Class A

HFMCX

1.16%

5.75%

4.75%

Hartford Equity Income Fund - Class A

HQIAX

1.02%

5.75%

4.75%

Hartford MidCap Value Fund - Class F

HMVFX

0.83%

0%

0%

Hartford International Opportunity Fund - Class I

IHOIX

0.88%

0%

0%

American Funds Growth Fund America - Class A

AGTHX

0.64%

4.50%

3.50%

American Funds AMCAP Fund - Class F3

FMACX

0.37%

0%

0%

American Funds Growth Fund - Class 529A

CGFAX

0.72%

5.75%

4.75%

What's important to note here is that these are really expensive funds to own. Not only are there front-end sales loads on many of these funds, they have very high expense ratios, and many charge 12B-1 fees as well.

Furthermore, it's weird the asset choices. We didn't go into too many details on account types, but he did share that his advisor was managing a regular account, a retirement account, and a 529 college savings plan. So, my guess is that in the retirement account, he want with some of the no-load funds because he couldn't justify the large sales load as a fiduciary. 

So here's the scary part. Look at how much he was paying in fees (in dollars) to this "financial advisor":

Symbol

Dollar Amount

Sales Charge

Commission Fees

Annual Expense Fees

ITTAX

$40,000

$2,300

$1,900

$429.78

IHGIX

$40,000

$2,300

$1,900

$388.31

HFMCX

$40,000

$2,300

$1,900

$437.32

HQIAX

$20,000

$1,150

$950

$204.00

HMVFX

$20,000

$0

$0

$166.00

IHOIX

$10,000

$0

$0

$88.00

AGTHX

$10,000

$450

$350

$64.00

FMACX

$10,000

$0

$0

$37.00

CGFAX

$9,000

$517.50

$427.50

$64.80

Total

$199,000

$9,017.50

$7,427.50

$1,879.21

Ouch.... do you see how much this guy pays on his $199,000 portfolio - WAY TOO MUCH!

And this financial advisor - he's making $7,427.50 in commissions on top of his $108 per year advisory fee. When you add in the expense ratio, this portfolio is costing the investor $11,004.71 in year 1. And potentially costing the investor $1,879.21 or more per year after!

I should also mention that it's highly likely this individual is "rebalancing" his clients portfolios at least once a year - which means more commissions in his pocket. All at his client's expense.

What I don't think he realized was that his $40,000 investment started at $37,700 because of this sales charge - so he was already investing at a disadvantage. Then, you add the huge annual fees on top of it!

I personally think this is very wrong. And what compounds the problem is that this advisor wasn't transparent with his client. If an advisor is transparent and someone wants to pay - that's one thing. But when the client is left in the dark on the true costs of their investments - in my opinion that should be criminal.

What A Low Cost Portfolio Looks LIke

Looking at this guys portfolio, I don't even know if it really makes a lot of sense.

But, for argument's sake, let's say it does. Could we build a much lower cost portfolio? 100% yes. 

Here's what a similar low cost portfolio looks like. Notice I combined a couple of funds into the same fund for large cap growth. The investments he was in didn't make sense - but it could be do to retirement account choices.

Also, we chose a Vanguard 529 portfolio to mimic the existing 529 plan. Plan choices may vary, and it could make sense to open a state-specific plan.

Hartford Balanced Fund - Class A (ITTAX)

Hartford Dividend & Growth Fund - Class A (IHGIX)

Hartford MidCap Fund - Class A (HFMCX)

Hartford Equity Income Fund - Class A (HQIAX)

Hartford MidCap Value Fund - Class F (HMVFX)

Hartford International Opportunity Fund - Class I (IHOIX)

American Funds Growth Fund America - Class A (AGTHX)

American Funds AMCAP Fund - Class F3 (FMACX)

American Funds Growth Fund - Class 529A (CGFAX)

Vanguard Balance Index Fund - Admirals Shares (VBIAX)

Vanguard Dividend Appreciation Fund - Admirals Shares (VDADX)

Vanguard MidCap Index Fund - Admirals Shares (VIMAX)

Vanguard Equity Income Fund - Admirals Shares (VEIRX)

Vanguard MidCap Value Index - Admirals Shares (VMVAX)

Vanguard Total International Index - Admirals Shares (VTIAX)

Vanguard Growth Index Fund - Admirals Shares (VIGAX)

Vanguard Growth Index Fund - Admirals Shares (VIGAX)

Vanguard 529 Growth Index Portfolio (Fund 4517)

Symbol

Expense Ratio

Dollar Amount

Sales Charge

Commission Fees

Annual Expense Fees

VBINX

0.07%

$40,000

$0

$0

$28

VDADX

0.08%

$40,000

$0

$0

$32

VIMAX

0.06%

$40,000

$0

$0

$24

VEIRX

0.17%

$20,000

$10

$0

$34

VMVAX

0.07%

$20,000

$0

$0

$14

VTIAX

0.11%

$10,000

$0

$0

$11

VIGAX

0.06%

$10,000

$0

$0

$6

VIGAX

0.06%

$10,000

$0

$0

$6

Fund 4517

0.24%

$9,000

$0

$0

$21.60

Total


$199,000

$0

$0

$176.60

By simply investing in a low cost portfolio, we were able to reduce total costs from $11,004.71 to just $176.60. That's a 99% reduction in costs.

Let's say that you even want to pay a fee-only financial advisor to help you set this up. Well, that would likely be a one-time cost of around $1,000. Even if you add that in, you're only paying $1,176.60 in year one, which is 90% less than you would with this financial advisor.

Not only that, but the annual fees are significantly lower. The original portfolio was costing the investor $1,879.21 per year! This new portfolio with low cost mutual funds is only costing the investor $176.60 per year! A 91% reduction in annual expenses!

What Types Of Fees (And Words) To Look Out For

In today's world, you can invest for free. There are multiple services, and many of the big companies, that have commission-free ETFs, no account minimum IRAs, and free stock trading. 

And the price of financial advice has significantly fallen as well. If you want a robo-advisor to invest automatically for you, Betterment charges just a 0.25% annual fee.

The fact is, you should be focused on avoiding fees - fees are the biggest cost for investors over the long run. So minimizing them should be your top priority. But what do you need to watch out for?

Sales Load/Loaded Funds - The biggest fee that hit our reader was the sales load. Almost all the funds that his financial advisor placed him in were "loaded" - meaning they charged him a fee to invest. In this case, it was almost always 5.75% up front. And the financial advisor received a commission from that load of 4.75%. 

Do you see why financial advisors can be incentivized to steer clients to loaded mutual funds? That was where the big money was for this advisor. The annual fee was nothing (just $108 per year). But this advisor was making almost $7,500 in commissions on this investor

Even worse, we were able to find less expensive funds for all the investments this financial advisor placed his client in. My opinion is that this is not in the client's fiduciary interest. I really wonder how the financial advisor would justify it in court if he was sued?

The bottom line is, avoid mutual funds that have a sales load. You can do better.

Expense Ratio - The next biggest fee to be extremely mindful of is the expense ratio. This is the percentage of your investment that you'll pay each year to the mutual fund/ETF company. It's an annual fee - so it compounds with your investment.

Many basic ETFs and mutual funds have expense ratios of less than 0.25%. The best expense ratios are down 0.03% to 0.06%. If you notice in our reader's story, not only was he sold loaded mutual funds, but each of these funds had expense ratios over 1%. That's incredibly high (and in my opinion, should be outlawed). 

Typically, your expense ratio will be lower with stock index funds, and higher with bonds and international funds. The fees are just higher for these types of investments. The bottom line here - look for the lowest expense ratio possible.

Commissions - Commissions are what you pay your broker to invest. For example, Fidelity has $4.95 commissions, but they also have many commission-free ETFs. 

You should look to avoid commissions where ever possible. But don't avoid commissions at the expense of higher expense ratios. 

For example, if you have a commission free fund at 0.10% expense ratio, and an ETF that you'll pay $4.95 for, but has just a 0.06% expense ratio - go with the lower expense ratio. Since it's a percentage of your investment, that's more money than any commission! 

In this example, if we invested $20,000 - the expense ratio at 0.10% is $20. At 0.06%, it's $12 per year - a savings of $8 per year - already overcoming the commission expense of just $4.95.

"Top Financial Advisor" - If you ever hear a financial advisor boasting about being the top financial advisor in their firm or area, seek clarification. You see, many firms internally rank their advisors by how much money they bring into the firm, or by how much commissions they're earning.

As an investor, these could be the opposite metrics you want from your financial advisor. You don't want to work with the advisor earning the most commissions - because they are charging you those commissions! 

Now, some rankings can be helpful, but just do your due diligence before working with anyone.

My Dream For How Honest Financial Advisors Would Disclose Their Fees

The sad part of this is that it takes a lot of time and effort to figure out what you're actually paying your financial advisor. I spent about an hour researching the fees, expense ratios, and commissions that the financial advisor was receiving for this article. And most people won't be spending their time doing that.

I really with more advisors were up front, honest, and transparent about their fees. It's why I really like fee-only financial planners. You pay a flat fee up front and get a financial plan that you can execute.

However, I don't even know if that goes far enough for what people need to know about their investment fees. I think that we've come a long way in disclosing fees for mortgages, car loans, credit cards, and more - but investments are still a very dark area. 

I wish that honest financial advisors would put together a one-pager fee disclosure, and would be required to go over it with clients. The client would then have to sign off on it.

I envision it like this:

Investment Fee Disclosure Form

I've uploaded a Word Document of this form if anyone wants to use and/or modify it. You can download a copy here: Investment Fee Disclosure Form

I think this type of form would bring a high amount of transparency to the costs associated with investing, financial advice, true fiduciary interest, and more.

Final Thoughts

I really hate it when I see readers in a bad situation. I don't think it's right how this reader's financial advisor setup his investments. However, this is sadly a common practice and I've heard of it quite a bit.

It's one of the reasons why I decided to not go into financial services after interning at a brokerage that was doing similar things. It just felt dirty.

In today's world, you can setup a low cost portfolio and save thousands of dollars in fees. If you want or need advice, pay for it - but just make sure you fully understand what you're paying for and all associated costs.

If you're not comfortable even managing your portfolio after getting a financial plan, then looking at a robo-advisor service like Betterment is a great way to go. For a small fee (0.25% of assets), they take care of everything start to finish. All you have to do is transfer money into the account - so simple.

The bottom line is that you don't need to be gouged to get solid financial advice. And you should ALWAYS know what you're paying.

What are your thoughts on this? Have you been taken advantage of (or seen it happen)? Do you think the fiduciary rule should be stricter in disclosing investment costs and fees?

The post How Honest Financial Advisors Should Disclose Their Fees appeared first on The College Investor.

Ibotta Review: Get Rebates For Your Normal Shopping
7:21
2018-01-14 01:36:18 UTC 7:21
Ibotta Review: Get Rebates For Your Normal Shopping

Wouldn’t it be great if you could earn cash back on everyday necessary items without having to clip coupons?

One of easiest way to make money on everyday purchases is to use Ibotta, a free app that makes it easy to save money. Grocery store rebates are some of the easiest ways to earn cash back with this program, and it just takes a few seconds.

Did you know that Ibotta is not just for grocery stores? You can also use Ibotta at pharmacies, clothing stores, restaurants, and convenience stores, home improvement stores. Ibotta even works when you’re shopping online.

Ibotta Review: Get Rebates For Your Normal Shopping

People are skeptical when it comes to coupons and apps in general, so we’ve given you our honest thoughts about Ibotta, with the pros, cons, and everything in between.

What Is Ibotta?

Ibotta is a free smartphone app that allows you to get cash back for items you purchase. With Ibotta, it's easy to save money on things that you buy everyday, such at groceries, to shopping for clothing from retailers like Abercrombie, Forever 21, GAP, Kohl's, and Target. 

Earn extra cash with Ibotta while shopping for items you were already going to buy.

Signing Up/Getting Started

You can start the sign up process by going to ibotta.com, or by downloading the app, which is available for use on iPhone and Android devices. First time users will get $10 into their accounts once they claim their first rebate!

How To Use Ibotta At A Glance:

Here are some quick tips to help you get started:

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    Download the free Ibotta app on your phone, or set up an account on your desktop. (You will probably use the app more frequently, but Ibotta works on your computer and smartphone).
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    Open the app and browse through the available rebates, unlocking any rebates for items you want to purchase by tapping the plus sign.
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    Do your shopping as you normally would, and save your receipts.
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    Upload your receipt manually or scan the barcode from your receipt into the app.
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    Get paid and redeem your rebates for cash and gift cards.

How Does Ibotta Work?

Download the app

Once you’ve downloaded Ibotta and completed registration, open the Ibotta app to begin. You can register here, and log in using your account information.

Add Offers to your Account

Open the app and browse through rebates and unlock. Select your favorite stores and apps if you haven't done so already. You will also see available offers from stores near you.

Just click on each store, and you’ll see all the items eligible for rebates and cash back offers. Find products you want to purchase, and get ready for savings on your Ibotta App.

You can search by specific category, store, or look at the “What’s Hot” or “What’s New” categories at the top. Since some rebates will only be available at a particular store, be sure to check the stores that offer the rebate you want.

You can add rebates to your list as you find them by clicking the plus sign.

Sometimes, you will have to take a short quiz about your buying habits to get to the rebate, and other times, you will have to watch a 15-30 second video in order to add the offer to your list.

The more offers you add, the more cash you can get back. Be sure to redeem offers before they expire.

Go Shopping

After adding offers to your account, they will be added to your My Offers list. Buy these items at over 300 retailers where Ibotta works. Remember that some offers are retailer exclusive, so read carefully before shopping. Also, make sure you buy the right items by checking the offer details and exclusions. Save your receipts in case of any issues.

Three Ways To Redeem

There are three ways to earn: submit your receipt, link a loyalty card, or make an in app purchase.

Submit Receipts to Ibotta

Submit your receipt manually or scan the receipt barcode (QR Code) into the app. To verify your receipt, open the Ibotta app and find your store. Click the “Verify” button at the bottom and follow the prompts.

Once you are done shopping, you can either scan your receipt barcode directly into the Ibotta app, or take a picture of the receipt and manually add the eligible items. Scanning your receipt with the Ibotta app is the easy - just scan the barcode into the Ibotta app, and Ibotta will find the eligible items.

If you take a picture of the receipt, you will have to manually add the items eligible for Ibotta cash back offers. Make sure you capture the whole receipt, including the date, time, and store name. Your earnings will be available for cash out via PayPal after Ibotta approves your receipt, usually within a few hours with some exceptions.

Link a Loyalty Card

With specific retailers, users must connect their loyalty card and add offers to their Ibotta account prior to shopping.

Users will automatically receive credit for successful redemptions within 48 hours. Check your Ibotta app for Preferred Retailer Partners and learn how to link your loyalty card here.  Try to link your loyalty card at least 24 hours before your first shopping trip.

Mobile Shopping Submission:

Mobile Shopping retailers allow for in-app or app-to-app purchases. While you don’t have to send a receipt, keep it until the offer is completed. For more information on Mobile Shopping offers, visit here.

What Stores Are Available?

You will know what stores are available to you when you visit Ibotta and sign up. Most major chains like Wal-Mart, Target, Sam’s Club, Publix, Kroger, Whole Foods, Cost Plus World Market and Costco are available. You will also find your regional chains. For those in the Midwest, you will find deals from Baker’s, Hy-Vee and Fareway. Once you select your store, start browsing deals and offers.


What Items Are Available On Ibotta?

Most items are grocery and home items, but you will also find deals for other online retailers such as jet.com and Groupon. You can expect to save a few dollars each week on groceries and non-grocery items.  

What Types of Rebates Are Available?

You can earn generic and brand specific rebates using Ibotta. You can earn generic and brand specific reabes using Ibotta

Generic Rebates

Generic rebates are rebates geared towards a specific item of any brand. For example, you can get a $0.50 rebate for any gallon of milk. 

Brand Specific Rebates

Brand specific rebates pay more than generic rebates, but you have to buy a specific brand of the featured product. For example, you can use your $1.00 rebate on any variety of General Mills Cereal. The cereal has to be from General Mills in order to qualify for the rebate.

How to Maximize Your Ibotta Rewards

You probably know someone who uses coupons but doesn’t quite understand how to use apps like Ibotta. For every person you refer to Ibotta who redeems a rebate within two weeks, you will get a $5 bonus.

What’s in it for them? New users will also receive $10 when they sign up through your referral link and start using the app. Some users turn Ibotta into a lucrative side hustle and work with teams.

How Does Ibotta Pay You?

To withdraw cash from your account, follow instructions here.

To redeem your offers, just expand the profile link and click “withdraw cash.”

The Ibotta App pays via PayPal or Venmo once your account reaches $20. You cash out once you reach the $20 mark and your money will be in your account within 48 hours. Recently, Ibotta has added gift cards from retailers like Amazon or Wal-Mart as another form of payment.

Pros:

The product selection is extensive. In addition to healthy foods like fresh produce, you will also find everyday items ranging from personal care items to pharmacy items. It only takes a few minutes of time to see big rewards.

In-App Shopping

Ibotta recently added in-app shopping rebates for a few partners. If you are a Groupon shopper, you can earn 2% to 10% cash back when clicking through from Ibotta. Other partners include Hotels.com, EBay, and Boxed.

There Are Rebates For Generic And/or Store Brand. 

Every week there is some sort of rebate for generic and store brand items. Even with a couple of dollars per week, you could save over $100 with just generic rebates alone.

Rebates Not Offered In Coupons

You will find rebates for items that you would never see a coupon for in regular mail. There are rebates for healthy food, such as fresh meat, produce, yogurt, and cheese.

There are also rebates for essential household items, such as toilet paper, paper towels, cleaning products, and trash bags. You know you have to buy these items, so why not save money on them?

Ibotta is for More Than Just Groceries

Ibotta originally came out as an app for groceries, but as it grows, Ibotta is adding non-grocery retailers and other partners.

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    Alcohol: Get offers for beer, wine and liquor from restaurants, grocery stores and gas stations. Whether it’s a 6 pack from the grocery store or a premium bottle of vodka, you can earn cash back on your purchases.
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    Groupon: Save even more on Groupon by earning between 2% and 10% cash back on your purchases.
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    Hallmark: Let your loved ones know you care by sending them greeting cards. If you spend $10 at Hallmark, you’ll get a $5 rebate.
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    Hotels: What’s better than a vacation? Earning up to 4%cash back on your hotel stay through Hotels.com.
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    Sam’s Club memberships: You could get $10 back through Ibotta if you are signing up for a New Sam’s Club membership card.
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    Pharmacy: Whether it’s makeup, vitamins, or flea treatments for your pet, you’ll probably find a great deal in Ibotta’s “Pharmacy” section.

Cons:

Ibotta Cash Expiration And Fees

Many users let their rewards build up until they need extra cash, but you need to be aware of what happens if you wait too long. If you don’t redeem an offer for 12 consecutive months, Ibotta will start charging an inactivity fee of $3.99 per month until your earnings are depleted. This is by far the biggest drawback of using Ibotta, since life happens, and sometimes we forget to redeem our offers.

You Are Encouraged To Spend More

For some people, a rebate is yet another temptation for impulse purchases. Seasonal rebates for holidays and big events (like the Super Bowl) definitely make it hard to say no.

Restrictions And Fine Print

Certain items are restricted from Ibotta cash back offers, but as long as you read the fine print, you’ll be fine- just refer to your smartphone for details. You can even scan the item before purchasing to make sure you have the right one.

The Bottom Line: Is Ibotta Worth It?

Ibotta is an easy way to save on almost everything you were already going to buy, except you spend a few minutes to scan your items and receipt. You get cash back, and it only takes a few minutes to get rewards that add up fast.

The product and store selection is extensive, and you can buy alcohol, household goods, baby products, and healthy foods like fresh produce. The only real drawback is getting hit with a monthly fee if you forget to redeem your rewards for cash within one year.

In the end, Ibotta is an easy way to earn extra cash, whether you’re a college student looking for deals or you just want to set aside some money for holiday shopping.

Tell us- do you use Ibotta? How much have you earned in rebates so far?

The post Ibotta Review: Get Rebates For Your Normal Shopping appeared first on The College Investor.

Amazon Prime vs. Netflix: How Do They Compare?
8:15
2018-01-14 01:36:18 UTC 8:15
Amazon Prime vs. Netflix: How Do They Compare?

Online TV is taking over our lives. Netflix CEO Reed Hastings says that sleep is his biggest competitor. And anyone who has stayed up four hours for “one more episode” will agree that he’s right. 

Streaming TV is great for a cheap date or solo night in, but paying for too many streaming services will leave your wallet thin (not to mention a permanent butt mark on your couch). In general, I think it’s best to choose one streaming service and forgo the rest. That means I pay one less expense, plus I have more desire to side hustle rather than watch TV all day.

Amazon Prime vs. Netflix: How Do They Compare?

So which streaming service should you choose? Amazon Prime Video or Netflix? You may be surprised to learn that for me, Amazon Prime is the obvious answer.

Who Has Better Selection?

I think it’s fair to say that both Netflix and Amazon Prime Video have more TV footage than you can ever hope to watch in your entire lifetime. Honestly, the sheer volume of available watching material is almost silly. That said, I used InstantWatcher.com to figure out which streaming service had more content.

As of November 2017, Netflix had 4101 Movies and 2814 Seasons of TV shows. Amazon Prime has a mind boggling 36,412 Movies and 6133 Seasons of TV shows. It’s important to remember that a fair bit of the selection for both services is absolute crap.

For example, 31,066 of Amazon Prime’s movies are Not Rated. That means the movies are too old for rating or the are too small to merit going through the rating process. Just 897 Netflix movies are not rated.

Overall, I think that Amazon Prime edges out Netflix in terms of available selection, but Netflix curates their content a little bit better. In particular, Netflix seems to have more recent movie selections.

Do The Original Series Make The Service?

Both Amazon and Netflix are doubling down on their original series concepts. Netflix hit series include Master of None, Jessica Jones, Orange is the New Black, The Unbreakable Kimmy Schmidt and so many more.

Netflix is absolutely creating binge-worthy TV with just enough drama to keep you watching, but not so much that you feel stressed out while watching. 

Amazon has made some inroads in the original series space. The Man in the High Castle is a true mind-bender, and Transparent and Mozart in the Jungle are both highly regarded. Amazon’s problem seems to be that they are creating a traditional TV watching experience rather than focusing on the strength of streaming. I’m sure that Amazon is doing everything in their power to change that right now.

In my opinion, Netflix dominates this category right now, but I’m not counting Amazon out. Amazon Prime Video is a core focus for cash-heavy Amazon, so they will be coming with firepower over the next few years.

What’s Easier To Stream?

Most new viewing devices (like Roku or Smart TVs) make it easy to stream any service, so you don’t need to pick between Amazon Prime or Netflix. However, some older devices don’t make it easy to stream Amazon Prime.

If you have an older device, you’ll may have to go with Netflix, but anyone with a device from the last couple of years should have easy access to either option. Right now Netflix has a slight edge, but Amazon will own the future.

Amazon is already making great inroads into the smart house technology, so you can bet that Amazon Prime Video will be way easier to access than any other streaming service in the future.

Who Has The Better Price?

If you’re a college student with a valid .edu address, you can pay just $49 per year for Amazon Prime. Everyone else needs to pay just $99 (or $10.99) per month for Amazon Prime. Amazon Prime customers can use three screens at the same time.

Netflix on the other hand, charges $7.99/month for a one screen option, $10.99/month for two screens (and HD access) and $13.99/month for 4 screens and Ultra HD access.

Since Prime Video also comes with free 2 day shipping for all Amazon products, plus sweet deals on subscription services, Amazon is the hand’s down winner in this category.

If You Had To Pick One…

It probably doesn’t come as a shock that the cheaper option wins out for me. I think Amazon Prime Video is an amazing service, and I’m thankful that it saves me from buying a $7.99/month Netflix membership.

I don’t think Amazon Prime Video is as entertaining as Netflix (at least not right now), but I’m okay with that. I would prefer to watch less TV rather than more. Amazon Prime Video has more than enough content to keep my mindless habits going strong, so I don’t see any need to rejoin Netflix any time soon.

Which one do you prefer and why?

The post Amazon Prime vs. Netflix: How Do They Compare? appeared first on The College Investor.

Lenda Online Mortgage Lender Review
7:52
2018-01-14 01:36:18 UTC 7:52
Lenda Online Mortgage Lender Review

Lenda Online Mortgage Lender Review

Buying a new home is an exciting time.

But the euphoria can quickly wear off once you start going through the mortgage application process.

Just to give you an idea of what you’ll be facing - it’s extremely drawn out, there are multiple people involved (sometimes not communicating with each other), mountains of paperwork, and lots signatures that can’t be missed or else they can hold up the entire process.

Lenda Online Mortgage is looking to turn the mortgage application process on its head.


Lenda Mortgage

Quick Summary

  • Fixed rate 30, 15, and 10 year loans
  • Low costs: No origination fees or broker commissions
  • Online application process is easy to use and fast

Lenda is a fintech based in San Francisco. Their tagline is “Home Financing Made Easy”. The way they do this is through a fast, low-cost, paperless process. How fast is fast? Rather than having to wait 3 days for a loan approval, you can get it within an hour.

In 2017, the average number of days it takes for a mortgage of all loan types to close was 43 days, according to mortgageorb.com. That’s down from 47 in February of 2015. It’s an involved process as you can see from the chart below:

Lenda Online Mortgage Lender Review

Source: iloanhomemortgage.com

Overall, you can expect a Lenda Mortgage to close sooner, coming in under 30 days.

Lenda offers mortgages for 15 and 30 year fixed along with refinancing options.

All Digital Mortgage Application

Mortgage applications have been slowly moving to digital but they are notoriously still cumbersome when it comes to the application process. There’s still lots of paperwork to wade through and upload. Much of this is because mortgage lenders simply haven’t streamlined the mortgage application process.

Jason Van Den Brand, CEO of Lenda, had this to say about the traditional mortgage application process, “It’s made to be confusing. The less you know, the more you are going to pay.”

That’s where Lenda makes a difference. You’ll find that their application process is all digital. Documents are generated and signed electronically online.

You’ll still need to upload some of your documents but Lenda provides a checklist to help smooth out that part of the process. There’s just once place to upload everything rather than multiple touch points hat can get confusing.

One feature that really helps is a progress indicator, showing how far along you are in the mortgage application.

Lenda likes to provide full transparency about their application process and fees. To get an idea of what the entire process will look like with Lenda, they’ve outlined the 4 weeks it takes a loan to close in their mortgage guide:

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    Week 1 covers choosing a mortgage and applying for a loan.
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    Week 2 focuses on the home inspection and locking your interest rate.
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    Week 3 dives into appraising and insuring your new home.
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    Week 4 wraps things up with the closing process.

The mortgage guide goes into detail for each of the above steps. You’ll get a better understanding of Lenda’s application process by going through their easy to follow guide.

It’s important to point out that you aren’t left alone with Lenda’s website. You’ll be assigned a Lenda Advisor who will work with you through the above steps.

Lower Overall Cost

Cost is another area where Lenda is able to differentiate themselves from traditional mortgage lenders. They don’t charge upfront origination or broker fees. Lenda is able to accomplish this through reduced paperwork and a smaller staff.

In regards to younger applicants, Van Den Brand says they are “tired of being nickel-and-dimed at every turn”.

Lenda’s fee structure is a big shift within the mortgage industry. In a traditional mortgage application process, it’s not uncommon for various fees to arise out of no where.

While Lenda doesn’t set mortgage rates, they do help you try to find the best rate as one of the first steps in their mortgage application process.

Besides the fees that Lenda is able to control, there are many that they can’t control. But Lenda does its best to help you understand the fees that you’ll incur through out the mortgage application process.

The graph below outlines other fees you can expect to incur:

Lenda Online Mortgage Lender Review

Source: lenda.com

Not Yet Everywhere

One big caveat with Lenda is that their services aren’t yet offered in all states. Currently, they are restricted to California, Colorado, Oregon, Texas, and Washington. They are working to expand their infrastructure into more states.

Additionally, there are some loan types not offered by Lenda. These include:

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    Manufactured or mobile homes
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    Commercial properties
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    Adjustable rate mortgages
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    HELOCs

Conclusion

It’s clear that one demographic Lenda is targeting is millennials. Specifically because they prefer an all digital, simplified, transparent application process.

As Lenda expands into additional states, they should be able to further improve and refine their existing application process, pushing them further in front of the competition as they continue to change the mortgage lending industry.

If this sounds interesting, get started with Lenda here.

Have you ever considered using an online mortgage lender? why or why not?

The post Lenda Online Mortgage Lender Review appeared first on The College Investor.

Hulu vs. Netflix vs. Amazon Prime: What Is The Best Option For Streaming?
10:06
2018-01-14 01:36:18 UTC 10:06
Hulu vs. Netflix vs. Amazon Prime: What Is The Best Option For Streaming?

Hulu vs Netflix vs Amazon Prime: What is the best option for streaming?

With more and more people opting to cut the cord with cable companies and only watch what there are interested in, the marketing for online streaming and on-demand services has grown exponentially in the last few years.

Hulu, Netflix and Amazon Prime are currently the biggest players in the television streaming game.

I cut the cord about 2 years ago, and I couldn't be happier. Honestly, I don't watch much TV to begin with, but I've still been able to enjoy all my favorite shows, and I save a ton of money each month by not having cable.

However, if you're considering cutting the cord, it can be hard to know what the best option for streaming really is?

In today’s post, you will get a side-by-side comparison of the three services so you can decide which one of them best fits your needs.

Comparing The Prices Of Hulu, Netflix, And Amazon

Each of these companies has a unique pricing structure that can make it hard to tell which is the best deal.

When it comes to price, the lowest Netflix plan starts at $7.99. This gives you:

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    Ability to stream to ONE device
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    A large catalog of movies and TV shows (however, many are old from before you were born) 
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    No commercials

Hulu’s basic plan is $5.99. This provides you with:

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    Ability to stream to TWO devices
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    A large catalog of movies and TV shows - including current seasons on select Networks
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    Limited commercials (ad-free streaming is a paid add-on option)

The price of the starter version of Amazon Prime Video is included in your Amazon Prime membership - which starts at $49 for a whole year for students and allows you to get two-day shipping on goods purchased on Amazon.

Content on Amazon Prime Video is ad-free.

For each of these services there are premium plans that allow you to:

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    Get extra programming/ premium channels such as HBO and Showtime (Hulu)
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    Buy/rent specific movies , episodes or seasons of TV shows (Amazon Prime)
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    Removes ads from your programs (Hulu)
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    Access live streams of sports games on channels like ESPN and FS1 (Hulu)
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    Stream on more devices (Netflix)
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    Watch programs in High Definition (Netflix and Amazon Prime)

What Programming Options Are There?

Netflix

Netflix has had a long tradition of recycling movies and TV shows every so often. This is typically due to the duration a movie or series is licensed to Netflix for.

While you can get access to some past seasons of particular TV shows, Netflix is not known for featuring current seasons of network television shows. Once a while, a brand new movie hot off the cinemas screens will be featured on Netflix.

All the three platforms have seen a strong push towards original programming recently - we will talk about this more in the next section.

Hulu

Hulu began back in the day as a place where you could watch replays of current shows on network television. To a large extent, it is still the only online streaming service that provides this feature although the number of current network television shows has seen a decline recently.

Several of the network television stations now have their own online streaming that allows you to watch replays. There are even now paid options if you want to watch an episode of the show in real time.

An upgrade to Hulu’s $39.99/month plan however could very easily eliminate your need for any of the other platforms and cable television. With this plan you can do everything you can do with the basic $5.99 plan as well as:​

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    Watch live TV on your Chromecast, Roku, Fire TV, Apple TV, iOS and Android devices
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    Stream 50+ top live and on-demand sports, news and entertainment channels

The option to watch live television from premium sports, news and entertainment channels puts Hulu in a class of of its’ own.

Amazon Prime Video

Amazon Prime Video resembles Netflix in many ways.

You can get access to a select, but large library of TV shows and movies with your Amazon Prime membership.

While they do in fact have a wide array of video content available, there are specific TV shows you have to purchase in order to watch. Shows for purchase usually range between $1.99 and $3.99 per episode and you can buy a whole season of the show for around $14.99.

While this is easily a con of Amazon Prime, if you really want to watch a show and you cannot find it on any of the online streaming platforms this could be a low cost way to get the content you want to watch.

Similarly, recently released movies that are available on Amazon Prime Video can be rented for $3.99 for a limited period of time (usually 3 days). On occasion, these very movies are available on Netflix for no additional charge.

Who's Got The Best Original Content?

Original show series from Netflix, Hulu and Amazon have been nominated for the same awards as shows on networks such ABC, NBC and CBS. No doubt the quality is great and if you are paying you are getting your money’s worth of quality new programs.

This trend is unlikely go away soon.

The upside to this is that if you are bored with the old stuff, you can discover entirely new content and any one of these platforms will provide you with that.

The downside to it is that unless you are subscribed to all three, there are some originals you will have to miss.

Ultimately it will come down to which one of the platforms make the most sense for your viewing needs and which one most suits your bank account.

Closing Thoughts

Online streaming of movies and TV shows has definitely developed beyond what it used to be even five years ago.

In this post, we compared Netflix, Hulu and Amazon Prime.

Since the post title asks “what is the best option for streaming?”, we have to pick a winner amongst the three.

For the overall value provided, the premium version of Hulu ($39.99/month) might be the best value for your dollar over time if you plan to completely cut your expensive cable and would like to replace it with a cheaper alternative that allows you to watch the types of programs you want.

On the other hand, if watching current TV seasons and gaining access to live sports, news and entertainment channels is less of a concern for you, Netflix is definitely a choice we would suggest.

Which one is your favorite?

The post Hulu vs. Netflix vs. Amazon Prime: What Is The Best Option For Streaming? appeared first on The College Investor.

The Three Best Rewards Credit Cards For College Students
6:45
2018-01-14 01:36:18 UTC 6:45
The Three Best Rewards Credit Cards For College Students

Best Rewards Cards For College Students

For any college student using a credit card, no annual fee and great rewards are two key, must-have features.

Credit card companies are starting to offer incentives to younger card holders, especially students. These include additional rewards for paying your purchases on time and rewards for good grades.

Along the way, the cards are providing incentives to help students learn to spend responsibly and build a solid credit history at the same time.

Christine Forman, a marketing director for Discover, had this advice for students, “As a student applying for a credit card, you should be focused on using it responsibly to build your credit history. Handling credit responsibly now could help you to get lower interest rates in the future.”

An alarming statistic reported by a 2017 U.S. News Survey found that 44.2% of students aren’t taught how to use credit cards before getting one. Credit card companies are now offering various forms of education on responsible use of credit cards.

Let’s jump into the line up for some of the best student cards when it comes to rewards.

Discover it® for Students

This might be one of the best student credit cards available right now. A unique feature is that Discover will pay students $20 at the end of the year if they maintain a 3.0 GPA. Students can take advantage of the offer for up to 5 years. Learn more about this offer here.

Carrying a monthly balance means incurring interest charges. The same U.S. News survey from above also found that 31% of students carried a monthly balance over the past year, 6 or more times. This means students aren’t paying off their balance each month and allowing it to accumulate interest.

Having an incentive to pay your credit card on time every month can help build positive financial habits. But we’d like you to take it one step further and pay your balance off each month to avoid interest charges and accumulation of debt.

When you’re learning how to manage a credit card, accidentally missing a payment isn’t uncommon. This can have a number of negative side effects that can range from an increased APR, late fee, negative mark on your credit, and reduced grace period. But not with the Discover it® for Students.

Discover allows students to pay late without any impact on their APR. Additionally, there isn’t any fee for first late payment.

This card comes with a 5% cash back rewards program, which rotates through different categories. For all purchases that aren’t on a current 5% category, students earn 1% cash back.

Knowing your FICO score means knowing the health of your credit. You’ll receive your updated FICO score with each monthly statement for free.

Security is always a concern and this card goes the extra mile when it comes to ensuring your protected. By activating alerts, you can be notified if your social security is found on any number of risky websites. Additionally, you can be notified when new accounts show up on your Experian credit report.

Dealing with fraudulent charges can be a time consuming hassle. The Discover it® for Students card comes with $0 Fraud Liability. Meaning, you aren’t responsible for unauthorized charges. As well, you can freeze your account right from the Discover website or mobile app.

A similar card offered by Discover is the Discover it® chrome for Students. The main difference is that this card offers 2% without rotating categories. Learn more about this card here.

Here’s a summary of the differences from Christine Forman, “Discover has two student cards available—Discover it® for students and Discover it® Chrome for students—that both offer reward programs,” says Forman. “The Discover it® chrome card for students gives 2% cash back at gas stations and restaurants up to $1,000 in combined purchases each quarter automatically and 1% cash back on all other purchases, while the Discover it® card for students earns 5% cash back in rotating categories each quarter up to the quarterly maximum when activated and 1% cash back on all other purchases.” 

Also, did we mention there’s no annual fee. You can learn more here.

Journey Student Credit Card

The Journey Student Credit Card is available from CapitalOne and boast a nice rewards plan. If you spend $500 per month, it will result in an annual $75 cash back. CapitalOne even includes a calculator on the credit card website so you to determine the reward amount based on monthly spending.

Cash back rewards are 1% of purchases. However, you can boost your cash back to 1.5% simply by paying on time.

The card doesn’t have an annual fee and includes CreditWise, which provides unlimited access to your credit score.

Citi ThankYou® Preferred Card for College Students

Unlike the other two cards, this is a points based card. The Citi ThankYou program offers a wide range of options for using your points. Compared to the cash back cards, there’s a few reasons why you might choose this card.

If you spend $500 (a very practical feat) within your first 3 months, you’ll earn 2,500 bonus points. Another reason is an intro offer for 7 months of 0% APR on purchases.

2X points are earned on dining and entertainment related purchases. All other purchases earn 1X points. There aren’t any limits on points and they never expire.

Categories that you can redeem points for include:

There’s no annual fee and the card includes EMV Chip Technology for enhanced security.

More than ever, students have a few great credit card options available to them. We’ve outlined two that provide cash back and one based on points. You really can’t go wrong no matter which card you choose.

Final Thoughts

Picking out the right credit card to maximize rewards can be tough. That's why we think the Discover it® for Students is a great card - you get the most flexibility for the rewards that you're looking to use.

Remember, always treat a credit card like a debit card and pay off your balance in full each month! You don't want to bury yourself in credit card debt to simply take advantage of a little bit of rewards.

The post The Three Best Rewards Credit Cards For College Students appeared first on The College Investor.

The Ultimate Lyft Vs. Uber Comparison (For Drivers and Riders)
12:00
2018-01-14 01:36:18 UTC 12:00
The Ultimate Lyft Vs. Uber Comparison (For Drivers and Riders)

The Ultimate Lyft Vs. Uber Comparison (For Drivers and Riders)

The taxi industry has suffered a huge loss by the increased popularity of rideshare apps, notably Lyft and Uber. I personally have been using these apps almost daily for about a year, and I love them. However, I'm shocked by how many people are still on the fence by these apps.

For riders, it can be strange to get "in someone else's car" the first time, but once you realize the convenience, you'll be hooked.

For drivers, it can be a great source of extra income that you can do on your own terms.

We have done an in-depth comparison for Uber and Lyft for Drivers and Riders.

Whether you’re a rider looking for a quick way to get downtown, or a driver looking to make extra cash for the holidays, we have all the information you need to help you make the right choice.

Riders

Whether its travelling or looking for a ride to the bar, most riders just want a safe, reliable and convenient option to get to their destination. Below, we will compare Uber and Lyft based on price, convenience, availability, and other amenities available for riders.

Price/Other Charges

Both companies offer an account credit for getting started, but watch out for peak times, also known as surge times. Uber can increase the price up to 7x or 8x more than the original price, whereas Lyft increases their price by at least 2x the original amount. Lyft drivers are seeing an increasing surge of riders from Uber, increasing demand and inflating prices. Don’t worry; both companies will let you know the cost before you accept the ride.

With Uber and Lyft, the following factors will determine your ride fare:

Your City

Do you live in a large city of metroplitan area?

Distance

Where are you traveling to, and how far is it from your place?

Traffic

Are you located in or traveling to a high traffic area?

Tip

How much are you planning to tip?

To get an accurate estimate, check both apps to compare the rates before you request a ride. This way, you get the best deal on a specific trip. You can also compare rates through Fare Estimate. Just enter your starting point and destination, and you’ll see Uber and Lyft’s prices and available vehicle types.

The Uber app gives you a better idea of the total cost of your ride. Lyft is improving their app to be more transparent, but it’s still not quite there yet.

App/Ease of Use To Book Ride

Both apps are user-friendly and functional. Uber’s app appears to be more sleek and modern, with many features. You get to see when your driver will arrive at your pickup location and give them a rating after the trip. There’s not much difference, except for the fare estimate and interface.

Rating

Both apps require the rider to rate their experience and ask for feedback. Uber’s is notable because if you give your driver a 5-star rating, you get to give him a compliment and write a thank you note to recognize the driver’s exceptional service.

Uber’s app is not only full of features that let you book your ride and estimate your fare, it also allows users to tip their drivers. Lyft’s app is more vibrant, with fireworks going off in the app when a rider gives a good tip.

On the downside, the cross-promotion of other services such as UberEATS and other delivery services may be too noisy/create too many distractions for a rider who is just trying to quickly book a ride at a good price.

Availability In Areas

Although ridesharing options are popular in metropolitan areas, smaller towns are slowly catching on. Riders can expect to catch a ride from Uber anywhere they go, while Lyft is becoming more available in different cities.

While Lyft is slowly expanding, Uber has a higher coverage area than Lyft.  Lyft is a great choice in times of high demand or when there is a driver nearby and you need a low cost ride fast. If you need a ride that looks good, Uber has a better selection of vehicles. If Uber is your choice, then you will pay less with UberPOOL.

Availability Of Vehicles

The most striking difference between Uber and Lyft is the variety of available vehicles.

Uber caters to businesspeople and professionals, and has a broad range of vehicles to choose from, including high-end luxury vehicles. Lyft also has higher quality vehicle options available, ranging from a Chevy Tahoe to a Maserati Quattroporte, but they are not as common as Uber LUX vehicles. Many of the Lyft Plus, Premier, and Lux vehicles are similar to the vehicles already included UberX and UberBLACK. To save time and money, decide on the vehicle you want, then do your research.

Vehicles Options For Uber

UberPool

This is the cheapest ride option available. Ride share rides go along the same route.

UberX

Another budget option, everyday car for up to 4 people.

Uber XL

An SUV with seating for up to 6 people.

UberSELECT

4-door luxury sedan dfor up to 4 passengers

UberBLACK

High-end luxury vehicles with seating for up to 4 passengers

UberSUV

The most expensive servicde Uber offers, a high-end SUV with seating for up to 6 passengers

Vehicle Options For Lyft

Lyft Line

Riders share rides traveling the same route. This is the cheapest option for riders.

Lyft

A regular vehicle that can accommodate up to 4 passengers, which is the cheapest option for not sharing a ride with strangers.

Lyft Plus

A regular vehicle with room for up to 6 passengers

Lyft Premier

Higher quality vehicles than other Lyft options with room for up to 4 passengers

Customer Support For Riders

Both riders and drivers can reach customer service via email, in-app support, website support, and critical response lines. Riders have found Lyft to be a bit more helpful in solving problems. Uber has canned responses readily available on their Help Portal, while Lyft actually takes time to answer each question. In the rare event you need help, both apps will get you to your destination and answer your questions.

Brand Image

Uber’s image, heavily geared towards businesspeople, seems to be more high-end and prestigious. Overall, Uber offers a concise and professional business-like ride to your destination. The professionally dressed Uber driver will get out and open the door for the rider, help with bags, and overall, give the rider a full service experience.

On the other hand, Lyft tends to be playful and approachable, with a pink fluffy moustache display on the vehicle. Just as their slogan promises, Lyft is the equivalent of “Your Friend With a Car.” Lyft promotes an image of community and friendliness, which extends to how drivers are expected to interact with passengers.

Some drivers even participate in themed rides (examples include the Harry Potter theme and disco theme), while other drivers stick to the pink mustache theme. If you’re looking for a friendly ride with social interaction, Lyft is the perfect choice. Time will fly by as you sit in front seat and have a nice chat with your driver.

Recently, Uber has been the focal point for local and worldwide scandals, while Lyft has stayed out of the negative spotlight. As the number of scandals continues to rise for Uber, many riders are switching to Lyft. Expect to see more incentives and innovation from Uber as the company grows. Overall, Uber appeals to business riders who value luxury and prestige, while Lyft is geared towards more relaxed users simply looking for a friendly ride.

Drivers

It seems like almost everyone is either driving for Uber or Lyft after work to make some extra money. Some drivers even make a full-time income from driving for rideshare apps. Which one is better? Which one will make you the most money? Let’s take a look below.

Income and Other Opportunities

How Much Do Uber Drivers Make?

Let’s start with Uber. Uber offers lucrative signup bonuses of up to $500 if you complete 75 rides in 30 days.

Some Uber drivers have expressed dissatisfaction with pay, saying it was not worth the work, while others seemed content enough working for the ride-sharing company in conjunction with their other jobs.

It's important to note that it can be impossible to figure out individual pay for drivers per hour. It can vary so much - location, time, distance. And even the same drive each day can vary a little due to changing market conditions. 

However, it can make decent money on the side, on your own terms.

With recent changes to the Uber board, the company is optimistic for better compensation schemes and increased driver flexibility.

If Uber sounds interesting, you can sign up here.

How Much Do Lyft Drivers Make?

Some drivers report bonuses anywhere from $500 to $5000 for Lyft, depending on location. Our advice? Be careful, and be sure to review Lyft’s terms for new driver promotions before jumping in.

According to a recent survey of close to 1200 drivers, rideshare platforms revealed that Lyft drivers averaged around $17.50 per hour, close to $2 more per hour than Uber drivers.

Lyft and Uber drivers earn approximately the same average per month, but the tips and earnings per trip are higher for Lyft.

Lyft drivers have the opportunity to earn a much larger amount of tips, while Uber just recently introduced in-app tipping features for passengers. Factors to consider include whether the driver is driving part-time, availability, and high demand cities.

A recent earnings data from Certify finds Lyft drivers to average $25.73 per hour.

Technology and loan company Earnest noted that Lyft drivers make slightly more than Uber drivers, with median earnings for a Lyft driver recorded at $210 per month and averaging $377, compared to $155 and averaging $364 for Uber.

However, the firm also noted that that Lyft drivers also drive for Uber, and vice versa.

Lyft drivers, if you are to go by all the survey results mentioned above, were higher paid, higher rated, and tended to be more satisfied than drivers of other popular transportation competitors.

Expenses also include vehicle upkeep. Factors like the type of car being driven, the city, age, driving record must also be factored in.

Full-time earnings (or driving from 45 to 50 hours a week) can reach around $800 with Lyft, according to some accounts.

The company has also been described positively for its startup environment and opportunity for growth.

Want to sign up for Lyft? Sign up and get started here.

Other Considerations

Expect to have some downtime between rides, especially if you live in a smaller town. Some drivers have reported only a few hundred dollars for a week of full time work. You can also expect your earnings to be affected by gas prices and maintenance costs. Also, the earnings vary by state. You can expect to be closer to the maximum hourly rate of $35 in cities like New York and Los Angeles.


Vehicle
Requirements

Although the specifics will depend on the area you want to drive, Lyft and Uber have different standards. Uber requires a 2002 car model for most cities, whereas Lyft requires the driver’s vehicle to be a 2004 vehicle or newer, with special requirements for newer vehicles in these cities. Uber requires a 2002 car model for most cities.

High-end drivers prefer UberBLACK, regular drivers tend to prefer driving for Lyft.

Expenses

While drivers must incur toll fees when travelling on toll roads, passengers are added a surcharge to cover the fee.

Drivers are reimbursed if a passenger damages or soils their vehicle; otherwise, they are responsible for their car payments and maintenance.

Some say it is not a reliable form of income and incurs high maintenance costs for their cars, but being a Lyft or Uber driver is still a good choice for people who need a small amount of extra income.

Troubleshooting

Similar to riders, drivers report a better experience working with Lyft representatives, whereas Uber representatives offer canned responses and seem to be constantly overwhelmed.

The Bottom Line

If you’re a rider, you will probably switch between Uber and Lyft depending on factors such as availability, convenience, and cost. If luxury is a priority, Uber is the obvious choice. If you want to be able to tip the driver within the app, Uber makes it easy, although most riders aren’t thinking of the convenience of tipping when when they book the ride.

 Many rideshare drivers will drive for both Uber and Lyft, and take whichever ride comes up first. This minimizes downtime spent waiting and is one of the easiest ways to increase earnings. As a driver, you can sign up for Uber or Lyft, depending on availability in your area. Many drivers sign up for both rideshare companies to minimize downtime.

As a rider, the situation will also play a role in your selection. If you have a group of people doing a pub-crawl, Lyft might be your best choice. If you are trying to impress a potential client for a business meeting, Uber is your best bet. For both riders and drivers, it comes down to availability, preference, and opportunity.

Drivers and riders: What can you share about your experience with Lyft or Uber? Tell us in the comments below!

The post The Ultimate Lyft Vs. Uber Comparison (For Drivers and Riders) appeared first on The College Investor.

What To Do If Your Student Loan Lender Messes Up Your Credit Report
13:12
2018-01-14 01:36:19 UTC 13:12
What To Do If Your Student Loan Lender Messes Up Your Credit Report

Student Loan Lender Credit Report Errors

Imagine this situation: You get a letter from Nelnet confirming that your student loans are paid in full. Then two years later, you attempt to go back to school and get a student loan, only to find out you're denied because the National Student Loan Database says you're default on said loan. Through multiple glitches, Nelnet sent your loan to collections instead of marking your loan as paid in full on your credit report.

Or image in this situation shared to me by student loan lawyer Adam Minsky: I had a client who tried to consolidate his loans through the Direct consolidation program though a servicer (Servicer 1). The loans were held by Servicer 2. In the middle of the consolidation process, Servicer 2 transferred the loans to Servicer 3. Servicer 1 sent the consolidation payment to Servicer 2; Servicer 2 didn't return the payment or forward it to Servicer 3. This resulted in a duplication of the loan balance - Servicer 1 demanded payments on the newly issued consolidation loan, while Servicer 3 demanded payments on the underlying loans that were yet to be repaid. The Federal loan servicers all blamed each other and refused to communicate or rectify the situation

Now, while both of these are more extreme errors, glitches do happen. You have to realize that they loan servicing companies employ tens of thousands of people, and process millions of payments and requests each year. Even working at 99.99% correct, errors will still happen to thousands of borrowers each year (sadly)...

What can you do if your student loan lender messes up your credit report or your loans? Here's the steps you can take.

1. Communicate With Your Lender

The first step you should take is simply call your student loan servicer. Honestly, so many people want to jump to lawsuits and think they will get their student loans paid off because of a simple paperwork error. The chances of that happening are extremely low, and they are non-existent of you don't even try to resolve the issue yourself.

As we mentioned above, these are large organizations, and they are doing lots of different things. Mistakes do happen. The best thing you can do is call your lender and try to get the error resolved. Yes, it will take some of your time to make the phone call and document your conversation, but it's the first step, and it will resolve a lot of issues.

Just remember, document date, time, who you spoke to, and the nature of the conversation. Even better if you can take a screenshot of your phone to prove you called, or record the call (as long as you tell them you're recording the call - they are anyway).

2. Send A Certified Letter

If talking to your lender over the phone or via email isn't getting you the results you need, it's time to take things up a notch. Now's the time to send a certified letter to your lender and ask for resolution to your complaint.

Depending on your situation, you may need to send multiple letters. For example, if your lender is incorrectly reporting information to the major credit bureaus, you'll want to send a lender to each bureau and your lender.

When sending a letter to the credit bureaus, ensure that you include a copy of your credit report that is incorrect. Here's a good sample letter to send to the credit bureaus.

If you're disputing something more serious, such as our examples above, you might need a debt validation letter. Here's a great sample of a debt validation letter that will require the company to prove they have the right to collect the debt.

It's important to note that if you're looking to get a debt validated, the lender or collector has 30 days to provide you with the information from the date they receive your letter. That's why it's essential you send the letters certified with proof of receipt.

3. File A Complaint

If you're still not getting anywhere, you can file a complaint about your student loans servicing company to try to get the ball rolling. I call this step #3, but you can honestly do it concurrently to step #2.

By filing a complaint, you'll not only get the bottom of the pyramid moving, but hopefully get the top of the pyramid moving as well.

The best place to file a complaint is the Consumer Finance Protection Bureau (CFPB). You can file a complaint online here: https://www.consumerfinance.gov/complaint/

Make sure you take the time to document everything with your situation to hopefully get your complaint expedited.

You can also file a complaint at the Department of Education here: https://www2.ed.gov/about/contacts/gen/index.html

Finally, it never hurts to contact your Congressman. The President and the Secretary of Education have proposed various reforms to how student loans are serviced. If you're having problems, making a complaint could put these potential reforms on their radar.

4. Talk To A Student Loan Lawyer

Finally, if you're still not getting the resolution you need, you might need to talk to a student loan lawyer and see if they can help. 

There are a few scenarios where you should jump right to this step:

  • You're being sued by your lender
  • The 30 days have elapsed and your lender has not provided proof of the debt and no resolution has taken place

Otherwise, if you're not making progress, make sure you've gone through steps #1-3 and documented everything before going to a lawyer. Strong documentation will make your case much stronger if you have one.

Final Thoughts

It can be tough to deal with your student loan lender. It can be even tougher when they are making mistakes.

If you don't even know where to start with your loans and want professional help, we recommend Ameritech Financial, a company I’ve personally vetted. They can help you navigate the student loan terrain and help you systematically apply for the programs offered by the Department of Education. If you’re not sure about doing it yourself, then Ameritech can help you find the repayment solution that’s right for you, and potentially restructure your loans so that you can qualify for programs you may not otherwise have qualified for. You can call them at 1-866-863-3870 or check out their website here.

The post What To Do If Your Student Loan Lender Messes Up Your Credit Report appeared first on The College Investor.

Best Travel Credit Cards For College Students
7:37
2018-01-14 01:36:19 UTC 7:37
Best Travel Credit Cards For College Students

While you’re in college you have a lot of things going on and you’re on a tight budget.  Ramen noodles are on the menu every day and the occasional latte seems like a huge treat.  

On top of that, you have to worry about how to afford travel to visit family during school breaks and is a spring break trip even a possibility?  

With money being so tight while you’re in school, you can’t even think about travel!  Or can you??  

Of course you can!  With some smart spending and the right credit cards you can travel for free, or pennies on the dollar!

Best Travel Credit Cards For College Students

Here are some of the best travel credit cards for college students (and anyone else really).

Travel Credit Cards For College Students

While you’re in school, your travel dates aren’t exactly flexible.  Sure you can keep an eye out for some amazing flight deals all over social media, but chances are that the travel dates for those deals won’t fit your needs.  


Because of this you may be stuck with some higher priced tickets that are tough to afford.  There are cards that can help you wipe out most, if not the entire cost of your travel costs.  Here are a couple of recommendations with no annual fee and no foreign transaction fees.  

One card that comes to mind is the Capital One Venture One card.  Currently this card offers a 20,000 mile sign-up bonus after spending $1,000 on it in the first 3 months of card ownership.

Best Travel Credit Cards For College Students

 You earn 1.25 miles per dollar spent on the card which allows you to build a mileage balance very quickly.  This card has no annual fee and these miles that you earn on the card can be used to wipe out any charges coded as “travel” on your credit card statement.  

For example, let’s say you buy a plane ticket home on Spirit Airlines and your round trip cost is $200.  You could use 20,000 miles to completely wipe out that cost from your card!  Oh yeah!  This card isn’t just limited to wiping out the cost of flights.  

It wipes out anything coded as travel, which could be car rentals, hotels, Airbnb’s, etc.  The miles earned on this card are valued at 1 cent a piece if redeemed for travel.  You can redeem your miles for other non-travel related purchases, but it would be at a bad rate so I wouldn’t recommend it.  

Learn more about this card here.

Another credit card with some great features is the Discover It Miles card.  This card has no annual fee and you can earn 1.5 miles per dollar spent.  While this card does not have a sign up bonus, it does offer a miles match during your first year.  

Best Travel Credit Cards For College Students

Basically what that means is if you earned 20,000 miles in your first year of card ownership, then Discover will add another 20,000 miles to your balance! The icing on the cake for this card are the $30 annual inflight WiFi credits. After all, you need to stay connected, even while on a plane! Another good thing about this card is that miles are worth 1 cent a piece, whether they’re redeemed for travel or for other things.

Cash Back Credit Cards For College Students

What if your school isn’t too far from home and you don’t need to fly? Even if you plan to drive back to see family and friends, gas isn’t free. Gas on a road trip is an added expense, not to mention the snacks you need to survive the trip! A cash back card might be a better fit for you! With a cash back credit card, you have the freedom to choose how to spend the cash you earn from your card instead of being restricted to certain categories. So, while they're not travel credit cards for college students, they can still work.

A cash back card that I recommend is the Citi Double Cash card. This no annual fee card earns 1% cash back on all purchases, but then you also earn another 1% cash back for paying your balance. This is basically a 2% cash back card. 

Best Travel Credit Cards For College Students

This card’s earning rate is excellent compared to other cash back cards.  The cash you earn on the card can be redeemed for checks, statement credits or gift cards.  This allows for a lot of flexibility on how you want to use your credit card rewards.

Another solid option for a cash back card is the Discover It Card.  Not to be confused with the Discover It Miles card mentioned above, this is a cash back card.  You can earn up to 5% cash back on rotating categories such as gas, groceries, dining, etc, each quarter and 1% on non bonus category spend.  If you max out each rotating category each quarter you could earn $300 cash back.  

Best Travel Credit Cards For College Students

On top of that, if you shop through the Discover shopping portal, you could earn even more cash back!  As with the Discover It Miles card, Discover will match all of the cash back you earned your first year.  That could be a considerable amount if you use this card for all of your expenses.  This card also has no foreign transaction fees and no annual fee.  

Learn more about this card here.

Final Thoughts

Whatever your needs are, you can find a card that will help you meet your goals.  Whether it’s saving on flights or hotels, or earning cash back for road trips, you can cut costs considerably with some smart spending.  


No matter which card you choose, if you put most or all of your expenses on your preferred credit card, your rewards balance will grow in no time.  Just remember to spend responsibly.  Don’t spend more than what you would if it was a debit card

 This will help you stay within your budget, but reap the rewards that credit cards can offer!

Do you have any upcoming travel plans? Have you ever used any of these cards?

The post Best Travel Credit Cards For College Students appeared first on The College Investor.

How These Regular Folks Are Earning $10+/hour (on the side) To Buy Holiday Gifts
9:35
2018-01-14 01:36:19 UTC 9:35
How These Regular Folks Are Earning $10+/hour (on the side) To Buy Holiday Gifts

How These Regular Folks Are Earning $10+/hour (on the side) To Buy Holiday Gifts

The holidays are upon us and the usual stress of getting gifts for the people we love is on our minds.

And since simply skipping out on the long-standing tradition of gift-exchange is not on the table (in most cases) finding ways to fund it become so necessary.

This year, we reached out and asked a few friends what creative things they have done in the past to make some good money for holiday gifts and they did not disappoint.

All of these answers we gathered are simple things anybody can pick up between now and the holidays and earn very decent money before the day arrives.

Here we go.

Teach English

Brett Jaycox is trained nurse who lives with her two children and husband in Puerto Rico.

To help her save up money for Christmas gifts this year Brett said “I am teaching ESL (English as a Second Language) to kids in China before my kids wake up in the morning, Monday through Friday. I love the kids. It’s fun and I do it in my PJs. Plus the the extra hustle working from home is great.”

As the world becomes more globalized the demand for English teachers is increasing.

Back in the day, you would have to travel to live in a country to be an English teacher. These days, thanks to the Internet, you can teach virtually.

And this opportunity is not restricted to English either. There are people all over the world looking to learn Spanish, French, German, Mandarin and even some fairly obscure languages.

You can expect to earn between $10 and $30 an hour teaching languages online. We recommend teaching through VIP Kid - you can do it online in the comfort of your own home.  Try it out today!

These resources are helpful if you are looking to teach languages as an extra source of income.

Short-Term Gigs

If you are not great at languages, that is alright!

You can find several short-term gigs on websites like Upwork, Fiverr and Freelancer.

It is a matter of deciding what skill it is you offer and then presenting that to the people who will pay you.

Amy Beardsley, a freelance writer, mentioned that she and her husband sometimes pick up these types of short-term but “low-paying” gigs to fund holiday gifts.

Yes, you heard that right.

While you might not earn a six-figure income from picking up short-term gigs, it is possible for you to accumulate a few hundred dollars to help you get those gifts.

Cash Back Rewards

“I am mad I got cash-back on that purchase”

Said nobody. EVER.

Another way our friends are making some extra cash to buy those gifts is by signing up for cash-back and gift card rewards websites like Ebates and Swagbucks. In fact, I just got paid my $100 Ebates check in the mail this week! It's a great reminder of how much you can save if you just click a link before online shopping!

Those gift cards can be given away as gifts in of themselves and you can certainly apply cash back to actual purchases.

Write Personalized Love Poems

Roshni Gandhi, a lawyer and freelance writer also weighed in on the conversation and mentioned that she has written personalized love poems in the past to earn extra cash for those holiday gifts.

Proof of the fact that if you can truly add value to people in ANYWAY, you can get paid handsomely for it.

Sell Your Old Stuff

Selling old possessions on platforms like LetGo, OfferUp and Craigslist is still a popular way a lot of regular folks are generating good cash for the holidays.

In addition to earning that extra cash, selling your old stuff is a great way to declutter spaces in your home.

Don't quite know what to sell? We have this guide of 6 things you can sell right now to earn extra money!

Write Research Papers

This one was from Roshni again.

If you love to delve deep into topics and write about them, writing research papers could be that extra side gig that helps you win money for holiday gifts.

If you don't know about writing research papers, but do want to get paid to write, check out this article on how to get paid to write for blogs.

Deliver For Amazon Flex

Fred is a stay-at-home dad in San Diego who also delivers packages for Amazon on the weekends and at night. You can now sign up to deliver packages right to the doorsteps of people who have ordered items on Amazon under the Amazon Flex Program or deliver groceries under the Amazon Fresh Program.

“With Amazon Flex, I make between $18-$25 an hour and typically work in 3 to 4 hour blocks. If I am able to pick up 5 of those blocks per week, I can easily make $400 per week.”

Not bad at all!

This year Fred is planning on  surprising his elderly parents and is proudly using using Amazon Flex to fund that.

Fred says “It is easy to sign up for and you can work it around your daily schedule.”

Check out Amazon Flex and Amazon Fresh.

Mystery Shopping

Companies want to make sure their marketing techniques for products are working. The best way to evaluate that is to be constantly conducting market research.

Market research companies are hired by bigger corporations and they use regular people like you and I to conduct that research.

That is all mystery shopping is.

This is another gig Fred (the dad who also works with Amazon Flex) mentioned as a source of income if you are cash-strapped for holiday money.

Signing up to become a mystery shopper does not require any qualifications.

You will just have to pose as a buyer, ask the questions outlined by the market research company, record and then submit those answers.

Mystery shops pay anywhere between $10 and $50 per shopping trip. And you can incorporate it into your regular shopping routine.

Final Thoughts

If you have been stressed out about having enough to cover gifts this year, let your mind rest easy.

Each of the gigs mentioned above can help you earn $10 an hour or more in the weeks leading up to the holidays.

None of them requires that you have particular qualifications and signing up for any one of them will take you but a few minutes.

Try them out and let us know how it goes!

Are there any other creative ways you are earning money for holiday gifts this year? 

Comment below to let us know.

The post How These Regular Folks Are Earning $10+/hour (on the side) To Buy Holiday Gifts appeared first on The College Investor.

How You Can Pay Rent With A Credit Card
5:56
2018-01-14 01:36:19 UTC 5:56
How You Can Pay Rent With A Credit Card

Pay Rent With A Credit Card

If you’ve cashed in on the rewards provided with credit card points, no doubt you look for every way possible to pay for every single expense with a credit card. That's why we're thinking about how you can pay rent with a credit card.

When using your credit card as your debit card, you rack up a lot of points for expenses you have to make anyway. Things such as gas, groceries and dining out could be paid with a credit card and your rewards just pile up!

Well that’s fine and dandy, but what about your larger expenses, such as rent? Being able to pay larger expenses with a credit card would definitely give your points balance a boost!

Most landlords don’t accept credit cards as a form of payment, so that pretty much throws that idea out the window right? Not so fast! There is a workaround to being able to pay bills with a credit card, that normally do not accept credit cards as payment.

How To Pay Rent With A Credit Card

Many companies have come and gone that allow you to use credit cards to pay bills, but not all have withstood the test of time. Plastiq is a popular site that allows you to pay just about any bill with your credit card, for a fee.

Using Plastiq is easy. Just set up an account, enter your bill recipient’s information and pay them via Plastiq. Plastiq then sends them a check for the amount you requested. This opens up a whole new list of opportunities to earn more points. You’re able to pay bills such as your rent, mortgage, taxes, tuition, utilities, insurance, contractors and the list goes on and on. As you can see, your point earning ability has grown exponentially.

Plastiq accepts Visa, MasterCard, American Express and Discover for bill payments. There are some restrictions when paying mortgages where you’re not allowed to pay with Visa or American Express. If you’re paying rent though, you should be ok with whatever your preferred card is. 

One downside to be aware of are the fees associated with Plastiq. The standard credit card fee is 2.5% of your total payment. If paying your rent this could be a substantial fee. However, there are a few ways to reduce or eliminate the fees. Plastiq will often times run promotions to lower your fees when paying bills in certain categories. Taking advantage of these promotions can significantly reduce the fees you pay.

Not paying a fee seems more exciting to me and there is a way to achieve this. Plastiq has a generous referral program to where you and the person you refer could earn “Fee Free Dollars”. The amount of Fee Free Dollars you earn has changed over time for each referral, but the more people you refer, the more Fee Free Dollars you earn to pay your bills for “free”.

So, by signing up with Plastiq here, we'll get $1,000 fee free dollars, and you'll get $500 fee free dollars just to start! Check out Plastiq here.

What To Consider When Choosing A Credit Card

Here’s where it gets interesting. The card you choose to pay your bills ultimately depends on you and your future goals with your credit card rewards. Some people prefer travel rewards while others prefer cash back.

Regardless of which points you collect, there are a couple of things to consider. Both of these things go hand in hand when making your decision. One thing to consider is if the points you earn will offset the fees from Plastiq. If you don’t pay fees on your bill payment then it’s a no-brainer, but if you pay a full or reduced fee, make sure to crunch the numbers to make sure that you’re coming out ahead. 

Another thing to think about is how many points will you earn with your rent payment? Depending on your card’s earning structure, you could earn multiple points per dollar spent. Some cards offer a flat rate of points earned on each dollar spent, while other cards offer bonus categories where you could earn more than the base rate per dollar spent. The more points you earn helps offset those fees!

My Picks For Best Cards To Use To Pay Rent

With that said, here are a few cards that I like when paying bills on Plastiq. First is the American Express Blue Business Plus card. This card earns 2x Membership Rewards points per dollar in all categories on your first $50,000 spent per year. That is an excellent earning rate on a credit card with no annual fee. If you pay rent for your small business, this is a great way to amass a lot of Membership Rewards points. As mentioned in a previous article, Membership Rewards points are extremely valuable and can save you tons of money on travel. Learn more about this card here.

Another strong contender that could earn you a lot of miles is the Discover IT Miles card. This card has an earning rate of 1.5 miles per dollar. The miles earned on this card could be used to erase travel expenses made on the card. This card has no annual fee and Discover will match all of your miles earned at the end of your first year of card ownership. You’re practically getting 3 miles per dollar spent in year one! As an added bonus you get up to $30 in WiFi credits per anniversary year. For not having an annual fee, this card packs quite a punch! Learn more about this card here.

If cashback is more your thing, then I’d definitely go with the Citi Double Cash card. This is another no annual fee card that has a great earning rate. You earn 1% cash back on all of your spending, plus you earn another 1% cash back when you pay for those purchases in full. Being the responsible spenders that you are, this is essentially a 2% cash back card!

Final Thoughts

Being responsible with your spending doesn’t have to be such a bore. You can benefit greatly with credit card rewards all while staying within your budget. Making all of your purchases with credit cards, even those bills that traditionally haven’t allowed you to pay with a credit card, allows you to earn many more points than before. So, what are you going to do with your increase in credit card rewards?

The post How You Can Pay Rent With A Credit Card appeared first on The College Investor.

Planning For The Future With A High Paying Physical Job
9:29
2018-01-14 01:36:19 UTC 9:29
Planning For The Future With A High Paying Physical Job

High Paying Physical Job

There's a high demand for physical jobs worldwide, and many of these jobs can pay exceptionally well. Think of jobs like oil rig worker, underwater welder/construction, working in war zones as a contractor, and more. These jobs can be incredibly demanding, and they aren't for the feint of heart. But if you're willing to work hard, and put in the sweat equity, the financial payoff can be rewarding.

But there is a big downside - too many people in these jobs don't plan for the future. While the money is great, it typically doesn't last. Either you can't do the job anymore, or the jobs in that field dry up. 

So, what can you do? Should you avoid the work? 

If you want to take on a physically demanding job because of the pay - more power to you! But please make sure you plan ahead and understand what you're getting into. Especially avoid the de-railers we discuss further on.

Let's break it down on how you can prepare.

Understanding The Physical Job Dynamic

Physical jobs are in demand because they are hard work. And they pay really well because they are hard work (and likely dangerous). In many cases, these jobs are not in desirable areas as well (remote areas, war zones, underwater/at sea, in shady areas of town).

As a result of all these factors, the average length of time people work in these types of jobs is just 4 years. That's average! 

That means, you can expect to earn a high wage, but likely not for very long. And it can vary greatly by industry. However, most tenures hover around that four year mark.

  • Oil and Gas Workers: 4.6 Years
  • Construction Workers: 4 Years
  • Farming, Fishing, Forestry Workers: 4.1 Years

You can read the full breakdown of tenure from this BLS report.

What Kind Of Pay Are We Talking About Here?

So, what kind of pay makes this type of work worthwhile? It can really vary greatly, but here's some ideas:

  • Oil and Gas Rig Workers: $100,000/yr (and they typically work 2 weeks on, 2 weeks off, so 50% of the year)
  • Alaskan Fisherman: $15,000/mo (they can earn $45,000 for the 3 month crab season)
  • Commercial Diver: $93,000/yr (also typically work one month on, one month off)
  • Military Warzone Contractors: $150,000/yr 

As you can see, these jobs all pay much higher than the median U.S. income of $59,000. And given that most of these jobs cater to younger, single adults, it can be a huge windfall to earn this in a short period of time.

This can definitely put you in an above-average net worth as a millennial.

The Big De-railer: Keeping Up With The Joneses

However, all of these jobs come with a big downside. Sadly, too many people in these industries spend all their money quickly. They buy fancy cars, go out and party, and live life extremely when they aren't working (which can be 50% of the time). 

It's not uncommon to see people in these jobs broke again when they get back to work. And they start a cycle of needing the high pay to support a frivolous lifestyle outside of work (which also doesn't help their health).

As you think about these career choices, you need to also think about your mental fortitude to avoid these surroundings. When all your work friends are buying cars, drinking, and even doing drugs, can you step away and not get involved? 

When friends and family hear about your job, see your money, will you be able to say no to handouts and gifts?

And will you be able to avoid your own lifestyle inflation that could sneak up on you just because...

These are all things you need to think about if you take a career in any of these fields.

How Can You Plan For The Future?

So, what can you do to plan for the future if you're going to take one of these high paying jobs? It's actually not hard, but it is a mental change - and that can be challenging.

1. Save, Save, Save

The biggest thing you can do is save money - and save a lot of it. The great thing about most of these jobs and industries is that you cost of living is taken care of while you're at work. Your food, lodging, and more is paid for by your employer. So, not only do you earn a high salary, but you should have minimal expenses while working.

You should look at saving 50-75% of your pay while working, if not more. And you should save it automatically out of each paycheck, and into an account that's hard to get to.

For example, you can open an savings account at an online bank, and automatically have 75% of your paycheck deposited to it. You can put the other 25% into your checking account.

Check out these options to get started:

2. Eliminate Your Housing

If you're working in a field where your employer will cover your housing while you work, see what you can do to minimize or eliminate your housing while you're off work.

For example, could you stay with your parents, or rent a room from a friend for really cheap? 

For most people, housing is their biggest monthly expense. Given that you might go months without needing housing, why pay for something you don't need? 

Look at options to minimize or eliminate this expense to save more money for the future.

3. Take Advantage Of Your Employer's 401k Plan

If you employer offers a 401k (which most do), take advantage to the max. I'm not talking about simply contributing up to your employer's match - I'm talking about maxing out your contribution.

You can contribute $18,000 in 2017, and $18,500 in 2018 - shoot for that number. You can be really rich if you always max your 401k contributions.

By contributing a lot to your 401k, not only are you saving for the future, but you can lower your tax bill as well!

4. Be Careful About Your "Friends"

As we mentioned above, you need to be careful about who you spend time with. Not only are there are lot of people who blow their money very quickly, but there are others who will hit you up for your money.

I'm not here to tell you to leave all your friends, ignore all your work people, and be a hermit, but honestly, I've seen it too many times where even the best intentioned people get caught up in the mix.

I strongly advise that you don't hang out with work people outside of work, and keep a low profile when you're earning good money.

5. Plan Your Exit

Finally, you need to plan your exit on your own terms, and be prepared if something does happen. Sadly, the reason you're getting paid so much for these jobs is because they are dangerous. You could die, but it's more likely you could simply be injured and can't work.

Or, if you do it for long enough, you might simply get too old to do the job. 

So, plan your exit on your terms.

Make sure you have life insurance to protect your family (check out the comparison here), disability insurance if you get injured, and a savings plan if you simply can't work and need to change careers.

You should also consider what your next job is going to be? Let's say you simply can't do the job anymore - what work are you going to do until retirement?

Don't leave these things up to chance - really think about it up front so you can have a smooth transition later.

Final Thoughts

Getting a high paying physical job can be lucrative, but it comes with risks - not just death and disability. Too many people take these jobs, earn great money, and still end up broke.

If you're going to take the risk, you need to take the steps necessary to protect your reward. It's possible to use these jobs to make huge progress on your life goals (such as paying off debt, saving for retirement, buying a house, etc).

Just make sure that you're smart about the choices you make, and plan accordingly. 

The post Planning For The Future With A High Paying Physical Job appeared first on The College Investor.