Financial Tips Articles
If you have student loans you may be able to lower your payments with the government’s Income Based Repayment (IBR) plan. IBR is a new repayment plan for the major types of student federal loans, which include any Stafford, Grad PLUS or Consolidation loan made under either the Direct Loan or FFEL program. However, if you are in default you are out of luck. Additionally, parent PLUS Loans or consolidation loans that repaid a parent PLUS Loan are not allowed as well.
IBR caps your required monthly payment at an amount that should be affordable based on your income and family size. New and old loans for any type of education (undergraduate, graduate, professional, job training) may qualify for the IBR plan.
You may apply for IBR if your federal student loan debt is high relative to your income and family size. Your lender will determine your eligibility, however, you can use the Departments IBR calculator to estimate if you would likely benefit from the IBR plan. The calculator looks at your income, family size, and state of residence to calculate your IBR monthly payment amount. If that amount is lower than the monthly payment under a 10-year standard repayment plan, then you are eligible to repay your loans under IBR.
For more information visit studentaid.ed.gov.
Now maybe a great time to buy a car, especially if your current vehicle is a gas guzzler. President Obama is about to sign into law a program called the Car Allowance Rebate System (CARS) to help consumers purchase a new, more fuel efficient vehicle when they trade in their less fuel efficient vehicle. The government incentive could save you up to $4,500 to purchase a new car.
To qualify, your vehicle must be less than 25 years old on the date of trade-in and you can only purchase a new or leased vehicle costing less than $45,000. Your trade-in vehicle must have 18 MPG or less, however, some very large pick-up trucks and cargo vans may have different requirements. To find out your vehicle’s official MPG, visit www.fueleconomy.gov. Additionally, your trade-in vehicle must be registered and insured continuously for the full year preceding the trade-in. You will not need a voucher because dealers will automatically apply the credit at the time of purchase. To find the trade-in value of your vehicle visit Autos.MSN.com.
How Will CARS Work? According the website Cars.gov:
- Step 1: Visit CARS.gov for current information about the program.
- Step 2: Determine if you qualify, then shop for a new car.
- Step 3: Bring the title, registration and insurance papers showing continuous registration and insurance coverage for the past full year.
- Step 4: When you buy or lease a new vehicle, the dealer handles the submission of all required information to NHTSA (National Highway Traffic Safety Administration).
- Step 5: NHTSA ensures that your purchase meets the requirements.
- Step 6: About 10 days later, NHTSA will issue a financial credit to the dealer.
Many financial experts recommend having a 3 to 6 emergency fund (of your typical living expenses) in the bank for unexpected events in your life such as a job loss. However, in today’s economy is a 3 to 6 months emergency fund enough? Many unemployed people are having difficulty finding jobs within 6 months. It’s now taking some people up to a year to find employment. So it maybe a good idea to have a 1 year emergency fund!
If you don’t have an emergency fund, the hardest part is how to get started. You know you should have an emergency fund but how can you create one when money is already being tight. As with most things, it’s all about creating a plan and sticking to the plan.
The first thing is tracking where all your money is spent each month. If you were to track every dollar spent you’d be amazed how much of that money falls in the “I don’t really need this” category. You also maybe surprised how much money you spend on small items that adds up to a decent amount of money over time. That $5 coffee you purchase every morning at Starbucks in a month is costing you $100. That’s over $1,000 in a year for coffee. That’s money you could have put towards you emergency fund.
Another strategy is to reduce your 401K contributions temporarily to build you emergency fund. However, if your company is matching you, you should put at least that amount in your 401K. So for example if you are putting 10% of your gross salary in your 401K but your employer matches dollar for dollar 6%, your should reduce your contribution to 6% to still getting the matching dollars. Why lose that money?
Also create a budget and look at each expense to determine what you can do to reduce that expense. Do you really need to be paying $85 per month for cable TV? Can you reduce it to $50 per month? Do you need to spend $100 per month for cell phone? Can you reduce it to $60 per month? Do you really need that gym membership that you almost never use, saving you $35 per month? Can you shop around for cheaper car insurance and raising your deductible saving you a few hundred dollars per year? Can you take your lunch to work instead of eating out everyday? If you look closely at your budget to determine how much money you can save by cutting expenses you will be surprised with how much money you can save!
So go ahead and get started. Time is of essence. Start today!
I’m always looking to save money and am seriously considering getting rid of my land-line and instead using the Magic Jack. Magic Jack was launched mid last year and I’ve heard nothing but good things about the service. (See 2 videos below).
Magic Jack works by first purchasing a phone jack that you plug into your computer via the USB port. You then plug your home phone into the jack to make your phone calls. It’s that easy. The service includes free local / long distance, free directory assistance, free phone number, free call waiting, free voicemail and free caller ID. Additionally, you get a Magic Jack phone number that people will see on their Caller ID.
The phone jack costs $39.95 plus $6.95 for shipping and handling. After the one year of free service, it’s $19.95 per year for the phone service. That is a fantastic deal.
Visit MagicJack.com for more information.
Magic Jack infomercial
Magic Jack Review
The higher education law passed by Congress last year requires that all colleges have net price calculators on their websites by 2011 to determine out-of-pocket cost and financial aid packages available.
The calculators ask for a variety of information similar to the Free Application for Federal Student Aid (FAFSA). The calculators then use this information to deterrmine how much a student or family is expected to pay.
Additionally, the calculators will highlight the cost to attend that specific school and financial aid package the school might offer to make up the different between the student/family out-of-pocket contribution and the total bill.
There are several universities that already have calculators which include:
Every month hundreds of thousands of Americans are getting laid off. With the unemployment rate at 8.5% as of April 2009, millions of families have to deal with the uncertainty and stress from losing their jobs.
The good news is that President Obama’s 2009 Stimulus Package (American Recovery and Reinvestment Act) helps people out of work. There are a few things that you should be aware of.
The first $2,400 from unemployment benefits in 2009 is exempt from federal income taxes. Of course anything benefit over the $2,400 you will have to pay taxes for.
Unemployment benefits have been extended for 20 weeks plus an additional 13 weeks in high unemployment areas such as Michigan. Check with your local unemployment office to determine if you eligible for an extension. The date you must exhaust your regular unemployment benefits in order to qualify for extended unemployment benefits has been changed to December 31, 2009 from March 31, 2009.
Although this doesn’t see like much, every dollar helps. Unemployment benefits have been temporarily increased by $25 per week. Prior to the increase, the average weekly unemployment benefit was about $295.
The government has subsidized COBRA coverage allowing you to keep medical insurance coverage provided by your former employer. COBRA is usually more expensive, however, for workers laid off between September 1, 2008 and December 31, 2009, the government will subsidize 65% of premiums under COBRA for up to 9 months. Be sure to contact your former employer to determine if you qualify for the new subsidized COBRA insurance. The 65% subsidy is for individuals with yearly salaries of $125,000 or less or for couples filing jointly making $250,000.
I’m a customer of Bank of America and didn’t know that they offered cashback when using a Bank of America check (debit) card or credit card. The service is called the “Add It Up” program. Cashback ranges from 1% to more than 10%. Bank of America also offers a ton of coupons and discounts to many major retailers which can save you some significant money.
To get the discount, you must be a Bank of America customer and then apply for the program. You then use your Bank of America check card or credit card when you shop through their website which is linked to participating retailers.
The cashback is credited into your checking or credit card account of your choice. The service is simple and free to Bank of America customers.
Below is a screen shot of some of the better cashback deals. There are a ton of them.
Bank of America Cashback Discounts
For more information visit BankofAmerica.com/shop.