|
|
|
|
|
|
|
|
|
|
|
|
This Week In Your Wallet:
First Date Red Flags…But Make Them Financial
Do we save for retirement…or our child’s college education? It’s a question I get a lot from parents. Now, thanks to a change at the federal level, doing both is getting a little easier. As the Wall Street Journal reports, pretax contributions made to retirement accounts will no longer count as income in the formula used on the “Federal Application For Federal Student Aid,” which determines how much families receive in support.
The change is expected to save families anywhere from $5,000 to $10,000 annually. “In the past, the FAFSA asked families how much they contributed to their work-sponsored retirement accounts,” writes Oyin Adedoyin for the Journal. “Retirement contributions were then factored back into total income, raising the amount families are expected to contribute.” Note, the change to the FAFSA impacts federal aid, as well as support from colleges using the same formula. “Some colleges and universities use alternatives to FAFSA when considering how much institutional aid they grant to students,” explains Adedoyin. “Their formulas may still count retirement contributions as income.” Regardless, the change is welcome help for parents trying to balance their futures and their children’s.
Bye Bye Broker Fees?
If you sold a home recently, you probably paid somewhere between 5-6% commission, split between both the buying and selling agents. That could change in the future, following a federal trial in Missouri, where a jury ruled the National Association of Realtors and a handful of big brokerage firms artificially inflated commission pay. “This jury decision represents a watershed event that’s likely to precipitate changes that increase price competition in the residential real estate markets,” Stephen Brobek, a senior fellow at the Consumer Federation of America tells USA TODAY. The decision, coupled with another lawsuit going to trial next year in Illinois, has the potential to eliminate the practice of the seller paying both agents’ fees. If that happens, it could drive commissions down by about one-third, and drain the industry of $20-$30 billion in commissions annually.
The verdict will put money back in the pockets of consumers — buyers and sellers (because the buyers’ share of fees are usually factored into the price of the house.). But as expected, those in the real estate sector are taking issue with potential changes, saying they’re “anti-consumer,” as it could lead to more professionals becoming dual agents, and more homebuyers opting not to use agents at all. “Any system that makes it harder for first-time and lower-income home buyers to retain a trusted advocate will cost home-buying consumers more money,” Rich Rosa, president of the National Association of Exclusive Buyer Agents told USA TODAY. “The lack of loyal representation will lead to costly mistakes, ultimately hurting the most vulnerable home buyers.”
Ditching School For Travel Deals–Is It A No-No?
If you’re a parent of young children, you know how expensive it is to travel during school breaks. Given high travel costs and inflation’s strain on household budgets, it can be tempting to pull your little one from the classroom to take advantage of off-peak deals…but should you? As the New York Times reports, many parents are saying “yes.”
The pandemic, for many, made remote work (and school) an option and changed the way families approached vacation. That was true for Stephanie Tolk, who was profiled in the Times piece and recently traveled internationally with her husband and two daughters for over a year. “People had bought into the idea that their kids went to school at 8:15 and that you don’t see them again until 4 in the afternoon,” she said. “That was all shattered in 2020…I found that I wanted more time with my kids.”
While educators say skipping school to travel could put children at a disadvantage, some parents say there are major upsides, not only with off-peak pricing being better, but also with the type of learning. “I’ve had a life of really impactful, powerful, transformative international experiences,” Ms. Tolk said. “I always knew that I wanted that for my children.”
PS, if you’re in need of tips to save on travel–especially with the holiday season coming up, check out some of HerMoney’s best, here.
First Date Red Flags…But Make Them Financial
If you were asked on a first date to the Cheesecake Factory, would you go? In a now viral Facebook post, 40 year-old truck driver Jeremy Fike had the eatery topping his list of places not to go on a first date. Also making the list of places he says should trigger red flags are church, the gym, a bowling alley and a couple dozen others.
The Washington Post’s Michelle Singletary opined on the list and thinks we should worry less about the Cheesecake Factory and more about red flags of the financial sorts. “All this talk about first-date restaurants has provided an opening for a conversation on what really matters,” she says. “When dating, you should be looking for relationship red flags that might make you financially incompatible.”
Some of the things to beware of–acting as if debt is “no big deal,” overspending and being a bad tipper (cringe). “Watch how someone tips..if your date grouses all the time about the gratuity, it should make you pause. Miserly behavior is not a good look.”
Have a great week!
Jean
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HerMoney Media, Inc. ("HerMoney") is not a client, agent, representative or affiliate of Edelman Financial Engines ("EFE"). EFE is a sponsor of the "HerMoney with Jean Chatzky Podcast," created by HerMoney. HerMoney receives a sponsorship fee from EFE depending on the number of podcast downloads, which is paid on a quarterly basis each year. In turn, HerMoney also provides promotional deliverables regarding EFE on the HerMoney podcast, newsletter, and social media channels. Due to this sponsorship arrangement, HerMoney has an incentive to endorse EFE and its services.
*The HerMoney podcast is proudly sponsored by Edelman Financial Engines. Unlock your wealth potential with our sophisticated wealth planning. Continue your journey at EdelmanFinancialEngines.com. Sponsored by Edelman Financial Engines – Modern wealth planning. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM3082631.
We maintain a strict editorial policy and a judgment-free zone for our community. We strive to remain transparent in everything we do. Website posts and newsletters may contain advertisements, links and mentions of products from our partners. Learn more about how we make money.
|
|
|
|
|
|
|
|
|
|
|
|
