Monthly Archives: February 2014

My First Loan

Do you remember your first loan you borrowed?  Perhaps it was a student loan.  Maybe it was a department store credit card.  But more likely it was a loan from your parents.


My first loan from my parents is still amazingly vivid in my mind. My sister and I shared a bedroom and we really wanted to have a small black and white television in our room.  (It was the 1970’s. TV technology has come a long way since then!)  I think I was about eight years old and my sister was about eleven.  My parents agreed that we could have the TV, but we had to pay for it ourselves. It was my very first purchase on credit.  I don’t remember exactly how much the TV cost, but I think I had to repay somewhere in the neighborhood of $30 for my half of the TV.  Quite a lot for an eight year old in the 1970’s.  My father was very legitimate about the whole thing.  He had ledger sheets where he tracked the balance due.  I would save my change and make payments from my allowance and birthday and Christmas gifts.  And within a year I had paid my debt.

While my father did not charge me interest on this loan, he did teach me some very valuable lessons about purchasing on credit.  I learned the importance of making regular payments.  I learned the joy of watching my debt amount decrease.  I learned the pride of having successfully made a fairly major purchase.  I learned that sometimes you have to sacrifice the things you want to make payments on debt.  Debt is an obligation.  Credit allows you to buy things without having the money on hand in advance, which is very helpful for expensive things like houses and cars and higher education.  But paying it off…that’s freedom!

The Newspaper Carrier Who Saved Me a Bundle

Snow newspaper

With all of the snow we’ve had recently, I’ve never been happier about a money-saving decision I made back in December.  Just before Christmas is when I cancelled my subscription to the local newspaper.  I’m a classic kind of girl and I love reading the physical newspaper.  I love the feel of it.  I love the smell of it.  I love the way it transports me back to a simpler time, when this was the way people learned what was happening in the world.  So why did I give it up?  It was not as much about money as frustration.  My house is apparently at the very end of the route of a newspaper carrier who has timeliness issues.  The paper’s policy is that home-delivered papers should arrive no later than 6:30 am on weekdays and 8:30 on weekends.  But I was lucky if my weekend papers arrived before 9:30.  And the weekday delivery is what ultimately drove me to cancel.  I generally leave for work at about 7:45 am, and after full week of the paper not arriving before I had to leave for work, I’d had enough.  I just don’t want to read the morning newspaper at 7 pm, which is what was happening.  I’d had enough and I canceled.

But I still read the morning news (and still from the Centre Daily Times—I’m a small town girl at heart).  I just read it online.  My online subscription costs me about $10 a month less than the physical media.  I get the news when I want to read it.  I don’t see ads.  I now get a much better selection of comics from the Washington Post online (you can get a free online subscription with your .edu email address!).  And the best part….I don’t have to walk out into my snowy driveway to retrieve it!

I’m much happier because the frustration of delivery timing has been eliminated from my life.  And I’m much happier because I’m saving $120 per year.  Were it not for the tardy carrier, I likely wouldn’t have made this decision.  I should probably send him a thank you card.

Making Do With What You’ve Got

This has been one of the more challenging weeks of my life.  After years of living with carpal tunnel syndrome, I finally had surgery to correct my right hand (my dominant hand).  This means that my favored hand has been mostly out of commission (thus my absence from the office last week).  But I was amazed at how quickly I figured out how to make things work.  When I couldn’t pull up a zipper, I wore yoga pants.  When I couldn’t tie shoes, I wore slip-ons.  When I couldn’t cut meat, I ate pasta.  When I couldn’t open a bandage, I used my teeth and my one good hand to tear it open.  When faced with a coffee maker that the top opens from right to left, I turned it around backwards in order to pour in a pot of water from the left side.

Sometimes you have to be resourceful.  You figure out a way to make it work.  You find a way to make do with what you’ve got.  This works in your financial life, too.  If there’s not enough money for an entertainment budget, you use the library for DVDs and books.  You invite friends over for pot luck dinner and board games.  You cook a nice dinner at home instead of going out.  If there’s not enough money for the apartment you want, you get a roommate to split the expenses.  If there’s not enough money for your dream car, you get a used car.  If there’s not enough money for a car at all, you use public transportation.

If you think about things long enough, there’s usually a way to make things work, whether it be getting past an injury or getting through the monthly bills.  You find a way to make do with what you’ve got.

Tax Time!

Income Tax

I (and many others) got my W-2 form last week.  This means it’s time to start thinking about doing my taxes.  I like to do them early, because I want my refund to earn interest for me, rather than for the IRS.  But I, like many, hate the process.

I’m thankful that there is lots of help out there.  There are a couple of different options to get help with your taxes:  in person or in the form of computer software.  Many people just run in fear from the idea of taxes and assume their best option is to go to the local tax prep office and have somebody else do it.  This is going to be a pricey option.  If your tax picture is simple (e.g.: standard deduction and just wages and interest for income) there’s absolutely no reason to pay someone else to do this for you.  You can easily do it yourself.  If you have itemized deductions and capital gains, it’s a little more complicated, but you should still be able to handle it with the help of a computer program.  You can find a list of several good ones here.

Please remember that if your adjusted gross income for 2013 is less than $58,000 you are able to e-file and receive tax preparation assistance at no charge.

Also, keep in mind that you may be eligible for some educational tax benefits.  You should soon be receiving your Form 1098-T from the University (or you can find it on eLion under “Taxes—1098-T Credits” in the Financial section).  This will help you to calculate your eligibility for these benefits.

The Lifetime Learning Credit is a tax credit of up to $2,000 available to individuals who file a tax return and owe taxes.  This credit is subtracted from your tax liability, reducing the total amount of federal income tax you pay.  In order to claim this credit, you will need to complete and submit IRS form 8863 with your federal tax return.

If your income is too high to allow you to claim the Lifetime Learning Credit, you may qualify for the Tuition and Fees Tax Deduction of up to $4,000.  This is an “above the line” deduction, which means you do not need to itemize your deductions in order to claim it.  You can find this deduction on line 34 of your 1040 or line 19 of your 1040A.  The required supporting form is available online.

Additionally, student loan interest is an “above the line” tax deductible expense.  If you paid any student loan interest in 2013, you may be able to claim the Student Loan Interest Deduction.  You can find this deduction on line 34 of your 1040 or line 19 of your 1040A.

If you would like to learn more about tax benefits for education, you should reference the IRS publication on these benefits.