Search Results

Listen to the podcast HERE Have you heard people mention the FIRE movement but you aren't sure what it is? It stands for Financial Independence, Retire Early and was coined in the 1990's book "Your Money Your Life." It has gained traction in the last decade, especially with millennials. The basics are a very frugal lifestyle and extreme savings. It is a thought process of anti-consumerism; the complete opposite of the "keeping up with the Jones'" mindset. It's definitely not for everyone. It takes a great amount of discipline, sacrifices, and lifestyle adjustment but it also takes enough income to make the concept work, usually 6 figures. You also need a lack of debt like credit cards and student loan payments that eat up a large percentage of your budget. Followers of the movement evaluate every expense in terms of the number of work hours it takes to pay for it and they save 50-75% of their income. The goal is to "retire" in their 40's or maybe even their 30's. The old school train of thought for retirement was saving over a lifetime career and retiring somewhere around 65. But a lot of people ask the question "how many good years will I have to enjoy life and what I love?" Which leads to the next question, why does retirement have to be defined by an age? After all, most retirement accounts don't let you access your money until you reach a certain age (unless you pay penalties). Why isn't retirement defined by a number? A number unique to everyone. A number that generates the amount of income YOU need to live the lifestyle you want to live and spend your days doing what you WANT to do! The thought process is financial independence and a life of flexibility. Retire early doesn't mean you have to completely stop working but the financial independence allows you to do something part time or that pays less but you really enjoy and you still have the income you need to cover your expenses. If you plan to live an elaborate lifestyle in retirement then you will most likely need to work longer, save more, or a combination of both. Followers of the FIRE movement greatly focus on two rules: the rule of 25 and the 4% rule. The rule of 25 states that you want your savings to be at least 25 times your annual expenses. If your annual expenses are $80,000 then you need $2,000,000 in savings (plus a standard emergency fund of 6-12 months expenses). The $2,000,000 is your FIRE number. Once you have attained that number then the 4% rule applies. This rule (from the Trinity study) states that if you withdraw 4% a year (adjusted for inflation) then you will have enough to live off of long term. One thing to note here, if your investment account reaches that $2,000,000 number so your 4% is the needed $80,000 but the market crashes and declines 20% for example, you now have $1,600,000 and a 4% withdrawal is only $64,000. For this to work, you have to have assets that can generate enough income to cover your expenses. These rules have the savings and investments channeled on paper assets. A mix of tax advantaged retirement accounts and regular brokerage accounts. Remember, the retirement accounts can't be accessed until retirement age so if you are retiring early you will need an account that can be accessed at any age. FIRE followers max out their tax advantaged accounts first. If you have a 401k at your job then you want to max it out, especially if your employer has an employee match because that is just free money. The 2023 max contribution to your 401k is $22,500. 2023 max contributions for both Roth and traditional IRA's is $6500 and $15,500 for a SIMPLE. Remember that these contributions may be tax deductible so that's just another win for maxing these accounts out! Once these accounts are maxed out then you save in a traditional brokerage account that is diversified to account for your risk tolerance. Let's look at an example of how many years you need to get to your number based on income and expenses. If your income is $70,000 and your expenses are $60,000 and you are saving $10,000 per year then you will need 44.3 years to retire. Ouch! But what if you pick up a side hustle and increase that income to $85,000 and you cut out all expenses except necessities and get them down to $50,000 so you are saving $35,000 then you are at 20.6 years. If you are 25 when you start this then retiring in your mid 40's is possible. The FIRE movement is heavily focused on paper assets such as stocks, bonds, mutual funds, and ETFs. They are relatively easy to purchase, especially on a monthly basis. However, with the volatility in the markets recently there are FIRE followers turning to rental real estate to generate their retire early income. It can be a great way to achieve the goal. If you max out the retirement accounts like the 401k and IRA for the later years but focus on the rental real estate for the immediate cash flow needs, you have a good chance of achieving "retire early" even earlier than if you followed the rule of 25. You can begin buying the properties when you have the savings to fund a down payment, mortgage the balance, and the rental income pays down the mortgage while also generating some monthly cash flow. Plus, rental properties can create some great tax advantages since taxes are paid on the net rental income after expenses and depreciation and rental income is not subjected to self employment tax. If you are looking to retire early or just generate additional income and cash flow, rental real estate can be a great option. Plus, real estate usually appreciates in value so that is another win. If you are thinking, I can embrace some of this but maybe not all of it, there are some different variations of the FIRE movement. Lean: this is the person living an almost extreme minimalist and frugal lifestyle and completely focused on how much they can save. This person is not going "to live a little" so to speak. Fat: this is the person that isn't as focused on retiring early but is focused on saving more so that they can "live it up" in retirement. This person needs $200,000 a year versus the $50,000 of the Lean person. Barista: this person is focused on working less but not necessarily completely escaping work. They want to live off the "retirement money" and concentrate on more meaningful work that only creates a limited income. Your desired lifestyle in retirement, regardless of your retirement age, heavily dictates the amount of savings you need and the length of time it will take to achieve financial independence. The FIRE movement thought process is not for everyone and like most things, there are risks associated with it such as: having to pay for health insurance when you leave a job that has provided it. This could be a big expense making that annual expense number increase drastically. Medicare doesn't kick in until 65 so you may have decades to cover. as mentioned above, your investments may not perform as planned and the market could crash and take years to recover. while you are in the savings period, you have to earn enough to cover your basic needs and still save 50% or more. If you have a family, child care, and other large expenses, saving 50% may not be feasible. also as mentioned above, if your budget is full of debt payments like credit cards and student loans, saving 50% may not be possible even if the rest of your budget is strictly addressed. All in all, followers of the FIRE movement are people that believe laboring for decades in a job you don't enjoy is not a life well lived. They believe we were not meant to spend 8 hours in an office each day and 2 hours in our car commuting. They are wanting to live a simple life, extravagance is not their style.

The other day I was scrolling Instagram and stopped at a post that was talking about why has our society normalized the encouragement of a victim to reconcile with their abuser. It stopped me in my tracks and it has made me do a lot of thinking. The page is focused on emotional and mental abuse so was geared towards victims of that type of abuse. One of the first things I thought of, besides how true this post was, was that you don't see victims of physical or sexual abuse being encouraged to reconcile with their abusers. So why do people basically shame the victims of emotional and mental abuse? When the victim of such abuse finally gets up the courage to leave the relationship, the last thing they need is to be shamed for their strength. Physical wounds are often easy to see so victims typically get support and help quicker than victims of abuse that isn't as visible. Plus, the abusers that invoke emotional and mental abuse usually have a perfect public facade to discount their victim's abuse claims. Their facade is so believable that people often side with the abuser thus leaving the victim more alone with a lower sense of self worth and value. Then, the victim's closest friends and family shame them for not reconciling! It's no wonder that healing from emotional and mental abuse is a traumatic path. The courage to leave is actually one of the smallest steps because society has the out of sight out of mind approach with supporting victims of abuse that they can not see. Victims often receive support from only a handful of people while being ostracized by many and shamed by others. Meanwhile, the abuser continues their fake perfect facade and actually plays the victim. They pretend the relationship ended because of something the actual victim did to them, often going to great lengths to prevent the abuser from being heard. If you know someone in this situation, even if you don't know the depth of the abuse, stop encouraging them to reconcile and instead support them in their healing. Ask questions and learn the depth of what they endured. Be an advocate for them, especially if their abuser has created a smear campaign against them. Treat them the same way you would if they told you they were being physically or sexually abused. Extreme emotional and mental abuse is not just a disagreement or a spat. For many it has been a lifetime of manipulation, control, fear, degradation, and gaslighting. All while the abuser was seen by others as a wonderful person. The behavior of the abuser is intentional and calculated and those that believe the abuser are just being played as a fool by the abuser. If you are looking for social media pages that support recovery from emotional and mental abuse, these are a few of my favorite on Instagram: @laurakconnell @escapingnarcissticmothers @narcissisticparents @novas_narcissitabuse_recovery @silenceofthenarcs

Who doesn't love cinnamon rolls? These are packed with icing all the way through not just on top! Sweet and creamy deliciousness in every bite! I used Pillsbury crescent sheets for this recipe. The cream cheese mixture makes enough for 2 crescent sheets but if you want extra icing, just do one sheet and reserve half the cream cheese mixture to ice on top after baking!

Listen to the podcast HERE Watching our babies grow up can be hard on a momma's heart. Some milestones are harder than others and some are just down right scary. The driver's license is one of those moments. After a year of riding alongside them (with our eyes closed a good bit of the time), we all of a sudden turn them loose. We pray they stay safe and make smart decisions. There are so many distractions these days, notably the phone, that weren't an issue for us parents. On the flip side, we also have (for the most part) safer vehicles now and apps like Life 360 so that we can keep dibs on our teens. I watched that Life 360 app like a hawk those first few weeks after my son got his license. Side Note: I am not affiliated with Life 360 but if you haven't checked this app out, I recommend it. There is a free version and a paid version. We didn't use it until my son got his license but we are thankful to have it. Here are some of my favorite features: you can set alerts for certain locations. I get an alert once he arrives at school and when he leaves. I also get an alert when he arrives at his girlfriend's house. LOL it tells you how fast they drove. You can actually track them as they drive and see how fast they are going. it tells you if they accelerate aggressively or have any hard breaking. and probably my favorite, it alerts you if there is phone usage while they are driving. Okay, back to the topic at hand. I am generally prepared for most things. I keep a tight rein around our family finances and household items. I talk with lots of mom friends (as well as dads) about lots of topics and have always felt very in tune. However, there was one item that caught me completely off guard and that was the sticker shock when I added my son as a driver on our insurance policy. I thought it was an error for sure. Sadly, I was wrong. So I am here today to give y'all a heads up on the insane cost of insuring teen drivers. If you already have a teen driver then you know exactly what I am talking about and you are probably still recovering from the sticker shock yourself! States vary on their insurance laws and regulations. I live in NC and the minimum coverage requirement is 30/60/25 coverage. That is coverage that pays up to $30,000 for bodily injury for one person, up to $60,000 for the total bodily injuries, and up to $25,000 in property damage. The property damage doesn't have to be another vehicle. It could be a fence or something like that. As you can imagine, costs from an accident, especially a bad accident, are going to be well beyond those limits. If you (or your teen driver) are found at fault for an accident then you are responsible for the damages. I don't like to think negatively or focus on the worst case scenario BUT what if your teen driver causes an accident that totals a Porsche? Or what if your teen driver runs off the road and hits a pedestrian on the sidewalk? You are going to want much higher coverage limits and so a full coverage policy may be ideal! If you are unsure what your limits are, I encourage you to check and if they are the minimum then you may want to look at increasing them. Yes, your premium will go up if you increase the limits but it is definitely something worth evaluating for peace of mind! Speaking of premiums, how much is it going to be to add your teen driver? According to the website carinsurance.com, your current premium will increase anywhere from 50-100%! Yes, you heard that correctly! Ouch right? Except for a few states (like NC) that prohibit this, male teen drivers pay more than their female counterparts due to a higher crash rate. It is usually cheaper to add your teen driver to your existing policy and list them as a secondary driver. Quotewizard.com states that you can pay up to 48% less by adding your teen to your policy rather than them getting a stand alone policy. The site also lists out average prices by state. (I will link this information in the show notes). It states that the national average for a two parent policy is $302 per month and adding a teen to that policy will add another $278 per month for a total of $580. However, the average stand alone policy for a teen is a whopping $532 per month! And according to insurance.com "When you add a 17-year-old driver to your policy you'll see an average rate increase of $2,102 a year for full coverage. The average cost of car insurance for a 17-year-old on their own policy is about $5,924 a year. For a 16-year-old driver, the average rate for full coverage is $7,203." If your teen doesn't have any accidents, speeding tickets, or the like then the rates will decrease and once they are 25 with a good driving record, they will decrease substantially. You may be wondering, what would happen if my teen caused an accident or got a speeding ticket, how will that affect the rates? The national average is a 25% increase from a speeding ticket and if your teen got that speeding ticket and they are on your policy, then your rates are going up! The good news is that your teen may be eligible for some discounts. Insurance companies don't always let you know about these discounts so be sure to inquire. Good student discounts, extra driver education, low mileage, as well as a few others. It's definitely worth checking to see if any are available! If your teen is nearing driving age, do your homework and shop around for rates because you may end up needing to move your coverage to another company and if you bundle your insurance with your home that process could take a little longer. If you or your teen are buying their own car, check insurance rates before you buy. As you can imagine, sports cars come with higher rates but things like certain safety features can bring rates down. Bottom line, getting the driver's license is a big deal and while it comes with a lot of excitement for the teen, it comes with a lot of scary for the parents! A serious conversation with your teen so that they fully understand the responsibility they are taking on with their license is a must. I do want to note that when your teen has their learner’s permit, it doesn’t affect your insurance, only once they become a licensed driver. The content in this blog is educational in nature and is not considered financial advice.

What is the one thing in this world that we can't get more of? Time! I recently had a post on Instagram about respecting people's time. It was more of a Public Service Announcement than a planned post but it garnered a lot of attention, comments, and even several direct messages. Bottom line was, y'all were agreeing with what I had said. I think the incident that caused me to make the post really got under my skin because I have been thinking about time a lot lately. About how short life truly is. I have been making a concerted effort to make each and every day count to the fullest. I have embraced taking better care of myself so that I can be the best version of me each and every day. Making every little thing worthwhile. Not wasting time and regretting it later. Here's what happened: I had offered my services to another CPA to help her with something she was unfamiliar with. I have never met this woman and I was not going to be paid for this meeting. Nevertheless, I was doing it to help her out and her client. I allowed her to choose the date and time. So, 10:00 on Wednesday morning was the time. It was a gross, cold, and rainy day. I arrived at her office about 9:58. I walked in and told the receptionist who I was there to see, she told me to have a seat, and that she would let her know I was there. I sat there and I sat there (fortunately my hubs had sent me some dog videos to help pass the time). The receptionist never said another word. The person I was supposed to meet never came out to see if I was there. Other people that work there walked through the lobby. Not a single one ever spoke to me. Not a "Good morning" or a "Who are you here to see and I will see if they are ready for you?" Nothing. Crickets. The longer I sat the more irritated I became and at 10:30 I decided I would leave. So, I got up and walked out the door. The receptionist never tried to stop me. I just got in my car and drove home. Almost 15 minutes to drive back home. I had wasted a solid hour of my day. My PSA on Instagram was about respecting people's time. Everyone's time is valuable and precious. Yes I understand that we all run behind from time to time. We can easily let someone know that as well. When I go to my OB, if she has had a patient go into labor and is tending to them, then I will be told as such. I won't be left in the waiting room with no updates. There are probably some OB's that don't do that but I have always had a great experience when that arises. Bottom line: it's not really hard to respect people's time as long as you don't think your time is more valuable than theirs. I think the older we get the more we think about time. We regret all the time we've wasted. Whether it was a career we didn't like, long daily commutes, sleeping in too much, prioritizing the wrong people, and the list could go on and on. Being intentional matters in regards to so many aspects of our lives and time management is a huge one. I have always been a planner and I know I am a little over the top when it comes to my schedule. I am one of those that time blocks so I can get everything done. It's a reason I was upset by wasting an hour. I had the thought process of "well I could have gotten X done and not needed to do it Saturday." Here's the thing, not only do we need to be respectful of other people's time; we need to be respectful of our own. I believe people that respect their own time tend to be more cognizant of time in general and thus respect other's time as well. Being intentional with your time each day of what you want to accomplish, who you want to spend your time with, who you want to do things for, etc makes a difference. We all have errands to run and things we don't love to do (but may need to do) and by planning for it all we are able to utilize our time to the fullest and have less regrets about wasting time. Do you regularly leave people hanging? Do you regularly waste time having meaningless conversations (mostly gossip)? Do you regularly waste time binge watching shows, even ones you've already seen? Here is what I think about when I am planning how to spend my time each day: if I found out tomorrow that it was my last day on earth, would I be happy with how I spent my time today or would I be regretful? I know that is quite a depressing thought but that is also the point. It is depressing if our answer would be regretful. Make your time count! Respect other people's time so theirs counts too! We can't make more of it. Therefore, we can't waste a minute of it!

Listen to the podcast HERE Since we are now officially in tax season, I thought it would be a good time to focus on some tax topics. Today we are going to look at the standard deduction versus itemized deductions. In 2018, the standard deduction amount drastically increased following the 2017 Tax Cuts and Jobs Act. This increase greatly helped people that did not itemize before. However, many people that did itemize before now find the standard deduction to be more beneficial so they are no longer filing itemized deductions. We are going to take a look at the difference in the two, some things that are eligible for itemized deductions, and ways to maximize your deductions and minimize your tax liability! When you are filing your taxes, your form 1040, you basically add up all of your income whether it is from W2 wages, dividends, self employment, etc for your total income. Then you subtract either the standard deduction or your itemized deductions to arrive at your taxable income. The bigger that deduction, the lower your taxable income and thus the lower your actual tax liability. For the 2022 filing year, the standard deduction is $12,950 for single or married filing separately and it is $25,900 for married filing jointly. For 2023 those figures increase to $13,850 and $27,700 respectively. The thing is most people do not have enough itemized deductions for them to total more than the standard deduction. Therefore, the standard deduction is more advantageous. But you want to make sure you aren’t leaving any itemized deductions on the table. What are some expenses that are eligible to claim as an itemized deduction? Medical and dental expenses can be a big one. If you pay for your health insurance yourself out of pocket then you can claim your premium payments. If you have a high deductible health insurance plan then you may be spending a lot out of pocket. Or maybe you have a high co-pay. A lot of people don’t have dental insurance and pay all of that out of pocket. These expenses qualify for an itemized deduction. State and local income taxes, real estate taxes, and personal property taxes can be itemized. Mortgage interest is a common one people know about. Home equity loans and lines of credit can be an itemized deduction as long as the funds were used for home improvement. You can’t take out a home equity line of credit and use the funds for a vacation and also be able to claim the interest as an itemized deduction. Charitable contributions are also another common one. These can include gifts by cash or check but they can also include other contributions such as donating a car or appliances. This is why you always want to get a receipt when you donate items and have the receipt state the value of the item. If you have suffered a loss due to a federally declared disaster, your loss can be claimed as an itemized deduction. Hurricane Ian this past year is an example of the type of disaster that would create the kind of loss to be claimed here. I do want to note that many of the itemized deductions are subject to things like income limits so if you are planning to itemize, you want to make sure your deductions are allowed. So, what should you do if your itemized deductions are almost as much as the standard deduction? You are incurring all of these expenses like mortgage interest, property taxes, etc and you feel like you aren’t able to take full advantage of those expenses because they don’t add up to as much as the standard deduction. For example, say you have $8,000 of mortgage interest, $4,000 in property taxes, $5,000 in state and local income taxes, and $7,500 in charitable donations. A total of $24,500. Just a bit under the standard deduction of $25,900. In this case you would take the standard deduction because it gives you more benefit. But is there a way to use those qualifying expenses? Bunching your itemized deductions may be a strategy that can work for you. You basically itemize every other year and take the standard deduction in the years you don’t itemize. Let me show you how this works. Charitable contributions, property taxes, and medical expenses are the most common to bunch but if you pay estimated state and local taxes then you can use that too! Basically, what you are doing is paying two years worth of expenses in one year. In our example just a minute ago, the couple was giving $7,500 in charitable contributions. Say they did that every year on December 31. If they wanted to bunch their itemized deductions then this is what they would do: for the year 2022, instead of making that $7,500 donation on December 31, 2022, they make it on January 1, 2023 and then they make it again on December 31, 2023. So, in 2022 they don’t have charitable contributions but in 2023 they have $15,000. By making the donation on January 1, 2023 you are not effecting your personal cash flow nor that of the receiving charity but you are effecting your total itemized deductions. Most municipalities give a grace period until January 31 for paying property taxes. Using our same couple, say they pay their 2022 property taxes of $4,000 in January of 2023 and then pay their 2023 property taxes in December 2023. They now have $8,000 in property taxes to itemize. What about medical expenses? If you know you are going to have a large expense and you have the flexibility to time it, then plan accordingly! For example, I have a high deductible health insurance plan. A few years ago I needed surgery and I knew it would get kicked to deductible first and we would have a roughly $7500 expense. Scheduling that surgery in a bunching year would help take advantage of that expense. Let’s take a look at how the numbers shake out. Assume the couple we mentioned above are married filing jointly and have $100,000 in total income. In 2022, their itemized deductions totaled $24,500 so they took the standard deduction of $25,900 which creates a tax liability of $8,481. In 2023, they again have $100,000 in total income and their itemized deductions are slightly less than the standard deduction of $27,700 so they again take the standard deduction. Their tax liability is $8,236. For a total two year tax liability of $16,717. Now, let’s say they decide to take the standard deduction in 2022 and bunch their itemized deductions into 2023. The 2022 tax liability would still be $8,481. Their itemized deductions would be: $8,000 of mortgage interest, $8,000 in property taxes because they paid the $4,000 for 2022 in January 2023 and 2023 in December 2023 $5,000 in state and local income taxes, and $15,000 in charitable donations because they made their payments in January 2023 for their 2022 giving and again in December 2023 for the 2023 giving. Total itemized deductions of $36,000. Their 2023 tax liability would be $7,240 giving a two year tax liability of $15,721. They would save $1,000 just by changing the date of their property tax and charitable contribution payments! It’s now February 2023 so we can’t go back and change 2022 at this point but if you have been taking the standard deduction because your itemized deductions were slightly less then you may want to look at holding your 2023 payments into January 2024 on eligible expenses and take the standard deduction in 2023 and bunch your itemized deductions in 2024. I don’t know about you but I am always game for saving $1,000! Especially in taxes! Be sure to consult your own tax advisor if you have any questions about your own personal situation.

My Italian friends may not approve of this simple "cheater" lasagna but it still received a huge thumbs up from my boys and was super quick and easy. I do prefer to use the Rao's brand of sauce because it has great flavor and bakes really well.

Listen to the podcast HERE We all have heard what a serious problem student loan debt is. After all, there is currently $1.75 TRILLION outstanding with an average of just under $29,000 per borrower. More than half of students leave college with student loan debt. That debt often takes a decade or more to repay, putting a strain on the monthly budget of young adults as well as starting them off behind on their long term financial goals and retirement saving. When I taught my first Personal Finance class back in 2021, I had a class of high school seniors. Many were planning on using student loans to pay for college. After all, they have become completely normalized in our society because the ever increasing cost of college is out of reach for many families to afford. Almost all of my seniors in that class that were planning on using student loans either found another way to pay for college such as starting at a community college to knock out core classes then transferring or they greatly reduced the amount of student loan debt they were going to take on. If you use that national average amount that I just mentioned of almost $29,000 and use a 5% interest rate and a standard 10 year repayment plan, the monthly payment would be right at $300 for those 10 years. However, if you were able to graduate without student loan debt at say age 22 and immediately began investing $300 per month at 7.5% annual return (This is well below the 10 year stock market average) then you would have nearly $53,000 at age 32. If you left that $53,000 invested and did not invest any more towards it, that $53,000 would grow to about $465,000 by age 62. A total of $36,000 of contributions from age 22 to 32 and it becomes $465,000 by age 62. On the flip side, if you have to pay off a student loan for 10 years and can’t save and invest until age 32 then when you start investing at that $300 a month at age 32, it would take you until about age 64 for it to have grown to $465,000. You would be making that $300 a month investment for over 30 years! Your total contribution would have been $115,200 rather than just $36,000. When I give students these kinds of numbers and how drastically student loan debt can impair their long term financial goals they want to eliminate or minimize student loan debt. Few students (or their families) truly understand what they are signing up for when they take out a student loan. We could talk for hours about student loans but today I am going to give you an overview of the types of student loans as well as their repayment plans. As you may recall from the first two episodes in this series we talked about the FAFSA, the Free Application for Federal Student Aid. You want to get this completed as soon as it opens up for the following school year that you are applying for. The FAFSA will give you that EFC number, the Expected Family Contribution, (don’t forget this term is changing to the Student Aid Index in 2024). In talking with some parents recently, their EFC turned out to be much higher than they were anticipating it to be. That is when it is good to have that 529 plan we talked about last week or some other kind of college savings set aside. When your child applies to college, the school will have a published Cost of Attendance, a sticker price, and then the net price will be the price after financial aid is applied. We generally think of financial aid as aid that does not need to be repaid like a grant but some student loans are actually classified as financial aid. The FAFSA helps determine the amount of aid a student is eligible to receive based on their financial need. Often times there is a gap between the net price and the EFC where additional funds are needed. Plus, families often don’t have enough funds to cover their EFC. This is where student loans come in. There are both federal and private student loans. Federal loans make up about 92% of total student loans and are generally more favorable towards the borrower. Private student loans are generally thought about as a “last resort” if federal loans have been exhausted. Let’s look at the federal loans first. The most favorable type is the Direct Subsidized. This type is based on financial need. The school will tell you if you are eligible and how much you are eligible for. The beauty of this type is that the government covers the interest while you are in school (at least part time), during the grace period, and during any deferment periods. Next is the Direct Unsubsidized. This type is not based on financial need. It will usually have a slightly higher interest rate than the subsidized and there are loan limits. The big thing here is that the borrower is responsible for all interest that accrues while you are in school, during grace periods, deferments, etc. Both the Direct Subsidized and Unsubsidized have a fixed interest rate and do not require a credit check. Repayment plans generally begin about 6 months after graduation. Next is a Direct PLUS Loan. This is where the Parent Plus loan comes in. This loan is taken out by parents of undergraduate students. It is intended to fill the gap between the COA (Cost of Attendance) and any Direct Subsidized or Unsubsidized loans or financial aid received. The limit available is the COA minus financial aid received. These generally have a higher interest rate and the payments start immediately upon disbursement unless you apply for deferment. However, interest still accrues during the deferment. These loans are not eligible for income driven repayment. The parent is the responsible party for the loan repayment. Next up is a Direct Consolidation loan. This is when you combine all eligible federal loans down into one. Having one payment to manage is a way to simplify. It usually creates a lower monthly payment but increases the length of time to repay thus increasing overall interest paid. This is usually done after you have left school. The interest rate is based upon a weighted average of the consolidated loans. This is eligible for income driven repayment. However, depending on the type of loans you are consolidating, you want to make sure you won’t lose credit for any payments that have already been made on the pre-existing loans. Private student loans are a consideration when all federal loan options have been exhausted. They are generally less flexible, have higher interest rates (that could be fixed or variable) and they do require a credit check, meaning most students will need a co-signor in order to obtain one. They can cover any costs and limits are dependent on the lender and the loan but you do want to make sure that the lender does work with your intended school. There are also Private Refinancing options that may allow you to get a lower rate if your credit has improved during the meantime. Current interest rates as of today are averaging about 5% for the federal direct loans, 7.5% for the Plus loans, and a range of 5.6-13.8% for private loans. You can see how those private loans especially could get quite expensive. What are the repayment options for these loans? For the Federal Direct Loans (both subsidized and unsubsidized) repayment starts 6 months after you graduate or have gone less than part time. For the unsubsidized, the interest is still accruing during that time. As mentioned above, the Parent Plus loan the payments start at disbursement unless a deferment until after graduation is applied for (but the interest still accrues). The Standard Federal Plan is 10 years of repayment with the same monthly payment for those 10 years. This is what automatically happens unless another plan is decided. The Graduated Plan is the same 10 year time frame but the payment starts small and increases over the 10 years. The Extended Plan allows up to 25 years for repayment with either a fixed or graduated monthly payment. The Federal Direct Consolidation plan is for the repayment of a Direct Consolidated loan and allows up to 30 years to repay. Federal loans (except for the Plus loan) are eligible for Income Driven Repayment. You can do the Direct Consolidation loan and consolidate your Parent Plus loan into that and be eligible for Income Driven Repayment. This plan is usually 10% of your discretionary income over a term of 20 years. There are also 15% and 25 year options and a 20% of discretionary income for 25 years. Discretionary income in this context is calculated as the difference between your annual income and 150% of the poverty guideline for your state of residence and family size. Payments under this plan may not fully cover the interest so the unpaid interest is added to the principal thus increasing the principal balance each month the interest isn’t fully covered by the payment. Private repayment plans vary by the lender and the terms of the specific loan. Some have the payments start when the loan in disbursed and some have interest only payments while you are in school. The average private student loan has a repayment term of 7-15 years but they can be anywhere from 5-20. All in all, if you need student loans you generally want to exhaust your federal loan options before choosing a private student loan. You want to take out as little as absolutely possible in total and repay it on the shortest term you can afford. It is easy to see how people have an extremely hard time obtaining their long term financial goals when they are spending up to 25 years repaying student loans rather than being able to save and invest their money. The long term considerations of student loan debt need to be thoroughly evaluated before taking it on. Options to make the degree less expensive such as community college then transfer to a 4 year school, working while in school, and work-study programs all should be considered. That dream school may financially kill your long term wealth dreams so always keep options open. A good rule of thumb is not to graduate with more student loan debt than what your starting salary will most likely be. The bottom line, college is expensive. Do your research before you commit to a school or any loan. Remember, colleges have a net price estimator on their websites. And don’t forget to get that FAFSA filled out as soon as you are eligible to! The future is wide open, don’t narrow it with overwhelming student loan debt!

Who doesn't love a delicious yet simple recipe? I've rounded up my top 10 simple recipes into one simple place! All are perfect for weekly meal planning. Italian Pork Chops This slow cooker favorite creates cut with a fork pork chops with delicious flavor. Hamburger Veggie Soup Another slow cooker favorite comfort food that creates perfect lunch leftovers for the next day. Mexican Turkey Chili For when you want a little spice with your slow cooker easy supper. Buffalo Wings Game day food in the slow cooker? Yes, please! Blue Cheese Burgers Prep ahead the juiciest burgers for your weekend cookout. Mexican Marinated Chicken Prep ahead in less than 5 minutes and throw in the skillet when you are ready for supper. Caprese Chicken A super easy entree that is restaurant worthy. Simple Salmon This easy recipe works well with grouper, flounder, and other flaky fish as well. Healthy has never been so simple. Chicken Noodle Soup Another comfort food, slow cooker meal that pairs well with a grilled cheese. Chicken and Dumplings Slow cooker comfort food wins again! More hearty than the chicken noodle soup but simple enough for a weekday meal. Which simple meal is your favorite?

Listen to the podcast HERE Today we are going to be talking about 529 plans. As you may recall from last week’s post (Part 1: Paying for College) we talked about some important terminology and one of those terms was the EFC, the Expected Family Contribution as determined by the FAFSA. This is the amount that your family is expected to be able to contribute towards the cost of college. We also spoke about the term gapping and this is difference between the net price (not the sticker price we spoke about) but the net price and the EFC. This gapping amount is where students often need to obtain a loan if a family doesn’t have funds to cover it. A 529 savings plan is a great way to be saving funds to put towards both the EFC and potential gapping. So what exactly is a 529 plan? A 529 plan is a qualified tuition plan that is a tax-advantaged savings plan to save for future education costs. There are two types: a prepaid tuition plan and an education savings plan. The education savings plan is the more common and is the one we are focusing on here. It works similar to a Roth IRA in that you invest after-tax dollars and the investment grows tax-deferred and the withdrawals are tax free if used for qualified education expenses. 529 plans are sponsored by the states. There is at least one plan sponsored in every state. That means the state determines the rules and the limits for the plan. However, most plans do not have a residency requirement, meaning you do not have to be a resident of the state plan you choose. If you are interested in a plan from a state other than your state of residency, be sure to confirm the residency requirements. Just because the states sponsor these plans, it does not mean they guarantee their plans. As with most investments, there is a level of risk. Most portfolio options include mutual funds and/or ETFs (exchange traded funds). However, there are plans with products that are FDIC insured. You want to choose a plan that is in line with your risk level. There are also age-based portfolios that become more conservative as they approach the age of withdrawal to limit market type disruptions to the portfolio. 529 plans have pre-set investment options that you choose from. There is the ability to change the investment option but there is a limit on how often that can be done. As with most investment accounts there are fees associated with these plans so be sure to review the fee structure. Time is your friend when it comes to investing so start as early as you can! There are many plans that can be opened with as low as a $25 contribution and then additional contributions can be made as often as desired. While there are not limits on the annual contributions to a 529 plan, they are considered gifts in regards to the annual gift tax exclusion which is currently $17,000 a year in 2023. A 529 plan contribution can be a great option for relatives and friends that want to give to your child. (Think about the grandparents giving less toys and more 529 contributions at Christmas!) Grandparents can own the 529 plan but under current law it is generally more beneficial for the parents to own the plan. I will cover that more in just a minute. One other important thing to remember is that the 529 plan can only have one beneficiary. So if you have multiple children you will need a plan for each one as the beneficiary of that plan. Let’s move on to what the plan covers. What is a qualified education expense that can be withdrawn tax free? A qualified education expense under a 529 plan includes tuition and fees, room and board, books, supplies, and equipment. Tuition does include up to $10,000 a year for a K-12 school, not just a college or university. Qualified expenses do not include transportation or health insurance. Expenses must be withdrawn in the same year incurred so you can’t take a withdrawal in December for tuition due and paid in January. Qualified education expense withdrawals are not subject to federal income tax (and in most states not subject to state income tax), but what are other tax implications of a 529 plan? This can depend on the state and 529 plan chosen so again understand the plan thoroughly before you commit to it. It may be worth consulting your tax accountant before choosing a plan. Some states do allow tax deductions on your state income tax return for contributions to a 529 plan. Depending on your state of residence and the plan you choose, you may be eligible for these deductions. Your tax professional can answer these questions depending on where you live. What if withdrawals are made that are not for qualified education expenses? Withdrawals that are not for qualified education expenses are subjected to a 10% penalty as well as federal and state income tax. The penalty and tax is assessed on the earnings portion of the withdrawal not the full withdrawal. For example, if you had contributed $10,000 and the plan had grown to $15,000 and you withdrew the entire amount, only the $5,000 would be subjected to the penalty and tax. Also note that there are a few exceptions that the 10% penalty is waived. What if my child doesn’t go to college or doesn’t use all of the funds in a 529 plan? You can change the beneficiary and the funds can be used for another child, grandchild, etc. You can also make yourself the beneficiary if you desire to go back to school. Beginning in 2024, you can rollover up to $35,000 from a 529 plan into a Roth IRA. Note there are some requirements for this such as length of time the 529 plan has been opened but they are not overly stringent or complex. This rollover is a great way to start a retirement plan for your child if the funds are not used for college. Will a 529 plan affect the FAFSA and financial aid eligibility? Currently if someone owns the 529 plan other than the student or the custodial parent, that 529 plan could negatively impact financial aid eligibility more than one owned by the student or custodial parent. However, there is a new simplified FAFSA rolling out for 2024-2025 that will create changes that are more favorable to someone else such as a grandparent owning the 529 plan. The new FAFSA will also replace the term EFC (the Expected Family Contribution) with the term SAI (Student Aid Index). While the formula for the SAI is similar to that of the current EFC it is important to note that families with multiple children in college at the same time will be treated differently. This change especially could negatively affect middle and high income earners in their calculation. So, a 529 plan may be a good option for families that fall into this category. All in all, a 529 plan can be a great option for a lot of families but it is something that you need to do your homework on before committing to it. There are a lot of plans to choose from so you want to make sure you decide on the one that is most in line with your risk level and goals. The average cost of college tuition has risen over 179% in the last 20 years (educationdata.org)! Start planning for college when your children are young! Let time be on your side while the plan is growing. There are simple ways to fund your plan each month and of course let the grandparents and other relatives know about it. Student loan debt is a huge burden on young adults graduating from college. Early planning and saving can greatly reduce and maybe even eliminate the need for student loans!

Listen to the podcast HERE. College is expensive and paying for college is a real concern for most families. The process is a lot to navigate and it can be overwhelming. There is a lot of terminology and a lot of data to consider. The COA or Cost of Attendance is the total cost to attend college, not just the cost of tuition. People often focus on tuition not realizing how expensive other costs are and then are surprised by the actual total cost. The COA includes not just tuition and fees but also room and board, books and supplies, transportation, etc. You want to focus on the COA not just the cost of tuition. College has both a sticker price and a net price. The sticker price is the published cost on a school's website. The net price is the actual cost paid after aid is applied. Schools have a net price calculator on their website to give you an estimate. It's important to remember that while private colleges are generally more expensive than public, they usually have more funds available for aid. Don't rule out a private school right away. Check out their net price calculator to see if it could be a good option. In order to qualify for financial aid, you must fill out the FAFSA, the Free Application for Federal student Aid. (Note: future episodes and blogs will go more in depth on this topic) The importance of mentioning the FAFSA here is that the FAFSA will give you your EFC, Expected Family Contribution. The information you provide on the FAFSA will determine the amount fo your EFC. This is the dollar amount that your family is expected to be able to provide towards the cost of attendance. If you do not receive aid for the difference between the COA and your EFC this is called gapping. This difference is often covered with student loans (student loans will be discussed in more depth in a future podcast and blog). When I am speaking of aid, I am referring to one of two types: 1. Needs Based aid is grants and scholarships that are awarded based on a family's ability to pay. 2. Non-Needs Based aid is awarded on merit. Let's look at some published average Costs of Attendance, the sticker prices. Note: These are nationwide averages provided by www.educationdata.org 4 Year In State Public College: Average Annual COA: $25,707 4 Year Degree Total: $102,828 4 Year Out of State Public College: Average Annual COA: $43,421 4 Year Degree Total: $173,684 4 Year Non Profit Private College: Average Annual COA: $54,501 4 Year Degree: $218,004 4 Year For Profit Private College: Average Annual COA: $33,528 4 Year Degree: $134,112 What are some options to bring the total cost of the 4 year degree down? Online degrees are an option depending on the desired field of study. Students can remain living at home and save on living costs as well. Not all online tuition is cheaper than in person but some schools specialize in online programs and they generally have lower online tuition than in person programs. Community college programs are on the rise. Many offer classes that students can take while still in high school and agin college credits. Many also have programs where general undergraduate class credits transfer to a 4 year college. This allows a student to remain at home for a year or two, knock out some core credits, while paying an average of about $1865 per semester. This can also be a good option for a student that is undecided about their field of study. High school college counselors or your local community college should be able to provide more information on program options in your area. So remember that the sticker price is not necessarily the net price you will pay. You can explore the net price calculators for various schools early on in your search. Be sure to fill out the FAFSA early. It's available beginning October 1 for the following school year. It will provide your EFC and help guide the financial aid process. Start working on that plan to pay for college as early as you can. Be sure to check out the future podcasts and blogs for more information! Note: All information is education in nature and is not financial advice.

Comfort food in the slow cooker? Yes please! NOTE: If you want more of a soup like consistency, use 4-5 cups broth (or water) rather than just the 2-3 called for in the recipe.

This "mocktail" tastes like a tropical vacation and if you want the real thing, a shot of vodka or rum should work just fine. Ingredients: 1 pound strawberries 1 cup water 1 cup sugar OR 1/3 cup stevia powder Fresca (or club soda or sprite) Top and hull the strawberries. In a blender, combine the strawberries and water and blend into a puree. In a saucepan, combine with the strawberry puree with either the sugar or stevia. Bring to a boil while stirring then simmer over low heat for 5-8 minutes. Let the strawberry simple syrup cool. In a glass with ice, fill 1/3-1/2 full with the cooled strawberry simple syrup. Top with Fresca and mix well.

In my recent podcast, The Value of Meal Planning, (you can LISTEN HERE) I discuss the benefits of meal planning. The main benefits being a reduction in evening stress and saving money! Depending on how often your family eats out, gets take-out, etc will dictate how much the potential savings can be. Since numbers are often easier to visualize than to just hear, I am breaking down the numbers I mentioned in the podcast. My first example was a family of 4 getting take out. The family all gets chicken Alfredo from Olive Garden at $18.99 per entree for a total of $75.96. On the flip side, if the same family made the chicken Alfredo at home (including salad and breadsticks), it would cost them a total of $25-$30 depending on jar or homemade sauce. Keep in mind that amount is with none of the groceries being purchased on special or in bulk, that is regular retail pricing at my local grocery store. Averaging out the at home cost results in a savings of about $49 for JUST ONE MEAL!! Now, say you get take out like this once a week and you eliminated that by eating at home. If you did that once a week for the entire year you would have a savings of $2,548! Now say you kept up with eating at home over a 10 year period and invested that savings (we will assume an average rate of return of a realistic 7%). After 10 years you would have almost $37,000!!! What if you get take out a lot and you eliminated two nights a week? That's $5,096 savings a year and almost $74,000 over the 10 year period! And what if you get take out all the time and eliminated it 4 nights a week? That's a yearly savings of $10,192 and a whopping $147,000 over the 10 year period!! If you are wondering how to pay for college, pay off your own student loans, pay off your credit card debt, etc, then changing your take out habit could be your answer! What if you tend to just go through a drive through and get a less expensive meal? Let's compare the same family of 4! Family of 4 goes to Chick Fil A and gets 4 chicken sandwich with fries meals. They are $7.89 each for a total of $31.56. If you were to make chicken sandwiches and fries at home the total would be about $10. That is with Ore-Ida fries, Tyson chicken patties, and brioche buns. (All prices are regular retail and are not specials or bulk items) So, that is a nearly $22 difference. Let's see what savings that creates if you opt to make it at home. Once a week is $1,144 in yearly savings. If you did that for 10 years and invested it (same 7%) you would have over $16,000. Twice a week would be annual savings of $2,288 and a 10 year investment of over $33,000. Four times a would be annual savings of $91,52 and a 10 year investment of over $132,000. If you are eating out multiple times a week, this simple lifestyle change could greatly better your financial future! Whether you use the savings to pay off debt, save for college, or save for retirement; it's an easy change that is LIFE CHANGING! Note all prices are from grocery stores, Olive Garden, and Chick Fil A located in zip code 28557. These prices could differ slightly in other areas. Last note to add: All information is considered educational and is not considered financial advice.