Ask Brianna: How to Avoid a Spring Break Money Hangover

Posted on March 29, 2018May 1, 2018 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 want to travel this spring, but I don’t have a lot of extra cash. How can I make it happen?”

Spring break doesn’t just belong to college folks tired of pulling pre-midterm all-nighters in the library. Everyone needs an excuse to indulge, whether or not you’re in school.

But jetting off for spring break like you might have in college is pricey (and seems exhausting after age 22). I searched the travel comparison website Kayak for weeklong all-inclusive resort vacations in Cancún, Mexico, booked one month in advance. For a trip in late March, the average cost was about $1,600 per person, which included flights, a hotel room and meals.

That is a ton of money for someone who doesn’t have any extra cash.

Bottom line: You have no “extra cash” if you have no emergency savings. You have no “extra cash” if you’re wondering whether you have enough room on your credit card. But with some planning and forethought, you can have an emergency cushion and a vacation, too.

Try this plan: Do something small, cheap and slightly less extravagant; save a little for emergencies; and then plan a guilt-free trip next year with money that’s actually in your bank account — the very definition of “extra cash.”

Protect your future first

Proactively saving money for emergencies you can’t predict is more important than a big vacation. Find the money by cutting a subscription service you don’t use or getting rid of extras on your cell phone plan you don’t need. You don’t have to sit at home watching HGTV until you have three to six months of expenses saved, though.

Save $500 first, then reward yourself with a meal out. Get to $2,000, and take a day trip somewhere. After that, you’ll be in a better position to spend on things you want simply because you want them. Add up your basic expenses each month, and keep saving until you can cover three months’ worth, then six months’.

Treat yourself closer to home

While saving up, you’re still allowed to do cool stuff. The trick is to pay for that stuff in cash so you’re not building credit card debt at the same time. Here are some ideas for local escapes:

A massage or spa service: A one-hour massage costs $73 on average, according to the the American Massage Therapy Association, though prices vary depending on where you live. Search for a massage therapist through the association’s therapist lookup tool.

A pasta-making class: I found options that cost $35 for a 1.5-hour class, $79 for a two-hour class or $140 per couple for a 2.5-hour class.

Go on a hike: National parks have free entry on certain days during the year, including Saturday, April 21, the first day of National Park Week. Spend a day at the closest one to you; pack a lunch and pay only for gas to get there.

Once your emergency fund is up and running, consider signing up for a rewards credit card, which can get you cash back to spend, or points for flights or hotel stays when you’re ready to go away. Many come with sign-up bonuses that can subsidize part of a future trip — but make sure to pay off the balance each month to avoid paying interest.

Plan way ahead

People who successfully save for vacation do it all year long. Just like you put a specific amount each month toward that emergency fund, and ideally also for retirement, do the same for travel, says Shurdonna S. Joseph, a certified financial planner at Janney Montgomery Scott in Philadelphia.

Danny Kofke, a special education teacher in the Atlanta area and author of “The Wealthy Teacher,” generally goes on one big summer trip with his wife and two kids. He saves $1,000 to $1,500 for it in what he calls a travel escrow account over the course of the year.

This strategy requires researching far in advance where you want to go and how much it costs. So try it for the next vacation you take. If that all-inclusive resort sounded appealing, set up an automatic transfer to your savings account for $133 a month, and you’ll have $1,600 for next year. Many online banks let you set up and name several accounts or subaccounts, so make one specifically for “Fun,” “Travel” or “Seeing the Sun Again.” You might even save more than you thought you could.

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

The article Ask Brianna: How to Avoid a Spring Break Money Hangover originally appeared on NerdWallet.

3 Investments That Aren’t Actually Investments

Posted on March 27, 2018March 16, 2018 by James Royal, PH.D.

Superinvestor Seth Klarman has famously said that investments are assets that produce cash flow. If they don’t, they’re speculations. It’s a simple but astute observation that undercuts what many consumers consider investments — things like gold and handbags and baseball cards.

So what’s the logic behind Klarman’s quote? Investments are assets that provide goods or services that are valuable to someone and generate cash flow. An investment could be a profitable business or an ownership stake in such a business, like a stock. Good investments become more valuable over time because they increase their cash flow. Owners of these assets have a claim on that cash flow, so investors want to buy stock in them.

In contrast, speculations are assets that don’t produce cash flow. Their value is tied to whatever price people are willing to pay for them. Because they don’t produce cash, any potential profit from the asset depends, crucially, on getting someone else to pay a higher price than what you paid. It’s called the “greater fool” theory. (This isn’t to say that some people can’t make money in speculations, but rather that they’re not a solid basis for investment.)

Klarman’s advice: Buy investments, not speculations. For many investors, that means acquiring stocks of cash-flowing companies in the stock market. Using Klarman’s criterion, these three highly popular “investments” aren’t investments at all.

1. The fad of the moment

Shoes, handbags and baseball cards — to name just a few things — are the epitome of speculation. Consumers put money into these products thinking they’ll be worth more in a few years, and the producers are often only too happy to feed this fantasy with “limited edition” collections at marked-up prices.

Many consumer goods have had their place in the sun, such as Star Wars action figures, sports cards, Beanie Babies, Dutch tulips — speculations all. A few years later they’ve been forgotten as the next fad rises.

As with anything aesthetic, buy it because you like the art, the handbag or the action figure. Do not expect to sell it for more.

2. Your home

Nobody likes to hear that their single largest asset is a speculation, but that’s the case with a home you live in. A house or apartment produces no cash for its live-in owner. So like other speculations, the price of a house does not depend on its producing cash flow for the owner.

What about real estate as an investment? An owner-occupied house is different from a property that you own to generate rental income. By definition, a rental property is an investment, and potentially a good one, depending on the purchase price and how it’s managed. However, a “flip” house, where the buyer has the intent to quickly turn around and sell it, perhaps with some improvements, is a speculation. Yes, plenty of good returns can be built on speculations — but the asset itself is a speculation.

We all have to live somewhere; own a home because you like it, or because it makes better financial sense than renting. Don’t own a house just because you think you can sell it for more later.

3. Gold and other commodities

Gold investors love to say that the metal has real value, because it’s a hard asset, unlike paper money that can be created at will. But it’s just as much a speculation as your house and fads, because its value does not rely on it producing cash flow. Speculators are wagering on gold to rise in value so they can get more dollars when they sell it, not because the financial system will crumble and we’ll only have shiny metal to trade with. The same goes for other commodities, such as other precious metals, diamonds and agricultural goods. Include bitcoin in this bin.

If you like gold, buy stock in an investable company that mines it and generates cash from operations. If gold prices do rise, the company will have more upside than the commodity itself.

The article 3 Investments That Aren’t Actually Investments originally appeared on NerdWallet.

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Don’t Let Friends Derail Your Finances

Posted on March 22, 2018March 16, 2018 by Laura McMullen

Over the past few years, Meghaan Lurtz has had to turn down two destination bachelorette parties for dear friends. She was in graduate school and didn’t have the money to go.

“It felt really crappy, because these are people that I know and I love and I care about, and I absolutely wanted to be there,” she says. “But finances are what they are. You have a budget, and budgets have restraints.”

Lurtz is the president-elect of the Financial Therapy Association. She’s counseled people who’ve been in similar situations and said yes to both the pricey activity and, in turn, credit card debt.

After all, it’s hard to turn down fun with friends. But that fun can add up, as buddies expect you to shell out for group vacations or smaller expenses, like dinners, drinks and concerts.

Here’s how to determine whether you’re spending too much with friends and, if so, fix your finances without hurting your relationships.

Reflect on your — not your friends’ — finances

First, recognize that everyone has a unique “money mindset” that shapes financial decisions, says wealth psychology expert Kathleen Burns Kingsbury, author of the recent book “Breaking Money Silence.” Income and savings certainly play a part, but so do our upbringings, personalities, cultures and values. “What’s important to you and how you spend your money might be different than your friends,” Kingsbury says.

So resist giving the side-eye when your friend goes for those $600 boots — that’s her decision and her money. Instead, “try to come up with your own philosophy around money,” Kingsbury says. Determine what’s important to you — traveling the world, paying off your credit card debt or buying a home, for example. Then prioritize accordingly.

Kingsbury suggests scrutinizing last month’s credit card and bank statements to make sure your spending aligns with your priorities. Aim to get a broad sense of where your money is going and whether you ought to adjust your spending habits.

For example, you may want to course-correct if you spent $500 at the bars but put $0 toward that home you’re saving for. Creating a budget, if you don’t already have one, will help.

Spend less money (not time) with friends, if needed

Say you realize you’re overspending on social activities with friends. This problem is pretty common, Lurtz says, and it’s often driven by FOMO — the fear of missing out. You may say “yes” to every pricey dinner or group trip, for example, even though your budget screams “no.”

Remember that the point of these outings is likely more about spending time with friends than it is about eating or vacationing, Lurtz says. “So, if you can be with the person in a less expensive way, do it,” she adds. Here are a couple of strategies:

Use cash. Participate in the activity, but leave the plastic at home and bring only the amount of cash you feel comfortable spending. Unlike swiping a credit card, handing over cash feels more substantial and forces you to use “mental accounting,” Lurtz says.

“Believe me, you’re less likely to buy a round of shots for all your friends when you only have a $50 bill in your pocket,” she says. And you still get to hang out. “You’re out there, you’re going, but you also have the pride in knowing that you prioritized your goals.”

Focus on the friendship. You can always pass on activities you don’t want to spend money on. Fight that FOMO by spending time with friends in a different way.

For example, skip the $100 dinner with your crew and grab a $5 latte with those friends the next morning. “You’re honoring the friendship” and showing interest in spending time together, Kingsbury says. “But you’re coming up with an alternative for the connection they’re trying to have with you — at your spending level.”

Discuss money with friends

When you pass on an activity, thank your friends for the invitation and give them plenty of notice. Be honest about your financial priorities and respectful of theirs, Kingsbury says. Rather than complain about their expensive tastes, explain that you’re trying to save for a home, for example.

An open talk about your financial goals — and your friend’s, if she’s up for it — does more than lessen the blow of a declined invitation. It can help you become better friends.

Discussing our money and values, Kingsbury says, “increases intimacy and helps us understand where the other person is coming from.”

The article Don’t Let Friends Derail Your Finances originally appeared on NerdWallet.

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When Renting Your First Place, Good Credit Can Open Doors

Posted on March 20, 2018March 6, 2018 by Claire Tsosie

When first-time renter Angelica Fattu-Logan, 20, started applying for apartments, she braced for rejection. But those rejections never came — in part because she had good credit.

“I applied to about three or four different apartments, and they all accepted me right away,” says Fattu-Logan, a drugstore manager and college student from Peoria, Arizona, who recently moved into an apartment with her fiancee. “It was a pretty quick process, like two days. It was just a matter of picking which one I liked better.” She maintains her credit by paying for groceries with her credit card and paying off the balance right away.

For young folks fearing rejection from landlords, Fattu-Logan’s positive experience is heartening. It also illustrates an important point: Good credit can be especially helpful for first-time renters.

Better chances of approval

When you’re new to renting, good credit can make up for other shortcomings in an application.

“If [applicants] have a good credit score, even if they haven’t rented before, that means that they’ve handled their finances well and that they’re responsible,” says Laura Agadoni, a landlord and real estate writer based in Marietta, Georgia. That could be enough to make up for a lack of a rental history, otherwise a major factor in rental decisions, she says.

“My bottom line is, I just want to get my rent on time,” she says.

Requirements can vary, but Agadoni says many landlords look for credit scores of 640 or higher for renters. They also consider factors such as income, debt and employment.

In some cases, those with good credit scores might not need to find a co-signer, a person — often a parent — who’s equally responsible for making payments. But Agadoni notes that she might still require a first-time renter with good credit to get a co-signer if they’ve worked at their job for less than a year and have limited savings, for example.

“Every situation is different,” she says.

Savings on rent and deposits

If you’re approved with good credit and meet all the landlord’s requirements, you’ll generally just have to pay the security deposit and rent described in the rental listing. But if you’re approved with bad credit, you may have to pay a premium — not just on rent, but potentially for utilities, too.

“We’ve definitely seen consumers with more challenged credit having to put higher deposits down in order to rent a property,” says Jim Triggs, senior vice president of counseling at Money Management International, a nonprofit credit counseling agency. The firm offers counseling to renters, among other services. He adds that landlords sometimes also charge higher rents to these applicants.

Many utility companies — such as electricity and gas providers — also charge upfront deposits to those with poor credit.

“Normally, the better your credit, the better arrangements you’ll have with any of those utility companies, up to and including zero deposits,” Triggs says.

More bargaining power

In cities where the rental market is extremely competitive — say, San Francisco or New York — having good credit is just table stakes. But in areas where landlords have trouble finding tenants, a good score can give you bargaining power.

That’s because good credit is a crystal ball that tells landlords you’re reliable. “How you pay your bills is predictive of how you’re going to pay your bills in the future,” says credit expert John Ulzheimer. “That includes rent.”

If a landlord is eager to find a renter and you have good credit, “the apartment [landlord] is absolutely going to want you to move in, and move in lickety-split, because they’re going to want to start getting paid,” Ulzheimer says. “And you can lean on them a little bit.”

For example, he says, you may be able to negotiate a good parking spot or extra garage remote controls, even as a first-time renter.

Before renting, check your credit

Before you go apartment-hunting, check your credit reports and credit scores to see where you stand.

Doing so is free and doesn’t hurt your scores. If you have good credit, you can walk into property viewings with confidence, knowing you’re set up for success. If you have bad or no credit, you can focus on making improvements. Be upfront with landlords about what steps you’re taking to work on your credit and, in the meantime, budget for a larger security deposit. It may take longer to find a space that’s right for you, but with persistence — and maybe some help from a co-signer — you’ll get there.

The article When Renting Your First Place, Good Credit Can Open Doors originally appeared on NerdWallet.

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In the Red Before You Wed? Talk Debt With Your Partner

Posted on March 15, 2018March 6, 2018 by Sean Pyles

Commitment, shared goals and mutual understanding can provide a strong foundation for a marriage — and so can having your financial house in order.

With eight in 10 American households carrying some form of debt, such as credit card bills and student loans, according to a 2015 Pew Research report, it’s not surprising couples are carrying over this financial burden into wedded life.

Debt doesn’t have to a deal breaker when it comes to marriage. With some honest conversations, good planning and an understanding of how you’ll handle finances — individually and together — you can mitigate the challenge of debt and build a strong financial future.

Lay everything out

As a couple, it’s important to have a clear understanding of where each of you is financially. A good first step is to pull your credit reports, says Kitty Bressington, a certified financial planner based in Pittsford, New York.

“This helps couples identify the debt in a very noncommittal, no-blame kind of way,” Bressington says. “At this point, we’re not talking about budgets or eliminating debt.”

Look over the details of each other’s credit reports, including debts types, balances and any negative marks. Talk through what they mean and how they affect your overall financial picture.

Discussing this information can be awkward or difficult, but doing so now could save you a lot of heartache later.

“The couples that are successfully going to navigate this issue are the ones that … actually talk about it and come up with a plan,” Bressington says.

Know your goals — and how to tackle them

Next, discuss your broad financial goals and how debt affects those. For example, how could paying down debt free you up to buy a house, or save for retirement?

“Discuss your values around money, but make the conversation more goal-oriented and positive,” says Paula Levy, a licensed marriage and family therapist. “You two are trying to get somewhere and achieve something. Talk through where you see yourselves in one year, in five years, and establish a joint financial vision.”

Then figure out how you’ll resolve your debt. Will you tackle your individual debts on your own, or take them on together?

Consider different ways to resolve your debt:

DIY debt payoff: The debt snowball method — paying off smaller debts first to stay motivated — can keep you on track in the long run.
Consolidation: Balance transfer credit cards or a personal loan may help you consolidate multiple debts into one, ideally with a lower interest rate. You’ll likely need good credit to qualify.
Debt relief: Debt management plans from nonprofit credit counseling agencies or bankruptcy can help you resolve your overwhelming debts quickly and cost-effectively. Bankruptcy can stay on your credit report for seven to 10 years.

Know that you won’t be on the hook for debts your partner incurred before marriage. Once married, you are responsible for debt acquired under your name, and it will only affect the credit score of whoever incurred it. In community-property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), though, debts are divided between both parties in the event of death, divorce or annulment, regardless of who acquired them during the marriage.

Keep the conversation going

As you make progress on paying down your debt, check in with each other — keeping your long-term goals in mind — and course-correct where needed.

“‘Till death do you part’ is a long time,” says wealth psychology expert Kathleen Burns Kingsbury. She advises building flexibility into your plans and talking about your finances on a regular basis. “It could just be a 10- to 15-minute conversation so people don’t feel locked in.”

Follow your progress and look at the impact it’s having on your other financial goals. Paying off debt, like marriage itself, is often a long-term commitment.

The article In the Red Before You Wed? Talk Debt With Your Partner originally appeared on NerdWallet.

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Keep Your Money Safe While You See the World

Posted on March 13, 2018March 6, 2018 by Chanelle Bessette

An overseas adventure can be a lot of fun, but there are potential hazards that travelers should take into account when planning trips.

The risks of international travel don’t include just your physical safety; your financial security can easily be jeopardized by scammers and thieves if you aren’t careful. Here are some tips and tricks to keep your money safe while abroad.

What to do before you go

1. Figure out the best plastic to Pack

Familiarize yourself with your credit cards’ travel-related perks and benefits. Some cards, for example, offer rental car insurance, trip cancellation insurance, lost luggage reimbursement, travel accident insurance and more. It’s even better if your card is on a network with wide international acceptance (Visa or Mastercard), and if it doesn’t charge foreign transaction fees.

You should also bring a debit card, in case you need to access cash. But check to see whether yours will reimburse you for ATM fees.

2. Order some currency for the country you’RE visiting

Speaking of cash, getting some in advance of your trip is a good idea. Not only will the exchange rate likely be better upfront, but it also will mean fewer visits to ATMs and other places where your debit or credit cards may be compromised — and therefore less risk of falling victim to scammers. Just be sure to keep your physical wallet secure, and consider carrying cash and credit cards separately so that you still have a method of payment in case you’re pickpocketed.

3. Buy a tamper-proof, RFID-blocking wallet

And speaking of pickpockets, many are experts at finagling physical wallets away from unsuspecting travelers, but these days they can also steal digital credit card information via radio-frequency identification skimmers. Protect against both kinds of theft with an RFID-blocking travel wallet that can be tucked into your waistband or under your shirt to ward off sticky fingers.

4. Inform your bank/card issuer of your itinerary

If your bank/issuer doesn’t know that you’re traveling outside the country, it may freeze your account and apply a fraud alert when it sees foreign transactions. By letting your bank/issuer know your travel plans, you ensure you’ll be able to use your card freely. And you can still be alerted if your card information is used outside of your planned destination.

5. Set up account alerts you can easily access

You might not have cell service when traveling overseas, but a Wi-Fi connection will allow you to receive emails or push notifications from your bank/issuer about account activity. They can help you know if your card or account has been compromised.

6. Photocopy necessary documents, write down bank contact info

If your physical wallet is stolen, you’ll want to have backup copies of your passport and have access to bank contact information so that you can cancel any compromised cards.

7. Think about getting travel insurance

If you’re not already covered by your primary health insurance or your credit card’s insurance-related perks, you might want to consider travel insurance. The right policy can protect you from the financial loss of misplaced luggage, travel delays, medical emergencies and more.

What to do while you’re abroad

1. Be vigilant about pickpockets

Crowded places are a thief’s playground. Be wary of where you keep your wallet, and watch out for people who bump into you, as they may be trying to swipe it. Better yet, avoid carrying your wallet at all if you can.

2. Use your Hotel Room’s safe

Ideally, your hotel room will have a safe in which to store important documents (like your passport), as well as some extra cash and a spare credit card — or some payment form that you don’t have to carry on your person while exploring your destination. If your hotel lacks this option, a lockable suitcase could work, although a locked bag is much easier to carry out of a hotel room than a safe is. Or, ask if your hotel has a safe in the office and allows guests to store items there.

3. Look out for malicious technology, like skimmers

If an ATM or merchant point-of-sale device looks sketchy, you may want to avoid using it. A credit card skimmer, a device that thieves can attach to point-of-sale terminals, can quickly copy your credit card’s information, which can then be sold to others or used to make fraudulent purchases. The devices often are hard to spot because they look like regular magnetic stripe swipers.

4. Be aware of common scams at your destination

Unscrupulous taxi drivers with “broken meters,” “friendly” locals who want to show you how to use ATMs, and elaborate ploys performed by street vendors and beggars can trick you out of your money. Research common problems before you go, as scams like these can happen the moment you leave the airport.

5. Be careful about which Wi-Fi networks you use

Entering bank usernames and passwords on your laptop or smartphone while on a public Wi-Fi network can leave you susceptible to fraud and theft. Only use private, secure Wi-Fi networks to check banking or credit card information while abroad.

What to do if theft happens to you

1. Report card theft to your bank or issuer

If you’ve lost a wad of cash, you’re probably out of luck. But if your debit or credit card has been compromised, your bank/issuer should be able to cancel the card, ideally before the thief does too much damage. Remember that fraud protections for credit cards are generally more robust than they are for debit cards. (With the latter, it’s your own money at risk, not the bank’s.)

2. Report illegal behavior to local authorities

A police report is often necessary if you later file for identity theft relief or have to dispute false information on your credit report. The local police can also benefit from having information about criminals in the area.

3. Use your backup credit card and/or cash

Ideally, you’ve kept a spare credit card or cash squirreled away from the rest of your wallet. If so, it can help tide you over for the remainder of the trip, or at least until you can receive a new card or get to a bank to withdraw more funds.

4. Keep tabs on your credit report

Even after you’ve closed your compromised credit cards, you’ll want to make sure scammers haven’t somehow managed to open anything new in your name and that you don’t have unpaid fraudulent charges racking up interest and late payment fees. If you see something that looks odd on your report, be sure to dispute it with the major credit bureaus. You’ll also want to ensure that you’ve updated any autopay accounts that require a new card number, so that you don’t miss an important recurring payment.

The article Keep Your Money Safe While You See the World originally appeared on NerdWallet.

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Ask Brianna: Is 4-Year College Right for You?

Posted on March 8, 2018March 1, 2018 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.

Americans want to believe that we all have the chance to explore our individual brands of limitless potential. We tell young people, “Do what you love and the money will follow.” We say they should take the time to discover who they really are and pick a career that will match.

As you might have heard, college isn’t cheap. Increasingly, only those whose families have the resources or the willingness to take on student loan debt can afford to enroll in a four-year college, explore existential questions, and hope they’ll end up with a fulfilling, well-paying career.

“So everybody’s kind of on their own, and it means the advantaged kids get to be Hamlet and the disadvantaged kids don’t,” says Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce.

If you’re considering what to do after high school, or counseling someone who is, here’s how to navigate the options for achieving your very own American dream.

Plan to pursue postsecondary education — of some kind

Despite the cost, college has become more and more compulsory. Automation has increased the demand for high-skilled workers, and jobs in the fastest-growing industries — like health care, education and finance — often require education beyond high school.

The Georgetown University Center on Education and the Workforce defines good jobs as those that pay at least $35,000 a year for workers under age 45 and $45,000 for workers over 45. In 1991, about 40% of those jobs required a bachelor’s degree; by 2015, 55% did.

While that’s a big jump, it still means 45% of good jobs are attainable without a four-year degree. But a high school degree alone likely won’t lead to earnings that are high enough to sustain you. That means you should plan to continue on in school. And don’t wait too long, especially if your family isn’t in the top 20% to 25% of earners.

In that case, “Every year you don’t go to college increases the chance you’ll never go by almost 25%,” Carnevale says.

Choose a career path first

Unsurprisingly, it will be easier to choose a postsecondary path if you have a career in mind. The Bureau of Labor Statistics’ Occupational Outlook Handbook is a good place to start. Search potential careers by pay, level of education needed, growth rate and more.

The average bachelor’s degree recipient earns 168% of a high school diploma holder’s salary, according to an analysis by the Hamilton Project, a policy initiative affiliated with the Brookings Institution. But a bachelor’s isn’t the only path to good pay.

Aircraft mechanics, for instance, enjoy median earnings of about $60,000 a year with a mechanic’s certificate and 18 months of experience, according to the Bureau of Labor Statistics. By contrast, the bureau says that’s also how much teachers, social workers and nutritionists make with a four-year degree.

A career, of course, isn’t just about making money. The most fulfilling jobs offer autonomy, variety, and opportunities for on-the-job training and advancement, says James Rosenbaum, professor of education and social policy at Northwestern University.

Consider taking small steps to a degree

Carnevale and Rosenbaum advocate for incremental education, especially for students who don’t have the money to pay for a four-year education outright or who have concerns about graduating on time. Consider alternative college paths: Start with a one- or two-year certificate at a trade school or community college, get a job at a company that offers tuition assistance, and pursue an associate or bachelor’s degree while you work.

“We definitely see that pathway of earning a certificate and then continuing on to earn a degree after that has grown,” says Doug Shapiro, executive research director at the National Student Clearinghouse Research Center.

Make sure both the school and the program of study you choose are reputable. Check that they’re accredited and licensed, if applicable, using the U.S. Department of Education’s Database of Accredited Postsecondary Institutions and Programs.

And if this all feels complicated, know that it’s not just you.

“It used to be pretty easy: If you didn’t want to go to college, you didn’t; you could do just fine if you didn’t,” Carnevale says. “Now you’ve got to go on to some kind of postsecondary ed, and the choices you make matter a lot.”

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

The article Ask Brianna: Is 4-Year College Right for You? originally appeared on NerdWallet.

5 Pieces of Popular Tax Advice That Are Actually Baloney

Posted on March 6, 2018March 1, 2018 by Tina Orem

The world is full of tax advice this time of year, but not all of it is good. Here are five misguided, worthless or flat-out bad pieces of tax advice that tax pros say they wish never existed.

Bad advice: Get an extension — you’ll have more time to pay your taxes!

Why it’s bad: It’s wrong. Getting an extension gets you more time to file, not more time to pay. “I see that every single year,” says Tyler Gibbons, a CPA and partner at Riser McLaurin & Gibbons in North Charleston, South Carolina. “If an extension meant you didn’t have to pay your taxes until October, the [April 17] tax deadline would mean nothing to anybody. Not a single American would file their taxes in April if that were the case.”

Better advice: If you don’t have enough cash to pay your taxes, hand over what you can by April 17, then get on a payment plan with the IRS. As long as you’re responsive and provide information when requested, the IRS typically doesn’t resort to wage garnishment or other scary stuff, Gibbons says. “They do that when you just ignore them,” he says.

Bad advice: Don’t get an extension — you’ll get audited!

Why it’s bad: It’s bogus. “For some reason, that is just one that comes up all the time,” Gibbons says. The result is that people rush and throw together a tax return in April even if they don’t have everything in order. “They think if they get extended that they’re going to get audited, or it raises their probability of getting audited. And it’s just bad advice,” he says.

Better advice: Get an extension if you need it (but get it by April 17). Better to file later and correctly than to file in a hurry and make mistakes, Gibbons says. You also can get a sense of your situation now by putting your numbers into a tax calculator.

Bad advice: You should buy real estate for the tax breaks

Why it’s bad: Although mortgage interest and property taxes can be deductible, buying real estate has to make sense for other reasons too, says Eric Tyson, co-author of the forthcoming “Selling Your House for Dummies.” If you plan on moving soon or aren’t going to itemize on your tax return, or if houses are overvalued in the area, buying may not be a good idea. “I don’t care if you get the tax break if it’s not a good deal,” Tyson says.

Better advice: Ignore people who make taxes the No. 1 reason to buy real estate. Also, think about your tax-filing habits. You have to itemize to deduct mortgage interest and property taxes; it won’t do you much good if you take the standard deduction, Gibbons says. “Then, owning a home is just owning a home, and you’re not getting the benefit of the quote-unquote ‘tax write-off,’” he says.

Bad advice: Taking the home office deduction will trigger an audit

Why it’s bad: It’s not true. “We hear that every day,” says Jordan Amin, a CPA and partner at EisnerAmper in Iselin, New Jersey. “I don’t believe that the home office deduction gives rise to an audit any more than anything else does.”

Better advice: Take the deduction if you qualify, Amin says. “Even if you were to be audited, if you’re doing everything properly and accurately, then that would be fine. So why would you leave a deduction on the table?” he says.

Bad advice: You don’t have to report money from a side hustle

Why it’s bad: Having a side job or getting paid wages in cash still counts at tax time. “They think that if they’re not getting a form, like a 1099 or a W-2, that they do not have to report income. We hear that all the time,” Gibbons says.

Better advice: Report all of the income you earn — even if you were paid in cash and even if you didn’t get a W-2 or 1099 from the person who paid you. “That mentality of, ‘If I get cash, it’s not taxable’…. It just makes us wonder sometimes,” he says.

The best advice of all

Here it is: Unless they’re qualified tax professionals, your neighbors, in-laws and co-workers probably aren’t the tax gurus they say they are.

“You wouldn’t necessarily take advice, if you had the flu, from the guy at the gym. I’m not sure you should take tax advice from that person either,” Amin says.

“If it sounds like it’s too good to be true, it’s probably something you should look into and get advice from a professional, rather than from the guy on the bus,” he says.

The article 5 Pieces of Popular Tax Advice That Are Actually Baloney originally appeared on NerdWallet.

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Act Now Before the Fee for New U.S. Passports Increases

Posted on March 1, 2018March 1, 2018 by Gregory Karp

If you’re thinking about applying for a new U.S. passport, sooner is better than later, as the fee is set to increase $10, to a total of $145 for an adult, on April 2.

The increase, aimed at recapturing the true cost of issuing a new passport, will not affect passport renewals by mail, according to the U.S. Department of State. That cost will remain at $110.

However, the passport “execution” fee — charged when you must apply in person — will go to $35 from $25. The execution fee is only part of the total cost of a new passport for an adult, which will reach $145 after April 2; the cost for children younger than 16 will be $115.

The U.S. Travel Association didn’t comment on the likely impact, if any, of a fee increase on international travel by Americans.

But if you were planning to apply for a new passport anyway, you might as well do so soon before the $10 increase.

In addition to being required when traveling abroad, a passport can also be used as ID in other cases, including airport security screening, which could be important if you live in a state where your driver’s license soon won’t be a sufficient form of ID.

You can also use a passport for identification in opening a bank account and several other situations in which you need to provide a government-issued photo ID.

Who will pay the higher fee?

You’ll pay the execution fee if you’re a first-time applicant who must apply in person. Most people choose to do that at a U.S. post office. The State Department projects a total of about 11.5 million in-person applicants in 2018. (The fee applies to anyone filling out a passport application form called DS-11.)

In addition to those applying for their first passport, people in these situations will need to apply in person and incur the higher fee after April 2:

You haven’t renewed an old passport in 15 years
You are younger than 16, or you were when your previous passport was issued
Your passport was lost, stolen or damaged

The execution fee also applies to applications for passport cards for land and sea border crossings from Canada, Mexico, the Caribbean and Bermuda. Cards are not valid for air travel. The total fee for cards will increase to $65 from $55 for adults.

The State Department said it requested the fee increase after two studies put the actual cost of in-person services — identity verification and document review — at about $33 or $34 per applicant, depending on the study. The fee was last adjusted in 2008, when the State Department lowered it from $30 to $25.

Paying an extra $10 after April 2 might not sound like a huge amount, but you could use the fee increase as motivation to act soon and cross off “apply for passport” from your to-do list.

The article Act Now Before the Fee for New U.S. Passports Increases originally appeared on NerdWallet.

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