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When I was in college, I wanted to start an investment club.  I'd been looking at getting a group of people together to start one, and so I'd been looking for a good “how to start an investment club” tutorial.

The trouble is, the only one I've found is a book – Starting and Running a Profitable Investment Club.  While this book is great (with over 200 pages of excellent step by step examples), for a lot of investors who already have a good understanding of the stock market, it's not needed.

So, I wanted to put together this resource in case you wanted to start you own investment club.  Here is a step by step guide on how to start an investment club.

Also, with the rise of different FinTech companies, and lower costs to investing, actually having an investing club might not make sense anymore. We share some alternatives below.

The Benefits Of An Investing Club

There are several reasons why you would want to start an investing club. The biggest is community and education. With an investing club, you're working with others to identify investing ideas, and you're probably going to learn a thing or two.

Different clubs have different rules, but a common theme is each member identifies investments, and then shares their thoughts with the group for critique.

Another reason why people (used to) start investment clubs was to save on costs like commissions. Let's say you had 20 members in your club. If you were going to buy that stock individually, it could easy cost each member $10 in commissions. So each trade would cost $200 in aggregate. However, if you pooled your money as a club and placed one trade, it would be just $10 – saving you $190 each trade. That's a big deal – as expenses are on of the biggest reasons for investment underperformance.

1. Find And Organize Potential Members

The first thing you need to do is find and organize potential members.  This is the hardest step, because the premise of an investment club is that you have to contribute money, and time, to the pot that is shared by a group of people.

The biggest thing that you want to find are people who are going to be willing to contribute to the success of the club, and not freeloaders.  From everything I've read, the ideal size of a group is 5-20 people.

Remember, if you have too few members, in order to get enough capital you're all going to have to contribute more money.  If you have too many members, it may be very hard to manage and have an effective meeting.  Or, even worse, you don't agree and have a very fragmented portfolio.

Some clubs even have an initiation fee that is much higher than the monthly contribution, say $1,000 to start, then $50 per month.  The reason is to only get members that are dedicated to helping, and by having a high entry fee, you weed out potential loafers.

Once you've identified potential members, ask yourself the following:

  • Do you trust them with your money?
  • Do you trust them to pay on time?
  • Will they do their own research?
  • Will they contribute to conversations?
  • Is unorganized and doesn't keep records?
  • Has trouble pulling the trigger – either to buy or sell?

While none of those individual may be a deal-breaker, you should ask yourself and confirm.

2. Setup An Organizational Structure

Once you've found some potential members, you need to setup an organizational structure for your investment club.  The smaller the club, the more informal the structure can be.  However, no matter how many or how few members you have, when it comes to dealing with money, having a pre-defined structure is always best.

For the basics, you should agree on the following:

  • Club Directors: President, Vice-President, Treasurer, Assistant Treasurer, and Secretary.  Once again, since you're dealing with money, it's always good to have two people looking after it.  Along with the positions, decide how they are elected and how long they stay in the position.  Many clubs do a one year term, but some do longer.  Also, decide on what each person does.  Who actually places the physical trade?  Who runs the educational aspect?  Who does the taxes?  These are all logistical things that are important to consider early on.
  • Time and Place: Decide a time and place to meet.  The smaller the club, the easier it is to meet at a home.  Many clubs meet monthly, some more often, some less often.  For example, one of the most famous investing clubs, the Beardstown Ladies, meet and invest every month.
  • Club Rules: You should also setup basic rules for the club.  For example, you should have semi-defined rules for buying and selling, how to handle payouts and distributions, how to payout a member if they quit, how to add a member who wants to join, how to end the club.  Remember, things happen, life changes.  You have to plan for these things early on so that the club can continue smooth sailing when they do happen.
  • Record Keeping: Every member will always want to know what their percentage of the equity is, so it is important that you keep accurate records at all times.  Decide on how you will do this and how you will communicate it to club members. The simplest way to do this is to have a Google Spreadsheet with everyone's contributions visible. You can even share this with the group.
3. Setup a Legal Structure

Next, you need to setup a legal structure for your club.  There are two key reasons for this:

  1. Ideally, the small investment amounts you contribute will grow into a big pile of money
  2. You cannot open a brokerage account as a club without a legal structure

The most common legal structure for an investment club is a partnership.  In that case, you need a partnership agreement and operating agreements.  There are many cheap online options that can do this for you, such as RocketLawyer or Nolo, but you may also want to consider getting professional help to set it up at first.  Spending a little on a lawyer to draft some documents can make things much easier in the future. Check out our full guide to setting up an LLC for investing.

You'll also need to register your club to get an EIN (Employer Identification Number) from the IRS.  This is actually the easiest step, and you can quickly do it here: How to Apply for an EIN.

Once you have a defined legal structure, you need to open an account at a brokerage.  Many full-service brokerages offer accounts for investment clubs, but they tend to charge higher fees to trade.  I'm a fan of TD Ameritrade, and they offer accounts and help to investment clubs.  No matter where you open an account, you will need to provide copies of your legal agreements and your EIN.

Depending on the company, they may be willing to help you get started investing, or even come to your club meeting to provide basic information and education.  It never hurts to ask, even at a discount brokerage like TD Ameritrade.

4. Build a Common Agenda

Now that all the legal structures are in place for your club, you need to build a common agenda for each meeting.  This is where the magic happens!

Typically, at each meeting, you want to review your financials and performance.  Larger clubs sometimes do this only with the directors, and then email out statements to members.  Typically, they also review investment positions, so that poor performing investments can be identified and dealt with.

Once you've covered the legal stuff, every club does things differently, but you have a few common purposes:

  • Discuss/Decide how to invest
  • Education and/or Presentations
  • Research and Discussions

Many clubs will have “homework” or delegate out research for their members to complete.  Typically, the club will identify a target sector or type of investment, then delegate out companies to research.  At the next meeting, the club will regroup and discuss their findings.

Once the presentations and research has been done, the club has to decide how to invest.  Hopefully the rules you set early on aid in this process (i.e. 2/3 vote or something similar).

Finally, don't forget the education piece.  While you don't have to do it every meeting, it is a great idea to have presenters educate members on various topics.  Many clubs even invite in speakers to share stories and information with the club.  This is a great way to mix it up (so it doesn't get boring), while still being helpful and educational.

5. Have Some Fun

Finally, you have to have some fun!  If you don't, members could get bored easily.  It starts with selecting a fun name, and maybe even fun director titles.

You should also think about food or snacks for your meetings.  If you meet at someone's house, do they cook each time?  What about meeting at a restaurant each week?  Whatever you choose, make sure that you feed your members!

Finally, you could even use some of your profits to go on fun outings.  I've heard of some groups committing to vacations with their investment earnings – trips to Hawaii or other fun destinations.  While not common, it certainly mixes things up and makes it fun.

Alternatives To Investing Clubs

Today, technology has made trading free. We've talked about the free apps for investing before. As such, if reducing costs was one of your primary concerns for starting an investing club, you might look into using a service like M1 Finance. M1 Finance lets you build a portfolio of stocks and mutual funds commission free. This is huge for investing clubs.

Now, you can still have a “club” that discusses investment ideas, but each member can have their own account and trade in it for free. This saves you the cost of creating an LLC, and it lets you not have to worry about a lot of compliance issues. You can then simply have investment discussions, and each member goes and executes it themselves.

Check out M1 Finance here and see how it could be a great alternative to an investment account.

What are your thoughts on how to start an investment club?  Is it something you've considered?

The post How To Start An Investment Club (And Other Alternatives) appeared first on The College Investor.

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Non-profit employees can qualify for a special student loan forgiveness program called PSLF or Public Student Loan Forgiveness. Not everyone works for a nonprofit, which raises an interesting question: can you start your own nonprofit to qualify for PSLF?

The answer isn’t so straightforward. Nothing is preventing you from starting a nonprofit and then pursuing PSLF. It’s what happens along the way that complicates matters.

In this article, we’ll pick apart what exactly PSLF is and how nonprofit employees qualify for it. Then we’ll discuss what’s involved with creating your own nonprofit and qualifying for PSLF under it.

There’s no guarantee that the PSLF program will be around 10 years from now when some people qualify for loan forgiveness after making their 120 payments. In fact, President Trump’s proposed 2019 budget calls for eliminating the PSLF.

"The long-term security of the program is presently in jeopardy because there are those who are against it in Washington," Heather Jarvis, a student loan attorney, told U.S. News.

On a brighter note, "From my research inquiries with financial planners, it seems as though those already submitted and enrolled in PSLF will continue," Dr. Jesse Kiefer, who works at the Hospital of the University of Pennsylvania, also told U.S. News.

However, not knowing what any future outcome will be, if you are already making qualifying payments or plan to, the best course of action is to stay the course until there is a confirmation that the program has been discontinued.

Qualifying for PSLF

Non-profit employees don’t automatically qualify for student loan forgiveness. To qualify, you must work full-time for a non-profit and have made 120 payments (10 years) while working for a non-profit.

The payment period doesn’t need to be consecutive and can be with different non-profits. In other words, you may have worked for a mixture of for-profit and non-profit organizations over the past 15 years. You also made 120 payments on your student loans while working at non-profits. In this case, you qualify for PSLF.

Non-profits include Federal, state government, local government, and 501(c)(3) organizations. Full-time employment may be defined by the organization or at least 30 hours per week, whichever is greater.

Not all student loans qualify for the program. But most government student loans will. Loans that do not qualify include:

  • Private
  • Direct loans that are in default

The following loans are eligible:

  • Joint Direct Consolidation Loan obtained with a spouse
  • Direct Subsidized / Unsubsidized
  • Direct Consolidated Loans
  • Direct PLUS
  • Direct Stafford Subsidized / Unsubsidized

Note that Direct loans that were consolidated, i.e., Direct Consolidated Loans, restart the payment count. You may want to consider leaving Direct loans out of any consolidation.

You’ll also need to be in a repayment program. Repayment programs include:

With an understanding of how to qualify for PSLF as a non-profit employee, the next section describes how to create a non-profit.

Creating a Non-Profit

A non-profit organization or 501(c)(3) can be far more difficult to start than a for-profit business. Once you’ve successfully created the non-profit, you must maintain its non-profit status.

The following are steps involved in creating a non-profit, as outlined by nolo.com:

  • "Choose a name."
  • "File articles of incorporation."
  • "Apply for your IRS tax exemption."
  • "Apply for a state tax exemption."
  • "Draft bylaws."
  • "Appoint directors."
  • "Hold a meeting of the board."
  • "Obtain licenses and permits."

It can take between 2 and 12 months for the entire process. A great source for starting a 503(c)(3) is https://www.501c3.org.

Qualifying Your Non-Profit for PSLF

Now to the big question: Can you create a non-profit to qualify for PSLF? You’ll need to be a full-time employee of your non-profit. That means working 30 hours per week. Next, your student loans will need to qualify as mentioned above. From this, you can see that there isn’t anything special about creating a non-profit that qualifies for PSLF. It is really a question of: (1) did you successfully create a non-profit, which you are able to work for full-time and (2) do your student loans qualify for PSLF?

If yes, then you should be able to have your student loans placed into the PSLF program after meeting the 120 payments requirement.

Qualifying for PSLF is fairly straightforward. The part that you will have more difficultly with is creating a 503(c)(3) and maintaining its non-profit status. At the end of the day, you’ll likely make your life easier by simply working for an existing non-profit.

The post Can You Create Your Own Non-Profit to Qualify for PSLF? appeared first on The College Investor.

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Picture this: You’re earning $50,000 a year but for one year you decide to stretch your budget to the max and live off of a meager $20,000. Let’s say that around 10 percent of your salary goes to taxes. That leaves you with $20,000 in savings – to do whatever you want to do with. An awesome 50 percent savings rate. But do you think you can live on $20,000 per year?

Luckily for you it is.

Whether you’re wanting to go extreme for a year to save up for a large purchase or want to keep a permanent fifty percent savings rate, you can do it. 

And if you are diligent in this for a long period of time, you can achieve financial independence sooner (even if you're not super frugal). 

Here’s how.

What You Need

First off, I want to point out that this budget probably isn’t going to work out for people who live in high cost cities like New York or LA. Above that there are also different variables that are going to help you live off of a low income.

However, while living on $20,000 per year might not work in high cost of living (HCOL) areas, achieving a 50 percent savings rate definitely is. So, simply change the math a bit, and you can still make it work.

If you're going for the $20,000 per year, here's what you need:

Low Cost Housing: As a general rule of thumb your housing shouldn’t be more than a third of your take home pay. So if you plan on living on a $20,000 budget you should find something in the $550 per month range – tops.

This might require some sacrifice. You might need roommates, a smaller place, or both. Or, you could get creative and look into house hacking to earn money where you live.

The Size of Your Family: Feeding a house full of teenagers on a low grocery budget? Probably not going to work – although with some creativity and bargain hunting skills it definitely can. It’ll be easier to pull off a low monthly food spending amount when there’s only 1-3 people in the household. (And no, I’m not insinuating that you kick your teenagers out of the house, just adjust your budget.)

So, this might be much easier when you're single.

Your Hobbies: You only have one life to live and I’m definitely in favor of the “spend your money to enhance your life approach.” With that said if your hobby is a money sucker it’s gonna be hard to stay on budget. You might be better off finding a low cost hobby.

Or, even better, check out our list of free hobbies that are still fun!

Your Commitment: Going from living on $40,000 to living on $20,000 is no joke. It takes some serious effort. Your commitment to saving money and living a low cost lifestyle is ultimately what will determine your success.

Your Debt Level: In the $20,000 a year budget I include no debt repayment of any kind. But understandably, you might have a little or a lot of debt. If this is your situation I’d factor your retirement savings into the budget and use every penny you have left over to kill your debt. Seriously, kill it.

Your Creativity: Some people flat out don’t want to live on less and that’s perfectly fine. No judgment here! If you’re in a position where you’ve already done the heavy lifting and can afford to live the life you want to live, power to you. You deserve it. However, if you’re like me and you really need to save/invest more than this budget can help.

The $20,000 A Year Budget

Just in case you were wondering, I do live on $20,000 per year or somewhere close to it. And it’s really not bad at all.

You can have fun and enjoy your life just as much on $20,000 as on $40,000. (Although according to research $75,000 a year brings people the most happiness.)

Right now my living situation costs $0 and if I would follow my budget to the letter I’d only be spending around $15k-$18k per year. So this is not my exact budget but one more realistic for someone trying to go from 20k to 40k.

Total Monthly Budget: $1,668

Money Saved = $20,000

You can play around with this budget until it fits you the best. For example maybe you want to include retirement saving in your budget rather than taking it out of the money you’re saving. You can cut back in different areas to compensate for that.

What you can do with the $20,000 saved:

  • Get a jump start on retirement investing
  • Save up for a down payment on a home
  • Pay off debt
  • Buy a rental property (you can buy a rental property for just $5,000 with RealtyShares)
  • Start a business (you can create a blog with Bluehost for just $2.95 per month and your time)
  • Use the money for emergencies
To Ensure Success...

To ensure your success there are a few preparations you can make. Preparing yourself for a lifestyle deflation will make your transition go much smoother.

Here’s what you should know.

Finding Housing Will Be Your Biggest Challenge – If you live in an expensive area finding housing will be your biggest hurdle. You want a place that a) makes you feel safe b) is livable and c) is cost effective.

In my area, $550 for rent is a pretty average number – but I live in a very rural area and many of you do not. Take your time and be creative. And realize, this is a TEMPORARY sacrifice and it will totally pay off in the long run.

Get Your Entertainment Lined Up – A common misconception is that people who live a low cost lifestyle don’t have any fun – this couldn’t be farther from the truth. I am always out do something, and most of the time it’s fun!

As far as TV and Moves go I pay $129/year for Amazon Prime (it's 50% off if you're a student with Amazon Student). This keeps the girls and I entertained at night. (And when I want to watch one of my favorite shows I go to my Mom or boyfriend’s house.) Also look for free activities – like hanging out with friends or family, taking hikes, riding bikes, or fishing.

Be Creative in the Kitchen – I’ll admit most of my meals are pretty routine. But then again, I’m not one who cares much about food. But for those of you who like a variety look online for recipes. You can recreate all of your favorite restaurant dishes for a fraction of the price.

Final Thoughts

Living on $20,000 per year isn't for everyone. It's simply one way, one approach, to achieving your money goals or getting towards FIRE sooner.

You could also look at earning more money and still saving 50% (or even more) of your income. Check out this story of saving 75% of your income

The bottom line is that it's possible, you just have to focus on it and get creative about your lifestyle. 

What other tips do you have for someone trying to live a low cost lifestyle?

The post How To Live Comfortably On Just $20,000 Per Year appeared first on The College Investor.

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Private student loans can be a valuable tool when it comes to paying for college. They typically offer low interest rates for qualified borrowers, have flexible repayment terms, and some even offer extra features like career coaching and more.

However, private student loans are the last choice when it comes to paying for college. Before you take out private loans, you should make sure you exhaust all other financial aid options, including Federal loans. 

Before you sign on the dotted line, make sure you understand what you're getting into. Student loans are a collateral on your future earnings, and you need to ensure you have a positive ROI (return on investment) of your education.

To make things easier, we've put together a list of the best private student loans to help you pay for college. Our number one choice is Credible, as they make comparing your student loan options easy. In just 2 minutes, you can see what you qualify for and if it makes financial sense. Check out Credible here.

Check out our list of the best private student loan lenders below:

1. Credible

Credible is our number one choice for private students loans because they are a marketplace that makes borrowing private student loans easy! In just 2 minutes, you can enter your information and see various loans that you might qualify for.

If you're happy with the rate and term you see, you can apply online in just minutes and get the loan application started. If you require a cosigner for your student loan, you can also have your cosigner apply online in minutes.

Credible makes the entire borrowing process easy and painless. Plus, they have most of the major lenders on their platform (including others on this list), which is why they are our first choice for borrowers.

They also have no origination fee, no service fees, and no prepayment penalties if you want to pay off your loans early. Check out our full Credible review here.

2. Commonbond

Commonbond has some of the most competitive private student loan rates that we've seen, which gets them on our list of the best places to borrow private student loans. 

Commonbond offers private student loans to undergraduate, graduate, and MBA students. They offer four different repayment plan options for student - including student loan deferment until college is complete. This is one of the most flexible options of the private student loan lenders we've compared.

Commonbond doesn't charge an application fee, but they do have a 2% origination fee - which is relatively high compared to other private student loan lenders. They also always require a cosigner for their private student loans, but they do have a cosigner release program.

Check out our full Commonbond review here.

3. Citizens Bank

Citizens Bank offers one of the most robust private student loan programs on this list. They let you borrow as little a $1,000, and all the way up to $295,000 depending on your degree. I personally love that they base the amount you can borrow on your degree program because it does help you focus on your ROI (return on investment). 

Citizens Bank also offers both student and parent student loans, which can be a potential alternative to Parent PLUS Loans. Given that we recommend most borrowers refinance Parent PLUS Loans, you can potentially take advantage of lower interest rates and fees up front.

Citizens Bank also offers the ability for student to defer payments until after graduation or make interest-only payments while in school. Parent borrowers must make at least interest-only payments while the student is in school. 

Finally, Citizens Bank also doesn't charge any origination fees, application fees, and has no prepayment penalties. 

Check out our full Citizens Bank review here.

4. College Ave

College Ave is another full service lender that is very much on-par with Citizens Bank and others on this list. College Ave allows you to borrow anywhere from $2,000 to the full cost of attendance. The also allow both students and parents to borrow, which can allow for flexibility.

College Ave has various repayment plans that allow for flexibility. They allow students to defer payments until after graduation, or student borrowers can make interest-only payments, full payments, or even flat amount payments. Parents also have some repayment choices, but they cannot defer payments while the borrower is in school.

College Ave also has no origination fees, application fees, and doesn't charge a prepayment penalty if you pay the loan off early.

Read our full College Ave review here.

5. LendKey

LendKey is another great lender that makes this list because they have great rates on their student loans and have a unique business model that allows them to do it. LendKey's loans are funded by credit unions and community banks - so you're getting a great loan, but it's handled by LendKey's online service. You never even realize that you have a private loan from a small bank.

LendKey doesn't have as much flexibility for borrowers during school. The "best" option is making minimum $25 per month payments while in school (which is pretty low, but not deferment). LendKey also doesn't offer loans to parents directly.

LendKey has no origination fees, application fees, and doesn't charge a prepayment penalty if you pay the loan off early.

Read our full LendKey review here.

How To Compare Private Student Loans

It can be hard to know when it makes sense to borrow a private student loan, and what features you should look for. All of the lenders on the list above are great, but each person has a different financial need, so it can be hard to know which is right.

When it comes to comparing private student loans, we recommend borrowers look at the following:

  • Interest Rate: Getting the lowest interest rate possible is the key to paying the least amount of interest on your loan. Remember, the higher the rate, the more you pay over the life of the loan.
  • Term: This is how long you'll repay the loan for. Always keep the shortest term possible. The longer the term, the more interest you'll pay.
  • Origination Fees: Look for loans that have low or no origination fees. However, if you can get a lower interest rate by paying a small origination fee, you should consider it. The origination fee is one-time, but the interest rate is ongoing.
  • Application Fees: You should look for private loans with no application fees.
  • Prepayment Penalties: You should look for loans that don't make you pay a penalty for paying the loan off early.
  • Cosigner Release: 90% of private student loans require a cosigner. You should find a student loan that allows you to release the cosigner in the least amount of time possible. The best we usually see is 24 months of on-time payments.
  • Flexible Repayment Terms: You should look for lenders that allow you flexible repayment options - such as deferment during school, and variable lengths after graduation. This will help you should you need it after graduation.
Fixed Rate vs. Variable Rate

There are two main types of interest rates on student loans - fixed rates and variable rates. Variable rates are usually "sexy" in that they are lower than fixed rates...today. However, variable rates can rise in the future if interest rates go up (they can also go down, but that's very rare). Fixed rate loans charge the same interest rate over the life of the loan. 

So, should you get a fixed rate or variable rate student loan? For most private loans, you should go for a fixed rate loan. The reason is, we are in a rising interest rate environment. Rates will only rise in the future since we're at historic lows today. You can see the best student loan rates here.

Given that you're still in school, you'll have several years before you make payments - during which time your rates could rise with a variable rate loan. So, while variable rates are attractive today, you might be regretting that decision in the future.

Now, if you're refinancing an existing student loan and know the timeline of your debt repayment, getting a variable rate loan is less risky. You can see the best places to refinance a student loan here.

Understanding Cosigner Release

It is near impossible to get a private student loan without a cosigner. In fact, 90% of all private student loans have a cosigner. 

The reason? Because private student loans act much more like car loans or mortgages - you need to have income, a high credit score, and more to qualify. 

For most college students, they simply don't have credit (yet), a high income (because they're students), or an employment history (once again, because they're students). That's why most banks require a cosigner. 

However, banks and lenders have realized that cosigners don't like to be cosigners, and they want to get off the loans as soon as possible - that's where cosigner release comes into play. 

Cosigner release is a program offered by lenders where, after a specific number of on-time payments, the cosigner can be removed from the loan. Many banks offer cosigner release after 24-36 on-time payments. This basically proves that the borrower is able to handle the student loan themselves, and they no longer need the protection of having a cosigner. 

When getting a private student loan, look for loans that have short cosigner release programs. This will allow your cosigner to be removed faster, which is always an added benefit. 

Important Considerations For Borrowers

Given that most private student loans require a cosigner, it's important that cosigners and borrowers know and understand what they are getting into. If the borrower can't pay the loan, the cosigner is fully responsible for the debt - and failure to pay could negatively harm both the borrower's and cosigner's credit.

Also, if something were to happen to the borrower (such as death or disability), the cosigner is typically 100% responsible for the loan.

That's why recommend that borrowers get term life insurance for the duration of the student loan - payable to the cosigner. The value of the policy should be the loan value plus interest. That way, if anything were to happen to the borrower, the cosigner is protected.

Check out Haven Life to get a quick quote online in about 5 minutes. You'll see that life insurance for college students is typically very cheap - and this can be a great way to protect your family should something happen. You don't want to be responsible for your cosigners loans.

Final Thoughts

Getting a private student loan can be confusing. That's why we've listed the top 5 places to get a private student loan so that you can compare your options quickly and easily.

It can take upwards of a month or more to get the paperwork done and your loan funded. Make sure that you're giving yourself enough time to apply and get approved so that you don't miss any deadlines at your school.

The post Best Private Student Loans To Pay For College In 2018 appeared first on The College Investor.

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You just graduated from college.

And now it is time to master your money.

However, nobody has ever given you practical guidance beyond “don’t buy expensive lattes” and “$20 for avocado toast is a waste of your money.”

In this post, I’m going to share five money tips that will have you mastering your money as a college graduate starting right now. If you're looking for our high school tips, check out this article on our five money tips for above average high school graduates.

5 Money Tips for the Above-Average College Graduate

Here are out five favorite money tips for the above average college graduates.

Pay Off Your Student Loans

It sounds like a broken record, but my number one piece of advice to college graduates is to start paying off debt as soon as possible.

Here’s the thing: even if you file for bankruptcy, the financial obligation of paying off your student loan debt will never go away.

Thus, the sooner you get started on it, the better.

The first step is to find out who owns your student loan debt. You could find this out by contacting your school’s financial aid office.

Alternatively, you could visit the National Student Loan Data System to help you locate your student loan servicer.

Below is a list of the most common student loan servicers and their phone numbers for your convenience:

  • Cornerstone: 1-800-663-1662
  • FedLoan Servicing (PHEAA): 1-800-699-2908
  • Granite State — GSMR: 1-888-556-0022
  • Great Lakes Educational Loan Services: 1-800-236-4300
  • HESC/Edfinancial: 1-855-337-6884
  • MOHELA: 1-888-866-4352
  • Navient: 1-800-722-1300
  • Nelnet: 1-888-486-4722
  • OSLA Servicing: 1-866-264-9762

Once you have determined who owns the debt and where your payments will be going, those factors will give you a solid idea of how much you can expect to go out each month in student loan debt payments.

In addition (or as an alternative) to paying off your student loans out of pocket, you can research ways to eliminate your debt with special programs. You might want to consider:

  1. Federal student loan forgiveness programs
  2. State assistance for student loan repayment
  3. Employer tuition reimbursement programs
  4. Federal student loan consolidation
  5. Income-based loan repayment programs

The sooner you get out of debt, the better!

According to this report by GOBankingRates, in 2017, 57% of Americans have less than $1,000 in savings.

This is not good at all considering we have a fairly high per capita income compared to most of the world.

Saving up money is easy when it is automated.

Check out this post where we described eight apps that will help you automate your savings.

Once you start saving money consistently, the next thing I recommend is to start investing.

When you invest, your money works for you instead of the other way around.

Investing is not just for people with “lots of money.”

You can get started investing today with as little as $100.

In fact, I would say this is an even better way to get started investing because you will learn the intricate ins and outs of the stock market with smaller amounts of money which will help you down along the line when you have more money to invest.

I've reviewed most of the major investment companies, and compare them here at our Online Brokerage Comparison Tool. Don't take my word for it, explore the options for yourself.

If you would like a robo-advisor to help you with choosing stocks, I recommend Betterment. Betterment is a great tool that allows you to simply deposit your money and it takes care of the rest of your investing. Get started with Betterment here.

Last but not least on the investing front, make sure you are taking advantage of 401(k) and IRA opportunities that are offered by your job.

It is never too early to start investing! Read our full guide to getting started investing after college.

Paying off your student loan debt consistently will put you in the right direction when it comes to building up your credit.

If you do get a credit card for rewards purposes, make sure you are paying it off at the end of the month.

A great credit score will help you save a lot of money in the long run.

When you go to buy a new house or get that new car, your interest rates will be much, much lower. Those savings eventually do count in helping you pay off your home or car faster.

Side Hustles Never Hurt

Starting a side hustle to bring in extra money can feed all of the above money tips.

If you do it right, it will help you get out of debt faster, save more money so you can invest, and because you will be paying all your bills on time, your credit will be stellar.

It has never been easier to start a side hustle.

You hardly need capital to start one and you can dedicate as little or as much time as you want to it.

In this post, we shared 50+ ways to make money using a side hustle. Read it and get started on one right now.

When it comes to mastering your money, every penny you earn in income helps.

Closing Thoughts

Becoming a master of your money does not have to wait until you’re in your 40s and 50s.

You can start right now with whatever money you have no matter how little it is.

In this post, I have shared five money tips for the above-average college graduate.

Putting all these five tips into practice will have you eons ahead in the financial game before most people even realize what is happening.

I would love to hear your thoughts in the comments.

The post 5 Money Tips for the Above-Average College Graduate appeared first on The College Investor.

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Student savings accounts are an area of banking that has been traditionally under-served. The reason is that many students don't have "much" to save. But just because you don't have a lot of money doesn't mean that you shouldn't get to have great savings account options.

However, over the past few years, banks have started to realize that students and young adults are key to future growth. And many banks are investing in this relationship by offering top savings accounts for student savers.

If you're looking for your first bank account, or maybe you're just looking for a better savings account, this article is for you.

When college students look for a online bank, they want a few key things: 

  • They don't want to pay any fees
  • They want easy access to their money from anywhere

Here are the best savings accounts for students that meet this criteria. If you want the quick answer, CIT Bank is consistently one of our top banks for online savings accounts because they offer high interest rates, low minimums, and have a great online product. Open an account at CIT Bank here.

Check out our list of the best savings accounts for students below.

The Best Savings Accounts For Students​

We maintain an updated list of the best online savings accounts for students here. This list is updated daily with the best rates and terms you can find.  While we recommend CIT Bank, there are definitely other accounts on this list that you should strongly consider. Check it out here:

You might notice that most of these banks are online. That's okay! That's what allows them to offer the higher rates and low costs compared to your local bank. As a student, it's also great to have a bank that specializes in online banking. That way, you know you can access your money from anywhere.

Our Criteria For Assessing Savings Accounts For Students​

As we mentioned earlier, college students have different criteria that other bank patrons. When we look at savings account options for students, we look at the following criteria:​

1. No Fees

We firmly believe that savings accounts should be free. This means no fees. No monthly fees. No transaction fees. No fees to withdraw your money. We also hate accounts that require certain things like direct deposit.

Free should actually be free.

A lot of traditional banks nickel and dime their consumers, so while you might earn a high interest rate on your money, you might also find out very quickly that you're losing that same "extra interest" to fees. 

Always keep fees at the top of mind when assessing a bank. 

2. Easy To Access Your Money​

We believe that it should be easy to access your money. It's your money! It shouldn't be locked away somewhere that you can't easily get to. If you want something that isn't as easy to access, check out our article on the Best High Yield CDs.

With easy access, consumers should be able to go online and quickly and easily see their money, setup transfers and withdraws, and have no fees to have this access.

Furthermore, we love the online banks because, unlike local banks, they are available nationwide. Some local banks may have trouble helping a student who went away to college.​

You might also look into finding a money market account that is very similar to a savings account. We maintain a list of the best money market accounts here.

Are Online Savings Accounts Safe?

You might be concerned using an online savings account - but you shouldn't be. Just like a regular bank, online banks are FDIC insured and your money is just as safe as it would be at a regular bank.

In fact, you might even notice some of the banks above because of their national presence. 

Online banks are just as safe as traditional brick and mortar banks. But they come with an added benefit! Since they don't have to maintain a bunch of physical offices, they can pass a lot of that savings onto the consumer - you! That's why many of the top banks that offer the best interest rates on savings accounts are online only. 

Comparing The Best Savings Accounts For Students

​Choosing a high yield savings account for students isn’t rocket science – although you do need to watch out for banks that advertise higher rates but come with a catch, like minimum balances or a teaser rate that drops after a few months.

The banks we feature here have no minimum balance, no monthly or low balance fees, and the advertised rates are permanent. Their rates differ slightly, but they’re otherwise similar: All offer 24/7 customer service and electronic transfers within a couple of days.

Here are some reviews of our favorite banks.

CIT Bank

CIT Bank consistently maintains one of the highest yielding online savings accounts. They are always raising their interest rate to be competitive and at the top. Furthermore, their platform is easy to use and you can sign up and have your savings account funded in just minutes.

There are no gimmicks with CIT Bank - you earn interest on your entire balance, and you have a low minimum to get started. Read our full CIT Bank review here.

BBVA Compass Bank

BBVA Compass Bank doesn't make very many lists (which is strange), because they have some of the best interest rates and online accounts available. We love them, and highly recommend them as a top online savings account for students. They have a low minimum, high yield savings account that can be accessed anywhere online.

Right now, they are offering a flat APY structure, but sometimes they do offer a tiered structure that rewards higher account balances.

American Express Bank

Most people think about American Express for their credit cards (and we love the best American Express Credit Cards). However, American Express also consistently has one of the top savings accounts available based on interest rate. And this is great for students because they have $0 minimum to open.

Check out our full American Express Savings Account review.

American Express was my first online bank account and I got it after high school to deposit some of the money I received for graduation. It served me well as a savings account for college student!

Marcus By Goldman Sachs

I had never heard of this bank until this year, but they have been making a full advertising blitz to get the word out. This new banking product consistently has some of the best rates and terms you're going to find online. They are always at the top of the list of best interest rates, and it only has a $1 minimum to open an account.

Check out our full Marcus By Goldman Sachs review.

The post The Best Savings Accounts For Students 2018 appeared first on The College Investor.

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If you're a college student, you're likely on a strict budget. You already have to pay for tuition, room and board, text books, and more. But if you're driving, you also need to have car insurance. Auto insurance for college students is usually in the back of your mind. 

Nobody thinks about shopping for car insurance. In fact, most college student students simply opt for the same insurance their parents have... even if it's not the cheapest.

But the simple fact is, auto insurance for college students can make up a huge part of your limited budget. And auto insurance rates change all the time. The "good deal" you got as a college freshman might be a bad deal today.

Plus, the average cost of car insurance for a 20 year old is $3,816 per year, or $318 per month! That's a lot of money!

That's why it's essential that you shop around and look for the best auto insurance rates. We've made it simple by putting together this simple comparison tool.

Our Pick For The Cheapest Car Insurance For College Students

It's important to remember that the average annual cost of car insurance in the United States is about $900 per year. That's $75 per month. But that's the average for everyone. 

The average cost for college students is roughly $3,816 per year, or $318 per month. So, if you're paying less than that, you're winning!

Winner: Allstate

Our #1 pick for the cheapest car insurance for college students is Allstate. The reason might surprise you. It's because Allstate has an awesome incentive program to combine renters insurance (which every college student needs) with their car insurance. And by combining your policies, you can save big bucks AND get more of what you need.

When you combine car insurance with renters insurance, you get a multi-policy discount, which saves you a lot of money. At Allstate, while rates vary, that can be a significant reduction. With that, we recommend Allstate as our top pick for the cheapest overall auto insurance for college students.

Runner Up: Metromile

You've probably not heard of Metromile, but it's a fantastic solution for college students who don't drive very much. This is car insurance that you simply pay by mile. So, if you're only driving 2,500 or 5,000 miles per year, you could be saving $500 or more on your car insurance!

We love this model for college students because you only pay for what you use. If you live on or near campus, and only drive during the summers and maybe some random trips, why are you paying for car insurance year round? Save some money, and check it out.

Compare Overall Auto Insurance For College Students

Here's our full comparison list for car insurance for college students. Remember, rates vary by state. Enter your zip code below and get started to find the lowest price near you.

Biggest Factors To Consider When Shopping For Car Insurance

Shopping for car insurance is tough because there are so many variables involved in what price you pay. If you already entered some information above, you might be surprised by the results. 

Everything from your history, your vehicle, where you live, and more all influence the price you're going to pay for car insurance for college students. And the fact is, the insurance companies have done the math. They know the risks of every area, car, driving habit, and more.

When it comes to shopping around for car insurance as a college student, make sure you take into consideration the following factors:

How Much Coverage Do You Really Need?

Some policies will try to oversell you on coverage. But you also shouldn't come up short. Every state also have different insurance minimums (which we highlight below), that you must follow. But the minimum might not be enough.

There are a lot of guides out there that can help you decide how much coverage you need, but it really comes down to a few factors:

  1. If you have a lot of assets, do you have enough coverage to protect yourself?
  2. If you don't have any assets, do you need as much coverage as you're paying for?
  3. Are you getting all the discounts you're eligible for (we talk about this below)?
Your History And Your Vehicle

Your driving history and your vehicle play a big role in the price of your car insurance. If you don't drive much, you might consider an alternative that we discuss below. That might save you a lot of money, especially if you don't even need to have car insurance as a college student!

Your vehicle also plays a big factor in your coverage. Some vehicles will be cheaper than others to insure. 

Alternatives For Low Mileage Drivers

If you're a low mileage driver (maybe you're at college, or don't need to commute much), there are car insurance services that can be extremely affordable. Our favorite is Metromile

Metromile is a pay by mile car insurance company. If you're driving less than 5,000 miles per year, you could be saving upwards of $500 or more per year by switching. This is a great solution for car insurance for students because if you're on campus 9 months a year, you might not need to be spending a fortune on insurance.

The way it works is simple - you sign up, pay a small monthly fee, and then a low per-mile rate. You plug a small device into your car which tracks your mileage. Super simple!

Check out Metromile here.​​​​

Quick Summary

  • Pay per mile car insurance
  • Low deductible options available
  • Ideal for low mileage drivers like college students
What About Ride Sharing Insurance?

One of our favorite ways to make money in college is to drive for a ride sharing company like Uber or Lyft. However, if you drive for these services, you need to get additional insurance if you're in an accident. These insurance policies are "add-ons", they cover you for the time you're using your vehicle for work.

If you don't have ridesharing insurance and you're in an accident, you could be liable for all the damages - your personal insurance likely won't cover you. 

You might think you're covered by Uber or Lyft when you drive, but that's only partially correct. Uber and Lyft only cover rideshare drivers once you accept a ride request and are en route to your passenger, and once your passenger gets into your car.  But when you’re online and waiting for a request OR the second you end the ride and your passenger gets out, you have no collision coverage from Uber or Lyft.  And that's typically an "accident prone" time.

So as a rideshare driver, you need to get a ride sharing insurance policy.  Our recommended company Allstate offers ridesharing policies, and other companies do as well. Make sure you talk to your insurance company about this if you're driving for Uber or Lyft.

Do You Need Insurance For On-Demand Rental Services?

What if you don't own a car, don't drive very much, and only use on-demand car rental services like Zipcar. Do you still need car insurance?

Using services like Zipcar is a fantastic tool for college students who only need to drive a few times a month. These are self service cars that are available on almost every college campus, 24/7. You only pay for what you use by the hour, and you can get started with their online app. 

The great thing about using a service like Zipcar is that car insurance is included. For your monthly membership fee and rental usage fee, you get an insurance policy that covers you while you drive - so no worrying! Everything is taken care of!

This is a fantastic alternative than owning a car and having to get car insurance if you don't drive very often. Check to see if Zipcar is available on a campus near you: Find Zipcar

Can You Just Uber Everywhere?

Even though we're talking about shopping for car insurance for college students, our end goal is really to save you money in your budget every month.

This may sound odd, but have you thought about ditching your car (and car insurance and other expenses) and simply using Uber or Lyft to get rides everywhere you need to go. Depending on where you live, how frequently you need a vehicle, and the prices in your area, it can be a really cost effective solution versus owning a car and having to shop for car insurance.

In fact, I personally sold my car and Uber everywhere. I document the full experiment (including what I spend every month), here: Why I Sold My Car And Uber Everywhere.

How College Students Can Get A Discount On Car Insurance

One of the hardest parts about comparing car insurance options is all the discounts that are available to drivers. These discounts can turn an expensive policy into the cheapest, and so it's important to make sure you get every discount you're eligible for.

There are three main buckets to break discounts down into:

Vehicle Discounts

Vehicle discounts are savings you get for driving a car that has specific features. For example, our recommended company Allstate offers the following vehicle discounts: 

  • Anti-theft discount (does your car have an alarm system?)
  • Anti-lock brake discount
  • New car discount (if it's this model year and you're the first owner)
Policy Discounts

These are discounts that apply to the entire policy, and are usually based on actions you take as a driver.

  • Multi-policy discount (if you have multiple insurance policies with the same company)
  • Full payment discount (if you pay your entire year premium at once, instead of in monthly installments)
  • Auto payment discount (if you sign up for direct debit of your insurance premiums)
  • check
    Responsible drive discount (if you go a long period of time with no claims or accidents)
  • check
    Paperless Statement discount (if you sign up for eStatements)
  • check
    Long term customer discount (if you're been a loyal customer for a long time)
Other Discounts

These are other discounts that you might get from your car insurance company, but they typically require special actions on your part. Always ask to see if you qualify. 

  • Good student discount (usually involves some combination of being a student and having good grades)
  • Drive education discount (if you take a driver education course sponsored by your auto insurance company)
  • Safety monitoring discount (some insurance companies now allow you to get a discount if you install a safety monitoring device in your vehicle to record your driving)

For students, the big discounts to take advantage of are the good student discount and the multi-policy discount. The multi-policy discount is typically the biggest dollar-amount discount that insurance companies will provide. However, for teenage and college student drivers, the good student can help a lot with rate reduction.

Is Switching Car Insurance Worth It?

Most of the time, changing your car insurance company for the company with the lowest rate is definitely worth it. Unlike banks or credit cards, changing your car insurance is easy. You can do it in about 10 minutes online, and your new policy is active. Then, you just need to cancel your old car insurance policy.

Another thing that can make switching car insurance worth it is combining it with renters insurance.​ College students need renters insurance. If you get a car insurance and renters insurance policy at the same company, your renters insurance can be free (or you can view it as a significant discount on your car insurance).

How Much Car Insurance Do You Need?

This is a tough question and it can vary from person to person. To complicate matters, some states require a base-line level of insurance for any policy (don't worry, the companies in the list above will all comply with local insurance laws so you don't have to worry about it).

If you're looking to get the cheapest policy possible, you can buy an insurance policy that is only liability. ​This means it only covers you for injuries and damages you cause to others, but it won't help pay for damage to your car. Typically, most experts recommend having at least $50,000 per person in liability coverage.

You can then add in collision or comprehensive coverage.​ Collision coverage will cover your vehicle for damages suffered in a collision. Comprehensive adds even more coverage, such as if your vehicle is stolen. Given that this insurance will cover more, it will also make it more expensive.

Car Insurance Minimums By State

Every state has different insurance requirements, which makes it so hard to compare insurance policies. That's why we have this tool that allows you to enter your zip code and see what policies you can apply for. They do vary quite a bit from state to state. 

What You Need To Compare

The first things to know is what you need to compare when it comes to states. There are four main types of insurance minimums that apply:

1. Bodily Injury Liability: This is defined per person and the maximum amount your policy will pay if someone is injured.

2. Property Damage Liability: This is defined per accident and covers damage you do to property (not your own vehicle). 

3. Personal Injury Protection: This is what you insurance company will cover for your injuries, and is defined per person and per accident.

4. Uninsured Motorist Protection: This is defined per person and per accident, and covers you if you're involved in an accident by an uninsured motorist.

It's important to note that these are just minimum amounts of insurance. You can also get comprehensive insurance that covers your vehicle in events like storm damage, theft, and more - but states don't require that.

Also, note that the minimums might not be enough for you. You need to assess your own personal finance situation and see if you might need more insurance. If you have an above average net worth, you might need more protection. 

Here is the full list by state. Note: these numbers are subject to change. Other restrictions to insurance may apply.

Alabama 
  • Bodily Injury: $25,000 bodily injury liability per person and $50,000 per accident
  • Property Damage: $25,000 property damage liability per accident
Alaska
  • Bodily Injury: $50,000 bodily injury liability per person and $100,000 per accident
  • Property..
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Graduate school is finally over!

No more assignments. No more 20-page essays and overnight library stays. You are done and done.

How about that job though? Bills have to be paid and those student loans need to be paid back.

Landing a job after graduation should technically be easy because more education should mean you’re more qualified for the job.

But anybody who has been out of grad school for more than an hour knows that landing a job after graduate school can be a long and frustrating process.

In this post, I will share six major tips to landing a real job that pulls on your strengths and degree after graduate school.

Take a Moment to Celebrate the Fact That You Are Done with Graduate School

Graduate school is no walk in the park!

As a matter of fact, 50% of graduate students drop out of doctoral programs every single year. Finishing a master’s degree or a doctorate is no mean feat.

Take a moment to take stock of your achievement.

Leverage Your Personal Network

There are job opportunities that are never advertised online and which you will only find out about if you talk to people in your personal network.

According to research by anthropologist Robin Dunbar, human beings have an average network size of about 150. This network includes your parents, siblings, friends, school mates, former work colleagues, professors, your local barista, and the people you work out with at the gym.

Who are the people on this list you can talk to about landing a job after you’re done with graduate school?

Make a list of 10 to 20 people that might be able to help and reach out to them.

Networking may also involve following your favorite companies on Twitter or LinkedIn and engaging with their posts with well-thought-out, but personable, responses.

Doing this will get you on the radar of whoever is doing social media for the company and can open up the lines of communication with decision makers within the company.

Use Job Aggregator Websites to Start Your Online Search

Job aggregator websites like Glassdoor and Indeed allow you to search for jobs using keywords.

Usually, your search will bring up jobs you are looking for and you should be able to apply.

You are also able to search for jobs by industry, region, or even by the date it was posted so you are not applying to jobs that were posted six months ago and have been filled.

A major advantage of job aggregator websites is that you can set up special alerts for particular keywords that trigger an email to be sent to you anytime a job related to the keyword you used is posted.

And so for Glassdoor, for instance, you can set up alerts for multiple job keywords or even for specific companies.

Anytime a job is posted matching your search or a company posts a job, you will receive an email prompting you to apply.

Visit major websites and set up alerts to get notified of the types of jobs you are looking for.

Job aggregator websites that you will find handy in your search include:

Use Search Engines

Another place to look for a job is to use search engines.

This is definitely a more difficult approach to using job aggregator websites, but the truth is that not every company lists jobs on these websites. Thus, you can find some hidden gems using this process.

You can search for jobs within a particular company by typing “company name + jobs” or “company name + careers” in Google.

This will yield links to the career pages of particular companies where you can then apply directly.

Do Not Use a Generic Resume (or Cover Letter)

When you use job aggregator websites like the ones I mentioned above, you are usually prompted to upload your resume so that you can easily apply for jobs that are posted on the website with one click.

While this sounds simple and appears to make things easier, it is not the best approach to applying for a job.

It is important to tailor your resume to specific jobs.

Recruiters and human resource personnel see so many resumes in their inbox every single day.

It is important that when they come across your resume, it

  • stands out, and
  • communicates that you really do understand what the company is looking for in their new hire.

You will be able to do the second point by paying attention to key phrases that are used in the job description.

Does the job description call for someone who is great at communicating because you will be interfacing with clients 75% of the time? It is important to highlight on your resume (and in your cover letter) experiences in your history that make you great at communication.

Pay attention to job descriptions and tailor your resume to suit them. Yes, this will take some effort. But once you land your dream job, it will be worth it.

Impress on Interview Day

This should be a given.

However, it’s surprising how many people show up to interviews completely unprepared: from being improperly dressed, to not even knowing what the role they are interviewing for entails.

Don’t be that person.

Do your homework on the company.

Glassdoor allows you to read reviews on the company and has people posting some of the questions they encountered during the interview.

Start there.

Is there someone who went to your school who works at this company? LinkedIn will usually give you that information.

It will serve you well to reach out to alumni from your school who work at this company to find out what their experiences have been and what you can expect.

A quick browse of company social media accounts (if they have any) will give you a glimpse of the culture at the company.

Whatever the case is, don’t go into your interview unprepared. Study the company. Study the role. Dress the part and be ready to impress.

Closing Thoughts

Looking for a job after graduate school can be a long and tiresome journey.

If your first few tries at finding a job have not been successful, don’t give up. Keep going.

Use and tweak the processes I shared above where necessary.

You will eventually find what you are looking for.

Are you graduating grad school this summer? How has your job search gone so far? I would love to hear your thoughts in the comments.

The post How to Land Your First “Real” Job After Graduate School appeared first on The College Investor.

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Side-hustling, self-employment, and entrepreneurship offer the promise of financial flexibility, but four times per year hustlers feel some pain.

That’s right, for self-employed people, tax time comes four times per year, and you'll almost always owe money.

This guide explains what quarterly tax estimates are, how to figure out how much to pay, and how to save money for the estimates. It also gives a step-by-step guide to paying for the quarterly estimates.

With this guide, the only pain you'll feel is the pain associated with paying taxes.

What Are Quarterly Tax Estimates?

When you work for a traditional employer, your employer withholds Federal income tax, state income tax, and Social Security and Medicare taxes from each paycheck. Your employer also kicks in its half of Social Security and Medicare taxes.

When you're self-employed, nobody withholds taxes from you. However, those taxes still need to be paid.

According to the IRS, you must make estimated tax payments for the current tax year if you'll owe at least $1,000 at the end of the year, and you expect to owe at least 90% of the total tax due on this year's return or at least 100% of the tax on the prior year's return.

If you're newly self-employed, and you've always received a refund in the past, you may expect that you won't owe at least $1,000. Unfortunately, for most self-employed people, that's not true. Since self-employed people have to pay Social Security and Medicare taxes on all their profits, they'll likely owe money, even if they don't owe Federal income tax. This includes people that side hustle driving for Uber or Lyft, and more!

Basically, if nobody is withholding money from you, you should expect to cut a check to the IRS every quarter (or you could face penalties)!

In 2018, quarterly estimates are due on the following days:

  • April 15, 2018
  • June 15, 2018
  • September 15, 2018
  • January 15, 2018

Thankfully, paying quarterly tax estimates isn't actually a huge hassle. You don't have to file any paperwork. You simply pay what you think you'll owe (more on that below) online or using a paper payment voucher.

If you end up overpaying or underpaying throughout the year, you can shore up the difference before April 15th, 2019 (tax day), and you'll be fine. If you underpay, you may owe some penalty interest, but even this penalty isn't too bad (unless you underpay by a lot). Right now the penalty rate is 4% per year, and is only calculated by the amount of time you owed the government money. Next year, you can use Form 2210 to figure out how much you owe (or simply use a tax software program to calculate it for you).

How Much Should I Pay Each Quarter?

As a business owner, estimating your quarterly tax payment is entirely your responsibility. Unfortunately, figuring out how much to pay is a bit of a guessing game. However, there are a few tricks to making the estimates.

Here are the five most common methods for estimating quarterly payments. Find one you like, and stick with it.

Withhold a Ton from Your W-2 Job

If you're a side-hustler with a W-2 job, you might get away with withholding more from your W-2 job. You can either claim a 0 (no deductions) to increase your withholdings, or specifically ask HR to increase withholdings.

People earning less than $1,000 per month can probably get away with withholding more from the W-2 job and avoid quarterly taxes altogether.

If you're married and filing jointly, you can also have your spouse increase withholdings. Between the two of you, you can likely withhold enough.

Again, this is only a strategy for side-hustlers or people who aren't earning a ton of profit from their business. If you have profits above $1,000 per month, you're going to need to choose another method.

This was the strategy that I personally used for most of my years of side hustling in college.

Use Last Year's Taxes

Using last year's taxes to make quarterly estimates is not an accurate way to pay quarterly estimates. However, it is good enough, and takes almost no time.

To avoid paying a penalty, the minimum you need to pay, in most cases, is 100% of your total tax burden from last year. If you earned over $150,000, you need to withhold at least 110% of last years tax bill. To do this, simply look at your total tax burden from last year:

  • Line 12 on the 1040-EZ
  • Line 39 on the 1040-A
  • Line 63 on the 1040

Now, divide that number by four. Pay this amount each quarter. For example, if you owed $8,000 last year, you'll pay $2,000 per quarter.

If you're married, and you file jointly, subtract the amount your spouse had withheld (Federal income tax only), and pay the remainder.

Just remember, if this is the method you choose, you may still owe money in April 2019. If possible, save a good chunk of your profits, so you can use savings to pay taxes rather than getting behind.

Estimate Using Tax Software

The IRS recommends that self-employed people estimate quarterly taxes using the 1040-ES. This requires estimating your total annual profit, and a lot of calculating by hand. To make this easier, you could use a free tax software program (like TurboTax, H&R Block, TaxAct, TaxSlayer, or others) to estimate your total tax burden for the year.

Most people who do this will multiply their first quarter revenues by four and their first quarter expenses by four. Then, they will plug those numbers into the software. The software will show an overall Federal tax burden. Divide that number by four, and pay that as your quarterly estimate. You can use the same amount each quarter or update it as the year goes along.

I used this method for a few years, and I always paid close to the right amount. In 2018, this method may not work as well as it did in the past. All of the tax software systems I recommended are still on the 2017 releases. For most people, that means the software will overestimate their tax burden by as much as a few thousand dollars for the year.

Withhold a Percentage of Profits

The previous three methods allow you to make the same tax payment each quarter, but this method offers a bit more flexibility while still being relatively easy to implement.

First, using your previous year's tax return, calculate your average tax rate.

That means divide the amount you paid in taxes:

  • Line 12 on the 1040-EZ
  • Line 39 on the 1040-A
  • Line 63 on the 1040

By your adjusted gross income from last year:

  • Line 4 on the 1040-EZ
  • Line 21 on the 1040-A
  • Line 37 on the 1040

This number gives you your average tax burden the previous year. If your average tax burden was 20%, then you can withhold 20% of your quarterly profit. If you (and your spouse) expect to earn more money this year, you can simply increase your estimated tax burden. For example, you might pay 25% of your income instead of 20%.

Use Great Business Accounting Software

Trying to figure out how much money to pay toward quarterly estimates may feel like more art than science. To make it easier, you may want to consider using a bookkeeping software program that generates tax estimates for you. Unfortunately, most highly rated bookkeeping software programs don't bother estimating taxes.

In fact, in our review, we only found that QuickBooks Self-Employed and GoDaddy Bookkeeping were up to the task. Both of these software programs clock in between $3.99 to $12 per month (depending on the package you choose), so they aren't overly expensive.

If you pay for business accounting software, consider switching to one that estimates taxes for you. It's a big timesaver, and makes cutting the quarterly check that much easier.

How Do I Actually Pay My Quarterly Estimates?

Once you decide how much to pay, it's time to pay your quarterly estimates. Again, the due dates for quarterly estimates are:

  • April 15, 2018
  • June 15, 2018
  • September 15, 2018
  • January 15, 2018

To pay, you could mail in a check with a voucher. You'll actually have to look at page five of the 1040-ES to figure out where to mail your check. Every state is different.

However, the easiest way to pay is online. Simply navigate to: https://www.irs.gov/payments.

Then find the box entitled, "Pay Your Taxes Now."

You can choose between direct pay (where you connect directly to your bank account), debit, or credit.

Paying with Debit or Credit Card

When you pay with debit or credit, you have to choose a payment processor. The least expensive is Pay1040.com. When you use Pay1040.com, you'll pay $2.58 for a debit transaction or 1.87% for credit transactions.

If you opt for this method, navigate to "Form 1040-ES Estimated Tax" on the Pay1040.com home page. a

Then follow the steps which will require you to enter the amount you want to pay, your personal information (especially Social Security numbers, filing status, address, and more), and your payment information.

Checking out is similar to checking out from an online retailer, so it's fairly intuitive. Just be sure to save your receipt. You don't want to dig through a bunch of old credit card statements to figure out how much you paid when you file taxes next April.

Paying Using Direct Pay

If you opt for direct pay, you then have to select "Make a Payment." Then you'll be directed to a new screen where you must select a reason for the payment. The reason should be "Estimated Tax."

Then your form should look like this:

Then you'll need to verify your identity using information from previous tax returns. This should just take a few seconds to fill out. Then, you'll move onto the payment processing page.

Here, you'll enter your payment amount, your bank account information, and an email address where you can receive a receipt.

After that, you submit an electronic signature, and your payment goes through. From start to finish, the whole process takes three to four minutes.

How to Save Money to Pay Quarterly Estimates

If you run a profitable business (or side-hustle), you'll almost certainly have to pay taxes this year. If you have a low income, and qualify for an earned income tax credit, you might escape owing taxes, but that's the exception rather than the rule.

Self-employed people almost always owe taxes because they have to pay 15.3% of their profits toward Social Security and Medicare. On top of that, you'll have to pay whatever Federal income taxes you actually owe.

Personally, I've found that the easiest way to save money for taxes is to set my tax money in a separate online money market account. Money in this account pays for taxes and nothing else. Each time I get paid, I set a percentage of the income into the account.

Separating tax money from other money makes it easier to set aside.

If your business involves many transactions, setting aside a percentage of each transaction might not be realistic. Instead, each week when you pay bills for your business, "pay" a savings account with your tax bill. If you break your quarterly estimate into 13 even payments, you can save the same amount each week. If you can't afford the full amount one week, try to compensate the next week.

If saving money each week or each time you get paid isn't realistic, just do the best you can. Paying a little bit each quarter is better than paying nothing at all.

Another way is to pay yourself first to lower your tax bill. Take advantage of things like a Solo 401k to save for retirement, which will reduce your tax bill each quarter (and year). You can also open an HSA Account and save as well. We think the HSA account is one of the best to save for retirement (not medical expenses).

Should I Pay My Quarterly Estimates with a Credit Card?

When you pay your taxes with a credit card, you add 1.87% to your tax bill. Is that a waste of money, or is it a smart move? If you're not into credit card churning or travel hacking, just use direct pay. You don't want to wind up in credit card debt just to pay your taxes.

On the other hand, if you pay off your credit card in full each month, and you're into travel hacking, paying with a credit card makes sense. Here are three times paying with a credit card works out.

Credit card bonuses: If you're not a big spender, but you're working toward a credit card spending bonus, taxes are an easy way to get you over the hump. Just remember, you still have to pay the bill at the end of the month. Also, this only makes sense to do if you wouldn't get the bonus through regular spending.

For example, these credit cards have awesome bonus offers right now and you could make the spending limit in one month!

You're "hacking" the system: Another way to "use credit cards" to pay your taxes without actually using credit cards is to buy reloadable Visa gift cards. Reloadable Visa gift cards are actually debit cards, so they are only subject to the $2.58 fee.

Sometimes you can buy Visa gift cards at discount or with minimal fees. In a worst-case scenario, you can buy a $500 gift card for $5.95 through GiftCardMall.com. Between the $5.95 fee, and the $2.58 debit fee, you end up with a 1.7% total fee for each $500 in taxes. That's a little cheaper than a 1.87% credit card fee, and it gets you toward your bonus a little faster. As long as your card gives you at least 2% back (or helps you get a bonus), the extra fees make sense.

Significant spending bonuses: Every once in a while, you'll see Chase Freedom offer a 5% category bonus on PayPal. As it turns out, you can use digital wallets like PayPal to pay for taxes. It takes a bit of jumping through hoops, but you could spend $1,000 on PayPal, earn 5,000 points, and spend just 2% to process payments. In that case, you come out ahead. If you have cards with category bonuses, be sure to look for digital wallet bonuses to maximize your points. test

The post The Ultimate Self-Employment Guide to Filing Estimated Taxes appeared first on The College Investor.

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Freelance writing is the ultimate side hustle. It’s flexible, it pays well, and it’s enjoyable.

In fact, freelance blogging helped me go from earning $1,600 per month to earning more than $5,500 per month. This profession was my golden ticket to bigger and better opportunities.

The flexibility and sheer amount of opportunity that comes along with freelance writing makes it a fantastic side hustle for anyone who enjoys to write. It can be worked into any college student’s schedule and can be a great side income for everyone looking to accelerate student loan pay-off.

If you want to get your foot in the door and start earning some extra cash here are 14 ways to get paid to write.

Blogs That Will Pay for Your Tips and Stories

If you love sharing your tips and stories and are looking for some one-off ways to get paid for your words, writing for blogs can be a very lucrative endeavor.

The benefit of this side hustle is that you can get paid well but have no commitment to submit articles on a recurring basis. If you have a great idea just pitch it to one of these blogs to get paid!

The Penny Hoarder – The Penny Hoarder is a blog dedicated to unique ways to both make and save money. The Penny Hoarder pays a flat rate per post (must be pre-arranged with the editor) and also offers bonuses of up to $800 if your blog post reaches a certain number of views.

The Dollar Stretcher – The Dollar Stretcher is a long standing frugal living website with a monthly print newsletter. You can earn $0.10 per word for stories or tips published in the monthly print version.

ACHS – American College of Healthcare Science is look for posts that are 600-1,000 words long related to your favorite topic on holistic health and wellness. They pay $50 per post.

World Start – World Start is looking for general computer, email, and software tips for their newsletter. They pay anywhere from $15-$35 per post depending on length.

Income Diary – Income Diary is a blog about making money online. If you’re a marketer or successful entrepreneur this could be a good fit for you. They pay anywhere from $50-$200 per post payable via PayPal.

Back to College – Back to College is looking for articles in regards to older students heading back to college. They pay anywhere from $32.50-$65+

Great Escape Publishing – This outlet is looking for articles about travel. They pay anywhere from $50-$200, depending on the type of assignment you take on.

iWorkWell – iWork Well is a website for businesses covering a broad range of topics. This site will pay you up to $200 per post.

Breaking Into Magazine Writing

One high-paying writing niche that’s a little tougher to break into is magazine writing.

Writing for a magazine can net you anywhere for $0.10-$2 per word. That can add up to a lot of money. If you’re successful in this niche you can make a lot more versus freelance blogging. The only downside is that your work may be a little less consistent.

If you want to break into magazine writing one of the best places to begin your search is the Writer's Market. This book contains hundreds of different publications that will pay you for your words. Not only that, but the Writer's Market has the name of editors to pitch as well submission guidelines and pay.

This is one book I’ve had on my shelf for a couple of years now and is a wealth of information.

Getting Jobs Off of Popular Job Boards

When I first embarked upon my freelance writing journey job boards were my go-to. I scoured my favorite job boards daily applying to as many writing jobs as I could.

You can find jobs like blog post writing, resume writing, and more on job boards.

Here are a couple of my favorites:

Problogger Job Board – The Problogger Job Board has many opportunities in many different niches on a weekly basis. Scour this job board daily and apply to anything that seems like a good fit to you.

Freelance Writing Gigs – Freelance Writing Gigs is a blog that scours the web and curates all the best new job offers on a daily basis.

You can find a list of other freelance writing job board sites here.

*Tip* When applying to job boards it’s extremely important that you’re only applying for jobs that you have specific knowledge in. Job Boards can be extremely competitive so the more you can position yourself as the “expert” the higher your chances of snagging that job will be.

Finding Unique Gigs on Craigslist

Another one of my go-to places when I was a beginner freelance writer was Craigslist.

Craigslist is a place you can find unique opportunities. There’s also the possibility of getting scammed on Craigslist so it’s important to do your due diligence and sign a contract before performing any work.

To find writing gigs on Craigslist simply search big cities (like New York or L.A. for example) and then go to the “Jobs” section and click “writing/editing.”

From here you’ll be able to look through the listings and find the work from home opportunities.

My favorite job from Craigslist was writing business descriptions for directories. I would write 100 word descriptions of various business (everything from AstroTurf companies to high-end hotels) which would be submitted to directories. I only received $2 per description, but since they were fairly easy to write the money added up quickly.

I usually netted at least $300 a week doing this in my spare time.

Cold Pitch to Find Your Own Clients

After going the job board and Craigslist route for months I finally transitioned to finding my own clients. I found this method to be the absolute best for creating a steady stream of clients who I actually enjoyed working with.

While finding your own clients is probably ideal, there are a few things you’ll need to do to make this work:

Choose a Writing Niche – Pinpoint exactly what you want to write about.

To get jobs you need to establish that you have expertise in a particular subject. Choose a topic that you enjoy writing about but also are very knowledgeable in.

Build a Freelancer’s Websites or Blog – The next step is to make your own little “home” on the internet. If you already have a blog in the niche you want to write in you can simply add a “hire-me” page to your blog.

If you don’t have a blog then create a freelancers website with the domain as your first and last name. You can then add an about me page, a services page, and also be sure to list contact information.

Collect a Few Writing Samples – If you have published work in the niche you want to break into then you’re in good shape! Simply link to those pieces from your writer’s website.

If you have no previous work then you’re going to need to find a blog or business you can submit a couple of articles to for free.

Start Pitching – The next step is to narrow down business and blogs that use freelance writers and pitch them. Be sure to make your pitches customized for each particular business or blog.

Rinse and repeat!

Cold pitching companies can sound a little overwhelming at first but once you get the process down it becomes very simple. If you’re serious about making a living freelance writing this is one of the absolute best ways to get a steady stream of paying clients, I promise!

If you need help building up your freelance writing business you’re in luck. My super-successful freelance writing friend, Cat Alford, has created a video course that will walk you step-by-step through building your own freelance writing business.

This course is $497 which is a bargain considering the value you’re getting! Seriously, if you hustled hard enough this course could pay for itself in a month.

Get Paid to Write

If you’re interested in earning some extra income by writing I hope that one of the ideas above has inspired you to take action!

Freelance writing can be a fantastic way to earn money and can even lead to full-time income if you can consistently produce quality work.

Do you have any questions about earning money through freelance writing?

The post The Ultimate Side Hustle: 14 Ways To Get Paid To Write appeared first on The College Investor.

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