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[Financial Friday] Can you separate college financial aid myths from facts?

For all you parents out there, how knowledgeable are you about college financial aid? See if you know whether these financial aid statements are myth or fact.

Can you separate college financial aid myths from facts?

1. Family income is the main factor that determines eligibility for aid.

Answer: Fact. But while it’s true that family income is the main factor that determines how much financial aid your child might receive, it’s not the only factor. The number of children you’ll have in college at the same time is also a significant factor. Other factors include your overall family size, your assets, and the age of the older parent.

2. If my child gets accepted at a more expensive college, we’ll automatically get more aid.

Answer: Myth. The government calculates your expected family contribution (EFC) based on the income and asset information you provide in its aid application, the FAFSA. Your EFC stays the same, no matter what college your child is accepted to. The cost of a particular college minus your EFC equals your child’s financial need, which will vary by college. A greater financial need doesn’t automatically translate into more financial aid, though the more competitive colleges will try to meet all or most of it.

3. I plan to stop contributing to my 401(k) plan while my child is in college because colleges will expect me to borrow from it.

Answer: Myth. The government and colleges do not count the value of retirement accounts when determining how much aid your child might be eligible for, and they don’t factor in any borrowing against these accounts.

4. I wish I could estimate the financial aid my child might receive at a particular college ahead of time, but I’ll have to wait until she actually applies.

Answer: Myth. Every college has a college-specific net price calculator on its website that you can use to enter your family’s financial information before your child applies. It will provide an estimate of how much aid your child is likely to receive at that college.

5. Ivy League schools don’t offer merit scholarships.

Answer: Fact. But don’t fall into the trap of limiting your search to just these schools. Many schools offer merit scholarships and can provide your child with an excellent education.

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10 Fun Activities to Do With the Family

Our families are very precious and we, as women, often go to the ends of the world to make sure that they are well provided and cared for. In today’s hustle and bustle however, the concept of family that used to prevail a few years ago is becoming lost. With the economy being so low and everybody in the family taking up jobs far away from the family home and kids leaving for schools in other states, the once close knit group slowly drifts apart.

The fact remains, however, that we won’t be able to understand the importance of family and taking some time out for the people we love, unless we don’t stop and take a breather first.

Sweet girl receiving kiss from her family

The members of any family, who spend time and participate in activities together, are known to build a positive outlook on life and their own self worth, children especially. After all, spending time together doesn’t require much. Activities don’t have to be costly or luxurious but they must be meaningful for the people involved. There are a number of ways that you, as a woman of 50 or above can enjoy time with your loved ones, i.e. your children, grandchildren, nieces, nephews and other members of the family as well.

10 Activity Ideas to Enjoy With the Family

This is why; when it comes to spending time with your family, experts suggest that mandatory family time should be scheduled at least once every week. When at a young age, your children are susceptible to the world around them. The following are some highly fun and creative ideas to make sure that your kids grow up into loving, caring, independent and positively driven individuals.

Bubble Catching Contest

This activity is one which includes the entire family and promises hours of laughter and amusement. You can make this into a competition; see who makes the biggest bubbles in the family and try to catch them with the round part of the bubble stick.

Happy child playing outdoors

Evolving Story

This is a very fun and entertaining activity that can be enjoyed by the whole family. Attach some pages on a clipboard and write a single sentence. The sentence will be the beginning to a story, which will be taken over by the next person with the clipboard. Continue passing the clipboard to all members, until you come up with a short story. Read it out loud and laugh your heart out at the absurd and funny story. This is also a good time to regale your grandchildren with the stories you grew up listening to, too!

Camping Trip

Remember what it felt like, going camping as a kid, with the extended family? You can ensure that the children in your family get to feel the same by planning a camping trip! Be it in an RV or an authentic tent in the woods, this is one opportunity that will not only let the whole family explore the great outdoors but also share the experience with each other.

German Shepherd Dog Sticking Head Out Driving Car Window

Dollar Store or Yard Sale Treasure Hunt

Take the whole family out for some inexpensive treasure hunting at a yard sale or dollar store. There’s no knowing what bargains you might find and at the end of the day, your slightly worse for wear pocket will be worth it.

Home Dinner and Movie Night

Having a movie family night is perhaps one sure method to bring the entire family together. Pick one night a week that works for everyone. Have everyone take turns picking a movie. You never know… you might learn something new from each other based on the movie choices!

Group of children with 3d glasses and popcorn

Family Walk

This activity isn’t only ideal when it comes to exercising but is also ideal for spending time with your family; walking, talking, and just being able to enjoy the fresh air together. Not many people take the initiative to walk outside, in their gardens, the local park or the sidewalk; just for the sake of walking! Plan a walk or better yet, enroll the whole family into a charity walkathon where you can enjoy together and do some good for the needy as well.

Cooking Together

Cooking together with your grandchildren is a very good way to teach them about their culture, family values and the food that has been cooked in their family for generations. The kitchen can also become a place for experimentation, where your grandchildren might very well discover their hidden talents in the culinary arts.

Mother and daughter prepare dough home cake

Room Painting and Decorating

Looking at the same walls and décor for years tend to bring out negative feelings that quickly surround the entire home. This is why redecoration and repainting walls and rooms should be done from time to time. This too, can be taken up as a group activity, where everyone can give their input. You can help give the grandchildren give them their “dream room.”

Plant a Garden

If you have been thinking of picking up a hobby that can be shared with the rest of the family and your grandchildren especially, planting and working in a garden is a very good idea. You can even make this into a lesson about nature and teach your grandkids about flowers, edible plants, etc; as you work on your vegetable or plant garden together.

Kid on a lawn with garden tools

T-Shirt Painting or Dying

Start a home project of designing T-shirts for just about every occasion. For this, you will need fabric paints or dyes and lots of creative ideas and fancy designs to come up with the coolest, funkiest personalized T-shirts. They can also be given as ideal presents.

 

Happy cute little girl with colorful painted hands

One thing to remember is, life doesn’t end after 50. In fact, the fun is just beginning with you being able to indulge in a variety of activities along with the future generations of your family, so enjoy this time to the fullest!

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[Motivation Monday] How you can make this year YOUR year!

Usually we start a new year with a mind full of resolutions and a heart full of hope. As time passes, we realize that the year is not so new anymore and maybe even worse, things aren’t looking so new either. It ends up being the same as the year before and that “to-do” list is still waiting to be crossed out.

It happens to all of us. We tend to stick to old routines and old feelings—sometimes out of habit and other times out of fear.

Here’s some good news though: it doesn’t have to be like that.

You don’t have to feel bad if you didn’t start your resolutions on January 1st, or if you skipped your Monday workout. There isn’t any rule on when you need to take charge of your own life and feel accomplished.

You can do all those things that your mind and soul are asking for right now. Right here and now is what matters, so make this year, your year… right now.

Don’t wait for life’s opportunities to present themselves on a silver platter; create your own luck instead.

There’s this short but meaningful letter going around online:

Quote - Dear Self, This is going to be your year. Dust yourself off and get started. Love, Me.

It may seem simple but take a second look. Read it to yourself and be mindful of its words. It’s a love letter that acknowledges the power you have to turn your whole year around. If you’re skeptical of the impact simple words and affirmations can have on your whole outlook towards life, look a little deeper.

In fact, let’s break down the meaning of that deceivingly simple letter and uncover its empowering message.

Be kind to yourself

How you talk to yourself matters. Your inner-voice matters. Cultivate it and let it kindly guide you. Between thinking “I’m as ready as I’ll ever be. I’m going to own it” and thinking “What’s the point? I’ve failed once before” there’s a world of difference. In fact, self-affirmations have been proven to calm people’s nerves and, as a result, it allows them to perform better throughout the day.

You may not always be able to control your thoughts and emotions; however, that doesn’t mean that you can’t do your best to try. Start your day with some self-love and remind yourself that you’re capable of facing life’s challenges, because deep down, you know you are.

Treat yourself kindly, like you would treat and speak to a dear friend, and you’ll quickly notice a positive difference in your attitude.

As author Steve Maraboli wisely put it: “The most powerful relationship you will ever have is the relationship with yourself.”

Get clear on what you want

“This is going to be your year” can mean something different for everybody. What exactly would make this your year?

Take a moment and get really honest with yourself. What would you like to accomplish this year? And, more importantly, how do you want to feel? Give these questions some thoughtful minutes and the answers will come to you. Don’t force this process though. If you’re not feeling quite on the right mind space, sleep on it.

The important thing here is to get clear on what you want.

More good news: you already know what you want and desire. Give yourself permission to find out what exactly will make this year your year and own it.

You know what they say… “It’s better to be at the bottom of the ladder you want to climb than at the top of the one you don’t.”

Take action.

Action is the key word in all of this. It’s important to know what you want to achieve and how you want to feel, but ultimately, all the self-affirmations, wish lists and meditation practices won’t amount to anything if you don’t take action.

A lot of people wait until they feel ready to start doing whatever they set their minds on. And really, who could blame them? It’s a common misconception to think that until you’re fully inspired and prepared, you can’t start tackling your goals and dreams. The hard truth is that, most of the time, it’s the other way around. By taking action, you become experienced and inspired.

Do you want to achieve financial freedom? Budget now and start getting rid of debt instead of waiting for a sudden income increase. Do you want to be fit and healthy? Work out now and start eating healthy right this moment instead of waiting for Monday to “start the week right.”

Whatever it is you want, take that first step. In the words of author and motivational speaker Zig Ziglar: “You don’t have to be great to start, but you have to start to be great.”

So dust yourself off and get started.

Speaking of starting things up, it’s time for a little challenge: write your own letter. Whether you’re reading this during a mini-break from a hectic day or during a lazy web-surfing afternoon, open up a file or go get a pen and write yourself a kind letter that inspires you to take action.

Follow the steps we mentioned or add in a couple of your own steps. It doesn’t have to be long and it doesn’t have to be difficult. It just has to be honest and kind.

Ready?

Write it. Read it. Mean it. Finish your challenge by taking a really deep breath.
Surely, you’ll notice a difference in your mood because words truly matter. Let your words inspire action.

As a final note, remember to stay motivated. You better believe that your words and actions matter (because they do), but, even if that’s already the case, you may find yourself struggling from time to time. Life just likes to throw us some curve balls once in a while.

So, whenever you feel cluttered and confused about how to achieve what you want, find motivation within yourself by rediscovering what you truly desire with our three steps: Be kind to yourself. Get clear on what you want. Take action.

Or… write an empowering love letter that reminds you this is going to be your year.

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[Financial Friday] What are required minimum distributions (RMDs)?

Traditional IRAs and employer retirement plans such as 401(k)s and 403(b)s offer several tax advantages, including the ability to defer income taxes on both contributions and earnings until they’re distributed from the plan.

what are required minimum distributions rmd

But, unfortunately, you can’t keep your money in these retirement accounts forever. The law requires that you begin taking distributions, called “required minimum distributions” or RMDs, when you reach age 70½ (or in some cases, when you retire), whether you need the money or not. (Minimum distributions are not required from Roth IRAs during your lifetime.)

Your IRA trustee or custodian must either tell you the required amount each year or offer to calculate it for you. For an employer plan, the plan administrator will generally calculate the RMD. But you’re ultimately responsible for determining the correct amount. It’s easy to do. The IRS, in Publication 590-B, provides a chart called the Uniform Lifetime Table. In most cases, you simply find the distribution period for your age and then divide your account balance as of the end of the prior year by the distribution period to arrive at your RMD for the year.

For example, if you turn 76 in 2016, your distribution period under the Uniform Lifetime Table is 22 years. You divide your account balance as of December 31, 2015, by 22 to arrive at your RMD for 2016.

The only exception is if you’re married and your spouse is more than 10 years younger than you. If this special situation applies, use IRS Table II (also found in Publication 590-B) instead of the Uniform Lifetime Table. Table II provides a distribution period that’s based on the joint life expectancy of you and your spouse.

If you have multiple IRAs, an RMD is calculated separately for each IRA. However, you can withdraw the required amount from any of your IRAs. Inherited IRAs aren’t included with your own for this purpose. (Similar rules apply to Section 403(b) accounts.) If you participate in more than one employer retirement plan, your RMD is calculated separately for each plan and must be paid from that plan.

Remember, you can always withdraw more than the required amount, but if you withdraw less you will be hit with a penalty tax equal to 50% of the amount you failed to withdraw.

 

 

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Tips for Women Entrepreneurs

According to the National Women’s Business Council, nearly 8 million women-owned businesses exist in the United States. Women-owned firms comprise 28.7% of all nonfarm businesses and generate more than $1.2 trillion in revenue. Interestingly, 88.3% of women-owned businesses have no employees, indicating that many women strike out on their own, perhaps to better balance work and family.¹ If you’re considering the launch of a new venture (or know someone who is), the following information may be helpful.

Tips for Women Entrepreneurs

Facing unique challenges

Although there are no gender differences in the steps involved in starting a business, women may indeed face unique challenges when it comes to implementing those steps.

According to a Babson College study, women entrepreneurs tend to have less confidence than their male peers. Among those who have identified new business opportunities, 34% of women admit to a fear of failure, compared with 29% of men, and less than half of women believe they have the capabilities to start a business, compared with 63% of men.²

Women may also face challenges in securing venture capital (VC) funding. In a different study, Babson researchers found that 85% of all VC-funded companies have no women on the executive team, and only 2.7% of VC-funded companies are led by a woman CEO. However, VC firms with women partners were more than twice as likely to invest in firms with women on the executive team and more than three times as likely to fund a company with a woman at the helm.³

Overcoming the obstacles

So what should a woman with a great business idea do?

First and most important, define what success means to you. Do you want a thriving operation with dozens of employees, or are you looking for self-employment to bring in additional income while allowing more time for family needs? Or maybe it’s something in between? Be sure you have a clear vision of your dream before you launch.

Understand that preparation and knowledge are keys to building confidence. Develop a written business plan that describes your business’s products and/or services, target market, marketing and sales strategy, opportunities and challenges, competition and how you will address it, and other key success factors. This document and the hard work involved in preparing it will be especially important if you plan to seek financing from lenders, angel investors, VC firms, or other outside sources. The required research will help prepare you to answer the tough questions from potential financiers.

Know that successful entrepreneurs are typically willing to take calculated risks. Don’t let fear drive your decision making. Once again, preparation is important, but don’t let your analysis end up in paralysis.

Be sure you have enough funds set aside to survive the start-up phase, which can last as little as a few weeks or as long as several years, depending on your business. Having enough money to live on during this period may further bolster your confidence, reduce fear of failure, and support wise risk taking.

Finally, take heart in knowing help is available. The Small Business Administration,Women’s Business Centers, and Community Development Financial Institutions (CDFIs) across the country provide resources and information especially for women business owners.

 

¹ National Women’s Business Council fact sheet, June 2015
² Babson College, Global Entrepreneurship Monitor, 2013 United States Report
³ Babson College, Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital

 

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