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So right now I have a pretty well paying job, but it's in an industry that I just don't like anymore, and I decided to go back to college. I'm doing community college at night for this next year and then moving to another city in my state to go to a University spring 2016 semester. I figured while I still have this well paying job, I should just squirrel away as much money as I can to make being super poor in college a little better for the first couple years. Right now I live with roommates for cheap, and I figure after rent/utilities, car payment, cell phone, insurance, I can put away about 1800-2200 per month and still have a bit of spending money. My question is, where should I be putting that money? Is there a special account that would accrue interest, or help on taxes or for when I fill out my FAFSA? Is 12 months not really that much time to matter and I should just keep it in my regular savings account? Apologizes if this doesn't deserve it's own thread.
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Jan 7, 2015 19:44
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| # ? Apr 25, 2024 05:56 |
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Online savings account and get 1% interest I would say.
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Jan 7, 2015 20:59
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You could open a 529 plan for yourself and in some states get a state tax deduction up to a certain amount. For example in Illinois you would be able to take up to a $10,000 state income tax deduction which would save you $500 in state income tax. That is really the only "special account" option that would exist, and whether it's worth it depends on the state you live in as far as how much, if any, income tax you could save and the quality of the state's 529 plan options. Edit: For your FAFSA it looks like 529 assets in your own name reduce your need-based aid by 20% of the assets value. This appears to be the same way they treat non-529 assets. If your financial aid could be significantly affected, it looks like you might be best served stashing money into a retirement account quote:For financially independent students who hold their own 529 plans, the assessment is a far larger 20 percent, but that's not typical. Where do you live? Droo fucked around with this message at 23:42 on Jan 7, 2015 |
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Jan 7, 2015 23:34
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12 months is short enough that you don't need to worry about inflation, but you also don't have enough time to make a 529 or other investment a safe course. Also people with schizophrenia generally don't have dissociative personality disorder.
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Jan 7, 2015 23:41
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Droo posted:Where do you live? I'm in Idaho.
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Jan 8, 2015 00:31
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So it looks like you could get a $4000 deduction at what appears to be a 7.4% marginal rate for you, making the maximum you could save in tax $296 by contributing. Idaho's plan also looks kind of lovely fee-wise (0.75% a year). If I were you I wouldn't bother with it. The tax savings is too low (because the maximum deductible contribution is too low at $4000) and the plan isn't very good. If I were you I would spend the time to get intimately familiar with the FAFSA form and figure out how the savings affects any financial aid you might receive.
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Jan 8, 2015 00:44
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| # ? Apr 25, 2024 05:56 |
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Thanks for the info dudes, I think I'll just be sticking it in my savings account as it looks like as an independent student, it'll count against FAFSA just the same. I don't really want to mess with setting up a retirement account and then pulling the money out a year later, seems like I might run into some issues.
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Jan 9, 2015 18:10
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