Money

Money Tip Monday: How To Save While Doing Laundry

[video width="1920" height="1080" mp4="https://script-notes.com/wp-content/uploads/2018/06/5WTS-While-Doing-Laundry.mp4"][/video] Doing laundry.  It's a fact of life, especially if we want clean clothes.  It can also be one of the largest sources of electrical or other utility expenses for your home.  It doesn't have to be that way though.  Consumers Energy provides some good common sense tips to help a little bit in your bid to save on energy:

  1. Run full loads. You'll save energy and water by reducing cycles.

  2. Clean the lint filter in your dryer before each load to improve air circulation.

  3. Inspect and clean the dryer vent periodically. Better air flow means more efficient drying.

  4. Hang laundry to dry. Hang clothes outside to dry on nice days, or hang them inside when the weather is not so nice.

  5. Use ENERGY STAR® rated washers and dryers. They use less energy and water than standard models. Consumers Energy (as well as other energy companies) can offer rebates up to $50 for an ENERGY STAR washing machine.

Paying for College With The 529 Plan

  529 Plan

Who has heard of the 529 plan?

Whether you’re the parent of a newborn, or your little one is in elementary or perhaps even making their way through middle school, there is no time like the present to start saving for college.

Many may think that just a regular savings account would be sufficient to start saving for tuition and textbooks.  However, there is another investment vehicle that you can use to get rolling.  Similarly to how one can stash away funds for retirement in an IRA, those wishing to save and invest funds for college can choose the 529 plan.  Read on for more.

What is a 529 plan?

According to the SEC, “a 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.”

There are two types of a 529 plan, prepaid tuition and college savings plans.

Prepaid Tuition

The SEC states “prepaid tuition plans let a college saver or account holder purchase units or credits at participating colleges and universities (usually public and in-state) for future tuition and mandatory fees at current prices for the beneficiary. Prepaid tuition plans usually cannot be used to pay for future room and board.”

Generally most prepaid tuition plans receive sponsorships from state governments and can also contain residency requirements for the one who is saving for college or the beneficiary.  It is important to note that these types of plans are not guaranteed by the federal government.  Some of these state governments will guarantee the money that you put into the plan, however others will not.  That being said, the importance of checking your individual state’s guidelines cannot be stressed enough.  For example, if your investments are not guaranteed by your state, and the plan’s sponsor should go broke or have some other sort of shortfall, then you could lose some or all of your money.

College Savings Plans

With this particular plan, “a college saver can open an investment account to save for the beneficiary’s future qualified higher education expenses – tuition, mandatory fees and room and board. Withdrawals from college savings plan accounts can generally be used at any college or university, including sometimes at non-U.S. colleges and universities. A college saver may typically choose among a range of investment portfolio options, which often include various mutual fund and exchange-traded fund (ETF) portfolios and a principal-protected bank product. These portfolios also may include static fund portfolios and age-based portfolios (sometimes called target-date portfolios). Age-based portfolios automatically shift toward more conservative investments as the beneficiary gets closer to college age.”

Almost on the opposite end of the spectrum, all college savings plans ARE sponsored by state governments and only a few have residency requirements for the saver or the respective beneficiary.  It is also worth noting that state governments do not guarantee investments in college savings plans.

Also worth noting is that college savings plan investments within mutual funds and ETFs do not get federally guaranteed, however, should you make some of your investments in some principal-protected bank products, those may be insured by the FDIC. Don’t forget too that similarly to most investments, investments within college savings plans have the potential to not make any money and could lose some or all of the money invested.

Additional Perks

As an added bonus, investors saving for college within a 529 plan may also get additional tax benefits.  Of course, make sure you understand the tax implications of investing in a 529 plan and consider whether to consult a tax adviser.

One perk is that many states will offer tax benefits for contributions to a 529 plan. Benefits can include deducting contributions from state income tax or matching grants. However, college savers may only be eligible for these benefits if investments are made in a 529 plan sponsored by that specific state of residence.

Also when it comes to 529 account withdrawals for qualified higher education expenses, earnings in the 529 account are not subject to federal income tax and, in most cases, state income tax. If 529 account withdrawals are not used for qualified higher education expenses though, they will be subject to state and federal income taxes and an additional 10% federal tax penalty on earnings.

Final Thoughts

While there are certainly other options for saving for college out there, if managed properly, the 529 plan can be a great investment vehicle while saving for your child’s college expenses.  If you would like to learn even more, the SEC offers up additional information and circulars for your reference to see if this might be a good fit for you and your family.

Teens - How To Save Your Way to a Millionaire This Summer

compound interest Ah summer, you can hear the birds chirping, the bees buzzing, fresh cut grass, and the shopping malls a callin’.  The sweet freedom of summer.  Hold up.  That last part, the shopping malls a callin’.  While your favorite retailer is probably hoping you’ll be more than ready to drop that hard earned cash this summer in their store, did you know that with a little planning, there could be an even better use for that money?  Compound interest.  Read on to find out more.

Perhaps you have never stepped foot in your local bank or credit union, or on the flip side, maybe you are actively saving and investing for your future. Regardless, remember with little effort and patience, there’s something you may have heard of before that can help you better utilize that cash called compound interest.

Compound Interest - Saving Your Way to Millions

Compound interest - probably sounds complicated on the surface, right? Guess what though?  Compound interest is what is going to help you get on the fast track to being a millionaire.  It’s actually free money!  Still not sure what to think? Just check out this example of Ben and Arthur via DaveRamsey.com to get just how much compound interest can help you in your savings journey for your summer job this year and go forward.

Ben and Arthur were friends who grew up together. They both knew they needed to start thinking about the future. At age 19, Ben decided to invest $2,000 every year for eight years. He picked investment funds that averaged a 12% interest rate. Then, at age 26, Ben stopped putting money into his investments. So he put a total of $16,000 into his investment funds.

Now Arthur didn’t start investing until age 27. Just like Ben, he put $2,000 into his investment funds every year until he turned 65. He got the same 12% interest rate as Ben, but he invested for 31 more years than Ben did. So Arthur invested a total of $78,000 over 39 years.

When both Ben and Arthur turned 65, they decided to compare their investment accounts. Who do you think had more? Ben, with his total of $16,000 invested over eight years, or Arthur, who invested $78,000 over 39 years?

Believe it or not, Ben came out ahead . . . $700,000 ahead! Arthur had a total of $1,532,166 while Ben had a total of $2,288,996. How did he do it? Starting early is the key. He put in less money but started eight years earlier. That’s compound interest for you! It turns $16,000 into almost $2.3 million! Since Ben invested earlier, the interest kicked in sooner.

Pretty sweet, eh?

So here’s what you can do now.  Your goal is to get going AS SOON AS POSSIBLE.  If you need help, reach out to your parents or teachers about how you can open a long-term investment account so you can get on your way to being a millionaire, too!  Finally, remember, the longer you wait, the less money there will be waiting for you at the finish line, so get rolling!

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Hurry: How To Save Money on Mother's Day Shopping

Mother's Day We're three days out from Mother's Day, and if you haven't picked up anything yet, you're probably wondering how to save money on Mother's Day shopping.

Here are some great ways to do some last minute shopping:

CardCash.com (Note we do not receive an affiliate commission from this vendor and just wish to help you save!)

This is one of our favorite discounted gift card web sites to save extra money on as they frequently run promotions for additional discounts toward the weekend, and they're back again this weekend.  With code: MOM, you can save an extra 6% on gift cards at Victoria's Secret, 6% at Forever 21, 6% at Lane Bryant, 6% at White House Black Market, 6% at H&M, 7% at Payless (which you may want to get a jump on due to their closing stores), and 6% at many more brands!

Amazon.com

If you have an Echo device from Amazon, as well as have a Prime Membership (another good gift idea - you don't even have to wait for shipping!), you can save plenty on lots of great gift ideas from chocolates to bracelets, to even $30 off of a new Echo (which is great with the new Alexa calling features!)  Make sure to check out our other post on how you could possibly save an additional $25 off your purchase of $50 or more if you have an American Express card!

Or if she might prefer a tablet, there's also deals to be had on the HD8:

Travel

Does your Mom (or Dad) like to travel?  Then you might check out IHG, which operates many familiar brands like the Holiday Inn and more.  They are currently running a promotion where if you book early, you can save up to 15% off of the usual prices!  We had a lot of our wedding festivities at the Holiday Inn here in Michigan and were quite pleased with the service and amenities!  Other options include Priceline, which is currently running a Memorial Day sale for up to 20% off on select hotels until 5/30.

Another favorite hotel chain that we like to travel to is Hilton, where you can get Mom a $50 daily credit for every night of their stay, at thousands of Hilton Hotels worldwide with code RPTVS1!

Chocolate and Food

Does Mom have a sweet tooth?  You can get 20% off Mother's Day gifts at Ghiradelli.com with promo code BESTMOM20.  Or another great gift, get Mom HelloFresh and save her some time from having to go out into the throngs of the grocery store.  We love the convenience with our HelloFresh meals, and how much time it saves us.  Plus they measure everything out for you, leading to lack of wasting of ingredients.  Right now, you can get $40 off your order with this offer!

Flowers

Of course you can't go wrong either with 1-800 Flowers.  Make sure to check out their Deal of the Week!

So there you go.  Hopefully this has been able to help you with some last minute shopping ideas, and save some money at the same time!  However, if there is an idea you're looking for for your own Mom, please let us know in the comments, and we'll try and do what we can to help find you a good deal!  Most of all though, make sure to take this Mother's Day, and spend time with your Mom.  Put down the devices, and just actually be present in the moment.

That is probably more than she could EVER ask for.

Happy Mother's Day!

How to Get Out of Debt With Undebt.it

debt consolidation It is a challenging question that faces most of us. How to get out of debt? Should I explore debt consolidation? Many of you have probably heard of the debt pay down snowball method made famous by personal finance guru Dave Ramsey. If you haven't, the basic premise is that you make minimum payments on all your debts except for the smallest, and put as much money as you can on that debt. Once that debt is gone, you then take its payment and apply it to the next smallest debt. Rinse and repeat as you go through each one. The more you pay off, the more your freed-up money grows – which is – wait for it – like a snowball rolling down a hill. The additional thinking too is that by starting with the smallest debt, this will add up to quick wins, giving you additional momentum.

Granted, you could do all of this with pen and paper. However, with today's technological advances, what's the fun in that? Enter Undebt.it.What is Undebt.it?  And how can it be better than debt consolidation?

With debt consolidation, a lot of times, you're moving the same amount of debt from one place, to another.  It isn't really going anywhere.

With Undebt.it, you get a free mobile-friendly debt snowball management tool and payment planner. As a bonus, you can also keep track of your monthly bills. The program will generate an easy to follow payment plan to assist in eliminating your debt. You also have flexibility in which method you might want to choose. There is the previously mentioned Debt Snowball – which takes care of your lowest balance first. Then there is the Debt Avalanche which knocks down the highest interest rate debt first. Mathematically it would make more sense to tackle this one first, which you certainly can. Again though, you will feel progress knocking off the smallest ones first, and a better sense of achievement. Or you can even create your own custom plan. Pick which works best for you.

Website Features

  • Multiple debt payoff plans, including custom plans
  • "Debt Snowflake" additional/one-off payment support
  • Add unlimited debt accounts
  • Sortable & exportable payment history per debt account
  • Summary view with projected payoff date & total interest
  • No personal information or links to your banking accounts required
  • Responsive design works on all major web browsers, tablets and phones
  • Localized currency formats
  • SSL encryption (https) protects your information
  • Completely free to start

There is no doubt about the tremendous benefits of getting debt out of our lives both financially and psychologically. That said, I would highly recommend giving this product a try as I know it has helped us get a lot of ours in order. It is great to have the visual representations of your progress as well, on top of the freedom of picking what plan you would like. Certainly let me know if you should have any questions, and all the best on your financial journey!

How to Invest in an IRA With Little Money

Betterment While many may already be investing in 401(k)'s through work, others may not have that option and still want to get investing in an IRA, be it Traditional or Roth.  Certainly if you are not investing at all, then now is as good a time as any to start.  You may be asking, but don't I need thousands of dollars to start investing?  Not at all.  Betterment makes it extremely easy to be able to both start and accelerate investing.  Read on for more.

Betterment can offer better returns

According to their Overview, the Betterment portfolio is designed to achieve optimal returns at every level of risk.  Utilizing features like diversification, automated rebalancing, better behavior and lower fees, their approach to investing can help investors generate 2.9% higher returns than the usual go it alone investor.

One of my favorite features is that they also offer Tax Loss Harvesting.  This can find systematically embedded capital losses that can help lower your investment taxes and increase after-tax returns.  Granted if you're looking for an IRA investment opportunity, this might not mean as much anyway due to your individual tax situation, but if you are looking for a separate investment account with them, then this feature could potentially help.

The company mentions that most people do not receive good and trustworthy investment advice.  Generally many financial advisors are paid to recommend certain investments so they recommend them - EVEN if it's not in the best interest of their client - resulting in a huge conflict of interest.  Betterment also is not paid to recommend any funds - resulting in no hidden fees.  They only choose recommendations that they feel are best for each individual and their respective goals.

History is on their side when it comes to results

Generally the company doesn't try to best the stock market, but with the goal of lowering costs and minimizing taxes, they strive to optimize your portfolio for the best-expected investor returns possible.  Looking at their page, they more often than not would have outperformed the average client investor in almost all periods over the last decade.

How Much Will This Cost Me?

Ah the million dollar question.  If you're looking to get started with your IRA investment, Betterment let's you get started with NO MINIMUM BALANCE, and you can cancel at any time!  The annual fee is only 0.25%.  You get automated portfolio management, tax-efficient investing features, advice across your investments and their award-winning customer support.  There are also no trade fees for buying and selling securities, no transfer fees for depositing or withdrawing from your account, and no rebalancing fees for when you want to change things up in your stocks/bonds allocation.

That said, we have had success with Betterment, and feel it is a great way for individuals and families to get started with their IRA retirement saving.  While one can never predict the stock market, surely it would have to beat today's interest savings rates with the proper allocations selected.

So what are you waiting for?  Get to saving and investing today - you can't afford NOT to.

E-Book Deal Alert: Freakonomics Available for $1.99

  Freakonomics picture of part apple part orange

When the book Freakonomics first came out, it set out to turn the study of economics on its head.  Authors Steven D. Levitt and Stephen J. Dubner posed questions such as, "which is more dangerous?  A gun, or a swimming pool?"  "What do school teachers and sumo wrestlers have in common?"  "Why do drug dealers still live with their moms?"  "How much do parents really matter?"  The authors set out to try and show that at the heart of it all, economics is how people get what they want, or need, particularly when other people want, or need the same thing.

That said, if you have not yet had a chance to read this series, be it due to price or any other number of factors, there is currently a great deal on the book for $1.99 on Amazon for the revised and expanded edition!

Save Money on Baby Diapers

Save on Honest Company Diapers

As new parents ourselves, we know all too well that one of the largest expenses many parents go through is diapers.  They are a fact of life when it comes to raising a child, a fact that is not lost on diaper manufacturers.

The Honest Company realizes this for parents and wants to offer an extra $20 off your first diapers and wipes bundle:

According to the company's story, their goal is to relieve parents of a few tasks by delivering family essentials right to your doorstep, allowing you to simplify your life and generate more time for you to be able enjoy what's most important in life.