I have mentioned on here using cash back sites like ebates, using cash back credit cards and buying gift cards on discount but I just discovered I could use all three and save more.
Mr. Rebates is a cash back site, I have used it occasionally but it is not my favorite. When I found out about it, you had to request a check and it did not seem to be anything special. I stuck to ebates and upromise and have since added on bond rewards. A few weeks ago though I wondered if any of my websites that I use to buy discounted gift cards were on the cash back sites. I looked at my normal sites and the answer was no. However, I happened to get an email that day from Mr. Rebates and thought I would check there as well. It just so happens that Mr. Rebates gives 1% cash back for cardpool. Cardpool is my favorite site to buy discount gift cards from because they accept american express and my american express gives me 2% back into my 529.
Now if I combine all these, the gift cards, the cash site, the cash back credit card, I can save some serious money. Now, I rarely find gift cards for groceries or gas but I always find gift cards for petsmart. I spend $62/month on prescription cat food and litter for cat. That is over three percent of my monthly expenses and that don't even count that we have to have him seen once a year to keep his prescription. So over a year I spend $744 at petsmart, if I buy the gift cards at cardpool I'd only spend $677 a year. But if I just make one extra stop at Mr. Rebates first I get back another $6.77, plus if I use my american express I get another $13.54 back. By using all of these deals together I save $87.31/year, over a 11% savings plus I bring my cat spending down to less than 3% of my monthly budget.
You can't buy gift cards for everything, nor can you use cash back sites or credit cards for everything but when you can, why not combine them to spend the least you have to, to get you want?
1 Million Dollars
Tuesday, June 28, 2011
Friday, June 24, 2011
Tax Credits for Education
Their are two different tax credits available for those who pay tuition for higher education. They are the American opportunity tax credit (valid during 2009 and 2010) and Lifetime learning credit.
The American opportunity tax credit is for the first four years of school. It replaces the Hope credit for 2009 and 2010. The Hope credit is only for the first two years. The full credit of $2500 is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above these levels. These income limits are higher than under the existing Hope and Lifetime Learning Credits. American opportunity tax credit (AOTC) includes expenses for course-related books, supplies and equipment which are not necessarily paid to the educational institution but the Hope credit and the Lifetime learning credit only allows tuition and fees charged by the college, therefore books would not be allowed. The following expenses do not qualify for tax credits: room and board, transportation, insurance, medical expenses, student fees except if they are a condition of enrollment or attendance, expenses paid with non-taxable funds or tax-free educational assistance or the same expenses used for any other tax deduction, credit or educational benefit. Taxpayers will receive a tax credit based on 100 percent of the first $2,000 of tuition, fees and course materials paid during the taxable year, plus 25 percent of the next $2,000 of tuition, fees and course materials paid during the taxable year.
Lifetime learning credit can be used for graduate classes, or when the AOTC expires, during the last two years of undergraduate education. Unlike the Hope Scholarship Credit, the Lifetime Learning Credit is calculated on a per family, rather than a per student, basis. Therefore, the maximum available credit does not vary with the number of students. Either the parent or the child, but not both, may claim the credit for the child's expenses in a particular year. If an individual claims the child as a dependent on his/her Federal income tax return for the year, only the individual may claim the Lifetime Learning Credit for the child's qualified tuition and related expenses. If no one claims the child as a dependent on a Federal income tax return for the year, only the child may claim the Lifetime Learning Credit for the child's expenses. Remember, if you are a dependent your parents must pay the tuition bill to get the tax credit. This means that a scholarship or student loan cannot pay for the tuition, if your parents or you want to take the tax credit. The person getting the tax credit must pay for the tuition. If you are not a dependent then the student loan, but not a scholarship, can pay for the tuition bill. The credit is equal to 20 percent of the taxpayer's out-of-pocket expenses up to a maximum of $10,000 in expenses. Thus, the maximum Lifetime Learning Credit (LLC) a taxpayer may claim is $2,000. The maximum credit does not change even if the taxpayer is claiming a credit for the expenses of more than one student in the family. A way to get around this is to use the AOTC and the LLC together or the LLC and the tuition deduction.
Also, you can use the grants,student loans, scholarships and money from a 529 to pay for the expenses not covered by the credit. For example, if you are taking the LLC, pay for your books plus transportation and living expenses from the student loans, grants etc. but if you were using the AOTC make sure to use your own money for the books and use the grant, 529 etc. on such things as transportation and living expenses.
By being careful and planning, you can minimize the cost of school. This may mean planning where and from who the money comes from but it can be done.
The American opportunity tax credit is for the first four years of school. It replaces the Hope credit for 2009 and 2010. The Hope credit is only for the first two years. The full credit of $2500 is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above these levels. These income limits are higher than under the existing Hope and Lifetime Learning Credits. American opportunity tax credit (AOTC) includes expenses for course-related books, supplies and equipment which are not necessarily paid to the educational institution but the Hope credit and the Lifetime learning credit only allows tuition and fees charged by the college, therefore books would not be allowed. The following expenses do not qualify for tax credits: room and board, transportation, insurance, medical expenses, student fees except if they are a condition of enrollment or attendance, expenses paid with non-taxable funds or tax-free educational assistance or the same expenses used for any other tax deduction, credit or educational benefit. Taxpayers will receive a tax credit based on 100 percent of the first $2,000 of tuition, fees and course materials paid during the taxable year, plus 25 percent of the next $2,000 of tuition, fees and course materials paid during the taxable year.
Lifetime learning credit can be used for graduate classes, or when the AOTC expires, during the last two years of undergraduate education. Unlike the Hope Scholarship Credit, the Lifetime Learning Credit is calculated on a per family, rather than a per student, basis. Therefore, the maximum available credit does not vary with the number of students. Either the parent or the child, but not both, may claim the credit for the child's expenses in a particular year. If an individual claims the child as a dependent on his/her Federal income tax return for the year, only the individual may claim the Lifetime Learning Credit for the child's qualified tuition and related expenses. If no one claims the child as a dependent on a Federal income tax return for the year, only the child may claim the Lifetime Learning Credit for the child's expenses. Remember, if you are a dependent your parents must pay the tuition bill to get the tax credit. This means that a scholarship or student loan cannot pay for the tuition, if your parents or you want to take the tax credit. The person getting the tax credit must pay for the tuition. If you are not a dependent then the student loan, but not a scholarship, can pay for the tuition bill. The credit is equal to 20 percent of the taxpayer's out-of-pocket expenses up to a maximum of $10,000 in expenses. Thus, the maximum Lifetime Learning Credit (LLC) a taxpayer may claim is $2,000. The maximum credit does not change even if the taxpayer is claiming a credit for the expenses of more than one student in the family. A way to get around this is to use the AOTC and the LLC together or the LLC and the tuition deduction.
Also, you can use the grants,student loans, scholarships and money from a 529 to pay for the expenses not covered by the credit. For example, if you are taking the LLC, pay for your books plus transportation and living expenses from the student loans, grants etc. but if you were using the AOTC make sure to use your own money for the books and use the grant, 529 etc. on such things as transportation and living expenses.
By being careful and planning, you can minimize the cost of school. This may mean planning where and from who the money comes from but it can be done.
Tuesday, June 21, 2011
Textbooks
My first semester at college I spent $700 on textbooks, some used and some new from the on-campus bookstore. My last semester at college I spent $300, some used and some new but I bought online and from private sellers. A savings of $400 per semester adds up to $3200 over the four years at college.
When I started trying to save money on books, I started by buying online at barnes and noble. Going to barnes and noble through upromise gave me three percent back on my purchases as well. This cut my costs down to $500 per semester and I thought I was doing well.
Then my last year rolled around and my DH and I started dating. He was even better than me at finding deals on textbooks. That year I checked half.com, amazon, textbooks.com, abebooks.com and campusbooks4less.com. Not one site had all my books for the best price but by checking them all I found all my books for cheap. If I had known about these sites at the beginning of college I would have been able to save more or work less.
When I started trying to save money on books, I started by buying online at barnes and noble. Going to barnes and noble through upromise gave me three percent back on my purchases as well. This cut my costs down to $500 per semester and I thought I was doing well.
Then my last year rolled around and my DH and I started dating. He was even better than me at finding deals on textbooks. That year I checked half.com, amazon, textbooks.com, abebooks.com and campusbooks4less.com. Not one site had all my books for the best price but by checking them all I found all my books for cheap. If I had known about these sites at the beginning of college I would have been able to save more or work less.
Sunday, June 19, 2011
Credit Scores
When you first become an adult, you do not have a credit score because you have no debt. A credit score is how well you handle debt. You may be thinking, well then I do not need a credit score. But how would you buy a house, in the future? Also, many employers have started running credit reports as have insurance companies. So how do you get a credit score without debt?
Sadly, the easiest way has been stopped. It used to be, you got a student credit card when you started college and then a few years later graduated to a regular credit card. As of 2009, you can no long do that, because of the credit card act of 2009. That act does not allow for students to get a credit card without their parents co-signing or having a job with a sufficient income until they are 21. No one, not even the credit card issuers seem to know what a sufficient income is unless you have a full time job.
You could get a secured credit card, but often those have annual fees and you should rarely pay for a credit card. You could ask your parents to add you as an authorized user, if they have great credit but how would you know what their credit score is? If you ask your parents to allow you to be an authorize user, let them know you will no be charging on the card, and you would prefer them to keep the card. Many students rack up large amounts of debt, and it would be unfair of you to do that to your parents.
If you parents are unable or unwilling to take the risk of co-signing, you still have options. If you take out student loans, as you repay them, you will earn a credit score. If you do not need to take out student loan, either because of grants or your parents are nicely paying for school, you would need to wait until you turn 21 to get a student credit card. This means you may not have as high of a credit score when you graduate as with the other options but it should be high enough if you pay on time and in full.
The most used credit score, FICO, ranges from 350-850. FICO uses payment history, the ratio of credit card balances to the total available credit limit, the length of credit history, types of credit used and how many time you request more credit cards or loans. Let's take each part separately, to have a positive payment history, you must pay on time. This also keeps you from getting late payment fees so avoid making late payment at all costs. The ratio of available credit is only referencing rotating debt, like credit cards. To get a favorable position here, do not use more than 10-30% of your credit card available credit. FICO likes seeing both installment debt, like student loans and credit card usage but you can get a very high FICO score without installment loans. Every time you request a new credit card or installment loan, you will get dinged on your credit score, so avoid getting too many credit cards or loans. To get the best rates you need a credit score of 760 or higher except for mortgage loans which you can have as low as 720 and still get the best advertized rate. You do not need to check your credit score though you should check your credit reports once a years to make sure they are accurate.
Once you graduated and been earning an income for about a year, you should start looking at reward cards. My favorite are cash back rewards, such as FIA card services with 1.5%-2% cash back or discover cash back. I have had trouble finding a good Visa or MasterCard cash back credit card but I am still looking.
Sadly, the easiest way has been stopped. It used to be, you got a student credit card when you started college and then a few years later graduated to a regular credit card. As of 2009, you can no long do that, because of the credit card act of 2009. That act does not allow for students to get a credit card without their parents co-signing or having a job with a sufficient income until they are 21. No one, not even the credit card issuers seem to know what a sufficient income is unless you have a full time job.
You could get a secured credit card, but often those have annual fees and you should rarely pay for a credit card. You could ask your parents to add you as an authorized user, if they have great credit but how would you know what their credit score is? If you ask your parents to allow you to be an authorize user, let them know you will no be charging on the card, and you would prefer them to keep the card. Many students rack up large amounts of debt, and it would be unfair of you to do that to your parents.
If you parents are unable or unwilling to take the risk of co-signing, you still have options. If you take out student loans, as you repay them, you will earn a credit score. If you do not need to take out student loan, either because of grants or your parents are nicely paying for school, you would need to wait until you turn 21 to get a student credit card. This means you may not have as high of a credit score when you graduate as with the other options but it should be high enough if you pay on time and in full.
The most used credit score, FICO, ranges from 350-850. FICO uses payment history, the ratio of credit card balances to the total available credit limit, the length of credit history, types of credit used and how many time you request more credit cards or loans. Let's take each part separately, to have a positive payment history, you must pay on time. This also keeps you from getting late payment fees so avoid making late payment at all costs. The ratio of available credit is only referencing rotating debt, like credit cards. To get a favorable position here, do not use more than 10-30% of your credit card available credit. FICO likes seeing both installment debt, like student loans and credit card usage but you can get a very high FICO score without installment loans. Every time you request a new credit card or installment loan, you will get dinged on your credit score, so avoid getting too many credit cards or loans. To get the best rates you need a credit score of 760 or higher except for mortgage loans which you can have as low as 720 and still get the best advertized rate. You do not need to check your credit score though you should check your credit reports once a years to make sure they are accurate.
Once you graduated and been earning an income for about a year, you should start looking at reward cards. My favorite are cash back rewards, such as FIA card services with 1.5%-2% cash back or discover cash back. I have had trouble finding a good Visa or MasterCard cash back credit card but I am still looking.
Friday, June 17, 2011
Saving money while eating out
We all know that eating at home is cheaper than eating out but sometimes you just want to go out to eat. What can you do to make eating out not eat up all your money? All it takes is a little planning.
You can get coupons from daily deal sites such as groupon or living social or you could buy discounted gift certificates on restaurant.com. You could also buy gift cards for your favorite chain restaurants on plastic jungle.
Both daily deal sites and restaurant.com allow you to buy a gift certificate for less than the amount you will spend but restaurant.com does require you to spend anywhere from ten to twenty dollars more than the gift certificate plus tax and tip. The website will let you know how much you need to spend and any restrictions. Some common restrictions are the higher price gift certificates only being useable at dinner or cheaper ones only useable at lunch. Daily deals are cheaper but normally you can only buy one per person and the choices are not stable.
If none of the restaurants from those sites appeal to you, I would recommend checking out plastic jungle. You won't get a good of a discount as the other sites but could save about seven to ten percent. Hey, that takes care of tax. You can also not buy alcohol, honestly just drinking water will save a large percent. Also keep in mind that most meals at restaurants are much bigger than you should be eating, put half or so aside for your next meal or split a meal.
By using these tricks you can go out for anywhere from 50%-90% cheaper than you would expect. And that means you can go out more often. Remember to check upromise and ebates before purchasing any of the gift certificates so you can get cash back on your eating out purchase. Right now upromise is giving 15% back on restaurant.com purchases.
You can get coupons from daily deal sites such as groupon or living social or you could buy discounted gift certificates on restaurant.com. You could also buy gift cards for your favorite chain restaurants on plastic jungle.
Both daily deal sites and restaurant.com allow you to buy a gift certificate for less than the amount you will spend but restaurant.com does require you to spend anywhere from ten to twenty dollars more than the gift certificate plus tax and tip. The website will let you know how much you need to spend and any restrictions. Some common restrictions are the higher price gift certificates only being useable at dinner or cheaper ones only useable at lunch. Daily deals are cheaper but normally you can only buy one per person and the choices are not stable.
If none of the restaurants from those sites appeal to you, I would recommend checking out plastic jungle. You won't get a good of a discount as the other sites but could save about seven to ten percent. Hey, that takes care of tax. You can also not buy alcohol, honestly just drinking water will save a large percent. Also keep in mind that most meals at restaurants are much bigger than you should be eating, put half or so aside for your next meal or split a meal.
By using these tricks you can go out for anywhere from 50%-90% cheaper than you would expect. And that means you can go out more often. Remember to check upromise and ebates before purchasing any of the gift certificates so you can get cash back on your eating out purchase. Right now upromise is giving 15% back on restaurant.com purchases.
Wednesday, June 15, 2011
How to decide if you should buy or rent as a student
Depending on the area it may be cheaper to buy a place versus rent for four year while in college, or while in grad school for five. Given that my DH and I bought a duplex you might think I am very pro-buying while a student is in school but it really depends on many factors.
First can you afford it? Buying a property requires a down payment, closing costs and emergency fund plus money for all the little expenses like lawn mowers, snow plows and even a washer and dryer. Most students do not have the money for all the upfront costs, even most graduate students may not have the money. Where would you get the money? Your parents?
That brings up the second point, especially if you are an undergraduate. Will your parents go along with the idea of buying a property? If so, who owns the property? If your parents are paying all the bills obviously they own it but to get owner occupied rates the person occupying it must be on the mortgage. How will you work that? That will affect your credit score and will affect if you can get loans later in life.
Also, at eighteen do you even have a credit score? Could you even get a mortgage even with your parents co-signing? You probably could but the interest rate may be a little higher than a rate your parents could get. This also means your parents need a good credit score and not much debt. Do you think your parents would qualify?
Then you must think, will you have the time to take care of the property, find tenants/roommates if you need them etc? I know that if my DH and I were not together neither of us could have bought the rental by ourselves. It was too much work and needed many different skills.
Then you need to check if the mortgage plus repairs will be lower than renting. You cannot be sure that housing will appreciate or even that it won't depreciate by the time you are done with school. You need to look at the costs of renting out the property when you leave. This means adding up all the monthly expenses plus repair and seeing if renting the place would cause you to break even if you only got rent for ten months out the year.
Now if every point work out, then maybe, just maybe, you would financial better off buying instead of renting but if even one of these does not work, don't buy. It won't help you, it will hurt you. Renting isn't a bad thing. My DH and I plan to rent while he is working a post-doctoral fellow because the time we will be in the area is so short. What each person needs to do is see what works best for them in their own situation.
First can you afford it? Buying a property requires a down payment, closing costs and emergency fund plus money for all the little expenses like lawn mowers, snow plows and even a washer and dryer. Most students do not have the money for all the upfront costs, even most graduate students may not have the money. Where would you get the money? Your parents?
That brings up the second point, especially if you are an undergraduate. Will your parents go along with the idea of buying a property? If so, who owns the property? If your parents are paying all the bills obviously they own it but to get owner occupied rates the person occupying it must be on the mortgage. How will you work that? That will affect your credit score and will affect if you can get loans later in life.
Also, at eighteen do you even have a credit score? Could you even get a mortgage even with your parents co-signing? You probably could but the interest rate may be a little higher than a rate your parents could get. This also means your parents need a good credit score and not much debt. Do you think your parents would qualify?
Then you must think, will you have the time to take care of the property, find tenants/roommates if you need them etc? I know that if my DH and I were not together neither of us could have bought the rental by ourselves. It was too much work and needed many different skills.
Then you need to check if the mortgage plus repairs will be lower than renting. You cannot be sure that housing will appreciate or even that it won't depreciate by the time you are done with school. You need to look at the costs of renting out the property when you leave. This means adding up all the monthly expenses plus repair and seeing if renting the place would cause you to break even if you only got rent for ten months out the year.
Now if every point work out, then maybe, just maybe, you would financial better off buying instead of renting but if even one of these does not work, don't buy. It won't help you, it will hurt you. Renting isn't a bad thing. My DH and I plan to rent while he is working a post-doctoral fellow because the time we will be in the area is so short. What each person needs to do is see what works best for them in their own situation.
Monday, June 13, 2011
What does college classes and saving for retirement have in common?
They both require a plan. If you have plan you will achieve both goals quicker. If you have no plan, you may fail. But when you are young, in college, so much can change in five years how can you have a plan for the next forty? A plan does not have to be set in stone nor extremely specific, it can be a general outline for your life and it can change as your life does. You just need to know what you want. For example, I have a wants list that I add to as I find items I want, as time passes I put money aside for those wants and either decide I no longer want that item or am able to buy it.
It is recommended that you save at least 10% of your income towards retirement as a minimum though some say women need to save 15% because we live longer. You may not think retirement is important but what if you get sick and cannot work? Wouldn't you like to be able to say enough is enough and stop working if you need to? Being able to retire does not mean you must retire just that you have the freedom to. Having a plan for getting though college does not mean that you cannot change the plan and take another path.
So let's make a plan for retirement. Can you start saving 10-15% of your income?
It is recommended that you save at least 10% of your income towards retirement as a minimum though some say women need to save 15% because we live longer. You may not think retirement is important but what if you get sick and cannot work? Wouldn't you like to be able to say enough is enough and stop working if you need to? Being able to retire does not mean you must retire just that you have the freedom to. Having a plan for getting though college does not mean that you cannot change the plan and take another path.
So let's make a plan for retirement. Can you start saving 10-15% of your income?
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