Month: February 2018

Common Budgeting Mistakes and How-to Avoid Them

Posted on by Alex Briggs

Most people have their first taste of money management during their high school and college years. This is the time when most young people use their first debit/credit cards, take out their first loans, and write their first checks. However, this is also the time when young people make budgeting mistakes that can leave long-lasting effects on their financial standing. These are 5 common budgeting mistakes and how you can avoid them before they happen.

1. Failing to Keep Track of How Money is Spent

Ask anyone who is financially well off about their secret to success, and you will likely hear advice pertaining to living within your means. Any given person has likely struggled with overspending at least once or twice but too much of it can land you in deep trouble. A great way to nip overspending in the bud before it has a chance to do significant damage is developing a personal spending plan.

The purpose of this type of plan is to compare your expenses with your income and ensuring that what you’re spending isn’t eclipsing what you’re earning. When you can achieve a profit from your income vs. your expenses, you can rest assured that you aren’t overspending.

2. Forgetting the Difference in Needs and Wants

Too many young people fall into the trap of running out of money simply because they haven’t fully examined the types of expenses they have. Pretty much any expense can be filed under one of two categories: a need or a want. For example, while food is an obvious need, a coffee shop latté is a want. Of course, when life becomes stressful with school and work, a latté can seem like a bare necessity. The good news is that you can still nurture your wants without breaking the bank. In this instance, you can avoid the coffee shop altogether and brew your own coffee in the mornings for a fraction of the price.

3. Taking Advantage of Credit

Once a young adult turns 18, they become eligible to enroll in credit-based offers. The credit card applications start flooding in through postal mail, and for young people who are new to finances, this can lead to trouble.

Simply put, you should avoid credit unless you are financially capable of handling the monthly payments in a comfortable manner. As a rule of thumb, if you have any feelings of doubt or confusion on whether you’ll be able to handle the costs that come with a credit card, it’s wise to forego getting one. Using credit unwisely (making large purchases, missing payments, and allowing the balance to grow higher over time) ultimately leads to a lowered credit score which affects so many other aspects of your finances. For example, foul play with credit in your younger years can lead to increased difficulty in your later years with obtaining home/car loans and obtaining new accounts of credit.

4. Taking Advantage of Student Loans

Once you begin college, you’ll likely begin the process of applying for loans to help cover some or all of the expenses associated with school. In some cases, lenders will offer an amount that exceeds the actual amount you needed for expenses. Too many times people fall into the trap of accepting these overages in the form of “refund checks,” which are then spent on wants rather than needs. This is fine in the moment, but once the program is completed, the loan repayment letters and payment forms will begin arriving. Borrowing too much can lead to difficulties in the future with repaying the loaned amount(s). While applying for college loans, keep tabs on your actual expenses, and be sure to accept only the amount necessary for covering your immediate school expenses.

5. Living in the Moment

As a young adult, you likely know what living in the moment means. For example, envision yourself in a social setting with your friends. Somebody proposes going out to eat at a pricey restaurant. The group is already having a good time, so what can possibly make this moment better than grabbing a bite to eat with your friends? Everyone agrees, and you initially do as well, even though you know deep down you aren’t exactly financially situated to afford this kind of expense. The simple answer to these types of situations is to just say no. Sure, you want to be involved and do things with your friends, but it’s okay to draw the line when certain activities start cutting into your budget. Additionally, keep in mind that at the end of the month when your bank account is looking scarce, you’ll be thankful you saved that extra $20-$30.

As time marches on, you’ll learn that not much feels better than knowing you have a firm grip on your finances. It’s a good idea to practice health management with your money at all times so that you can always remain in the habit of doing so. As you become better at conserving your money, your savings will grow in the long run, and you can even help your friends make better choices with their finances as well!

Alex Briggs is a contributing writer for NJS Realty.

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Doing Your Own Taxes? Pros Say Avoid These 4 Blunders

Posted on by Tina Orem

It’s easy to make mistakes when you’re trying to do your own tax return, but some mistakes seem to happen way too often. We asked a couple of tax pros about gaffes they see over and over again when people fly solo on tax prep. Here are four big ones they want you to avoid.

1. Using the wrong filing status

There are five primary ways to file: as single, married filing jointly, married filing separately, head of household and qualifying widow(er) with dependent child. You can’t just pick a filing status that sounds good, you can only use one you actually qualify for, says Larisa Cooper, a certified public accountant at GMLCPA in Tucson, Arizona. (Learn more about how to choose the right tax filing status.)

For instance, single women receiving child support often don’t realize they may be able to use the head of household filing status. “They file as single and they lose a lot of money,” says Michele Cagan, a CPA in Baltimore.

People who recently married or divorced also are especially prone to using the wrong filing status, which results in botched returns, overpaid or underpaid taxes, and other headaches, she adds.

“Just because you guys aren’t living in the same house doesn’t mean you’re divorced for tax purposes,” she says. “If your state has legal separation, which not every state does, that counts as divorce for taxes, but otherwise if you’re technically married on December 31, you’re married and you have to file married.”

2. Filing late because you can’t pay

Sometimes people decide to file their tax returns after the April deadline because they can’t afford to pay to the IRS what they owe. That’s a huge mistake, Cagan says. Filing late compounds money problems.

“There are pretty big fines and penalties for not filing on time, especially if you owe,” she warns.

Late-filing penalties typically cost 5% of your unpaid tax for each month your tax return is late. And late-payment penalties run 0.5% of your unpaid tax for each month your tax payment is late. That’s just at the federal level, and it excludes interest. Filing an extension doesn’t get you more time to pay, she says. It’s just an extension of the time to file.

There’s also no reason to procrastinate on preparing your return. “If you file early, you don’t have to pay early. That’s another thing people don’t know,” Cagan says. “You can file early, owe money, and as long as you pay by the deadline, you’re fine.”

3. Claiming the wrong dependents

The rules about who counts as a dependent can be complicated, but one thing is clear: Two people can’t claim the same person as a dependent. Divorced couples mess it up all the time, though, Cagan says. Both parents mistakenly claim the kids as dependents, or neither does.

“People don’t talk to each other, because they’re getting divorced and they don’t want to talk to each other,” she says.

People also repeatedly flub their taxes when their kids leave for college, Cooper adds. “[The parents] just won’t claim them because they think, ‘OK, the child is in college; I can’t claim [him] anymore,’ but that’s not necessarily true. Then the child goes ahead and files their return, claims [him]self, gets a huge refund. Then the parents look at their tax return and they have a huge bill.”

4. Making dangerous assumptions

People often use the same tax software version for far too long, Cagan says. They assume that what worked last year also will work this year. But events such as buying a house, having a baby or getting married can create more-complex tax situations, she says.

“When people have a [life] change and they don’t change their tax software, they’re trapped with whatever functionality it has,” she says. “People use the same things over and over out of habit, and it really limits how well you can do your taxes and how much you can reduce your tax bill.”

Risk-taking behavior is another issue. When Cooper points out a mistake on a tax return, she says she often gets this response: “Well, I’ve done it for years and the IRS hasn’t said anything.”

“Sometimes it takes the IRS many, many years to get caught up,” she warns. “Just because they haven’t said anything, it does not mean that they checked the return and they said that the return was correct.

“Sometimes we have to almost defend ourselves and show them the code, and we send them links on the IRS website. Then they go, ‘Oh, OK, all right. I’m really not supposed to be doing this,’” she says. “It’s a lot of educating.”

The article Doing Your Own Taxes? Pros Say Avoid These 4 Blunders originally appeared on NerdWallet.

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Can You Afford to Give Up Your Brick-and-Mortar Bank?

Posted on by Spencer Tierney

There are nearly 90,000 bank branches across the U.S., but when was the last time you visited one?

“I haven’t set foot in a bank branch or had a reason to since 2014,” says Jonathan Hasson, a user interface designer in Palo Alto, California.

For people like Hasson, banking online and by mobile device has replaced the need for branch visits. Last year, 46% of banking customers said they interacted with their bank only through digital channels, up from 27% in 2012, according to a survey by accounting firm PricewaterhouseCoopers.

As more people embrace digital banking, the idea of quitting a brick-and-mortar institution may become easier to consider, especially given the perks of going online. Online checking accounts rarely have monthly fees, and some online savings accounts earn annual percentage yields over 1.40%.

But traditional banks offer certain services, especially at branches, that aren’t so easily replaced by online banks. If you’ve thought about giving up your brick-and-mortar bank, consider these questions.

1. Do you ever deposit cash or write checks?

Many online banks offer nationwide fee-free ATM networks to make getting cash out of an account easy, but depositing cash is not usually an option. So if you end up with a wad of cash from a garage sale, for example, you might need to buy a money order and use the bank’s mobile check deposit to get the money into your account.

Writing checks can be another obstacle. Some online banks offer boxes of checks like traditional banks do, but it’s not a given, and you never know when you might need a check.

“Last year, I got married, and a lot of vendors only took checks as payment,” says Brendan McGuire, an iOS developer in New York City.

Buying checks from a third-party service might be an alternative. But some online banks either won’t let you write checks or won’t be held responsible if a third-party check has difficulty processing.

McGuire’s primary checking account is with an online bank, which would send checks on his behalf, but he found it easier and faster to simply write his own checks from an account he had at a local credit union.

2. Do you need any specialty banking services?

Be it online bill pay or mobile check deposit, online banks tend to cover core checking and savings account services, and some even provide loans, but they can’t do everything. Here are two examples:

Safe deposit boxes: These small vaults store valuable jewelry and important insurance or other documents that might be better off behind many banks’ steel-barred concrete walls instead of in a personal safe at home.

Wire transfers: Whether you’re closing on a home or need to send money to family overseas, you might need to wire funds, something that isn’t always an option with online banks. A bank branch is handy for sending time-sensitive or big transfers, especially if the destination is within the United States. But if you’re wiring funds abroad, you can find alternatives that are even cheaper than banks, at online companies such as TransferWise and OFX. (Read up on how to send money online.)

There are also some bank services that are easier and faster to do at a branch. Cashier’s checks, for example, are available at some online banks, but since those checks generally are mailed to your recipient, the time for delivery might take several business days.

3. Do you need the personal touch?

If your financial life isn’t complicated, you may not need an in-person contact. Many online banks offer customer service phone lines and online chat messaging when issues or questions arise.

“Say you want to open a small business or get help on some investment strategy, then it can be really helpful to have a face-to-face relationship” with a community banker, says Terry Jorde, senior executive vice president and chief of staff for the Independent Community Bankers of America.

You can manage most of your finances online, including getting a mortgage and auto loan, so it’s really about your comfort level with the internet. Some people just prefer in-person interactions.

“With older clients, a lot of times they’ve developed a relationship with someone at that bank,” says Missie Beach, certified financial planner at Modera Wealth Management in Atlanta.

“It’s not the bank they have a relationship with,” Beach says. “It’s that person.”

Combining the best of online and traditional banks

As more banking customers go online, many Americans do still visit the teller, according to a 2015 FDIC survey that examined unbanked and underbanked households.

But you don’t need to keep a bank that charges you monthly fees on checking or savings. Credit unions, the nonprofit equivalent of a bank, as well as community banks tend to have lower fees and better rates than national banks do.

Smaller banks have downsides such as less access to the latest technology or nationwide ATM networks, but that’s where online banks come in. Balancing your financial life with two banks might be worthwhile, especially if you want cutting-edge technology as well as access to a branch, just in case.

“It’s not an all-or-nothing thing,” says Jorde of the ICBA. “There are times that people will find it more efficient to use branches.”

The article Can You Afford to Give Up Your Brick-and-Mortar Bank? originally appeared on NerdWallet.

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The Smartest Way to Use Gift Cards

Posted on by Amber Murakami-Fester

If you received a gift card over the holidays, chances are you’re happy about it. After all, what’s not to like? Gift cards allow recipients to buy stuff without taking money out of their pocket — at least in theory.

But gift cards can be a mixed blessing. Forget you have one and it can sit in your drawer, unused, for ages. Receive one for a store you don’t care for and you may find yourself buying things you’d really rather not. Or maybe you’ll overspend and find yourself using that $20 Pottery Barn gift card for a $50 lampshade you don’t really need.

Here are ways to make sure your gift cards stay a blessing — not a curse.

Spend it sooner rather than later

If you intend to use your gift card, it’s better to act fast. Stores may go out of business, may not honor outstanding gift cards after filing for bankruptcy or may close their only location near you.

That’s especially true as consumer shopping patterns continue to shift and brick-and-mortar retailers shut their doors — 2017 saw retail giants including J.C. Penney and Macy’s announce the closure of stores nationwide.

And the quicker you use a gift card, the less likely you are to forget about it. Nearly $1 billion in gift cards went unused in 2015, according to consulting company CEB Tower. That’s a significant sum of money left on the table.

Don’t want to spend? Regift, resell or donate

If you receive a gift card for a store with no nearby location, or one that you simply have no interest in visiting, you can get rid of the card by regifting, reselling or donating.

“It’s important to do an honest assessment right from the beginning and think, ‘Am I really going to use this or is this a stretch?’” says Shelley Hunter, spokeswoman for Giftcards.com, a website that sells gift cards.

Find a friend or family member who will appreciate your unwanted present. And if you can’t, sell it to somebody else. Sites like Raise.com or Cardpool.com allow users to resell gift cards online. Though you likely won’t get the full value of the card back — the cash you get can range from 60% to more than 90% of the original amount — Hunter says it’ll be worth it if you weren’t going to spend it anyway. You’re likely to get closer to the full value for stores that have nationwide footprints and sell a wide variety of merchandise, such as Target or Walmart, Hunter says.

Or consider donating your gift card to a local school, after-school program or homeless shelter.

Donations may be eligible to use as a tax deduction.

Avoid overspending — and underspending

A study by payments technology company First Data found that 75% of consumers overspend the value of their gift card by an average of $38. That’s not necessarily a bad thing — a gift card can bring down the amount you spend on something you wanted but couldn’t afford otherwise.

Beware of “gift card creep,” however — spending excessively on something you didn’t really want, just because the card makes it relatively affordable. Plan ahead of time, and ask yourself whether you truly value the item. To get the best deal, you should also look around for coupons and shop when the retailer is having a promotion.

What if you’ve come close to your gift card limit and have a small amount left on your card? Certain states require retailers to exchange the value of the card for cash if it falls below a threshold. Though the threshold is $5 for many states that follow this policy, it ranges from $1 in Vermont and Rhode Island to $10 in California. Some stores may also have policies in place to refund low values for cash, regardless of which state they’re in.

Try new things

Gift cards can be a burden if you feel forced to spend money on things you won’t ever use. But they can also push you to try new things.

“You’re not giving a gift, you’re giving the gift of an experience,” Hunter says of presenting somebody with the store vouchers. So go out on a limb — try that new local restaurant, take the cooking class or browse through that clothing store you’ve been meaning to check out. You might find that your gift card brings more value to you than its worth in dollars and cents.

The article The Smartest Way to Use Gift Cards originally appeared on NerdWallet.

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Ask Brianna: How Do I Pick a Career I’ll Actually Like?

Posted on by Brianna McGurran

“Ask Brianna” is a column from NerdWallet for 20-somethings or anyone else starting out. I’m here to help you manage your money, find a job and pay off student loans — all the real-world stuff no one taught us how to do in college. Send your questions about postgrad life to askbrianna@nerdwallet.com.

This week’s question:

“I’m graduating from college and my major is really broad. I have no idea what to choose as a career. How do I pick one I’ll actually like?”

I can feel the stress radiating from your question. But try to let excitement be your dominant emotion right now, not anxiety. You’re about to start a career from scratch, unlike those in their 30s, 40s or 50s who are unhappy in jobs they chose and have to reinvent themselves in a new field.

Besides, “Ten years out of school, less than 20 percent of people are doing anything having anything to do with their major of study at college,” says Bill Burnett, co-author of “Designing Your Life” and executive director of the design program at Stanford University.

No matter what you studied, you can find a job you love. Think about what fires you up; explore related careers in short-term, low-risk ways; and make sure you’ll earn enough money to cover your needs, wants and future self.

Start with what you love

When you’re truly stumped by the direction to take, don’t look to other people for ideas. Look inward. Kate Gremillion, CEO and founder of career coaching company Mavenly + Co., recommends asking, “What do people traditionally come to you for that isn’t work-related?”

Are you the friend who gives great relationship advice, who designs T-shirts for your friends’ bands, or who initiates the group text to organize a night out? Those skills can translate to a paying job: as a marriage and family therapist, a graphic designer or an event planner.

The job you’ll most enjoy is one you’d do for free anyway.

Try before you buy

Talk to people in the line of work you’re considering and find low-risk ways of trying it out. Use your school’s alumni or career services office to find former students with jobs that intrigue you. Ask them to have coffee or speak on the phone so you can learn about their career paths.

At this stage you’re not asking if they’ll forward your resume to human resources, Burnett says. Instead, ask what steps they took to get to that role, what they like most about the job and what problems they’re facing right now.

That might give you the chance to offer your services as an intern, part-time assistant or consultant. Or you can ask to shadow them for a day.

Such experiences are helpful research, because for most people, job satisfaction has less to do with salary or title, says Gremillion, than with what they’re actually doing throughout the workday.

Keep money on your mind

Your career also needs to feed and house you.

“It has to be a match between what you’re excited about doing and what the world actually needs done,” Burnett says.

How much money is enough? Assess your potential paycheck against the 50-30-20 budget: 50 percent of your income should go toward necessities, 30 percent or less toward your wants, and 20 percent of more toward savings and debt. If rent and student loan bills will eat up more than half your income, you may need to look for a higher-paying job, or cut back on expenses.

Or scrutinize jobs based on this definition: A “good job” for a college graduate, according to Georgetown University’s Center on Education and the Workforce, is full-time, pays more than $53,000 per year and offers benefits like health insurance and a retirement plan.

Ignore everyone else

Finally, do your best to shut out messages from people who have their own agendas (except for me, of course).

Parents, especially, want their kids to be able to support themselves; when giving advice, “they default to positions or roles that they think will be safe and stable,” Burnett says. But not everyone will succeed at or enjoy being a doctor, lawyer or engineer. Your happiness matters more than what you’ve been told to do.

It will probably take a job or two to figure out what you want out of a career. Enjoy the exploration; after all, Gremillion says, “Work is allowed to be fun.”

This article was written by NerdWallet and was originally published by The Associated Press.

The article Ask Brianna: How Do I Pick a Career I’ll Actually Like? originally appeared on NerdWallet.

Save Money and Stay Healthy With These 5 Tips

Posted on by Anum Yoon

With the start of another new year, thoughts of how to keep your resolutions this time around pervade your mind. The top two resolutions in the U.S. for 2018 are to save money and to lose weight. Why not kill two birds with one stone and link these goals together? Being healthy doesn’t have to be expensive!

You don’t have to hibernate all winter to save money and stay healthy. Resist the temptation to become a couch potato! Besides, sticking around the house lessens your motivation to keep your goals and, in turn, weakens your immune system. Whether you venture out or stay at home, follow these five tips to keep your bank balance and health in check.

1. Get Quality Sleep and Skip the Starbucks

The foundation of good health is a restful sleep of seven to eight hours. While you sleep, your body conducts repairs and helps you feel well-rested for the next day. When you’re short on sleep, you’re more likely to fuel up on Starbucks and junk food from the vending machine to get through a day of work. Not only is that Triple-Venti-Caramel Macchiato going to short you $5 a day – it’s adding 310 calories and 42 grams of sugar to your day!

If you must start your day with Starbucks – stick to a hot green tea. It will save you nearly $3, is calorie and sugar free, and provides a gentle jolt of caffeine and a calming dose of  l-theanine to help you focus.

2. Take a Short Walk – It’s Free

Seasonal affective disorder challenges 14 million Americans annually, especially in the colder months between November and April. The shorter days and feeling boxed in encourage winter blues to set in.

Staying active is a helpful remedy. Your body still needs Vitamin D and access to nature. Take a short daily walk to cope with the winter blues and stay fit. You’ll also save money since a walk is free. Let your feet take you down a new neighborhood sidewalk, downtown or around a labyrinth.

3. Invest in Free Fitness Apps
Developed a fitness routine yet? Stay on top of your health goals by maintaining a routine and tracking your progress as you go.

Fitness apps, such as RunKeeper or Sworkit, help you track your health goals, whether that’s keeping up with steps, counting calories or finding new yoga moves to practice. Select your work level and get to stepping. Many of these apps are free or low cost, helping you to save money and remain accountable without hiring an expensive personal trainer. This free technology will allow you to keep track of your health goals when you don’t feel like going to the gym in the cold.

4. Avoid Markup While Eating Out

A great money saving tip while eating out and staying healthy is to avoid anything with an insane markup. Pasta is one of the cheapest meals at home, yet one of the most expensive when eating out. Save some cash and calories by opting for something high protein with some green veggies on the side.

If you must have that $15 fettuccine alfredo, consider splitting it with a friend, but be aware that some restaurants charge a small fee when you share a meal. You may feel tempted by the large portions but think of eating out as investing in two meals. Ask for a to-go box, and that way you don’t have to worry about spending money on tomorrow’s lunch.

5. Breakfast is Your Best Friend

When you eat a hearty breakfast, you can focus on eating smaller, healthy meals throughout the day to avoid binge eating and spending extra money. If you want to eat out, breakfast is typically your cheapest meal option. Skip the avocado toast while dining out – as it will be nearly double the cost than if you made it yourself at home.

Save money and stay healthy this winter by following these five tips. Skip the Starbucks and get some shuteye,  increase your likelihood of keeping health goals by taking short walks and investing in free fitness apps, avoid the unhealthy and expensive meals while dining out, and if you MUST dine out – opt for breakfast.

Don’t let winter blues get the best of you. Instead, maintain your best health and save a little money while you’re at it. Soon, the warmth of spring will arrive, with endless outdoor adventures ahead.

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Ask Brianna: Should I Tell My Partner I’m in Serious Debt?

Posted on by Brianna McGurran

“Ask Brianna” is a column for 20-somethings or anyone else starting out. I’m here to help you manage your money, find a job and pay off student loans — all the real-world stuff no one taught us how to do in college. Send your questions about postgrad life to askbrianna@nerdwallet.com.

This week’s question:

“I’m overwhelmed by student loan and credit card debt, and I’m embarrassed to admit it to my partner. Should I come clean?”

Some secrets are harmless, like eating the last slice of your partner’s favorite cake. Or saying you’re sick to avoid his aunt’s retirement party.

Hiding thousands of dollars in debt does not fall into the “harmless” category. While having debt is just one piece of your identity, it could directly affect your partner also: Maybe you’re unable to contribute to joint savings or keep up with your share of the bills, or you’ll have a harder time qualifying for a mortgage as a couple.

The debt might not come as a surprise if, say, your partner already knows about your lavish sneaker-buying habit. But the longer you wait to divulge the details of your financial stress, the more betrayed your beloved may feel when you eventually do it, says Don Cole, clinical director of the Seattle-based Gottman Institute, which conducts research on relationships.

“It’s better to be honest than to get caught,” Cole says. “The relationship is going to be able to repair much better from a shared problem than one that’s discovered.”

Gather the facts

First, nail down the specifics of the debt for yourself, says Kelly Luethje, a certified financial planner and founder of Willow Planning Group in Boston.

Understand your loans’ and credit cards’ outstanding balances, accompanying interest rates and payoff dates. That may help you gain some control, and it’s also the first step toward developing a plan to get out of debt.

Time it right

Confessing your debt balance isn’t first-date fodder. Tell your partner the truth once the relationship gets serious, like by the time you’ve hit the six-month mark.

At the very least, get everything out in the open before you decide to move in together. At that point, your debt will have an immediate financial impact on your partner. A credit card balance at the top of your credit limit means a lower credit score, for instance. And that could make getting an apartment together challenging.

If you’ve been together for more than six months or you’re already shacked up, don’t panic. But prepare to spill the beans soon. Cole explains it this way: After the fun and excitement of first falling in love, the next step is to make sure we can be our true selves with our partners.

“That is an essential phase in developing a lifelong, happy relationship,” he says. And it takes trust, which you can build only by being honest and transparent.

Broach the subject gently

Ask your partner to set aside time to talk. Pick a weeknight rather than a Friday or Saturday, says W. Bradford Wilcox, director of the National Marriage Project at the University of Virginia. He says weekends should be reserved for having fun, reconnecting and maintaining spontaneity, all of which strengthen long-term relationships.

Cole recommends starting the conversation with an “I feel” statement, followed by what you’re concerned about and what you need next. The Gottman Institute calls this a “softened start-up,” and it lays a positive foundation for hard discussions. You might say, “I worry about talking to you about money, but because I love you, I need to tell you about my finances.”

Explain the circumstances of your debt. Are you spending beyond your means, or did you pay for school without any help from family? Has your behavior changed since you first built up a credit card balance, or is spending still an issue?

Then talk about how you plan to pay it off. Work on eliminating credit card debt first, for example. Credit cards generally have higher interest rates than student loans. And think of coming clean as a positive step.

“Debt is stressful, and it takes away future options for people,” Wilcox says. “It robs you of a horizon, of the possibility to dream financially.”

Having debt doesn’t erase the fact that you’re the world’s greatest karaoke duet partner or banana bread baker. Opening up about it and asking for encouragement to address it could bring you and your partner closer — and give you permission to dream.

The article Ask Brianna: Should I Tell My Partner I’m in Serious Debt? originally appeared on NerdWallet.

Being a Financially Responsible Student: Highlights from Our Chat with Inceptia

Posted on by Alison Pfeifer

Inceptia joined Wise Bread for the #WBChat on February 1st to share insights on how to be a financially responsible student. Our #Knowl #WBChat featured awesome tips to help people learn about how students can be financially responsible. In total we had 105 participants, reached over 270K people, and had over 12.9 million impressions.

 

A preview of the TweetChat:

 

@wisebread: This week we have Inceptia joining us. Thanks for being here @Inceptia! http://inceptia.org 

 

@Inceptia: We’re excited to be here – thank you for having us, and thank you all for joining!

 

@wisebread: .@Inceptia, can you tell us about the ?

 

@Inceptia: The (knowledgeable owl) provides judgement-free information, tips, & resources to help students become financially empowered.

 

Continue reading highlights from the Wise Bread and Inceptia TweetChat here for financially responsible student advice.

How to Have a Proper Parental Fight Over College Costs

Posted on by Teddy Nykiel

As teens submit college applications and weigh different post-graduation paths, their parents face tough decisions, too. Do they:

  • Help pay tuition, even if it means dipping into retirement savings?
  • Take out parent loans, as a growing number of people do?
  • Encourage their children to attend a dream college, no matter the cost?

When couples clash over the answers, it’s often because their values about money and education are at odds, says Megan Ford, a financial therapist at the University of Georgia and president of the Financial Therapy Association. Financial therapy, a relatively new field, addresses financial, emotional and relational challenges.

Imagine a hypothetical student’s parents. One equates prestigious institutions with success and is bent on sending the child to an Ivy League school. The other believes a less-expensive state university offers an equally valuable education. Of course, the child’s opinion matters, too.

To reconcile a disagreement, start by understanding costs for your family. Then have honest conversations, look for common ground and call in experts if necessary.

Establish your college-cost baseline

First, estimate what college would cost your family at different schools. Look up school net price calculators — almost every college is required to have one — and compare the amount you’d owe after grants and scholarships at various institutions.

You may be surprised. For example, contrast Harvard University’s sticker price of $69,600 with its estimated net price of $9,600 for a Massachusetts family of five with a gross annual income of $100,000 and one undergraduate student. Going Crimson could be cheaper than attending a state university where the sticker price is lower but the financial aid package smaller, resulting in bigger out-of-pocket costs.

Net price calculations are just estimates, but they’re a good starting place for discussing whether parents will contribute and the sacrifices they might need to make to do so.

Hear each other out

When it comes to financial disputes, relationship therapists recommend digging into the reasons behind opinions before compromising or trying to persuade. People’s values about money and education are often rooted in their past, Ford says.

She recommends asking questions like, “What did education mean to your family growing up?” and “How did you pay for your college?”

Explore whether a stance represents a broader emotion, says Jennifer Dunkle, a financial and couples therapist in Fort Collins, Colorado. The parent lobbying for the pricey private school, for instance, may regret not attending his or her own dream college. The other parent may have put himself or herself through college and want the child to practice responsibility by doing the same.

Find areas you align on

Strive to find areas, however small, that you agree on. Here’s a freebie: Kids should submit the Free Application for Federal Student Aid, known as the FAFSA, so they can be eligible for federal grants, work-study programs and, if necessary, federal student loans.

As you seek agreement, Dunkle recommends an exercise derived from the research-based Gottman Method of couples therapy. You each draw a large circle. Inside, write things you’re not willing to waver on — for instance, “We will not dip into our retirement savings to pay for the kids’ college.” Outside of the circle, write what you’re willing to be flexible about, for example, “I paid for college completely on my own, so my child should do the same.”

Then, compare notes. Seeing the issues on paper may illuminate a compromise.

Call an expert

If you’re still gridlocked, consider bringing in backup. A few sessions with a couples or financial therapist can help if you’re struggling with communication or underlying emotional issues, Ford says.

In addition, a certified financial planner can help you crunch numbers — for instance, by how many years would you need to delay retirement if you pay for your daughter’s $50,000-a-year private college? Experts generally recommend prioritizing your retirement savings above a child’s college costs; you have a limited earning time left, while your child has longer to offset college debt.

Throughout the college-planning process, remember that it’s natural for emotions to run high when a kid leaves for school, Dunkle says.

“It’s a developmental change in the life of the family,” she says. “It can be a hard transition for everyone.”

Teddy Nykiel is a staff writer at NerdWallet, a personal finance website. Email: teddy@nerdwallet.com. Twitter: @teddynykiel.

This article was written by NerdWallet and was originally published by USA Today.

Image by Cathy Yeulet via 123Rf

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