Financial Planning Strategies for Holiday Spending and Savings

It’s hard to believe that we are already in the holiday season. Christmas is just over a week away so in this week's Monday Morning Quarter-Buck, Financial Planner Becky Eason (who we affectionately call our budget queen) is going to give you a few tips to save money in the upcoming weeks. 

Tip #1
A great way to save some money during the holidays is to wait until a few days after Christmas to have family gatherings. While it may be too late to do this for this year it can be something to keep in mind for future years. You might be asking “how does this save any money?”

Well, if your family does gift exchanges, then purchasing a gift the day after Christmas when retailers usually mark their Christmas inventory to 50% off, will be a very big savings.

Included in the discounts are gift packages, stocking stuffers, wrapping paper and many other little things that you don’t think about but often pick up last minute to fulfill your holiday shopping.

Of course, if you wait until after Christmas to purchase these items there is a chance that the stores will run out before you get there or that you won’t have as good of a selection but you could save a lot of money.

If you aren’t up for taking the risk that you won’t be able to get the items that you really want to gift you can still take advantage of some sort of discounts. You can plan ahead and purchase items for next year, if you have space to store it and won’t forget about the items. Popular items to do this with are decorations, gift bags, wrapping paper, holiday baking pans and holiday clothing. 

Tip #2
This next tip for saving money during the holidays is something that I struggle with, but feel very pleased when I follow my advice. When people say they would rather spend time with you than receive a gift, they probably mean it. It’s nice to both give and receive gifts but after all, aren’t the holidays supposed to be about spending time with those who are close to you?

If you really want to give a gift, try to make sure it’s something that the recipient will actually use and appreciate. And don’t spend money that you don’t have on gifts. All too often we receive gifts and the next year comes around and we realize that we never took the prior years gift out of the box! 

Tip #3
The third tip for saving money during the holidays is on food. We all know how expensive groceries are, especially when we are buying “special” foods for our holiday gatherings. To help spread the cost more evenly among all family and friends consider doing a dish to pass. Not only could this potentially
save you money but it can save a great deal of stress. 

Tip #4
As the holidays come and go, remember to cherish the memories and the time that you have with friends and family.

Tips for a Low Stress Tax Season

In this weeks blog Financial Planner Becky Eason writes about the big "T" word, that's right - TAXES!

As the end of 2019 quickly approaches, it’s time to start thinking about taxes. As we all know, tax season catches up with us very quickly with the hustle and bustle of the holiday season, and the recovery period in the weeks after the holidays.

Our goal is to make your tax season as low stress as possible. A great way to begin your tax season, is to create an easily accessible folder to keep all of your tax documents in. As you receive these documents in the mail you should open the mail and review the document, then put it directly in your tax folder. If you have any documents that you think may be important, include them in the tax folder and your tax preparer can review them to see if they need to be included with your taxes. I’m a firm believer in the fact that it’s better to have too much information than not enough. Once you believe you have received all of your tax documents you could do a document comparison to your prior year tax documents to make sure it looks like you have everything. At this point you can grab your folder and send the documents off to your tax preparer, or in the case of self-preparing a tax return, you can go ahead and get started.

If you have someone prepare your taxes for you make sure that you let them know of any significant changes that you’ve had during the year. Some of these significant changes would include a change in marital status, filing status, dependents, address, new driver’s licenses, change of income sources, and if you made any estimated tax payments during the year, especially if this is something that you haven’t done in the past. Failing to update some of that information could result in having a rejected tax return or losing out on potential tax credits or deductions. It’s much easier on all parties if you remember to update this information right from the start. In your tax document folder that we talked about earlier, you could keep a running note page with updates that you want to make known or questions that you might have.  

Another tip I have is to review your driver’s license. To help reduce identity theft, some states, such as New York State, require the information on your driver’s license to be entered prior to filing. Make sure that your license hasn’t yet expired and that it won’t be expiring during tax season. If your license is going to expire between the time of giving your tax preparer your tax information and the time that you will be e-filing the return, you will want to let your tax preparer know, because in some states your tax return can’t be filed if your license is going to expire.

As tax season approaches do your best to not feel overwhelmed. We are here to help you and answer your questions. 

Uncork the FAFSA - College Planning

By: Becky Eason

Why complete the FAFSA?

As of October 1st, it’s officially FAFSA season for the 2020-2021 academic year. FAFSA stands for Free Application for Federal Student Aid and should be completed by all high school seniors who plan to attend a secondary education school as well as current college students who will be going to school again next year. This form is completed based on the prior year tax return, so if you, or your parents, have completed your 2018 tax return you are able to complete this application. As much as I’m sure you don’t like completing this form it’s very important that you do so, especially for the following reasons.

The primary reason that FAFSA needs to be filled out is that it’s required for financial aid. FAFSA needs to be completed by students who are attending public schools and many times for private schools as well. Did you know that every dollar you borrow in student loans will cost you approximately double by the time you pay back your loan? If you are eligible for any amount of financial aid anything that you receive will help you out tremendously when your student loans enter repayment status. If you receive $100 in financial aid that is actually like receiving $200 if you think about the amount in repayment terms. 

Even if you know or believe that you won’t be eligible for financial aid, it's important that you still complete the FAFSA. The reason for that is that in order to be eligible for federal student loans you need to have a completed FAFSA. Unfortunately, this is not a very well known fact and thus results in many students missing out on the advantages of federal student loans You may not be eligible for any financial aid but if you are able to get federal student loans it’s worth your time and effort to complete the FAFSA. So, why would you want a federal student loan over a private student loan? An advantage of all federal student loans is their built in death and disability clause. If the person who holds the student loan passes away before the loan is repaid it’s forgiven and the estate is not responsible for paying anything back. If the loan holder becomes permanently disabled they can apply for a disability discharge and if the discharge is granted then their federal student loans will be completely forgiven. Another reason for wanting a federal student loan is the ability to have an income based repayment option, especially for students who plan to enter a career that is eligible for Public Service Loan Forgiveness (PSLF). In no cases are private loans eligible for PSLF. Also, a federal student loan can be either subsidized or unsubsidized. A subsidized loan is need based, so not all who complete the FAFSA will be eligible for this loan but the unsubsidized loan has no need clauses attached to it. The great thing about the subsidized loan is that while the student is enrolled at least half time in college the government is paying the interest on the loan, whereas with the unsubsidized loan interest starts accruing as soon as the loan is taken out (as would a private student loan).  

Trust me, I know how dreaded it was to fill out the FAFSA but it is worth all of your time and effort. Please don’t delay in getting this completed, as schools have limited financial aid to offer and they do run out of money. Financial aid is offered on a first come first serve basis.