On this episode of How To Money, Matt and Joel get into tons of personal finance topics including insurance deductibles, health savings accounts, falling rents in big cities, and a new rule from the Consumer Financial Protection Bureau that allows creditors to contact debtors through their social media accounts. Since one out of four Americans have a bill in collections at any given time, this means a lot of us will be getting solicitations in our direct messages. It’s important to verify that the debt is actually yours: It’s not uncommon for collections agencies to mix up names or amounts, and social media creates an easy target for hackers as well. Make sure to ask for details about the debt and what company the original amount was owed to, so you don’t end up holding someone else's bag.
With the healthcare marketplace open for enrollment, they want to make sure we’re considering health savings accounts, or HSAs, in our money management decisions. As you may have guessed from the name, these accounts are meant to have a healthy chunk of change in them specifically to pay for medical expenses – but because the money in the accounts never gets taxed, they’re also a great vehicle for saving for retirement. Only 6% of Americans are taking advantage of the investment opportunities with HSAs – make sure you’re one of them. And speaking of savings, they talk about several ways to save for our kids’ futures, such as making them authorized users on our credit cards so they can start building up credit now. They also discuss the advantages of state 529 plans. Currently, Utah, Illinois, and Michigan have the top-rated state plans in the country based on fees and investment choices, but Matt points out that it’s important to check on tax benefits in your home state, because they might make up for any shortcomings in the plan itself.
This is important information for parents, because according to Fidelity Investments, baby boomers actually have the most student loan debt in the country. Many signed up for Parent Plus loans that allowed them to shoulder a lot of their kids’ student loan debt – but now, they’re nearing retirement age, hoping to wind down their working life, with an albatross of overwhelming debt hanging over them. It’s important to be creative about paying for college: Look into cheaper schools, consider going to a community college first to get prerequisite courses out of the way, and apply for every scholarship or grant opportunity you might be eligible for, before turning to a loan. “They’re just bad news,” Joel says succinctly. Hear all this great information and more on this episode of How To Money.
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