3 Reasons You Shouldn’t Pay Your Child’s Student Loans

by Emily Guy Birken · 6 comments

College student

College has become something of a Catch-22 for students. It’s impossible to secure even a mediocre job without a college degree, but the constantly spiraling costs of education make it nearly impossible to pay for that necessary degree.

For parents of students, it can be tempting to try to help out — by cosigning a loan, taking out a Parent PLUS loan, or even paying off a child’s individual student loan. However, as reasonable as it may be to want to help your child fulfill their academic potential, taking on their student debt in any way can seriously affect your bottom line.

Here are three reasons why it’s okay to let your child navigate the student debt issue on her own:

1. Co-signing a loan could leave you saddled with debt.

While federal student loans don’t need a co-signer, private student loans will often require one. And that can be a huge burden for families. Federal loans offer many repayment options, but private loans are not required to do so.

This means that if your child has trouble finding steady or lucrative employment after college, you’ll be on the hook for any payments owed to the co-signed private loan. [ continue reading... ]

Are You Spending Too Much on Your Hobbies?

by Jessica Sommerfield · 7 comments

Riding dressage

Hobbies are part of how we express our individuality. In the daily grind of life, they’re also a way we can unwind, have some fun, and do the things we most enjoy. Without this outlet, life would be a lot more stressful. You could say that having hobbies is good for your health and well-being.

On the other hand, hobbies can be downright expensive and a huge strain when balancing your budget: a source of financial stress.

Here’s a list of some of the most expensive hobbies in the world:

Big game hunting, sailing, flying, mountain climbing, cigarette boat racing, hot air ballooning, collecting art and other expensive antiques or memorabilia, drag racing, flying, horseback riding, playing polo, ballroom dancing, tornado chasing, and sky diving

Some of these hobbies can cost millions of dollars a year! It’s important to keep in mind, however, that hobbies should be relative to your lifestyle and income level. Someone who is making several million a year can afford to spend more on their hobbies. What would be an expensive hobby for us might only be consuming 1% of another person’s income.

So, how much should YOU be spending on your hobbies? [ continue reading... ]

How to Buy the Perfect Gift for Less

by AJ Pettersen · 4 comments

Simple present

Buying gifts for others can be rewarding, or it can be stressful. If you haven’t prepared for a holiday or other gift-giving occasion, you’ll most likely be stressed out and at a loss for ideas. There are a few ways you can prepare so that you’ll be ready to buy the perfect gift — at the perfect price:

Pay Attention

My dad would always use this simple, yet underused, method for buying gifts. Whenever a holiday or a birthday approached, he’d closely examine what we talked about and what we hinted towards. Sometimes, he’d get a perfect gift and we wouldn’t even know how he came up with the idea. He’d do the same for my mom every year, and she’d always be amazed.

By paying attention to the person you want to buy a gift for, you’ll be able to understand what they really want. Maybe they’re constantly talking about something they have difficulty doing at home or something that’s broken. Pay attention and write down ideas as soon as they come to you. [ continue reading... ]

Are You Trading Too Much Time for Money?

by Miranda Marquit · 8 comments

Time vs. money

One of the more interesting things I’ve read recently was a piece about how the wealthy think differently than the middle class.

Steve Siebold, the author of the book How Rich People Think, interviewed more than a thousand millionaires and billionaires and came up with some information on the way that the wealthy approach life.

Among Siebold’s most interesting observations is the fact that, in the middle class, many people trade their time for money. Here’s what Siebold points out:

Formal education teaches people how to think and perform in the linear world of commerce, but the rich rarely become wealthy trading time for money.

This made stop and think. Am I trading too much of my time for money?

The Problem with Earned Income

According to Siebold, the emphasis on getting advanced degrees — and even four-year degrees — might be preventing some of the middle class from joining the ranks of the super-wealthy.

After all, a formal education prepares you for a job or career. It doesn’t really prepare you to engage in some form of wealth creation.

I know that, even though I’m self-employed, I often trade my time for money. My freelance writing business requires that I spend time and effort in exchange for pay. This is earned income. Earned income can be a great way to live comfortably, and even provide you with a way to set aside money for the future, building a nest egg for retirement (if your job is a “good” one).

However, earned income rarely results in financial freedom right now. And it doesn’t set you up to eventually rely on regular, organic revenue streams, rather than always having to give up time in order to get money.

To this end, many of those who are wealthy cultivate diverse revenue streams that involve passive income.

How to Develop Passive Income

Passive income does require a lot of work to get going. You have to research dividend stocks and spend time building up an income portfolio. You might have to build a business from the ground up, or become involved in a creative endeavor designed to provide you with royalties.

However, the common thread is that after a few years of putting in the time, you’ve cultivated passive income that provides you with revenue — without the need for you to always be trading in your time.

Instead, you have a little more flexibility and freedom. To a certain extent, a career like mine provides some of that. I do have some flexibility in terms of being location independent, as well as being able to set my own schedule and decide which clients to work with. However, I’m still trading my time in for money.

I don’t expect to always be doing so, though. I’ve started investing in dividend paying investments, as well as considering other alternative revenue streams. The goal is to eventually get to the point where much less of my time has to be used to earn a living.

What do you think of Siebold’s observation? How much of your time are you trading for money?

How to Use Meditation to Curb Your Worst Spending Habits

by Vincent King · 2 comments

Meditation

You’ve always purchased whatever you wanted, whenever you wanted. It’s part of your mentality: you “deserve” to have the things you want because you work so hard.

Adding another $100 to your credit card bill thinking you’ll “pay it off” with your next check is perfectly normal. Um, what about the other $10,987 you said that about?

Nothing’s changed, and you’re feeling increasingly worse the deeper you fall into debt. The problem is, the worse you feel, the more you want to spend to make it better.

Trust me. It never works that way.

Instead of making yourself feel better, you’ve bought more guilt, and that’s always expensive.

$12,764 later, you don’t know what else to do with yourself, and it hurts. You can’t stop spending.

Here’s the thing, though. You can, starting the second you change your mind.

You’ve heard the saying, “Change your mind, change your results.” It’s true. When you truly believe you’re above your spending habits, you can control them. They no longer dictate when your money leaves your wallet, since that’s left to your common sense.

Meditation can help you change your mind and facilitate better decisions. [ continue reading... ]

What to Expect When You’re a Life Insurance Beneficiary

by Emily Guy Birken · 2 comments

River

While we all know the importance of having life insurance to protect our families in the event of our death, the details of being the beneficiary of a life insurance policy are a little less clear.

Here’s what you need to know about collecting life insurance benefits, so nothing comes as a surprise during a stressful time:

Filing a Claim

A recent troubling investigation of insurance practices has shown that insurers will often fail to pay death benefits to beneficiaries, even if they know that the individual who purchased the policy has died.

In any case, while insurers will sometimes make efforts to contact beneficiaries after a death, there’s not necessarily a contractual requirement for them to do so. That means that the onus is on the beneficiaries to file a claim in order to receive their benefits. [ continue reading... ]

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