(Disclaimer:  I apologize for getting this song stuck in your head...again.)

We've all heard the hit song and most of us will admit we like it, or once did. The song is "Let It Go". This song is so popular with young women that I've read one mother refer to it as her daughter's addiction.  When I was watching my own daughter and one of her best friends singing a karaoke version of the song, I thought about the sense of empowerment that the lyrics relay. As they grow, I hope they both learn to be themselves and to not feel trapped by other people's expectations. 

It also made me think that many times it's not other people's expectations but our financial circumstances, regardless of how successful we are, that can make us feel trapped. Even those that achieve great success in a particular professional role might feel trapped if they aren't in a secure enough financial position to change course as their goals evolve throughout life. 

What Bill and I do every day is help our clients do what we did, just "let it go". We both, as a result of years of sound financial decisions, were able to transition from very successful corporate careers in the financial services industry to pursue our dream of being business owners and helping families and other business owners achieve financial independence. That is, having the financial freedom to pursue that dream occupation or transition to retirement.      

If you haven't done so already, I challenge you to take a stand and put your own personal financial strategy in place, so that one-day you too can just "let it go". 

Sincerely, 

Scott G. Russell

Cummings Financial Organization, Inc.

How to Pay for College without Going Broke

We all know the benefits of a college education - the ability to compete in today's competitive job market, increased earning power, and expanded horizons. But, if you're like most parents, there are a lot of demands competing for your hard-earned dollars like mortgages, retirement contributions; health care costs, raising your kids and vacations. Add in the costs of bills and unforeseen emergencies, and it's hard to imagine how you might fit in saving for college too. And yet, it's imperative that you start your child's college fund now. 

Making matters worse, the cost of college continues to climb.  If you project the current cost at a conservative 5% inflation rate for eight years, for the academic year 2020/2021, the cost of one year at a public college could be $33,130, while the cost of one year at a private college could rise to $65,931!

 The key to reducing the cost of college is to start early and to develop a comprehensive plan.  There six things that should be addressed that can help you reduce the cost of college.  They are:

• Student Positioning - There are many things that your child can do in order to be prepared for college, to make a reasonable and successful effort to maximize funding, and to become an appealing applicant to some exciting colleges and universities.  Excelling in academics or sports are good ways to receive scholarship offers.   Having your child take a career assessment test can aid them in choosing a major and help them avoid the costly mistake of changing majors multiple times.

•  Education Tax Incentives and Tax Reduction - These are college related tax strategies used to reduce your federal taxes, thus creating a "tax scholarship".  Examples include:

• Maximizing  the  Opportunities to Claim a Hope, Lifetime Learning Credit, and the Student Loan Interest Deduction
• Cash flow Strategies to Increase Amount of Funds for College Costs
• Opportunities to Shift Income to a Child and Gain Substantial Family Tax Benefits
• Employing your child

• Financial Aid - There is a great deal of mystique and misinformation associated with the term financial aid.  Many parents associate financial aid with various third-party scholarships offered by private institutions and organizations.  Although this type of aid does exist, it makes up only 1% of the total monies available for education. Financial aid consists of loans, grants, scholarship and work study.  Understanding how to qualify for grants and scholarships and how to maximize financial aid is essential.

• Cost Cutting Strategies - These are some of my favorites:
• Using Combination Degree Programs to Reduce the Time in College
• Using Guarantee Tuition to Lock in the Cost of College
• Transfer from a Public to a Private to Reduce College Costs
• Establishing In-State Residency to Avoid Out-of-State Tuition Costs
• Taking Advanced Placement courses in High  School
• Living at home and attending  a local college
• Going to a less expensive Junior College during the summer months and taking lower level courses

• Saving and Investing for College - There are several college savings options to choose from. These options include 529 plans, Coverdell education savings accounts, U.S. savings bonds, custodial accounts, mutual funds, and individual stocks.  Taxes can have a significant impact on your savings so tax deferred investments are preferred.

• Loans for College - Loans can make up a large part of how families pay for college.  Loans are available for students and parents and each has their own merits.  The most common question is whether one should use a home equity loan or a retirement plan loan.  Each option should be carefully reviewed before making a decision.

These are just a few things to bear in mind as you traverse the path between where you are now, and the bittersweet day when your child heads off to college.  Each of them can become an important part of the puzzle that can add up to acceptance at a great college- not to mention a much more manageable college bill. 

"Why Didn't My CPA Tell Me That?" 

 

 

Understanding the difference between tax prep & tax planning could save you thousands! America's Top Certified Tax Coaches, including Bill Cummings, share dozens of write-offs you've never heard of. 

Bill interviewed recently with WHUR 96.3 

and WLKF Talk 1430!