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My impression was that 529 in your, or your parents name was counted as assets for FAFSA (though at different discounts). In contrast, money in retirement accounts doesn't get reported as assets but will count against income when you draw on it to pay for higher ed. After maxing retirement accounts is a 529 a particularly bad place to sock away some savings assuming a kid is probably going to incur some eligible expense?
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Mar 17, 2016 22:25
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Ashcans posted:I wish that I could strangle everyone who buys a reasonably sized family home, and guts it to create a bunch of lovely two bedroom condos with granite counters. It's not hard enough to find space for a family in the city, you need to cannibalize what stock there is? What is wrong with a family living in a condo? Single-family homes are a cancer.
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Mar 17, 2016 23:01
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waloo posted:
I don't think so: quote:When a school calculates the student's Expected Family Contribution (EFC), only a maximum of 5.64% of parental assets are counted. This is quite favorable compared to other student assets, which are counted at 20%. Higher EFC means less financial aid. http://www.savingforcollege.com/intro_to_529s/does-a-529-plan-affect-financial-aid.php The only way to pay for college from a retirement account without penalty (assuming under59.5) that I know of is from a roth IRA, which is a pretty valuable retirement savings vehicle, so you might have a smaller EFC but could have a significantly worse retirement if you didn't plan accordingly.
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Mar 18, 2016 00:33
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Thanatosian posted:What is wrong with a family living in a condo? Single-family homes are a cancer. A developer recently built a 43 unit block down the street, and its entirely studios, 1bds, and 2bds with 3 rooms. The only family-sized units around are the old buildings (which aren't single family, they're multi-family with 3-4 units) which are getting converted into even more tiny places.
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Mar 18, 2016 01:46
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I finished up my master's and landed a cushy job. Now I'm facing down a significant amount of debt and want to make sure I'm going about it wisely. Unfortunate part is, in addition to student loans, I lost my source of income during my last year of school and even with full time student status and two jobs, ended up putting a lot of living expenses on my credit card. I've been trying to create a savings buffer, and am also trying to figure out if I should slow that down, but at the moment live to the very limits of my income Income after all payroll deductions: $3,650/month - plus some variable from a side consulting job, anywhere from 0-$600 more a month, always put towards debt/savings Checking: $1,897 Savings: $3,000 - contribute $200 a month Credit Card: ($10, 534) - 9.9% - limit of $14,700 - paying as I can, usually about $180 a month, compounds monthly Personal loan: ($9,200) - family member: "I don't know, pay me back as you can as long as you pay me back, maybe 3% interest non-compounding?"- Paying $100/mo Student loan: ($21,056) - 5.96%, principal: $20,500, paying $275/mo (minimum $243, compounds daily) Credit score: 714 (has slipped from 728 due to utilization rate of 60% across 4 cards, two inactive, one used rarely and paid in full) I'm contributing the fully matched 4% towards 401(k) as well, and 1% of income to employee stock options. I can post my budget as needed, but I feel that I'm doing a good job managing expenses otherwise. I track everything in Quicken and am aware that I need a cheaper apartment, which is like finding a unicorn in Seattle  This was spurred by realizing that I'm servicing over $500 in debt a month (and accruing about $186 in interest) and it's kind of cramping my life. Given that I have a Good credit score that only just slipped from Excellent, I was considering finding a nice balance transfer to try to reduce the credit card interest expenses while I work to knock that balance out first. But, given that I don't have sterling credit any more, I don't know if it's worth it to seek to open a new card. The terms I found from USAA are 0% balance transfer, 0% introductory APR until 06/01/2017 on balance transfers and then a variable Regular APR of 7.15% to 24.15%. In the past, I would have felt confident that I could get an extremely low APR and high limit. But as I have no visibility to either of those until the card is approved, I don't want it to be "surprise! Congratulations on a $3,000 limit with an APR of 14%". However, then I wondered: If that is the case that it ends up with a worse APR, and I only transferred a portion that I felt confident that I could pay off to that card during the introductory period, could I reduce my overall interest payments? For some reason this sounds like a stupid plan, and I'd love to have some other eyes on it so I don't have to feel like an idiot and ask my dad now that I'm an adult. Also, general advice on how to structure my payments and savings would be very welcome. Let me know if I'm missing any information! Gonktastic fucked around with this message at 02:43 on Mar 18, 2016 |
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Mar 18, 2016 02:27
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Ashcans posted:It's not the part about it being a condo, it's the part where people convert family housing into 'luxury' units that usually something like 2bds with a galley kitchen. So you have something like a 4 floor building that was originally two 3/4 bedroom units, and it gets converted into 4 two-bed units with much smaller living areas. They are great for one person or maybe fine for a professional couple (provided they don't want an actual kitchen or dining area), but they're rough for a family of three and forget it if you have two kids. On top of that very little new construction includes anything above 2bds, so you have an amount of housing that is growing, but a shrinking pool of family housing. It's not even just 'oh wow its really expensive to have space' it's 'you can't find a 3bd+ listing at all'. The solution here by the way is to let them keep building those units so it becomes less profitable to convert the bigger units.
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Mar 18, 2016 02:37
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Ashcans posted:It's not the part about it being a condo, it's the part where people convert family housing into 'luxury' units that usually something like 2bds with a galley kitchen. So you have something like a 4 floor building that was originally two 3/4 bedroom units, and it gets converted into 4 two-bed units with much smaller living areas. They are great for one person or maybe fine for a professional couple (provided they don't want an actual kitchen or dining area), but they're rough for a family of three and forget it if you have two kids. On top of that very little new construction includes anything above 2bds, so you have an amount of housing that is growing, but a shrinking pool of family housing. It's not even just 'oh wow its really expensive to have space' it's 'you can't find a 3bd+ listing at all'.
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Mar 18, 2016 02:42
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Gonktastic posted:I finished up my master's and landed a cushy job. Now I'm facing down a significant amount of debt and want to make sure I'm going about it wisely. Unfortunate part is, in addition to student loans, I lost my source of income during my last year of school and even with full time student status and two jobs, ended up putting a lot of living expenses on my credit card. I've been trying to create a savings buffer, and am also trying to figure out if I should slow that down, but at the moment live to the very limits of my income I can't offer a ton of advice for this, but I can suggest the Chase Slate card. I don't know about the USAA card, but not only is the Slate ~12 months 0% APR on purchases and balance transfers (in this case, obviously you wouldn't be purchasing anything) but there is also no balance transfer fee in the first 60 days. I was approved for $3,200 and that's allowing me to pay off interest accruing debt until the into APR expires. Keep savings constant, because it's not a huge amount. Maybe cut down once you're really comfortable with your emergency fund. I'd pay the minimum on the student and family loans, and attack the credit card debt. Moneyball fucked around with this message at 03:38 on Mar 18, 2016 |
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Mar 18, 2016 03:34
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last laugh posted:http://www.savingforcollege.com/intro_to_529s/does-a-529-plan-affect-financial-aid.php quote:How are distributions treated? For the record, given the current, crippling cost of a college education (thinking of loans), I'm not very enthusiastic about pushing him that direction unless something systemic appreciably changes in the next eighteen years. If anything, I'm inclined to push him toward a vocation like plumbing or electrical even he turns out to be like Einstein or John Carmack. His boomer grandparents, on the other hand, have been slowly pestering me as to how they can contribute almost the day after his birth.
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Mar 18, 2016 14:12
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How likely is it that being 2 days past the grace period on our mortgage payment will show up as a hit on our credit report? And is there anything I can do about it? I thought I setup a recurring payment to start this month but apparently it didn't get finalized or save so when I got an email on the 17th (due the 1st, grace until the 15th) I paid it and the $55 late fee immediately.
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Mar 18, 2016 17:03
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porkface posted:How likely is it that being 2 days past the grace period on our mortgage payment will show up as a hit on our credit report? And is there anything I can do about it? I know at Chase they don't report to the credit bureaus until 30 days have passed. They are also likely to refund the late fee if you ask nicely and haven't had one in a while. I would call your mortgage servicer.
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Mar 18, 2016 17:48
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Hashtag Banterzone posted:I know at Chase they don't report to the credit bureaus until 30 days have passed. They are also likely to refund the late fee if you ask nicely and haven't had one in a while. I would call your mortgage servicer. For sure, I've done this on the few times I've missed a CC payment. Usually it was because some of my cards didn't have auto-pay and I just forgot. I happens maybe once a year, and I always get it refunded. I've also always asked at the end of the call for some bonus miles or points or whatever, and I've always gotten them, just as a courtesy.
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Mar 18, 2016 17:53
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Gonktastic posted:I finished up my master's and landed a cushy job. Now I'm facing down a significant amount of debt and want to make sure I'm going about it wisely. Unfortunate part is, in addition to student loans, I lost my source of income during my last year of school and even with full time student status and two jobs, ended up putting a lot of living expenses on my credit card. I've been trying to create a savings buffer, and am also trying to figure out if I should slow that down, but at the moment live to the very limits of my income https://www.nerdwallet.com/balance-transfer-credit-cards The best balance transfer cards are either the BankAmericard at 18 months no interest with a 3% fee and Chase Slate at 15 months no interest with no fee.
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Mar 18, 2016 17:59
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Given that it's 14 months zero interest with zero fee, doesn't this one seem like a good option? I have a long history with USAA and will get a discount on my insurance if I have more services with them.
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Mar 18, 2016 18:11
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Gonktastic posted:Given that it's 14 months zero interest with zero fee, doesn't this one seem like a good option? I have a long history with USAA and will get a discount on my insurance if I have more services with them. Oh, I breezed over that part and didn't see the 0% transfer fee. Yeah, that's a good offer as well.
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Mar 18, 2016 18:24
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SIR FAT JONY IVES posted:For sure, I've done this on the few times I've missed a CC payment. Usually it was because some of my cards didn't have auto-pay and I just forgot. I happens maybe once a year, and I always get it refunded. I've also always asked at the end of the call for some bonus miles or points or whatever, and I've always gotten them, just as a courtesy. Awesome, thanks. I'm with Wells Fargo for what it's worth. I'll give them a call just to be sure.
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Mar 18, 2016 18:49
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I'd like to set up a ROTH IRA for someone in my extended family, and contribute to it. I'm not sure what the tax implications for this would be. I'd love to just put my bank account (which has my name only, not this person's name) on it and auto deduct an amount every month, but the IRA itself needs to be in the other person's name. Is the best way to deal with that, tax wise, to make it a gift from me to the recipient? It won't be a lot of money per year, just a few thousand at most, definitely below the contribution limit. I know for sure they don't contribute to an IRA themselves, so no risk in going over that limit. I do contribute to an IRA for myself, but that shouldn't be a problem, correct? Is there something else I should be thinking of? What can go wrong here?
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Mar 19, 2016 17:04
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The main thing that can go wrong is that they won't understand the contribution and withdrawal rules. They could even end up owing tax penalties just by ignoring it. They will have to keep track of it every year, you can't really do that for them. Personally I would sniff around for simpler ways to give them money.
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Mar 19, 2016 17:25
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I'm new to acting like an adult and have been going over my credit reports recently. I basically have no idea what the gently caress other than the basic common sense items (Liabilities, collections, etc) but my Transunion score is 75 points lower than my Equifax score, and my auto loan is seven months behind on my Transunion score. It says it was updated on March 16th but the last payment on my loan was September? I've been trying to find a credit card that will accept me while I turn my smoldering credit into something, but I've been getting denied and want to figure out why Equifax is 75 points higher, with a paid off loan that Transunion isn't showing from 8 years ago, and why my last seven months of on time payments aren't reflected on Transunion. The difference is significant enough that Transunion is rating me two levels lower than Equifax. (Worst / Very Poor versus Yellow / Not Good.)
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Mar 20, 2016 06:25
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Dear goons, I've been saving up my $$ and have around 50k to put down on a house with 7k for closing and 20k leftover. I have no debt and I'm contributing more than my employers match to my 401k. I take home 3,100 a month after taxes. Is 1,220 too large of a mortgage (w/ taxes & insurance) payment? I'm really waffling on buying a small , cheapish house with a mortgage that I absolutely know I can afford, versus a nicer house with a larger monthly payment. I want to spend all my money please help. Tres Burritos fucked around with this message at 19:34 on Mar 20, 2016 |
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Mar 20, 2016 19:29
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Tres Burritos posted:Dear goons, That's a really great job saving! $1220 over $3100 take home is probably going to be a little uncomfortable, but actually pretty decent given it's all inclusive of taxes and insurance. You're not on a super-early FI lifestyle path, but you're ahead of most of your peers. It's all about the long term view though. If you're buying a house that you hope to spend 30 years in, a bit of a premium can be well worth it, while buying for the short term because the payment is more doable is a bad idea due to super high transaction costs.
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Mar 20, 2016 20:19
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I think it's fine if you think you'll probably be there at least ten years and you really want it. As you say you're contributing to your 401k and you have 1900 a month left after the mortgage per month. I think you can afford it without it being too uncomfortable. As the guy above me said, buying if you'll leave it soon is a bad idea. Closing costs on the seller's side total abou 10-11%, so you're really taking a gamble that it will go up in value instead of staying stagnant or going down in a short timeframe. Do you also contribute to an IRA? If not, dialing back your 401k to the match and starting an IRA might be a good idea. Nail Rat fucked around with this message at 20:53 on Mar 20, 2016 |
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Mar 20, 2016 20:50
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Nail Rat posted:Do you also contribute to an IRA? If not, dialing back your 401k to the match and starting an IRA might be a good idea. It's probably just early and I'm missing something obvious, but why do you say this? Why should someone choose to contribute less to a 401k in favor of an IRA? Barring better expense ratios or investment options in one versus the other, of course.
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Mar 21, 2016 16:26
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You have more control over the IRA, and I can't imagine a 401k program with better investment options. Both are solid retirement products though.
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Mar 21, 2016 16:31
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incogneato posted:It's probably just early and I'm missing something obvious, but why do you say this? Why should someone choose to contribute less to a 401k in favor of an IRA? Barring better expense ratios or investment options in one versus the other, of course. - You can withdraw (edit: ROTH) IRA contributions at any time, penalty-free, unlike 401k - As Moneyball mentioned, you can pick and choose the best investment options on the market; super low expense ratio Vanguard options, which will most likely save you money vs. your current 401k investment Blinky2099 fucked around with this message at 19:00 on Mar 21, 2016 |
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Mar 21, 2016 17:30
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Blinky2099 posted:Yes. The long term investing megathread covers this a little bit, but... I believe your first point is only true for a Roth IRA. Traditional IRAs still incur penalties for withdrawals before at 59.5 (outside of some exceptions), and are taxable when withdrawn. Also some people have access to Roth 401k options. You and Moneyball make a good point with regard to likely better options with an IRA versus the average 401k. That makes sense. I was just making sure I wasn't missing something that made an IRA per se better than a 401k, all other things being equal. I am fortunate to have a very good 401k plan with lower expense ratios than I could find elsewhere, which is why I had asked. It might be worth noting in the newbie thread that it's not as simple as always dropping your 401k for an IRA (Roth or otherwise). But after you hit your employer match, I agree it's worth considering your options and comparing.
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Mar 21, 2016 17:57
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Would I be able to set up a Roth IRA for 2015 contributions still?
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Mar 21, 2016 18:05
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Massasoit posted:Would I be able to set up a Roth IRA for 2015 contributions still? Yes, until April 18th this year I believe (it's usually the 15th). Forget where I heard that and why it's the case.
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Mar 21, 2016 18:08
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https://www.irs.gov/Retirement-Plans/IRA-Year-End-Reminders April 18, 2016 because the IRS said so.
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Mar 21, 2016 18:37
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Moneyball posted:You have more control over the IRA, and I can't imagine a 401k program with better investment options. There are some big ones that have access to things like VIIIX, which is VTSAX but with an ER of 0.02% instead of 0.05%. But yeah in general the self-directedness of the IRA allows you to seek out better (cheaper) funds.
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Mar 22, 2016 05:15
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I'm currently saving up money to buy a house, with a target of 20% down plus closing costs to avoid PMI. I hope to have this by July of next year, but it looks like this will be a very difficult target to hit. I work for a private company that gives me 8.5% of my salary each year in stock. I currently have just under $20k worth. This stock is part of a retirement plan, and as such I cannot sell it whenever I desire. There are, however, several situations that you can redeem the stock, including "up to $20k for costs due at closing for your primary residence." My understanding is that I will pay my marginal income tax rate on this redemption. At the moment, most of my net worth is tied up in this. My question is: what would you do in this situation? Would you redeem some or all of this money when ready to purchase? On one hand, it makes me a little nervous to have so much of my net worth tied up in the company I also work for. On the other hand, this stock has historically returned 18%/year on average since inception, and 12% in the last decade. I feel like I would be losing out on a lot of long-term gains if I were to sell out. I should also note that my company has never laid off a single person - unless I screw up very badly, or do something illegal, the chances of me losing my job while the stock price also takes a hit (due to an economic crisis, for example) are very slim. Unless the company (very large, been around since the 20's) goes under.
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Mar 22, 2016 14:22
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baquerd posted:That's a really great job saving! $1220 over $3100 take home is probably going to be a little uncomfortable, but actually pretty decent given it's all inclusive of taxes and insurance. You're not on a super-early FI lifestyle path, but you're ahead of most of your peers. Nail Rat posted:I think it's fine if you think you'll probably be there at least ten years and you really want it. As you say you're contributing to your 401k and you have 1900 a month left after the mortgage per month. I think you can afford it without it being too uncomfortable. How much should you put into savings when you own a home? For the past two years my mindset has been "Save absolutely everything you possibly can", is 1k a month a good / bad amount? More? Less?
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Mar 22, 2016 14:27
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It all depends on the home in question, and what your emergency fund currently is(that part we know, 20k), and what your monthly expenses are. Let's say something like this: 1220 - mortgage, taxes, insurance 300 - groceries and household items(varies a lot based on your tastes, how much you eat, and how much yard maintenance you'll need to do, etc) 100 - electricity (this will change based on the size of the home, location, etc) 300 - transportation (this could be anywhere from 100 to a bus/train pass to 500 for a car payment, car insurance, and gas) 100 - internet/tv/whatever(who knows?) 100 - cell phone(obviously this can range from like 35 to well over 100) 200 - fun money(this is basically completely up to you) 2320 I think that's a reasonable budget, but as you can see, there's a lot of places where it could easily vary quite a bit. Going by this(if this was accurate, it's probably not one way or the other) and the fact that you could probably cut some things down if you had a job loss or were disabled temporarily, I'd say your 20k left over represents about ten months worth of expenses. I think that's pretty drat good. I assume the house in question is probably around 200k or so given the 1220 mortgage; you're probably looking at 5-6k a year maintenance on average. Most years it'll probably be more like 1-2, and every so often there'll be a big thing. If you had a budget that added up as above, you could fund a Roth IRA (460 a month) and still have about 350 left over discretionary; this can cover things that come up as they do, or be extra fun money/extra in savings as you please. Odds are this will more or less cover minor repair issues that come up, and if you're throwing it in savings every once in awhile when you don't need it, you'll have the cash when something major pops up. You'll also get several thousand back at tax time, especially after the first full year of ownership (in the first year, you'll pay less in interest and taxes due to only owning part of the year). Nail Rat fucked around with this message at 14:42 on Mar 22, 2016 |
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Mar 22, 2016 14:36
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Someone talk me out of a short sale house. We found a perfect house that is with in our budget now, not six months from now as we were thinking, so baring something really wrong with it, what are the downsides?
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Mar 22, 2016 14:47
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Nail Rat posted:Lots of good stuff Hokay thanks. I think I'll make a rough budget and then learn about a Roth IRA (Any recommended resources for dumb idiots?). Also I'm over withholding on my taxes (single / 0) so that should get me some more.
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Mar 22, 2016 15:00
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Tres Burritos posted:Hokay thanks. I think I'll make a rough budget and then learn about a Roth IRA (Any recommended resources for dumb idiots?). Also I'm over withholding on my taxes (single / 0) so that should get me some more. The Long Term Savings thread has lots of good info in the OP and lots of people who can give better advice than me: http://forums.somethingawful.com/showthread.php?threadid=2892928 The easiest place to start is looking at this PDF from the guy who wrote The Four Pillars of Investing. Both the booklet and the book are highly goon-recommended http://www.etf.com/docs/IfYouCan.pdf By the way, it only takes $1000 in a checking account and about 10 minutes of your time to start a Vanguard Roth IRA (their target retirement accounts, which are diversified, have only a $1000 minimum initial purchase). Just wanted to throw that out there.
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Mar 22, 2016 15:03
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It really doesn't take much time at all. Took me maybe 20 minutes and I kept getting interrupted.
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Mar 22, 2016 15:44
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SIR FAT JONY IVES posted:Someone talk me out of a short sale house. We found a perfect house that is with in our budget now, not six months from now as we were thinking, so baring something really wrong with it, what are the downsides? Is it an approved short sale? Even if the price is approved it can take a long time to close. How bad would it be for you if it was 6 months - 1 year from now before you could move in? That wouldn't be typical but the bank probably won't do anything quickly.
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Mar 22, 2016 16:07
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antiga posted:Is it an approved short sale? Even if the price is approved it can take a long time to close. How bad would it be for you if it was 6 months - 1 year from now before you could move in? That wouldn't be typical but the bank probably won't do anything quickly. It would be great if we couldn't move in for 1 year, We are living in a nice apartment that is super cheap, is big, in a great neighborhood and we are month to month, so having a year to keep saving would be excellent, especially given this house (baring any weird issues with the house). It's in the same town as we already live, so when my kid starts school in a few months we will stay in the same town. If time is the only downside, I'm ok with that.
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Mar 22, 2016 16:36
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I'd say just make sure you do your due diligence on inspections, etc. People who are doing a short sale probably haven't had a preponderance of money to spend on maintenance.
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Mar 22, 2016 16:46
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