There are many options to save for a child’s education including 529 and college savings plans, but many of these would most likely eliminate or reduce financial aid.  If you’re worried about financial aid impact, a  good way to approach the savings is to avoid savings and investment vehicles listed in college Expected Family Contribution (EFC) Calculation EFC Formula and on the FASFA form.  Some ideas include:

• A cash value insurance policy
• Roth IRA or other retirement savings
• House equity (though some private colleges take this into account)

• Open a regular non-retirement investment account
• Leave the account open, with your referral money in there, for at least 6 months.
• Fund your account with at least $1,000 within 30 days of opening the account
• Make a minimum of one trade within 180 days of account opening

About 10-20 minutes of work for $50, not bad.  Deal Specialist does use Tradeking for his equity trading, but if you are only interested in the promotion, you can buy one share of penny stock and leave it there (SGRP and TCX are under .50 at the time of this post).

I disagree with many financial experts in that I believe that credit cards are a good thing to have if you are responsible with your money.  It’s all about tracking your spending.  In fact, I have a harder time controlling my spending when I use cash since I can’t track it in my Financial Aggregation Tool.  Here are my Fave 5 reasons that I have a credit card.

5. Float  your debt
I pay my balance in full every month so I don’t accrue any interest.  In essence, I am getting free interest on that money every month.  For example, if I pay a $100 electric bill every month with my credit card, I can keep an extra $100 in a Certificate of Deposit or Money Market account to earn interest.

4. Get gifts/rewards for signing up
From cash to free toasters many cards offer some sort of incentive to sign up.  As long as you don’t go crazy signing up for every card that has some kind of gift with it you can use this to your advantage.

3. Save on interest
May cards have special terms on interest.  0% or reduced interest rates… some are promotional and some cards have a fixed low interest rate.  Use this in conjunction with Reason 1 (float) and you can get some extra interest.  Just make sure you read all the fine print and have the money to pay in full when the promotion period ends.

2. Get a reward for making purchases
Get cash/points/rewards for spending.  If you’re going to make a purchase anyway why not get an instant 1% discount.  Just don’t go overboard with chasing points.

1. Build your credit for big purchases
And the NUMBER 1 reason for getting a credit card is to build your credit.  Some day you may need financing.  The deal specialist does not believe in financing for cars (unless you can get <3%), but someday you will want to buy a house.  Easiest way to build up credit is to get a credit card.

That’s what the Fave 5 concept is – short concise 5 item lists about all things Deal Specialist: Personal Finance,  Productivity, Technology

For all our Fave 5 Features Click Here.

Even though I’m typically very comfortable with technology, I felt like I was flying an airplane using that weird trading tool (after the tutorial and doing a few practice trades I felt a bit better about it).  I opted to do a EUR/USD trade since that was supposedly the least volatile currency pair.  I looked at the trading chart and looked like (based on my probably not so good intuition) that EUR had dropped quite a bit during the day and was about to rebound.

So I set a limit buy order at the current price and crossed my fingers.  It went through instantaneously and then I set up a limit sell order a few ticks above my buy order amount and recrossed my fingers.  I looked at the thing for a bit and decided to not stare at the thing, my heart was beating 1000 beats a minute.  Good time for a bathroom break…

Got back from the bathroom and good news, the trade went through.  Net profit $6!!!  Hopefully, I get my $200 bonus soon, but I’m glad I went through this experience.  The FOREX is a bit volatile for me (I think I prefer the casinos), but I’m going to educate myself a bit more on the topic.

Very often people ask me where they should be putting their money for Retirement. Here’s the short answer, Contribute to your retirement in this order:

1. 401K up to company match
2. Roth IRA up to maximum contribution
3. 401K up to maximum contribution

Need more detail?

A 401K is an employer-sponsored retirement savings program. 401K contributions are tax deductible which means that you are not taxed on what you put into it. So… assuming a 25% tax bracket, for every $100 dollars you put in, you get $25 off your taxes.

Find out if your company has a 401K program and see if they have a company match. If they do, basically you are getting paid to save money for retirement. For example, my company matches 50% for the first 6% of my income. That means in addition to my tax benefit, my company gives me $50 for every $100 I put toward my retirement. WHAT A DEAL! This is a no brainer. You’d have to be an idiot not to take advantage of it.

After contributing to the 401K up to company match, you should start up what is called a Roth IRA. You can start it up fairly easily at an investment company like Vanguard or Fidelity. Unlike the 401K, the Roth IRA provides no deduction for contributions, however, there are great advantages:

• All earnings are tax free when you or your beneficiary withdraw them
• You can take out the money you put into the Roth IRA (not the earnings) at any time with no penalty
• Unlike other retirement plans you don’t need to take minimum distributions after age 70.5

If you still have money after contributing the company match, you should contribute to your 401K so you can get more tax savings.

For more info on 401Ks and Roth IRAs go to IRS website at http://www.irs.gov/taxtopics/tc424.html and http://www.irs.gov/publications/p590/ch02.html Share and Enjoy:

]]> http://www.dealspecialist.com/2009/07/24/retirement%e2%80%a6-where-should-you-be-putting-your-money/feed/ 0 http://www.dealspecialist.com/2009/07/23/newly-proposed-bill-could-extend-8000-housing-credit-to-all-homebuyers/ http://www.dealspecialist.com/2009/07/23/newly-proposed-bill-could-extend-8000-housing-credit-to-all-homebuyers/#comments Thu, 23 Jul 2009 10:00:01 +0000 Simon Eurek http://www.dealspecialist.com/?p=72 A new bill introduced in the house of representatives could extend the $8000 tax credit to all homebuyers, removing the income and new home restriction of the currently existing $8000 housing credit bill.

Info on Proposed Bill

For those that are not familiar with the existing First Time Homebuyer Credit bill that was released this year,  an FAQ is on the IRS website.

However, there is a better way!!! There is a concept called account/financial management which allows you to see the big picture: from your daily spending to your net worth to helping you manage a budget. This isn’t a new concept, Quicken has had a product that has done this for a long time. What made it cumbersome to use was the setup. Well with web technology taking leaps and bounds, much of the setup has been made easier and user friendly. Here are some popular websites that allow you to aggregate your finances:

Mint
Quicken Online
Yodlee MoneyCenter

Check it out!  In future posts I will be providing reviews for these sites.

• Credit card statements must be mailed out 21 days before they’re due
• Individuals under 21 will need a co-signer on their cards unless they can prove that they have the means to make payments on their own
• Credit card agreements will have to be posted on the internet
• Interest rates can’t be raised during the first year of an account
• Customers will be notified 45 days in advance of any change in interest rates
• Bills can be paid online or over the phone without incurring a processing fee
• Customers must be over 60 days late on payments before their interest rate can be raised on balances; if the rate is raised, it will go back to the lower rate if customers make the minimum payment on time for six months in a row.
• Overlimit fees can’t be charged unless cardholders are told that the purchase will put them over their limit and they authorize it to go through anyway
• If your card has more than one interest rate on balances, then payments must be applied to the highest interest rate first
• Gift cards can’t expire for five years, and issuers can’t charge dormancy fees for unused amounts left on the card

Changes sound reasonable.  It would be interesting to see how this will affect credit card offers.  These fees probably help fund credit card promotions.