1 Million Dollars

Friday, March 26, 2010

More tax information for students

Did you know that neither you nor your parents determine if you are a dependent after you turn 18? The IRS does and they have a specific formula to decide and it depends on how much you and your parents spend on you. However there is a twist, all student loans but not scholarships, for this, count as income.

To calculate if you are a dependent there is a very easy worksheet on pg 20 of publication 501 from the IRS, http://www.irs.gov/pub/irs-pdf/p501.pdf, fill it out honestly and you will know if you are considered a dependent for your parents according to the IRS. Often students are not considered dependents because of working or student loans but parents continue to claim them.

Overall it may be financially better for the parents to claim the child then for the "child" to claim themselves because it may allow for more deductions at a higher percent for the parents than the "child". For example, when I was under 24, my mom was being taxed at the 25% tax bracket and I was being taxed at the 15%. I would pay less in taxes than her for the amount of the dependent which was about $3000. However, technically, the IRS does not give parents that choice, if some how they find out they will force the parents to not claim the dependent and allow the student to claim themselves. Keep in mind this will cause problems with your parents and you may not want to force the issue.

Monday, March 22, 2010

Free Cone Day

March 23rd is free cone day from Ben and Jerry's. Just go on the Ben and Jerry's website for the closest participating Ben and Jerry's and get a free cone from 12pm to 8pm. They have been doing this for a while so they keep everyone moving in line but this is a big event so expect to wait in line for a while.

Have fun with free ice cream for spring.

Official website

Thursday, March 18, 2010

Credit for the college student

No not college credit, but a good credit score and the ability to get a credit card or loan. Getting a credit score became harder since the passing of the credit card act of 2009, which no longer allows for students to get a credit card unless their parent cosigns or they have sufficient income. I have been unable to find out from credit companies what sufficient income is, I honestly do not believe they know. I wonder why the government did not make that clearer for the credit card companies as well as the consumer.
I think the parts of the credit act are great for example they must apply your payments to the high interest charges first (they used to apply it to the lowest), and the fact that they cannot change the rate for the previous purchases. However I have great issue with the government not allowing students to get credit cards, we are adults and should be able to make financial decisions as adults. This does not effect students who's parents are supporting them but it does effect those of us trying to get through school on our own. I find it horrible that we can access private student loans, that have less protection for students and are bankruptcy proof but cannot get a credit card which has rewards and protection.
The best way for a student now to get a credit card is ask their parents to co-sign but if that does not work, get a student loan and pay back during school.

Thursday, March 11, 2010

Saving using the internet

There are many cash back sites on the internet, my three favorite are upromise, ebates, and bondrewards.
Upromise is designed specifically for college students and their families. A student can sign up for it and give their family a link and the entire family could get cash back for the college student. However it gets better, there are upromise surveys which will give you one dollar every once in a while as well as a few non purchase click throughs which you can get a bit of extra money. There is also a link to erewards.com which is surveys that can get you up to an extra $50 a year.
You can link upromise to a high yield savings through Sallie Mae and get an extra 10% of the money you have received from upromise in the the high yield saving. You need to set up automatic transfers of $25 a month to the high yield saving to get the extra money though. The interest rate on the Sallie Mae high yield savings account is about average for high yield saving.

Ebates is similar to upromise, however ebates.com is a little more high tech. Whenever you earn more than $5.01 they send it to your paypal account, no work on your part. That makes ebates superior to upromise. I love how easy it is to get the money. However, you may not get the money unless you have over $5.01, for over a year I had $3 sitting there not earning interest or anything because I had not gotten the amount I needed. However $5.01 is not a lot of money and ebates is the only cash back site that gives cash back for purchases on ebay so for that alone, makes it worth the two to five minutes to set it up. Also ebates allows for referrals. For every person you refer and they make once purchase you get $5 as do they. However that $5 is not included in the $5.01 that you need to earn to get the money.

BondRewards is the most unusual of the cash back sites. Bondrewards will only give you the cash back once you have reached 50 bond dollars, but 50 bond dollars do not equal $50. You can cash in 50 bond dollars for $25 or a $50 E bond. However to buy a $50 E Bond only costs $25 but the bond will not be worth $50 for another twenty years. Therefore when comparing bondrewards to other cash back sites, divided the percentage back by two to be able to get a equal comparison.

Depending on what website you are buying from will determine which cash back site is best for you at that time. A lot of the time, the cash back will be identical however each cash back site above has websites that the others do not, that I buy from and given that it does not cost me anything to sign up, I use all three. I find the website with the best deal and then go to all three sites and see which site gives me the best cash back. It only costs me five to ten minutes per purchase and it normally saves me about three percent of the purchase.

Tuesday, March 2, 2010

Best ways to save as a student

One of your best ways to save as a student is live at home but most university students do not want to do that. What else can a student do to save money?

First, get out of the dorms. Even if you rent a room it will probably be cheaper. Or you could get an apartment on campus, though more expensive than renting a room, you have the protections of being on campus but you can cook your own meal instead of getting a meal plan. Most of the meal plans are a rip off and most of the time students should be getting one of the smallest plans because you can have breakfast in your room most of the time as well as snacks.

Second, buy used books. Most of the time the only students that buy new books from the bookstore are the ones whose parents are footing the whole bill. To save money, go to the bookstore two weeks before class and get the ISBNs of all the books. You get get books from amazon, Barnes and Noble or even half.com. My first semester of school I spent $700 on books, my last semester I spent $300.
Also if you do plan to buy books off of amazon, go to the bottom of this blog and sign up for swagbucks. You search there, and it uses google and ask.com to search and you get points to redeem for many things, the best deal of which is $5 amazon gift cards. In the last year I made $50 of amazon gift cards just for using swagbucks vs. google or yahoo. Consider that you would be spending $600/year on books, $50 is over 8% of a savings. Stocks average between 8%-12%. Basically you could save as much as your parents have earned in their investments in a year.

Third, apply for scholarships within your department, you have a better chance of winning departmental scholarships than national scholarships and small amounts add up. Ask about them your first week into the department. I won a grant to travel to a conference to present some research I had done. If I had not asked I would not have even known about it and that got me $500, which paid for most of my food and the flight to the conference.

Fourth take the subsidized loans before the unsubsidized loans and even if you do not need the subsidized loan, get them and create an emergency fund in ING Direct or other online high yield saving. This will get you in the habit of saving and not putting things on credit cards.

Fifth, use the internet! Don't just buy the computer you see in the store, do some research. Google or swagbuck online coupon codes for anything you buy online. Buy gift cards of plastic jungle and save 4%-7% of the total cost. There are so many ways to use the internet to save, I am still learning them all. Does anyone have other ideas on how to save money using the internet?