This Week in Your Wallet: Debt Diet, Taxes and FAFSA
I am – once again – getting nervous about household debt. Home equity lines of credit are all the rage. Student loans are being used for things other than education. And consumer debt rose more last quarter than it did in the past six years. I wrote about this in my most recent column for Fortune.
For me, this caused a strange and troubling sense of déjà vu. You see, I was very early to the party of debt worriers the last time around. My Spidey sense started tingling all the way back in 2001. That sent me on a course to put together the get-out-of-debt materials that became The Debt Diet on Oprah and my best-selling book Pay It Down.
I bring this up because I’m teaching The Debt Diet tonight in Money School. If you’re feeling as if you’ve recently taken on too much (or are still hungover from the last time around), join me.
Perhaps some of that debt has come from spending too much on your kids. As parents we know there is no greater gift (and expense) than having a child. Don’t get me wrong, parenthood is worth every penny, but as we age, does it become easier financially or more difficult? I ask, because a recent Bloomberg article on how older parents are rewriting their financial plans after having children caught my eye. For example, when 37-year-old Barrow Barre quit her job to tend to her newborn twins, she asked her husband to increase his retirement contributions. In Bloomberg, Barre’s husband joked that retirement was irrelevant – he’ll be working until he’s dead. He has a point. If you’re having children in your late thirties, early forties, does retirement get pushed to the backburner? What about life insurance, estate planning, and oh yeah, saving for college?
For some answers, head here.
Death and Taxes
Which would you rather undergo – a root canal or your taxes? Seeing that I avoid the dentist chair like the plague, it’s taxes for me. For some of you, however, your annual affair with TurboTax sends a bigger chill down your spine. According to a recent survey from Dealnews.com, 23% of you would rather face the drill than your 1040 forms or tax software. In fact, 32% of you fear taxes more than death.
Sure, you can call your tax preparer the Grim Reaper, but if this year’s refund pans out to be anything like last year’s, which was an average $2,872 per person, then facing your fears is in your wallet’s favor. As for what you plan to do with your refund…I was delighted to hear that slightly more than half (51%) of you plan to save it – this is up 17% from last year. And only 9% plan to spend it, which is down 13% from last year. So aside from the whole fearing taxes more than death thing, the survey results are looking up.
Failure to file
Roughly two million college students could have qualified for the need-based Federal Pell Grant during the 2011-2012 academic school year. Moreover, 1.3 million students from this same group could have pocketed $5,645 (a full Pell Grant) for this academic year. Why didn’t they? As CNNMoney reports, it’s because these students didn’t bother to fill out their FAFSA (Free Application for Federal Student Aid) forms. Many of them based their actions, or inactions, off of the assumption that they were ineligible, according to a new government analysis by Mark Kantrowitz, senior vice president at Edvisors Network and author of “Filing the FAFSA.”
For parents of college-bound teens, remember that eligibility for federal aid isn’t dependent on income. Expected family contributions, assets, and cost of college are all taken into consideration as well – and that’s just to name a few. If Kantrowitz says the formula is complicated (and he does), then you can trust that it is – so feel better about not necessarily knowing the ins and outs of filing. But do know that you shouldn’t just assume your child is going to get a reject letter – you could be missing out on thousands of dollars for education. For more details, see the full article.
Fed up with cancelled flights? Me too.
Yes, between the Polar Vortex and more named storms than I can remember, it’s no secret that this winter has been a brutal one. Another brutality of heavy snow: cancelled flights. As Reuters reports, since December 21, over 74,825 U.S. flights have been canceled, and 285,889 flights delayed in the United States. Like the author of the article, I, or my loved ones, have been on more than one of those flights. In my case, it’s been a few. While warmer months (with hopefully less interference from Mother Nature) are on the horizon, it’s time to reflect on past frustrations and learn from them. Reuters is here to help with a list of dos and don’ts for upcoming travel hiccups.
My favorite: “Request to speak with an agent!” Or simply, talk to a human. After spending hours on the phone with various airlines this season, I feel like I’m on a first name basis with more than one airline representative. And for the most part, it resulted in better outcomes and less stress. Instead of yelling at the automated “attendant” who can’t seem to understand your first and last name, or rather, waiting at the gate for a miracle to happen, push to speak with a living, breathing agent. Even though we’re a society with a heavy reliance on technology, sometimes nothing beats the efficiency of connecting with another person. And when you’re on the phone with that agent, don’t forget to check about weather advisory refunds – this saved me hundreds of dollars (in change fees) while rescheduling a flight.
Have a great week,
Jean
