College Savings
Does a 529 Hurt Financial Aid?
A $60,000 parent 529 can add up to $3,384 to the aid index. A dependent student-owned 529 gets parent treatment too; an ordinary UTMA does not.
5 min read
Tag
Myth-Buster
23 posts
College Savings
What If Your Child Does Not Go to College?
On a $42,000 529 with $12,000 of earnings, the extra 10% federal tax is $1,200, not $4,200. Compare six routes for unused money.
5 min read
Banking
Is Money in an Online Bank Safe?
If it carries FDIC insurance, yes, and identically to a branch. The real risks are different ones, and the app on your phone may not be a bank at all.
6 min read
Credit
Does Checking Your Credit Score Lower It?
No. Checking your own is a soft inquiry and never affects the score. The belief comes from something true about a completely different kind of check, and that one costs under five points.
5 min read
Investing
Dollar-Cost Averaging vs Lump Sum
Investing all of it at once wins whenever the market rises, which is most of the time. That is a fact about averages rather than about you, and here is when averaging in is the right answer anyway.
7 min read
Budgeting
Budget Percentages by Income: 50/30/20 Does Not Scale
One set of percentages cannot fit every income, because the cost of keeping a roof and getting to work does not scale down. Realistic bands at five income levels, from spending data rather than a slogan.
6 min read
Budgeting
The 50/30/20 Rule, Tested Against Real Incomes
The rule is quoted everywhere and tested nowhere. Run against what US households actually spend, only the top fifth of earners can keep needs under 50%, and the bottom fifth spends 81.6% there.
7 min read
Debt Payoff
The Minimum Payment Trap, in Numbers
A $6,000 balance at 24.99% paid at the minimum takes 254 months and costs $11,360.48 in interest, which is nearly twice what you borrowed. The formula is doing exactly what it was designed to do.
7 min read
Budgeting
Why Budgets Fail in Week Three
Budgets do not fail from weak discipline. They fail because five specific things were never in them, and three of the five are predictable to the dollar: $1,011 a month, in this case.
8 min read
Saving
Sinking Fund vs Emergency Fund: The Difference That Costs You
One is for the expenses you know are coming. The other is for the ones you do not. Two households, the same money, the same balance every month, and one of them ends December with $296.
6 min read
Saving
What Actually Counts as an Emergency
A $640 alternator on a nine-year-old car is not an emergency. A $340 windscreen is. The three-part test that separates them, and why it decides whether your fund survives August.
6 min read