Thanks,
Vana

I have a question for you. I’m just graduated and I’m going to be starting my first job soon, yay! My question has to do with savings. I know there’s a multitude of things to save for, down payment on a house, vacations, appliances, down payment for a car, emergency fund, and the list goes on! I have one savings account, so I’ll be looking at my total savings. How would you recommend keeping track of the different categories?

Thanks!
–ed

Even though she knows that buying her own property is something she’d like to do (and she actually recently lent her brother money for his down payment), and not an unwise decision to make, she’s terrified about using most of her savings for a down-payment, about not having a very large financial security net. I’ve tried to explain to her that debt isn’t always evil, and she says that she realizes that, but is still terrified of owing money to anyone.
Is there any way I can help her get over her fear?

Do you still do some canning at home? If so, can you do a photo tutorial post on how you go about it or describe your canning process in more detail?

Also, my husband and I are considering getting a vacuum sealer so we can freeze more of the bulk groceries that we buy. In your experience, is it worthwhile to buy a vacuum sealer and the special bags for them, or is it better to stick with the ziploc bags we’ve been using? I’m wondering what other people have experienced with the vacuum sealed bags and whether they actually prevent freezer burn more than a ziploc freezer bag.

One other point about gift taxes, is that the annual exclusion is per person, per year. If the students’ parents are married, they may elect to share the gift, which doubles the amount that can pass without reducing the unified credit. The same idea applies to a married donee: Married donor + married donee = 4 annual exclusions, or $48,000 that can pass without implicating the unified credit / gift tax, in 2009.

Now, if I could only find someone to give me and my old man $48k …

It is worth noting, however, that for a given student in a given year, only one of: the Lifetime Learning Credit, the Hope Credit, or the T&F deduction can be used.

Also, for families with multiple students the Lifetime Learning Credit can only be claimed for one student per tax return per year.

So you’re correct in thinking that if a family only has one student, and he/she is going to school very part-time, it’s likely that a 529 plan would go unused.

However, for families with full-time students or multiple part-time students, expenses tend to quickly surpass the limitations for calculating either credit or the T&F deduction.

Also, at the point when your child doesn’t need the money, the tax disadvantage of pulling out the cash isn’t really important, I don’t think – it’s like found money, extra-budget, for yourself.

A full-time student, especially one attending an expensive school, would rack up a lot of expenses each year and receive a lot of benefit from a 529. But someone taking one class at a time from a community college would be unlikely to max out the Lifetime Learning Credit ($2,000) each year, let alone the additional $4,000 allowed for deductible educational expenses.

Always, always tip appropriately and be glad to do it. You are improving the standard of living for a hard-working person who has provided service to you. My daughter once had a customer tip her the cost of her wedding dress. She will never forget that customer and the joy he had in providing that for her.

I consider it a blessing to be able to tip. I am happy to share what I have to thank someone for serving me.