Saving and investing for college expenses may seem overwhelming, but setting aside even small amounts can give your child a head start. While many people are aware of tax-efficient investing accounts like 529 plans, you may not know about UGMA/UTMA accounts – another way to save for educational and other expenses.
In this article, weâll take a look at UGMA and UTMA custodial accounts, what they are, and how to determine the best way to save for your kidsâ future, while getting tax advantages.
UGMA stands for the Uniform Gifts to Minors Act and UTMA stands for Uniform Transfers to Minors Act. Account-holders are âcustodians,â and may transfer money into the account to benefit the minor, but the money is managed by the custodian. Typically the money is released to the minor at the age of majority (usually 21 but sometimes 18 or other ages).
529 plans differ from UGMA/UTMA account in a few key areas:
The two types of plans share some similarities:
If you have a medium to long-term horizon, either a UGMA/UTMA account or a 529 account is usually better than just putting your money in a savings account at a low-interest rate. And donât forget that it is possible to have both a 529 plan AND a UGMA/UTMA account for the same child.
Unlike with a 529 plan, the funds in a custodial account do not have to be used solely for higher-education expenses. The custodian can withdraw money in a UGMA/UTMA custodial account for any expense that benefits the child, like technology, transportation, housing, or any other expense for the child.
The biggest advantage of UGMA/UTMA custodial accounts is their flexibility. Because they can be used for a wide array of expenses, you can use the money in the account even if your child chooses not to go to college. While earnings do not grow completely tax-free like in a 529 plan, earnings in a UGMA/UTMA account are tax-advantaged, but in a different way.
Depending on how you file your tax return, a guardian can choose to include their childâs unearned income with their own tax return. Unearned income is money that doesnât come from employment, like from interest or investments. In 2020, the first $1,100 of a childâs unearned income can be claimed on the guardiansâ tax return tax-free, and the next $1,100 is taxed at the childâs tax rate, which is likely much lower than their parentâs.
If youâre looking to save money or transfer assets to your kids for a variety of expenses beyond education, a UGMA/UTMA custodial account can make a lot of sense. One thing to watch out for is that a UGMA/UTMA account is tied specifically to one named beneficiary. Unlike a 529 plan, where you can transfer the money in an account to a sibling or other beneficiary, with a UGMA/UTMA account, any unused funds must be used or distributed by the time the child reaches their age of majority or their stateâs maximum age for custodial accounts.
Apps like Acorns are making it easy to start a UTMA/UGMA account with their new product, Acorns Early. You can start in under a few minutes and set Recurring Investments starting at $5 a day, week, or month. Fun fact: If you invest $5 a day from birth, considering a 7% average annual market return, you could have more than $70,000 by the time the child turns 18. To learn more, visit Acorns.com/Early.
The post Why You Need to Open a UGMA/UTMA Account for Your Kids appeared first on MintLife Blog.
Before you start applying for internships, you need to have the appropriate documents. Here are the most important.
Students who donât already have a resume can find free resume templates through Google Docs and Microsoft Word. These templates have clean designs and are easy to edit.
If you want something more unique, you can buy a template on Etsy. Choose a template that you can easily edit in Microsoft Word or Google Docs. If youâre applying for internships in a creative field like graphic design or advertising, pick a template that has more flair and shows your personality.
When writing your resume, focus on the skills youâve learned and your accomplishments. If you were a waitress at Waffle House (like I was for a summer), mention how it taught you multitasking and organizational skills.
Create a LinkedIn profile and start connecting with people you know. Ask past employers for recommendations and to endorse you for specific skills like Photoshop or Excel.
Some internships will require a cover letter. A cover letter should express the value youâll bring to the company, like how your interests and skills fit with the organization and why you would be a good addition.
If youâre submitting a cover letter for an online application, make sure to use any keywords mentioned in the job description. Some companies use software that filters out cover letters missing these keywords.
Have a parent or adult mentor look over both your resume and cover letter. They can offer you advice on how to phrase specific ideas and remind you of jobs, awards, and other accomplishments youâve forgotten about.
Once youâve created a resume and basic cover letter, you can start applying. Here are the best places to find a virtual internship.
The first place to look is your college career center. Many large companies have direct relationships with universities and accept a certain number of interns from there every year.
Contact the university career center and ask them about internship opportunities. If you already have a declared major, your department may also have its own career counselor who can help. They may have more personal relationships with hiring managers and internship recruiters.
Sometimes colleges have their own internship and job boards, but it still helps to talk to a counselor directly. They may have more resources and can answer your specific questions.
Even though the pandemic has changed how colleges operate, some are still holding virtual career fairs. Youâll likely have to register in advance and choose a specific time slot, so look into these options as soon as possible.
Make sure to follow up regularly if you donât hear back from the career counselor. They may be busy, and your emails can get lost in the shuffle. Donât feel bad about reaching out multiple times- this is part of what you pay for as a student and youâre entitled to their help.
If youâve had internships before, contact people from those companies and ask if they need help. Itâs much easier to get an internship when you already know the people in charge – especially if you made a good impression during your tenure.
It doesnât matter if the people you worked with have different jobs now. They may still work in a similar industry and need an intern. Make a list of where youâve worked and all the people you remember. If youâre having trouble remembering names, go to the companyâs LinkedIn page to jog your memory and find their contact information.
After youâve contacted them, reach out to any professors you know who still have direct ties to the industry. They can forward your information or send you links to opportunities theyâve seen.
Donât be afraid to contact people at companies where you turned down an internship position. Most people donât take that personally and may still have positive memories of you – plus, getting a previous internship offer from a company indicates that youâre probably a good fit.
If youâre reaching out to professors you havenât talked to in a while, remind them what class of theirs you took and include a copy of your resume. This will make it easier for them to forward the email to any prospects.
Take your time when crafting emails to industry contacts. If you write an email with typos and grammar mistakes, your email may be deleted immediately. This is especially true if youâre contacting someone you donât know. They may receive dozens of emails from students like you and not have time to respond to them all.
If youâve reached out to your networking contacts with no luck, itâs time to look for a virtual internship on a job site. Job sites should be the last place you look for a virtual internship because itâs harder to stand out among a sea of candidates.
Here are some of the best sites and apps to use:
Remember not to discount an internship if thereâs no mention that the job will be remote. Some listings may be outdated and not reflect the current situation.
When you apply, check the companyâs website and LinkedIn profile to see if you have any personal connections. Having someone in common can help get your application into the right hands.
The post How to Get a Virtual Internship appeared first on MintLife Blog.
Hello friends! Praise be, the election is over and I just marked my birthday over the weekend – my official holiday season milestone. Whenever the calendar passes November 8, I feel like I can finally turn 100% of my attention to all things holiday. Obviously, the holidays are going to look and feel very different than years past. Perhaps instead of the holiday season, we should start referring to the next few months as the hunker down season. Because that’s what holidays in the time of Covid are going to require of us. But I’m not entirely mad about the idea of holing up at home. I’ll take a very valid excuse to look for ways to make my home as cozy, comforting, and beautiful as possible.
Enter the new rug collection from Beni Rugs, designed by my style soul twin, Colin King.
Called the Shape of Color, this new rug collection offers eleven Moroccan style rugs. Each rug features shocks of color inspired by Tangier and Marrakech. The hues are deeply saturated in simple geometric shapes or big bold stripes.
While I typically eschew color, rugs are a wonderful spot to inject something fresh into a room. I used a bold colored rug in my own living room. The particularly nice thing about a rug – it’s an easy way to reenergize a space without really having to change anything else.
There are a few secrets to picking out a rug. First, you want to think about size. A common mistake is getting a rug that is too small. You want all (or nearly all) your furniture in a space to sit on your rug. That helps a room feel anchored and like everything is working together. A too-small rug will actually make a small space feel even smaller!
Next, you want to think about foot traffic. If you’re looking to put a rug in a high foot traffic area, you’ll want to ensure any rug you select will withstand an onslaught of dirt and use.
Finally, when adding a colorful rug to your space you don’t need to “match your decor. You just want to keep everything in the same design family. Do you decorate with mostly warm colors or cooler tones? That will help you pick your colors.
If you’re looking to upgrade the coziness of your home before the holidays hit, I definitely think one of these rugs would be a great way to do it. I’m already debating which one I might add to our house. I do have a home office refresh in the works! If I pick out one of these rugs – I’ll be sure to share.
How are you planning on sprucing up your spaces for the holidays?
images c/o beni rugs
The post A Cozy New Rug Collection appeared first on Apartment34.
When most parents offer to fund their childâs tuition, itâs with the expectation that their financial circumstances will remain relatively unchanged. Even with minor dips in income or temporary periods of unemployment, a solid plan will likely see the child through to graduation.
Unfortunately, what these plans donât tend to account for is a global pandemic wreaking havoc on the economy and job market.
Now, many parents of college-age children are finding themselves struggling to stay afloat – much less afford college tuition. This leaves their children who were previously planning to graduate college with little or no debt in an uncomfortable position.
So if youâre a student suddenly stuck with the bill for your college expenses, what can you do? Read below for some strategies to help you stay on track.
Your first step is to contact the university and let them know that your financial situation has changed. You may have to write something that explains how your parentâs income has decreased.
Many students think the federal government is responsible for doling out aid to students, but federal aid is actually distributed directly by the schools themselves. In other words, your university is the only institution with the authority to provide additional help. If they decide not to extend any more loans or grants, youâre out of luck.
Ask your advisor if there are any scholarships you can apply for. Make sure to ask both about general university scholarships and department-specific scholarships if youâve already declared a major. If you have a good relationship with a professor, contact them for suggestions on where to find more scholarship opportunities.
Some colleges also have emergency grants they provide to students. Contact the financial aid office and ask how to apply for these.
Graduating early can save you thousands or even tens of thousands in tuition and room and board expenses. Plus, the sooner you graduate, the sooner you can get a job and start repaying your student loans.
Ask your advisor if graduating early is possible for you. It may require taking more classes per semester than you planned on and being strategic about the courses you sign up for.
If your parents have never filled out the Free Application for Federal Student Aid (FAFSA) because they paid for your college in full, now is the time for them to complete it. The FAFSA is what colleges use to determine eligibility for both need-based and merit-based aid. Most schools require the FAFSA to hand out scholarships and work-study assignments.
Because the FAFSA uses income information from a previous tax return, it wonât show if your parents have recently lost their jobs or been furloughed. However, once you file the FAFSA, you can send a note to your university explaining your current situation.
Make sure to explain this to your parents if they think filing the FAFSA is a waste of time. Some schools wonât even provide merit-based scholarships to students who havenât filled out the FAFSA.
If you donât already have a job, now is the time to get one. Look at online bulletin boards to see what opportunities are available around campus. Check on job listing sites like Monster, Indeed and LinkedIn. Make sure you have a well-crafted resume and cover letter.
Try to think outside the box. If youâre a talented graphic designer, start a freelance business and look for clients on sites like Upwork or Fiverr. If youâre a fluent Spanish speaker, start tutoring other students. Look for jobs where you can study when things are slow or that provide food while youâre working.
Ask anyone you know for suggestions, including former and current professors, older students and advisors. If you had a job back home, contact your old boss. Because so many people are working remotely these days, they may be willing to hire you even if youâre in a different city.
It may be too late to apply for a Resident Advisor (RA) position now but consider it as an option for next year. An RA lives in the dorms and receives free or discounted room and board in exchange for monitoring the students, answering their questions, conducting regular inspections and other duties.
If you still need more money after youâve maxed out your federal student loans and applied for more scholarships, private student loans may be the next best option.
Private student loans usually have higher interest rates and fewer repayment and forgiveness options than federal loans. In 2020, the interest rate for federal undergraduate student loans was 2.75% while the rate for private student loans varied from 3.53% to 14.50%.
Private lenders have higher loan limits than the federal government and will usually lend the cost of tuition minus any financial aid. For example, if your tuition costs $35,000 a year and federal loans and scholarships cover $10,000 a year, a private lender will offer you $25,000 annually.
Taking out private loans should be a last resort because the rates are so high, and thereâs little recourse if you graduate and canât find a job. Using private loans may be fine if you only have a semester or two left before you graduate, but freshmen should be hesitant about using this strategy.
Before resorting to private student loans to fund your education, consider transferring to a less expensive university. The average tuition cost at a public in-state university was $10,440 for the 2019-2020 school year. The cost at an out-of-state public university was $26,820, and the cost at a private college was $36,880.
If you can transfer to a public college and move back home, you can save on both tuition and housing.
Switching to a different college may sound like a drastic step, but it might be necessary if the alternative is borrowing $100,000 in student loans. Remember, no one knows how long this pandemic and recession will last, so itâs better to be conservative.
The post My Parents Can’t Afford College Anymore – What Should I Do? appeared first on MintLife Blog.
Hi friends. So sorry to go completely MIA on you. Between attempting online school with a five-year-old, much of California burning to the ground, and the general state total chaos in which we find ourselves, getting to the computer for any length of time has been a bit of challenge, to put it mildly. And then I blinked and summer is officially over.
But I had to finally get on here as I have big news for you!
They say you shouldn’t make major life decisions during times of extreme stress, right? Well, we decided to throw all caution to the wind and instead have purchased a coastal cottage in Washington State! Apparently a global pandemic, homeschooling a kindergartner and the most consequential presidential election of our lifetime wasn’t enough to keep me busy.
In all seriousness, if the past seven months of Covid have taught us anything, it’s the importance of friends and family and so we decided to create a gathering place that can bring together those we love most for years to come. Nestled within the myriad of inlets and islands that dot the Puget Sound north of Seattle, the cottage enjoys sweeping views of the Olympic mountains and Hood Canal. I consider it my official respite from the impending doom. Sadly it looks nothing like the inspiration images I’ve collected here.
Instead, it is going to take a LOT of work to get our little coastal cottage visitor ready – and in a very short period of time. Over the coming weeks, I plan to take you along on the entire design journey. I will be sharing everything with you – from the cottage’s current state, to all of my design inspiration and through the remodel process. If all goes according to plan, I’ll share a major before and after reveal in time to spend the holiday season with our family rather than more than 800 miles away.
Trust me, we’re going to have plenty to discuss, as I have to pick an entire household’s worth of things – from paint colors and kitchen cabinets down to dishware, bedding and everything in between. No design decision will be left unturned. It’s both exhilarating and incredibly daunting. These mood boards are just part my first ideation session for my dream vibe.
I’m hopeful sharing this process with you will offer you some fresh design ideas and positive inspiration as we all hunker down to weather what will undoubtedly be a stormy fall – be it literally or just politically. It’s been a rather dark year and I feel like this might be a way to share a little bit of light. I know I am very happy for the creative distraction. I hope you are too.
I can’t wait to share more very soon!
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