Archive for June, 2009
Monday, June 29th, 2009
If you have student loan debt, are you planning to pay it off early? Or are you simply making the minimum payments because you’re comfortable with the low interest rate, tax deduction, and low payments?
For the longest time, I’ve been in the second camp, happy to pay off my student loan debt using the minimums, knowing I had other financial goals that took precedence.
Well, that time has come and gone. With the down payment of our house complete, repayment of our high-interest auto loans, and money saved up for our first baby, the only big financial hurdle Mrs. PT and I currently face is the repayment of our student loans. And we’ve already taken action…
Last month we paid off one of our loans with one big chunk payment. Most of the funds came from our most recent ESPP flip (forced extra savings using company stock). And by the end of the summer, we should be able to wipe out the last student loan.
Overall I’m definitely proud to be able to close out this debt, but I do have mixed feelings whether this is the best move financially. With stocks, real-estate, and other investments on sale right now, I wonder if this money could have been better served elsewhere.
But I won’t be wondering long, as there are huge benefits to having this debt behind us: more money available for savings, more flexibility in our budget, one less payment to worry about, etc. Not to mention, student loan debt is the debt that would never be forgiven, even in bankruptcy. Lastly, it just feels good to be rid of it.
How about you? What did you do, or what are you planning on doing with your student loan debt?
In other news, last week I participated in a few blog carnivals. Check them out:
And there were plenty of nice article from last week throughout the blogosphere:
Have a great week!
Posted in Debt Reduction | 16 Comments »
Friday, June 26th, 2009
With the heavy summer travel season now upon us, I thought I’d throw out some quick travel tips. These are mostly based on the money-related lessons I learned while travelling to Ireland the past three weeks. For more detailed banking information see my previous post, Banking Tips for International Travel.
Know Your ATM and Foreign Transaction Fees- We ended up using our ATM card once and thought we’d only see a $2 fee. To our suprise, our ING DIRECT Electric Orange account charged us 2% foreign transaction fee. This is definitely something we should have researched prior to making the ATM withdrawal. Foreign transaction fees weren’t that bad on us the rest of the trip since we just used the local currency (Euro), but that’s definitely something you need to be aware of prior to using your credit card. Most fees are set at 1% to 3%. Capital One is one of the only companies that doesn’t charge you this fee.
Download Skype to Save on Phone Expenses – We’re still really big on Skype and used it make all our calls back home. We called both our friends and family who have Skype themselves, and occasionally used it to call a land line or cell phone using the Skype credits I had left over from my last trip. Skype is free for computer to computer video calls.
Consider Cancelling Services Back Home – Prior to leaving on our recent trip we’d been having some trouble with our Internet connection. So, we decided to call and just cancel it to save us from paying almost a month of service fees when we were out of town. AT&T offered to give us a month for free and then lowered our rate going forward to keep us from cancelling. Call your service providers today and let them know of your complaints or if you think you’re paying too much. They’ll likely work with you to help you cut some from your monthly expenses. Note: before cancelling anything, make sure you’re aware of any cancellation fees or big fees to have the service set back up when you return.
Inform Your Bank and Credit Cards – Most banks and credit card companies have fraud alerts set up on your account that prevent your card from taking any unusual charges, like in a foreign country. So, it’s usually a good practice to call them and let them know where you’re going. I usually do this at the airport while I’m waiting. We actually forgot to do this this time around. And suprisingly we never had a transaction questioned. Maybe it was because we were in Europe, I guess, versus a less developed country.
Add-On a Cell Phone International Feature - If and when we didn’t use Skype on our trip, we used our cell phones. Prior to leaving though, we called and made sure we had the international flat rate feature turned on. This usually costs around $5 for the month, but it lowers your per minute and per text charges to a more reasonable rate.
Do you have a good money-related travel tip? Leave it in the comments below…
Posted in Money Stories | 4 Comments »
Wednesday, June 24th, 2009
This past weekend I visited Blockbuster for the first time in a while. I’d written them off to a certain degree after my discovery of The New Release, Redbox (and Insideredbox.com), who let you rent DVDs for $1 or even $0. To be honest, the only reason I even considered entering Blockbuster was because I desperately wanted to watch a particular movie and it was out of stock at the $1 rental box closest to my home. And I’m not quite up to speed on the online movie watching, nor do I have an on-demand type cable or satellite TV service. I’m a bit old school when it comes to movies. Hey, at least I don’t watch VHS anymore.
So, reluctantly I stepped into the nearest Blockbuster, knowing I was about to pay $5 for something I could have rented for $1. Still, I was pleased to find the movie I wanted heavily stocked on the shelf. Then, I proceeded to the register where the person checking me out asked if I wanted to rent it for the one-night price of $1.99, or keep it for a week at $4.99. Obviously, since I was planning to watch the movie that night, I happily opted for the $1.99 price. Does anyone know when Blockbuster began offering this price and if it’s a nationwide offering?
Anyway, I left feeling good about my purchase, and at the same time, pleased with Blockbuster (a Dallas-based company) for altering their pricing structure to compete with the $1 boxes. The way I see it, this move will keep the brick and morter Blockbuster stores around for a bit longer. Eventually everything will be digital and you won’t need a store, but for now it’s nice to see them making the smart changes required to stay competitive.
I realize $1.99 still isn’t $1.00 or $0 (the Redbox price with promo code), but Blockbuster has the advantage of being able to stock more DVDs. Thus, increasing the chances you’ll actually leave with the movie you want. I think I’d pay $2 instead of $1 if I knew the movie would be there. Also, Blockbuster allows you to turn the movie in by store closing, whereas the $1 boxes seem to give you a 24 hour window to return the movie (correct me if I’m wrong about that one). All this to say, I think going forward, I’ll probably be using Blockbuster more for my movie renting needs.
By the way, I’m not really a movie rental subscription service fan, but I have tried both Blockbuster Total Access and Netflix and written reviews. So check these out it you’re interested: Netflix Review, Blockbuster Total Access Review.
Posted in Frugal Living, Money Stories | 8 Comments »
Tuesday, June 23rd, 2009
I recently received an email from a reader regarding cleaning up old credit report errors. Here’s the question (my emphasis added):
Does it count as an error on a credit report if there are accounts turned to collections that have actually been paid years ago? When my husband and I were applying for a mortgage, he got turned down because he had supposedly unpaid medical bills–from when he was 19. His parents insurance should have covered the charges, but his mother cannot find paperwork from that far back (my husband is 30 now). The collections agency hasn’t even been helpful when we contacted them for more information. Can we dispute the collections notice on his credit report even if we can’t prove the account was paid?
Here’s a paraphrase of my response:
I think you can claim that this is an error and report it as such. The credit reporting agency will then send the request to the creditor to prove that the account is truly in bad standing. If they don’t come up with proof that you still owe that money then they have to remove it. In other words, the onus is on the creditor to show that it’s valid. I wrote a bit more on this topic here: How to Fix Your Credit Report and Identity Theft.
I also reached out to some other pf bloggers for a response. Here are their replies (emphasis added):
Yes, it’s the responsibility of the collections agency to prove the debt is valid and they must provide written proof on request. Probably the easiest way to go about it is to contact the medical provider themselves and make them prove it. They probably can’t.
-Kyle from Amateur Asset Allocator
Yes, a credit bureau dispute would put the onus on the collections agency, and ultimately back on the medical provider to show proof of delinquent activity. And even if this is a legit collections attempt, at more than seven years old it should come off the husband’s report, unless there has been recent activity (which I doubt for something that far back in the medical field, unless we are talking thousands of dollars).
-Jason from Frugal Dad
The debt is past the statute of limitations of 7.5 years. Therefore the negative remarks will need to be removed, even if there was recent activity. Of course, the laws vary by state, so the reader will need to check in their individual state. Here’s something that might help: Gettin’ Out of Debt: Part II
-Madison from My Dollar Plan
By the way, if you yourself need to check your free credit report, visit annualcreditreport.com.
So what’s your take? Do you have anymore insight into a solution? Do you have experience with this issue that you’d be willing to share in the comments below?
Posted in Credit Cards and Credit | 6 Comments »
Monday, June 22nd, 2009
Happy belated Father’s Day to all you Dads out there. I just celebrated my first one, which Mrs. PT did a great job of making extra special. The holday reminded me of how lucky I am to be a Dad and the huge responsibility I have to protect my family and their future. Now that I’m a Dad, two financial products become more important, in my mind: college savings and life insurance. I’m promising that I’ll try and kick-start both this week.
One of the things we got to do this weekend was swing by T.J. Maxx and Marshalls and spend our two $25 gift cards. Similar to my previous reveiw of these discount stores, I was most impressed with T.J. Maxx in terms of store cleanliness, organization, and service. At T.J. Maxx we picked up the following with our $25: a small picture frame, two books for little Miss PT, and a t-shirt for Mrs. PT. They also threw in a re-usable shopping bag (a special they were doing last weekend only). Unfortunately we ran out of time and couldn’t make a decision on anything at Marshalls. I was definitely pleased with our purchases overall though and will be back to both stores soon.
Hits be Nimble, Hits be Quick…
107 Things That Make Good Financial Cents
Don’t Buy A House Just Because People Say It’s A Good Time To Buy
5 Personal Finance Podcasts Worth Downloading
Confessions Of A Recovering Spendaholic
How to Watch Live Sports and TV Online For Free
A Cottage Bathroom Remodel
How To Get Free Stuff? Just Ask
Carnival of Pecuniary Delights: Catch a Wave Edition
In other news, we made it home safe from Ireland. Had a great time, but I’m glad to be back sleeping in my own bed. This week I’m looking forward to sharing some posts related to our travels and some other fresh ideas I have floating around. Thanks for reading and have a nice week.
Posted in Personal Finance Links | 2 Comments »
Wednesday, June 17th, 2009
The following is a guest post by DebtKid, who blogs about his debt management journey. He runs a small software development company in Seattle and just launched a new online coupons section on his blog.
Parents who are in the unenviable position of saving for their retirement and their child’s education must start early to ensure their financial goals are met. The controversial topic of which is more important retirement or college savings becomes less of an issue with proper planning well in advance.
State sponsored 529 plans have been around since 1996 but have been gaining popularity in the last few years with parents who choose to pay for all or some of their child’s education. The following information explains the benefits and risks associated with these accounts.
What Are 529 Plans?
To put it simply a 529 plan is an investment account that offers tax advantages which make it very appealing as a way to save for college education.
Each state offers a 529 plan and you also can choose between a prepaid plan or a savings plan. If you want flexibility in your plan you may opt for the savings plan which is generally offers less growth but can be used at any institution. The prepaid plan on the other hand is used to pay for tuition at today’s rate at a specific institution. If you use your states 529 plan you may be eligible for state tax deductions. Interest earned in the account (when used for college expenses) is exempt from federal and possibly state taxes.
Benefits Of Using A 529 Plan
This method of saving for college expenses offers benefits beyond tax breaks and deductions such as:
- Parents retain control of the fund. This is important if you worry that your child may grow up and decide to use their college savings for a trip abroad or a new car. You have control over the account and make the decisions when and how the money will be used.
- Until you decide to withdrawal the money you will not have to worry about reporting information on your tax return. The year the money is taken out of the account will be the only time you receive a 1099 form to report taxable or nontaxable earnings.
- These plans offer flexibility in that you can move your investment to another 529 savings plan or change the beneficiary in the event your child does not go to college or receives scholarships which cover the expenses.
- Most 529 plans allow for substantial deposits which are not just limited to the parent. Grandparents, aunts and other individuals can contribute to your child’s education over the years. In most cases there are no age restrictions or income limitations for these plans.
- Plans owned by a parent or other donor will not have a significant impact on your child’s ability to receive federal financial aid as is considered a “parental” asset.
Risks and Drawbacks
As you can see using a 529 plan can be an excellent way to put money back toward ever growing college expenses however they are not without certain risks or penalties.
- Withdrawing money for anything other than college expenses will result in the owner of the account having to pay income tax on the earnings as well as a 10% penalty. If you have received a state tax deduction you may have to repay that as well.
- Some colleges take into consideration family owned 529 plans when determining scholarship or grant recipients.
- Certain savings plans have high administrative fees which can reduce your earnings. For this reason it is very important to carefully review all information before committing to a specific plan. Do your research, shop around and compare plans carefully to find the best option for your family.
Saving for future expenses, whether they are expected or unexpected is necessary in every household. For families with children going to college, using a 529 plan can make preparing for the high cost of education makes paying those expenses less of a drain on the household budget.
Posted in Kids and Money | 5 Comments »
Wednesday, June 17th, 2009
I’ve got a quick giveaway for my loyal readers. T.J. Maxx and Marshalls are doing a Father’s Day promotion and have each agreed to giveaway a $25 gift card to Prime Time Money readers. Here’s more about these stores in case you’re wondering who the heck they are:
If you enjoy spending time on the green, T.J. Maxx has great brand-name golf gear and accessories that will help you stay in the game and looking his best. From golf clubs to golf bags to classic golf shirts, T.J. Maxx has got the golfing enthusiast covered. If your ideal Father’s Day gift something for summer grilling, Marshalls has top-of-the-line grill gear, sauces, seasonings and more to keep family cook-outs delicious and affordable. And if you’re looking for something more professional, Marshalls and T.J. Maxx feature dress shirts and ties.
Generally speaking, these are discount department stores. I really like them and shop there occassionally. Check out my previously posted review of the T.J. Maxx and Marshalls shopping experience. In unexplained news, did you know: T.J. Maxx is called T.K. Maxx here in Ireland. Weird, huh?
Okay, enough chatter. To win a $25 card simply leave a comment telling me which store you’d like to get the card for. I’ll select the two winners from the comments. That’s it. Please be in the U.S. and please leave your comment by midnight CST tonight (the 17th). Thanks!
Posted in Blog | 18 Comments »
Sunday, June 14th, 2009
Our time in Ireland is ending soon. It’s been a great trip. Here are some more pictures from our stay (various city scenes from St. Patrick’s St. in Cork):
The QuickHits…
I want to thank you for sticking with the blog while I’m away. Special thanks to Jeff Rose and Debt Kid for standing in for me these last few weeks with some excellent guest posts on college savings. I should be back to full time postings the week of the 21st.
Posted in Personal Finance Links | 1 Comment »
