debt Archives — Page 2 of 14

How We’re Helping Our Teen Save for College

February 10, 2020 By MelissaB Leave a Comment

College is getting more expensive every year, and with the student loan crisis, more and more students and parents are trying to forego student loans. Avoiding student loans, if possible, is a smart way to go. We should know; my husband and I are still paying off his student loans from graduate school, which he finished eight years ago. So, we want to do everything we can to help our own children go to college without accruing any debt. How we’re helping our teen save for college involves a multi-pronged approach.

How We’re Helping Our Teen Save for College

There are four ways we’re helping our teen save for college:

Using an Employee Discount

My husband is employed at our local university, so our children will get 75% off the price of tuition. While this school currently costs approximately $12,000 for in-state tuition for a year, our children, thanks to the discount, will only need to pay $3,000 a year.

Matching Our Teen’s Savings

From the time our children were young, we set up a savings account for college. We match each dollar that our child saves in this account. Our three children all have varying balances, and one of our children is a much more prolific saver than the other two. While this account won’t cover their $3,000 a year that they will have to pay for college, it will likely cover their textbooks for several semesters.

Paying for AP Tests

How We're Helping Our Teen Save for College — Photo by Ben Mullins on Unsplash

Our teen is bright and this year decided to challenge himself with an AP history course. We paid for the AP test that he will take in May. If he scores a 4 or a 5 on this test, he will be able to earn college credit for the course.

Next year, he plans to take several AP classes and tests, and we’ll pay for those, too, in the hopes that he can score high enough and reduce the amount of time he needs to be in college.

Finding Scholarships

Our teen took a practice PSAT at school, and while his score was okay, it wasn’t stellar. Since he has a 4.0 in school, if he can raise his SAT score by at least 100, he will qualify for a $6,000 scholarship from our university. (The higher the scores, the higher the scholarship amount he qualifies for. If he could get his score even more than 100 points higher, he would qualify for an even larger scholarship.)

We don’t have money to pay for SAT tutoring, but having it would be valuable, especially if it helps our child raise his score and qualify for the scholarship. I found a scholarship offered through a private foundation that could be used for SAT prep. We applied, received the scholarship, and he’s begun tutoring this semester.

Final Thoughts

Money has been tight throughout our marriage, so we’ve never had much money to set aside for our children’s college education. (Our priority has been paying off our student loans and saving for retirement.)

However, helping a child in other ways rather than just paying tuition outright can also be valuable. This is how we’re helping our teen save for college.

MelissaB

Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.

www.momsplans.com/

4 Ways to Find Extra Money to Put on Debt

January 9, 2020 By MelissaB Leave a Comment

If you’re in debt, the common advice to get out of debt as quickly as possible is to get a second job and/or sell stuff. But for some people, getting a second job isn’t an option, and there’s only so much stuff around the house you can sell. However, there are 4 small ways to find extra money to put on debt that aren’t labor intensive but can make an impact on your debt reduction.

4 Ways to Find Extra Money to Put on Debt

You may have more money than you realize that can be mobilized to pay down your debt:

Practice Doing Without a Bit of Money Each Week

For instance, the first four weeks that you do this, just take $1 out of your budget a week to go toward debt repayment. That is only $4 for the first 4 weeks, which almost anyone can do. The next four weeks, make it $2 a week, so now you have $8 for the next four weeks going on debt. By the last four-week cycle of the year, you’re at $13 a week, or $52 extra to go on debt for those four weeks. At the end of a full year, you will have put an additional $364 on your debt.

Save All of Your Change

4 Ways to Find Extra Money to Pay Down Debt — Photo by Josh Appel on Unsplash

If you make a habit of paying in cash, try to save the change that you receive rather than spending it. I used to do this quite regularly, and we would have anywhere from $250 to $300 in change at the end of the year, all of which can be put on debt.

Have a No Spend Month

At least once a year, try to have a no spend month. You can decide if you want the no spend month to be only for groceries, or also for entertainment. Now, this doesn’t mean that you don’t spend at all but that you try to avoid any extraneous purchases. You might “need” to spend $300 on groceries for the month so you stay stocked in produce, milk, bread, etc., but if you usually spend $600 a month on groceries, your no spend grocery month will have netted you $300 in extra money. Some people also say no to eating out or other entertainment during the no spend month to increase their savings.

Roll Extra From Any Budget Category Onto Debt

Let’s say you budget for $700 a month for groceries, but one month, there were great deals at the grocery store, and you only spent $643. You can take that extra $57 and roll it onto debt. Likewise, if your internet bill is $75 a month, but you call up your provider and negotiate a deal and now only have to pay $56 a month for the next 12 months, roll the savings of $19 each month onto your debt.

If, at the end of the month, you sweep all of the extra from any budget category onto your debt, you’ll likely have anywhere from a few dollars to a few hundred dollars to put on your debt.

Windfall Money

Any time you have unexpected money come your way, put it toward your debt. You just got $1,600 back on your tax return? Put it on your debt. You got back a surprise $48 from your former employer? Put it on your debt. You use Rakuten regularly and just got a Big Fat Check for $7.47? Put it on your debt. No amount is too small.

Final Thoughts

While the common advice to pay down debt faster is to get a side gig, if you can’t do that, know that there are many other ways, even on a tight budget, that you can accelerate your debt repayment process.

What other ways have you found to pay down debt more quickly without getting a second job?

Incidentally, if you’re reading this because you’re in debt, but looking to get out of it, consider surfing over to our debt free family, they have a nice set of debt reduction tools that you might find helpful, here.

MelissaB

www.momsplans.com/

How To Prepare Your Teens to Live On Their Own

December 30, 2019 By MelissaB Leave a Comment

Sure, you love your children, but there’s no doubt that raising them is expensive. Many parents miss their kids when they move out, but they’re glad to be rid of a heavy financial obligation. . .unless the adult child moves back in. Suddenly, aging parents may find themselves paying for Junior again, negatively affecting their finances. One of the best ways to guard against that is to make sure Junior is ready to responsibly handle his finances when he flies the coop.

Since our son was about 12 years old, he has been eagerly anticipating moving out and living on his own when he turns 18. We want to make sure that when he does move out (whether that’s at 18 or a year or two later), that he can live independently and sustainably. These are some of the skills we’re working on.

How to Prepare Your Teens To Live On Their Own

There are some essential skills your child should master before moving out of the home:

Have a Strong Work Ethic

Some teens leave the nest never having worked a job or done chores around the house. Kids who leave home without a strong work ethic are less likely to successfully transition from childhood to adulthood, meaning they have a higher chance of ending up back at home.

Teach children from the time they’re young to work for the things they want. This becomes even more important as they reach the teen years. Rather than just give your child $20 when she wants to head to the movies with friends, make her work for her money by doing a job around the house or helping a neighbor with a task.

Budget and Handle Money Responsibly

Many an adult child has moved back home saddled with debt from the college years. To avoid this, in the high school years, teach your child how to budget. Show her how you budget for the family and have her create her own budget with the money she earns from an allowance or part-time job. Teach her to save for an emergency fund and to save for upcoming expenses.

Just as important as teaching her how to budget is to teach her how to use money responsibly. One way to do start doing this is to give your 13 or 14 year-old child the money you would normally spend for her clothes for the season. Let your child buy her own clothes with the money, and she will start learning how far a dollar stretches. Another way to do this is to let her buy her own food.

Buy and Cook Food

How to Prepare Your Teens to Live on Their Own — Photo by Andy Chilton on Unsplash

When our son was 15.5 years old, we decided to give him a weekly grocery budget and let him do all of his own grocery shopping and cooking. This has been interesting to watch. The first few weeks, he ate too many carbs because they were cheap and he thought they would fill him up, which he quickly found to not be true.

The next few weeks, he had a meat heavy diet, which left him feeling sluggish.

The weeks after that, he started finding healthy recipes with balanced nutrition. He did all of this with minimal input from us. He learned by doing and experiencing.

Plus, he’s learning not only how to grocery shop wisely, but also how to meal plan and cook, essential skills for when he leaves the home.

Final Thoughts

Obviously, there are many steps to get a teen ready to leave the nest, but right now in our family, we’re focusing on these three as they seem most important for a teen to be able to successfully live on their own.

What suggestions would you add for how to prepare your teens to live on their own?

MelissaB