How to Cover the Rising Cost of College

Money can be a complex thing. No, I’m not necessarily talking about the stock market or the emergence of cryptocurrencies. I’m talking about how every financial decision you make affects all the others. It sounds like a simple enough theory, but when it comes time to putting it into action, it’s often difficult to see through.

I see many clients who come in clearly stating their goals: they want to retire, they want to start their own business or pay for the children’s college education. They want to be financially independent. Yet, when we look at what they’re doing with their finances, we find that their actions may be working against their goals. That daily Starbucks habit has a different cost when you calculate how much you’ve spent in a given month that could have been used towards other expenses. For those who are constantly leasing new vehicles, those payments that never end take on a different perspective when you consider how they could have been applied to a down payment for a house.

We see it now with millennials struggling under immense student loan debt. While much of their income is funneled towards basic needs and paying down debt, little is left for necessary things like amassing an emergency fund and saving for retirement, let alone other milestones like purchasing a home. Putting off funding these other items can have a serious detrimental effect down the road. Furthermore, while millennials have grown to be the largest generations purchasing homes1, this major decision has prompted additional complications like borrowing from retirement to afford a down payment or underestimating ongoing maintenance cost. In fact, based on a survey by Bank of the West, 68 percent of millennial homeowners now have regrets about buying their home2 because every decision made truly impacted everything else.

Things can get especially tricky when decisions are being made by more than one person. Couples can have household goals, but if they’re not united in working towards them, these goals can often get sidelined. Perhaps they’re trying to save for a house, but one of them isn’t sticking to their plan. Maybe they’ve been diligently saving for retirement when one wants to take a major withdrawal to start their own business. Sometimes it can be as simple as not even bothering to discuss the household’s financial goals. Very often, if you’re not working together, you’re working against one another.

Please understand, I’m all for enjoying your hard-earned money. Sometimes, though, difficult choices have to be made. Perhaps it’s deciding to put off that trip with friends to pay off your credit card, or eating out less to build up your emergency fund. I remember being in that predicament when my family first moved into our home – we lived without furniture in two of the rooms! You see, the key to your personal financial success isn’t typically making more money. It’s really about being aware of your financial behavior and of how your daily financial decisions impact your long-term fiscal future.

1. https://www.housingwire.com/articles/42748-millennials-lead-all-other-generations-in-buying-homes

2. https://www.cnbc.com/2018/07/18/most-millennials-regret-buying-home.html

Tax-related fraud and identity theft have continued to grow, with millions of people becoming targets. Scammers need little more than your Social Security number and other general information to file a fraudulent tax return and hijack your tax refund. Taxpayers typically don’t discover the fraud until they attempt to file their own returns, which is why it's essential to file taxes as soon as possible. At the same time, you may want to confirm the appropriate timing with your tax professional. Although 1099s are due by the end of January, custodians may correct 1099s throughout February. If drastic changes happen to a 1099 after you file your taxes, the change can severely impact the amount you owe.

Here are some helpful ways to prevent your SSN from being compromised:

• If you have been a victim of identity theft, complete  IRS form 14039, identity theft affidavit.
• Respond immediately to any IRS issued notice once you verify the authenticity of the notice. You can do so by calling the IRS directly at 800-908-4490 or setting up your  online account.
• Get an Identity Protection PIN: a 6-digit number that prevents someone else from filing a tax return using your Social Security number or individual taxpayer identification number. Only you and the IRS know the IP PIN.