Can I Inherit Debt?

Man trying to role a huge boulder labeled "DEBT" up a steep hillWhen someone passes away leaving debts behind, you might be wondering if you have any personal liability to pay them. If you have aging parents, for instance, you may be worried about having to assume responsibility for their mortgage payments, credit cards or other debts. If you’ve asked yourself, “Can I inherit debt?” the answer is typically no, even though those debts don’t automatically disappear. But there are situations in which you may have to deal with a loved one’s creditors after they’re gone.

How Debts Are Handled When Someone Passes Away

Debts, just like assets, are considered part of a person’s estate. When that person passes away, their estate is responsible for paying any and all remaining debts. The money to pay those debts comes from the asset side of the estate.

In terms of who is responsible for making sure the estate’s debts are paid, this is typically done by an executor. An executor performs a number of duties to wrap up a person’s estate after death, including:

  • Getting a copy of the deceased person’s will if they had one and filing it with the probate court
  • Notifying creditors and other entities of the person’s death (for example, the Social Security Administration would need to be notified so any Social Security benefits could be stopped)
  • Completing an inventory of the deceased person’s assets and their value
  • Liquidating those assets as needed to pay off any debts owed by the estate
  • Distributing the remaining assets to the people or organizations named in the deceased person’s will if they had one or according to inheritance laws if they did not

In terms of debt repayment, executors are required to give notice to creditors who may have a claim against the estate. Creditors are then giving a certain window of time, according to state laws, in which to make a financial claim against the estate’s assets for repayment of debts.

If a creditor doesn’t follow state guidelines for making a claim, then those debts won’t be paid from the estate’s assets. But if creditors are less than reputable, they may try to come after the deceased person’s spouse, children or other family members to collect what’s owed.

Not all assets in an estate may be used to repay debts owed by a deceased person. Any assets that already have a named beneficiary, such as a life insurance policy, a 401(k), individual retirement account, payable on death accounts or annuity, would be transferred to that beneficiary automatically.

Can I Inherit Debt From My Parents?

Pencil erasing the word "DEBT"

This is an important question to ask if your parents are carrying high amounts of debt and you’re worried about having to pay those bills when they pass away. Again, the short answer is usually no. You generally don’t inherit debts belonging to someone else the way you might inherit property or other assets from them. So even if a debt collector attempts to request payment from you, there’d be no legal obligation to pay.

The catch is that any debts left outstanding would be deducted from the estate’s assets. If your parents were substantially in debt when they passed away, repaying them from the estate may leave little or no assets for you to inherit.

But you should know that you can inherit debt that you were already legally responsible for while your parents were alive. For instance, if you cosigned a loan with them or opened a joint credit card account or line of credit, those debts are legally yours just as much as they are your parents. So, once they pass away, you’d be solely responsible for repaying them.

And it’s also important to understand what responsibility you may have for covering long-term care costs incurred by your parents while they were alive. Many states have filial responsibility laws that require children to cover nursing home bills, though they aren’t always enforced. Talking to your parents about long-term care planning can help you avoid situations where you may end up with an unexpected debt to pay.

Can I Inherit Debt From My Children?

The same rules that apply to inheriting debt from parents typically apply to inheriting debts from children. Any debts remaining would be paid using assets from their state.

Otherwise, unless you cosigned for the debt, then you wouldn’t be obligated to pay. On the other hand, if you cosigned private student loans, a car loan or a mortgage for your adult child who then passed away, as cosigner you’d technically have a legal responsibility to pay them. Federal student loans are an exception.

If your parents took out a PLUS loan to pay for your higher education costs and something happens to you, the Department of Education can discharge that debt due to death. And vice versa, if your parents pass away then any PLUS loans they took out on your behalf could also be discharged.

Can I Inherit Debts From My Spouse?

When marriage and money mix, the lines on inherited debt can get a little blurred. The same basic rule that applies to other situations applies here: if you cosigned or took out a joint loan or line of credit together, then you’re both equally responsible for the debt. If one of you passes away, the surviving spouse would still have to pay.

But what about debts that are in one spouse’s name only? That’s where it’s important to understand how living in a community property state can affect your liability for marital debts. If you live in a community property state, debts incurred after the marriage by one spouse can be treated as a shared financial obligation. So if your spouse opened up a credit card or took out a business loan, then passed away you could still be responsible for paying it. On the other hand, debts incurred by either party before the marriage wouldn’t be considered community debt.

Consider Getting Help If You Need It

If a parent, spouse, sibling or other family member passes away, it can be helpful to talk to an attorney if you’re being pressured by debt collectors to pay. An attorney who understands debt collection laws and estate planning can help you determine what your responsibilities are for repaying debts and how to handle creditors.

The Bottom Line

Son talks with his mother about her debtWhether or not you’ll inherit debt from your parents, child, spouse or anyone else largely hinges on whether you cosigned for that debt or live in a community property state in the case of married couples. If you’re concerned about inheriting debts, consider talking to your parents, children or spouse about how those financial obligations would be handled if they were to pass away. Likewise, you can also discuss what financial safety nets you have in place to clear any debts you may leave behind, such as life insurance.

Tips for Estate Planning

  • Consider talking to a financial advisor about how to manage and pay off debts you owe or any debts you might inherit from someone else. If you don’t have a financial advisor yet, finding one doesn’t have to be difficult. SmartAsset’s financial advisor matching tool can help you connect with an advisor in your local area. It takes just a few minutes to get your personalized advisor recommendations online. If you’re ready, get started now.
  • The Fair Debt Collection Practices Act caps the statute of limitations for unpaid debt collections at a maximum of six years, although most states specify a much shorter time frame. However, some debt collectors buy so-called zombie debts for pennies on the dollar and then – unscrupulously – try to collect on them. Here’s how to deal with such operators.

Photo credit: ©iStock.com/NiseriN, ©iStock.com/AndreyPopov, ©iStock.com/FatCamera

The post Can I Inherit Debt? appeared first on SmartAsset Blog.

Source: smartasset.com

9 Ways To Successfully Balance School And Work

Advice For Balancing School And Work #balancingschoolandwork #timemanagementtipsMore and more people are choosing to attend college and work at the same time. This can be those who are going straight from high school to college or adults going back to college. Whichever applies to you, balancing school and work will be an important part of how successful you will be.

Whether you are working a part-time or full-time job, balancing school and work can be tough. There are many working students in college who are able to manage both, but there are also many who aren’t able to.

If you don’t balance them both well, it may lead to stress, lower grades, low-quality work being produced, and more.

No one wants that and I’m sure you don’t either.

This is supposed to be the time of your life where you are growing and changing, not feeling like you are drowning in everything that is going on around you.

There are ways to many ways to start balancing school and work so that you can graduate college while working a job.

I took a full course load each and every semester (usually 18-24 credits each semester), worked full-time, and took part in extracurricular activities. It was definitely hard and I won’t lie about that. However, sometimes a person doesn’t have a choice and has to do everything at once. Or, you might be choosing to multi-task and are wanting to learn how to better manage your time.

Related content:

  • Should you get an MBA if you want to start your own business?
  • Cutting College Costs: Understanding The Cost And Value Of Your Degree
  • I Thought I Was Too Good For Community College
  • Parents Paying For College – Is This A Good Idea?
  • 21 Ways You Can Learn How To Save Money In College
  • 16 Best Online Jobs For College Students

Working while you are going to college can help you not take out as many student loans, or you may be an adult who has to work to support your family while you are going to college. Either way, time management for college students who are also working will help you succeed at every aspect of your life.

Working while I went to college helped me take out less student loans, and I am so happy I found that balancing school and work was possible.

Related post: How I Graduated From College In 2.5 Years With 2 Degrees AND Saved $37,500

Whatever your reason may be, below are my tips for time management for college students who are also working. The tips below are what helped save me!

My advice for balancing school and work.

 

Find your motivation for balancing school and work.

There are many reasons for why you are both working and going to school, but sometimes you need to remind yourself why you are working so hard.

It can be really easy to watch others around you who aren’t doing both and feel jealous, stressed, or angry. But, remind yourself why you are working so hard.

Your motivation can be any number of things, like avoiding student loan debt, providing for you family if you are going back as an adult learner, and so on. Your motivation will be what you need when you are struggling to balance both work and school.

Related: 15 Of My Best Working From Home Tips So You Can Succeed

 

Carefully plan your class and work schedule.

My first tip for working college students is to carefully plan your class and work schedule.

Some students just choose whatever classes are offered. However, it is much wiser to carefully craft your school and work schedule so that everything flows together efficiently with a minimal amount of time being wasted.

To start balancing school and work with a carefully planned out schedule, you should start by researching when the classes you need are offered and start trying to eliminate any gap that may fall between your classes. Having an hour or two break between each class can quickly add up. Also, if you happen to have time off between classes, then using this time to do your homework and/or study can be a great use of your time.

Another time management tip is to try and put as many classes together in one day so that you aren’t constantly driving back and forth between school, work, and home. Balancing school and work can be hard, but it starts with creating a schedule that uses your time efficiently.

Related post: How I’m a Work-Life Balancing Master

 

Eliminate any time that may be wasted.

There are many time sucks that you may encounter each day, especially as you are balancing school and work and switching back and forth between the two. A minute here and a minute there may add up to a few hours wasted each day.

The time you save could be used towards earning more money at your job, studying, socializing, or whatever else it is that you need or want to do. For working college students, every minute is important.

There are many ways to eliminate the things that are wasting your time, including:

  • Cut down on your commute time. If you can find a job near your college campus then you can eliminate a lot of traveling time.
  • Find a way to work remotely. If you have a job that allows you to work remotely, then this can help you start balancing school and work time even better. You may even be able to work in between class breaks.
  • Prep your meals ahead of time. If you can make your meals in bulk ahead of time instead of individually making each one, you will be able to save a lot of time. Making your own meals is more than just time management for college students, as it means you will probably eat healthier and save money.
  • Be aware of how much time you spend on social media and cutback on TV. The average person wastes many, many hours each day on social media and watching TV. Cutting back on this may save you hours each day without even realizing it. TV and social media can be very distracting too, which is why it is so important to be aware of how it might be negatively impacting how you are balancing school and work.

Related post: 75 Ways To Make Extra Money

 

Separate yourself from distractions.

Time management for college students is hard, but it is even harder for working college students because there may be even more distractions.

Noise in the background, such as leaving your TV on while you study or a party your roommate may be throwing, can distract you from what you need to be doing. If you are trying to study or do homework then you should try to find a quiet place to get work done.

There are going to be so many distractions while you are working and going to college, and learning to separate yourself from those distractions will be one of the best ways to manage your time. I know it can be hard, trust me, but I also know how eliminating distractions can be a huge help.

You may want to close your bedroom door, hide the remote from yourself (trust me, this works!), go to the library, or something else. Sometimes you will have to force the distractions out, but it will help you save time and focus on what needs to be done.

Related: How To Be More Productive: 17 Tips To Help You Live A Better Life

 

Have a to-do list and a set schedule.

Having a to-do list is extremely helpful time management for college students, especially those who are working too. That’s because a to-do list will show you exactly what has to be done and when you need to do it by. You will then have your responsibilities sitting in front of you so that you will have to face reality.

You can have a to-do list that lists out your daily, weekly, or monthly tasks. You can use a planner, a notebook, Post-It notes, you can color code things, use stickers, etc. Just find a system that works for you and stick to it.

Balancing school and work will be much easier if you make a to-do list and keep a set schedule. So, write out what needs to be done each day, and knowing your schedule will keep you on task.

I know that when I am stressed out it can be easy to forget things, so having a to-do list eliminates any valuable minutes that I may waste debating about whether or not I forgot to do something.

 

Be a productive procrastinator.

We all know how bad procrastinating is, but sometimes you can actually waste your time on things that need to be done. I know that sounds strange, but it is actually quite helpful.

Here’s an example of what I mean: If you need to write a paper but find that you are procrastinating, then procrastinate by studying for a test. Now, you will still have to write that paper, but you will have already gotten the studying out of the way.

Balancing school and work is easier if you find tricks like this that make every moment you spend a productive one.

 

Take a break when you really need one.

Good time management for college students who are working often means that you are using trying to use every moment of your day as efficiently as possible. But, there are times when balancing school and work can feel extremely stressful.

In times like those, when you feel like you need a break, take a short one to help you come back refreshed and focused on what you need to do.

You can go for a walk, read a book, get in a workout, take a nap, etc. Taking a break when you need one will help prevent you from feeling burnt out, which is a danger when you are balancing school and work.

 

Find other college students who are doing the same.

I know that you aren’t the only one who is balancing school and work, and it might help you stay focused if you are able to find others who are working and going to school like you are.

Finding a friend who is doing the same can motivate you, they can help you stay on task, and you might even find someone to study with.

 

Working students in college need to be realistic.

While one person may be able to work like crazy and attend college at the same time, not everyone can do that.

If your grades are dropping, then you may want to analyze whether you should drop your hours at work or school. What is more important to you at this time and for your future? We can’t do everything always, and being realistic will help you understand your limitations so that you don’t burn out.

With the tips I’ve listed that help with time management for college students who are also working, you’ll be able to rock both your job and your college classes at the same time. Don’t forget to fit in time for fun as well. Good luck!

Are you one of the many working college students out there? Why or why not? What tips for time management for college students can you share?

The post 9 Ways To Successfully Balance School And Work appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

How to Change the Executor of a Will

A last will and testamentDrafting a last will and testament can help to ensure that your assets are distributed according to your wishes after you pass away. You can also use your will to name a legal guardian for minor children or choose an executor for your estate. It’s possible to make changes to your will after it’s written, including removing or adding an executor if necessary. If you’re wondering how to change the executor of a will after the fact, the process is easier than you might think. As you go about the process, it may behoove you to find a trusted financial advisor in your area for hands-on guidance.

Executor of a Will, Explained

The executor of a will is the person responsible for carrying out the terms of a will. When you name someone as executor, you’re giving him or her authority to handle certain tasks related to the distribution of your estate.

Generally, an executor can be any person you name. For example, that might include siblings, your spouse, adult children or your estate planning attorney. Minor children can’t serve as executors and some states prohibit convicted felons from doing so as well.

There’s no rule preventing a beneficiary of a will from also serving as executor. While beneficiaries can’t witness a will in which they have a direct interest, they can be charged with executing the terms of the will once you pass away.

What Does the Executor of a Will Do?

Being executor to a will means there are certain duties you’re obligated to carry out. Those include:

  • Obtaining death certificates after the will-maker passes away
  • Initiating the probate process
  • Creating an inventory of the will-maker’s assets
  • Notifying the will-maker’s creditors of the death
  • Paying off any outstanding debts owed by the will-maker
  • Closing bank accounts if necessary
  • Reading the will to the deceased person’s heirs
  • Distributing assets to the persons named in the will

Executors can’t change the terms of the will; they can only see that its terms are carried out. An executor can collect a fee for their services, which is typically a percentage of the value of the estate they’re finalizing.

Reasons to Change the Executor of a Will

While you may draft a will assuming that your choice of executor won’t change, there are different reasons why making a switch may be necessary. For example, you may need to choose a new executor if:

  • Your original executor passes away or becomes seriously ill and can’t fulfill his or her duties
  • You named your spouse as executor but you’ve since gotten a divorce
  • The person you originally named decides he or she no longer wants the responsibility
  • You’ve had a personal falling out with your executor
  • You believe that a different person is better equipped to execute your will

You don’t need to provide a specific reason to change the executor of a will. Once you’re ready to do so there are two options to choose from: add a codicil to an existing will or draft a brand-new will.

Using a Codicil 
to Change the Executor of a Will

Woman changes her will

A codicil is a written amendment that you can use to change the terms of your will without having to write a new one. Codicils can be used to change the executor of a will or revise any other terms as needed. If you want to change your will’s executor using a codicil, the first step is choosing a new executor. Remember, this can be almost anyone who’s an adult of sound mind, excluding felons.

Next, you’d write the codicil. In it, you’d specify the changes you’re making to your will (i.e. naming a new executor), the name of the person who should serve as executor going forward and the date the change should take effect. You’d also need to validate the codicil the same way you did your original will.

This means signing and dating the codicil in the presence of at least two witnesses. Witnesses must be legal adults of sound mind and they can’t have an interest in the will. So, a beneficiary to the will couldn’t witness your codicil but a neighbor or coworker could if they don’t stand to benefit from the will directly or indirectly.

Once the codicil is completed and signed by yourself and the witnesses, you can attach it to your existing will. It’s helpful to keep a copy of your will and the codicil in a safe place, such as a safe deposit box. You may also want to give a copy to your estate planning attorney if you have one.

Writing a New Will to 
Change the Executor of a Will

If you need to change more than just the executor of your will, you might consider drafting a new will document. The process for drafting a new will is similar to the one you followed for making your original one.

You’d need to specify who your beneficiaries will be, how you want your assets to be distributed and who should serve as executor. The new will would also need to be signed and properly witnessed.

But you’d have to take the added step of destroying all copies of the original will. This is necessary to avoid confusion and potential challenges to the terms of the will after you pass away. If you’re not sure how to draft a new will to replace an existing one, you may want to talk to an estate planning attorney to make sure you’re doing so legally.

What Happens If You Don’t Name an Executor?

Probate court hearing form

If, for any reason, you choose not to name an executor in your will the probate court can assign one. After you pass away, eligible persons can apply to become the executor of your estate. The person the court chooses would then be able to carry out the terms of your will. If you don’t have a will at all, then your assets would be distributed according to your state’s inheritance laws.

That’s why it’s important to take the time to at least write a simple will. This way, there’s no question of your estate being divided among your heirs the way that you want it to be.

The Bottom Line

Making a will can be a good starting point for shaping your estate plan. Naming an executor means you don’t have to rely on the probate court to do it. But if you need to change the executor of your will later, it’s possible to do so with minimal headaches.

Tips for Estate Planning

  • Consider talking to a financial advisor about creating an estate plan and what you might need. If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s financial advisor matching tool can help you connect with an advisor in your local area. It takes just a few minutes to get your personalized recommendations online. If you’re ready, get started now.
  • A will is just one document you may need as part of your estate plan. You may also consider setting up a trust, for example, if you have extensive assets or own a business. Life insurance is something you may also need to have, along with an advance health care directive and/or power of attorney.

Photo credit: ©iStock.com/eric1513, ©iStock.com/kate_sept2004, ©iStock.com/courtneyk

The post How to Change the Executor of a Will appeared first on SmartAsset Blog.

Source: smartasset.com

How I Paid Off $40,000 In Student Loans in 7 Months

Want to learn how to pay off student loans? With my student loan repayment plan, I was able to pay off $40,000 in student loan debt in 7 months!Want to learn how to pay off student loans? With my student loan repayment plan, I was able to pay off $40,000 in student loan debt in 7 months! One of the best ways to save money is to finally get rid of those pesky loans that are hurting your financial situation.

Learning how to pay off student loans can lead to many positives, such as:

  • You may finally feel less financial stress.
  • You may be able to use that money towards something more important, such as saving for retirement.
  • Getting rid of your student loans may allow you to pursue other goals in life, such as traveling more or looking for a better job.

I know these things are true because learning how to pay off my student loans is one of the best decisions that I’ve ever made.

No, it wasn’t easy to pay off my student loans that quickly, but it was definitely worth it. No longer having those monthly payments hanging over my head is a HUGE relief, and it allowed me to eventually leave my day job and travel full-time.

Related posts on how to pay off student loans:

  • 6 Ways I Saved Money On College Costs
  • How Blogging Paid Off My Student Loans
  • The Benefits Of Paying Off Student Loan Debt Early
  • 30+ Ways To Save Money Each Month
  • 12 Work From Home Jobs That Can Earn You $1,000+ Each Month
  • How Do Student Loans Work?

How to pay off student loans and create a great student loan repayment plan:

 

Total how much student loan debt you have.

The very first thing that I recommend you do if you want to learn how to pay off student loans is to add up the total amount of student loans that you have.

When you total your student loans, do not just estimate how much student loan debt you have.

You should actually pull up each student loan and tally everything, down to the penny. By doing so, you will have a much more realistic view of exactly how much you’re dealing with.

Plus, the average person has no idea how much student loan debt they have! Usually, they have far more than they originally thought.

 

Understand your student loans better.

There are many people who simply do not understand their student loans. There are many things to research so that you can create the best student loan repayment plan, and this will also help you understand your loans and interest rates.

You should understand:

  • Your interest rate. Some student loans have fixed interest rates, whereas others might have variable rates. You’ll want to figure out what the interest rate on your loans are because that may impact the student loan repayment plan you decide on. For example, you might choose to pay off your student loans that have the highest interest rates first so that you can pay less money over time.
  • What a monthly payment means. Many people believe that a monthly payment is all that you have to pay, are allowed to pay, or that by paying just the minimum monthly payment you won’t owe any interest. These three things are so incorrect! Even if you pay the minimum monthly payment, you will most likely still owe interest charges (unless your interest rate is 0% – but that is very unlikely with student loans).
  • Student loan reimbursements. Some employers will give you money to put towards your student loans, but you should always do your research when it comes to this area. Some employers require that you work for them for a certain amount of time, you have great grades, good attendance, and they might have other requirements as well. There are many employers out there who will pay your student loans back (fully or partially), so definitely look into this option.
  • Auto-payment plans. For most student loans, you can probably auto-pay them and receive a discount. Always look into this as you may be able to lower your interest rate by 0.25% on each of your student loans.

I recommend that you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more. You can also connect accounts, such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more. Plus, it’s FREE.

 

Determine if refinancing your student loans is right for you.

Student loan refinancing is when you apply for a new loan that is then used to pay off your other student loans. This may be a good option if your credit history or credit score is better than when you originally took out your student loans.

By refinancing your student loans, you may qualify for better repayment terms, a lower interest rate, and more. This is great because it may help you pay off your student loans quicker.

The positives of refinancing student loans include:

  • One monthly payment to simplify your finances.
  • Lower monthly payments.
  • Lower interest rates, and more.

Some companies, like Credible, allow you to refinance your federal student loans as well as your private student loans into one. On average, refinancing can save you thousands of dollars on your loan, which is amazing!

However, before refinancing a federal student loan, you will want to think about different federal benefits that you may be giving up. You may give up income-based repayment plans and loan forgiveness for those who have certain public service jobs (such as jobs at public schools, the military, Peace Corps, and more). By refinancing federal student loans, you are giving up any future option to these.

Read further at: Consolidating And Refinancing Student Loans – What You Should Know.

Related tip on how to pay off student loans: I highly recommend Credible for student loan refinancing. They are the top student loan refinancing company and have great customer service! You can significantly lower the interest rate on your student loans which may help you shave thousands off your student loan bill over time. Through Credible, you may be able to refinance your student loans at a rate as low as 2.14%! Plus, it’s free to apply and Credible is giving Making Sense of Cents readers a $100 bonus when they refinance.

 

Reduce your interest rate for your student loan repayment plan.

As I stated earlier, if you automatically pay your student loans each month or consolidate them, then sometimes you can get an interest rate reduction.

With Sallie Mae, I believe the reduction is 0.25%.

That may not seem significant, but it is something! Remember, every little bit counts when it comes to having a good student loan repayment plan.

 

Create the best budget.

If you don’t have one already, then you should create a budget immediately. This will help you learn how to pay off student loans as you’ll learn how to manage your money better.

Budgets are great, because they keep you mindful of your income and expenses. With a budget, you will know exactly how much you can spend in a category each month, how much you have to work with, what spending areas need to be evaluated, among other things.

Learn more at How To Create a Budget That Works.

 

Look for more ways to earn money.

Making extra money can allow you to pay off your students loans quickly because there is no limit to how much money you can make.

Finding ways to make extra money is how I was able to pay off my student loans so quickly!

And trust me, you probably do have time in your day to make extra money.

Just think about it: The average person watches 35 hours of TV a week and spends around 15 hours a week on social media. If you could use that time better and make more money with those extra hours, you’ll be able to pay off your student loans in no time!

Here are some ways to make more money so that you can learn how to pay off student loans:

  • Start a blog. Blogging is how I make a living and just a few years ago I never thought it would be possible. I earn around $100,000 a month through blogging. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $2.95 per month, plus you get a free domain if you sign-up through my tutorial.
  • Start a business. There are many business ideas that you could start in order to make extra money.
  • Sell your stuff. There are many things you can do to make money by selling items. We all have extra things laying around that can be sold, or you can even search for items that can be bought and resold for a profit.
  • Rent an extra room in your home. If you have extra space in your house, then you may want to rent it out. Read A Complete Guide To Renting A Room For Extra Money.
  • Answer surveys. Survey companies I recommend include Swagbucks, Survey Junkie, Pinecone Research, Opinion Outpost, Prize Rebel, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
  • Become an Uber or Lyft driver. Driving others around in your spare time can be a great money maker. Read more about this in my post – How To Become An Uber Or Lyft Driver. Click here to join Uber and start making money ASAP.
  • Find a part-time job. There are many part-time jobs that you may be able to find. You can find a job on sites such as Snagajob, Craigslist (yes, I’ve found a legitimate job through there before), Monster, and so on.

Related articles that will help you learn how to pay off student loans:

  • 75+ Ways To Make Extra Money
  • 8 Things To Sell To Make Money
  • 10 Ways To Make Money Online From The Comfort of Your Home
  • 10 Things I’ve Done To Make Extra Money
  • Ways To Make An Extra $1,000 A Month

 

How to pay off your student loans – Find ways to reduce your expenses.

The next step is to cut your budget so that you can have a faster student loan repayment plan. Even though you may have a budget, you should go through it line by line and see what you really do not need to be spending money on.

There’s probably something that you’re wasting your money on.

Until you write it down in your budget, you may not realize how much money you are wasting on things you don’t need. And, remember, it’s never too late to start trimming your budget and to put your money towards important things like paying off student loans!

Even if all you can cut is $100 each month, that is better than nothing. That’s $1,200 a year right there!

Some expenses you may be able to cut include:

  • Lower your cell phone bill. Instead of paying the $150 or more that you currently spend on your cell phone bill, there are companies out there like Republic Wireless that offer cell phone service starting at $15. YES, I SAID $15! If you use my Republic Wireless affiliate link, you can change your life and start saving thousands of dollars a year on your cell phone service. If you are interested in hearing more, I created a full review on Republic Wireless. I’ve been using them for over a year and they are great.
  • ATM fees. You don’t need to pay ATM fees, but for some reason so many people do!
  • Sign up for a website like Ebates where you can earn CASH BACK for spending how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free $10 cash back!
  • Pay bills on time. This way you can avoid late fees.
  • Shop around for insurance. This includes health insurance, car insurance, life insurance, home insurance, and so on. Insurance pricing can vary significantly from one company to the next. The last time we were shopping for car insurance, we found that our old company wanted something like $205 to insure one car for one month, whereas the company we have now charges $50 a month for the same exact coverage. INSANE!
  • Save money on food. I recently joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It’s only $5 a month (the first four weeks are free) and they send meal plans straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 or less per person. This allows you to save time because you won’t have to meal plan anymore, and it will save you money as well!
  • Fuel savings. Combine your car trips, drive more efficiently, get a fuel efficient car, etc.
  • Trade in your car for a cheaper one. For us, we are car people. Cars are one of our splurges. However, if you only have a nice car to keep up with the Joneses, then you might want to get rid of it and get something that makes more sense.
  • Live in a cheaper home. I’m not saying that you need to live in a box, but if you live in a McMansion, then you may want to think about a smaller home. This way you can save money on utility bills and your mortgage payment.
  • Learn to have more frugal fun. We don’t spend anywhere near the same amount of money on entertainment as we used to. There are plenty of ways to have frugal fun.
  • Look for coupon codes. I search for coupon codes for everything. Today, I have two for you. I have a $20 Airbnb coupon code and a free taxi ride with Uber. Both are great services that I have personally used.

 

See if your employer will reimburse your student loan debt.

Some companies will pay your student loans quickly if you work for them. I even know of someone who receives a $2 bonus for each hour that she works to put towards her student loans.

$2 may not seem like a lot, but if you work full-time, then that’s over $300 a month. $300 a month for student loans is a good amount! And, because it’s free money, it can all be put towards paying off your student loans quickly.

 

Create a plan to pay off your student loans.

After you have completed the steps above, you’ll want to put it all together and create a plan.

Without a plan, you would just be all over the place, making it difficult to reach your goal of learning how to pay off student loans.

You should create a plan that details the steps you need in order to pay off your student loans, what will happen as you reach each step, when and how you will track your progress, and more.

Being detailed with your plan will help you reach your goal and become successful.

 

Stay motivated with your student loan repayment plan.

Finding motivation can be a hard task for anyone. Motivation is important because it can help you keep your eye on the goal even when you want to quit. Motivation will help you continue to work hard towards your goal, even when it seems impossible. Motivation is what keeps you going so that you do not quit.

Yes, student loan repayment can seem very stressful when you think about it. Many people owe thousands and thousands in student loans.

And, no matter how young or old you are, learning how to pay off student loans can seem difficult or even near impossible. However, think about your goal and how good life will be once all of your student loan debt is gone.

Please try to not let your student loans get you down. Think positively and attack that debt so that you can pay off your student loans fast!

Trust me, once you finally pay off those pesky student loans, you’ll be happier than ever!

Related post on how to pay off student loans: 8 Ways To Get Motivated And Reach Your Goals

 

Pay more than the minimum if you want to learn how to pay off student loans!

The point of what I’ve written above is to help you pay off your student loans. However, you can always go a little bit further and pay off your student loans more quickly.

The key to speeding up your student loan repayment process is that you will need to pay more than the minimum each month.

It may sound hard, but it really doesn’t have to be. Whatever extra you can afford, you should think about putting it towards your student loans. You may be able to shave years off your student loans!

What other ways can a person learn how to pay off student loans? What’s your student loan repayment plan?

The post How I Paid Off $40,000 In Student Loans in 7 Months appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

A Guide to Schedule K-1 (Form 1041)

Man prepares his tax returnsInheriting property or other assets typically involves filing the appropriate tax forms with the IRS. Schedule K-1 (Form 1041) is used to report a beneficiary’s share of an estate or trust, including income as well as credits, deductions and profits. A K-1 tax form inheritance statement must be sent out to beneficiaries at the end of the year. If you’re the beneficiary of an estate or trust, it’s important to understand what to do with this form if you receive one and what it can mean for your tax filing.

Schedule K-1 (Form 1041), Explained

Schedule K-1 (Form 1041) is an official IRS form that’s used to report a beneficiary’s share of income, deductions and credits from an estate or trust. It’s full name is “Beneficiary’s Share of Income, Deductions, Credits, etc.” The estate or trust is responsible for filing Schedule K-1 for each listed beneficiary with the IRS. And if you’re a beneficiary, you also have to receive a copy of this form.

This form is required when an estate or trust is passing tax obligations on to one or more beneficiaries. For example, if a trust holds income-producing assets such as real estate, then it may be necessary for the trustee to file Schedule K-1 for each listed beneficiary.

Whether it’s necessary to do so or not depends on the amount of income the estate generates and the residency status of the estate’s beneficiaries. If the annual gross income from the estate is less than $600, then the estate isn’t required to file Schedule K-1 tax forms for beneficiaries. On the other hand, this form has to be filed if the beneficiary is a nonresident alien, regardless of how much or how little income is reported.

Contents of Schedule K-1 Tax Form Inheritance Statements

The form itself is fairly simple, consisting of a single page with three parts. Part one records information about the estate or trust, including its name, employer identification number and the name and address of the fiduciary in charge of handling the disposition of the estate. Part Two includes the beneficiary’s name and address, along with a box to designate them as a domestic or foreign resident.

Part Three covers the beneficiary’s share of current year income, deductions and credits. That includes all of the following:

  • Interest income
  • Ordinary dividends
  • Qualified dividends
  • Net short-term capital gains
  • Net long-term capital gains
  • Unrecaptured Section 1250 gains
  • Other portfolio and nonbusiness income
  • Ordinary business income
  • Net rental real estate income
  • Other rental income
  • Directly apportioned deductions
  • Estate tax deductions
  • Final year deductions
  • Alternative minimum tax deductions
  • Credits and credit recapture

If you receive a completed Schedule K-1 (Form 1041) you can then use it to complete your Form 1040 Individual Tax Return to report any income, deductions or credits associated with inheriting assets from the estate or trust.

You wouldn’t, however, have to include a copy of this form when you file your tax return unless backup withholding was reported in Box 13, Code B. The fiduciary will send a copy to the IRS on your behalf. But you would want to keep a copy of your Schedule K-1 on hand in case there are any questions raised later about the accuracy of income, deductions or credits being reported.

Estate Income and Beneficiary Taxation

Woman prepares her tax returns

If you received a Schedule K-1 tax form, inheritance tax rules determine how much tax you’ll owe on the income from the estate. Since the estate is a pass-through entity, you’re responsible for paying income tax on the income that’s generated. The upside is that when you report amounts from Schedule K-1 on your individual tax return, you can benefit from lower tax rates for qualified dividends. And if there’s income from the estate that hasn’t been distributed or reported on Schedule K-1, then the trust or estate would be responsible for paying income tax on it instead of you.

In terms of deductions or credits that can help reduce your tax liability for income inherited from an estate, those can include things like:

  • Depreciation
  • Depletion allocations
  • Amortization
  • Estate tax deduction
  • Short-term capital losses
  • Long-term capital losses
  • Net operating losses
  • Credit for estimated taxes

Again, the fiduciary who’s completing the Schedule K-1 for each trust beneficiary should complete all of this information. But it’s important to check the information that’s included against what you have in your own records to make sure that it’s correct. If there’s an error in reporting income, deductions or credits and you use that inaccurate information to complete your tax return, you could end up paying too much or too little in taxes as a result.

If you think the information in your Schedule K-1 (Form 1041) is incorrect, you can contact the fiduciary to request an amended form. If you’ve already filed your taxes using the original form, you’d then have to file an amended return with the updated information.

Schedule K-1 Tax Form for Inheritance vs. Schedule K-1 (Form 1065)

Schedule K-1 can refer to more than one type of tax form and it’s important to understand how they differ. While Schedule K-1 (Form 1041) is used to report information related to an estate or trust’s beneficiaries, you may also receive a Schedule K-1 (Form 1065) if you run a business that’s set up as a pass-through entity.

Specifically, this type of Schedule K-1 form is used to record income, losses, credits and deductions related to the activities of an S-corporation, partnership or limited liability company (LLC). A Schedule K-1 (Form 1065) shows your share of business income and losses.

It’s possible that you could receive both types of Schedule K-1 forms in the same tax year if you run a pass-through business and you’re the beneficiary of an estate. If you’re confused about how to report the income, deductions, credits and other information from either one on your tax return, it may be helpful to get guidance from a tax professional.

The Bottom Line

Senior citizen prepares her tax returnsReceiving a Schedule K-1 tax form is something you should be prepared for if you’re the beneficiary of an estate or trust. Again, whether you will receive one of these forms depends on whether you’re a resident or nonresident alien and the amount of income the trust or estate generates. Talking to an estate planning attorney can offer more insight into how estate income is taxed as you plan a strategy for managing an inheritance.

Tips for Estate Planning

  • Consider talking to a financial advisor about the financial implications of inheriting assets. If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s financial advisor matching tool can help you connect with professional advisors in your local area in minutes. If you’re ready, get started now.
  • One way to make the job of filing taxes easier is with a free, easy-to-use tax return calculator. Also, creating a trust is something you might consider as part of your own estate plan if you have significant assets you want to pass on.

Photo credit: ©iStock.com/fizkes, ©iStock.com/urbazon, ©iStock.com/dragana991

The post A Guide to Schedule K-1 (Form 1041) appeared first on SmartAsset Blog.

Source: smartasset.com

How I Paid Off $38,000 In Student Loan Debt In 7 Months

How I Paid Off $38,000 In Student Loan Debt In 7 MonthsLately, I have received many questions asking how I was able to pay off my student loans so quickly. I haven’t talked much about my student loans since I paid them off in July of 2013, but I know many struggle with their student loan repayment plan each and every day.

Due to this, it is a topic I am always happy to cover. Paying off your student loans is a wonderful feeling and I want to help everyone else experience the same.

 

Background on my student loans.

To start off, I am going to provide a quick background on my student loans.

I worked full-time all throughout college. I worked as a retail manager from when I was a teenager until I graduated with my two undergraduate degrees (I was a double major). Then, I was lucky and found a financial analyst position right when I graduated. I took around six months off from college, then I went back to get my Finance MBA, all while still working full-time and building my business.

Even though I worked full-time, I didn’t really put any money towards my student loan debt while I was in college.

Instead, I spent money on ridiculous things like going to my favorite Mexican restaurant WAY too many times each week and spending money on clothing that I didn’t need.

I didn’t have a realistic budget back then, at least not a good one. I didn’t think about my student loan repayment plan at all either!

So, when I finished my Finance MBA, I finally came to terms with the fact that I needed to start getting real about my student loans. I had six months after the day I graduated with my Finance MBA until my student loans would come out of deferment.

I knew I had to create an action plan to get rid of my student loans.

And that’s when I took a HUGE gulp and decided to add up the total of what I owed.

After adding all of my student loans together, I realized I had $38,000 in student loan debt. No, this might not be as much as some of the crazy stories you hear out there where others have hundreds of thousands of dollars worth of student loan debt, but I wasn’t exactly near the average of what others owed either. I also wasn’t happy because I kept thinking about how I had been working full-time for many years, yet I didn’t even put a dent on my student loans.

After totaling what I owed, I decided to buckle down and start my debt payoff near the end of 2012.

I ended up finishing paying off my student loans in early July of 2013, which means it took right around seven months for me to pay them off completely.

It’s still something I cannot believe is true. I always thought I would have student loans hanging over my head for years, so I am extremely grateful that I was able to eliminate them so quickly.

Now, you may be wondering “Well, how do I do the same?” Or you might even be thinking that it’s not possible for you.

However, I believe you CAN do the same and that it IS possible for you.

For some, it might take longer to pay off your student loans or it might even take less. It depends on how much you owe, how much time you can spend on making more money, and honestly, it also depends on how bad you want it.

Related tip: I highly recommend SoFi for student loan refinancing. You can lower the interest rate on your student loans significantly by using SoFi which may help you shave thousands off your student loan bill over time.

Related content: How Do Student Loans Work?

Here are my tips to pay off your student loans quickly:

 

Do you know how much student loan debt you have?

Like I said above, the first thing that made me jumpstart my student loan repayment plan was the fact that I took the time to add up how much student loan debt I had.

It shocked me so much that I probably wanted to throw up. That’s good though because it can be a good source of motivation for most people. I know it was for me!

When you add up your student loans, do not just take a guess. Actually pull up each student loan and tally everything down to the exact penny.

I highly recommend that you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but 100 times better as it allows you to gain control of your investment and retirement accounts, whereas Mint.com does not. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, and it is FREE.

 

Understand your student loans.

There are many people out there who do not fully understand their student loans. There are many things you should do your research on so that you can create the best student loan repayment plan.

This mainly includes:

  • Your interest rate. Some student loans have fixed interest rates, whereas others might have variable rates. You’ll want to figure out what the interest rate on your loans are because that may impact the student loan repayment plan you decide on. For example, you might choose to pay off your student loans that have the highest interest rates first so that you can pay less money over time.
  • Student loan reimbursements. Some employers will give you money to put towards your student loans, but you should always do your research when it comes to this area. Some employers will require that you work for them for a certain amount of time, you have great grades, good attendance, and they might have other requirements as well. There are many employers out there who will pay your student loans back (fully or partially), so definitely look into this option.
  • Auto-payments. For most student loans, you can probably auto-pay them and receive a discount. Always look into this as you may be able to lower your interest rate by 0.25% on each of your student loans.

 

Create a budget.

If you don’t have one already, then you should create a budget immediately.

First, include your actual income and expenses for each month. This will help show you how much money you have left over each month and how much money should be going towards your student loan debt each month.

 

Cut your budget to create a quicker student loan repayment plan.

The next step is to cut your budget so that you can have a better student loan repayment plan. Even though you may have just created a budget, you should go through it line by line and see what you really do not need to be spending money on.

There’s probably SOMETHING that can be cut.

You might not have even realized it until after you wrote down exactly how much money you were shoveling towards nonsense until now. However, now is better than never!

We worked towards cutting our budget as much as we could. I can’t remember exactly how much we cut it by, but I know that it was enough to where I felt like I was putting a dent in my student loans.

Even if all you can cut is $100 each month, that is much better than nothing. That’s $1,200 a year right there!

Side note: If you are still in college, I highly recommend that you check out Campus Book Rentals. It allows you to get your text books for cheap. I almost ALWAYS rented my text books and it saved me a ton of money!

 

Earn more money as a part of your student loan repayment plan.

The month I paid off my student loans was a month where I earned over $11,000 in extra income. While this does sound crazy, I did start off by making just $0 in extra income. Everyone has to start somewhere.

Even if $11,000 a month isn’t possible for you, I’m sure something is. If you can make an extra $1,000 a month in extra income, that can help you knock out your student loans in no time.

Related articles:

  • 75+ Ways To Make Extra Money
  • 10 Ways To Make Money Online From The Comfort of Your Home
  • 10 Things I’ve Done To Make Extra Money
  • Ways To Make An Extra $1,000 A Month
  • How to Earn Extra Income Part 1

 

Pay more than the minimum payment each month.

The point of all of the above is to help you pay off your student loans. However, you can always go a little bit further and pay off your student loans more quickly. The key to this is that you will need to pay more than the minimum each month for you to speed up your student loan repayment plan process.

It may sound hard, but it really doesn’t have to be. Whatever extra you can afford, you should think about putting it towards your student loans. You may be able to shave years of your student loans!

How much student loan debt do you have? What’s your student loan repayment plan?

The post How I Paid Off $38,000 In Student Loan Debt In 7 Months appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com