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1 2009 Education Week Provident Living: Saving for your Children’s Education and Missions August 21, 2009 Bryan Sudweeks From the BYU MSM web site Personal Finance: Another Perspective at http://personalfinance.byu.net

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  • 1.
    • 2009 Education Week
  • Provident Living:
  • Saving for your Childrens
  • Education and Missions
  • August 21, 2009
  • Bryan Sudweeks
  • From the BYU MSM web site
  • Personal Finance: Another Perspective
  • athttp://personalfinance.byu.net

2. Abstract

  • The choice to help financially with your childrens education and missions is an individual one, but an important one.For those who wish to help, many are unsure of ways to reduce the cost of education.This presentation will help with ideas and information about different ways to help parents save for their childrens education and missions.

3. Objectives

  • A. Understand the key principles of personal finance
  • B.Understand how education relates to financial goals
  • C.Understand the principles of financing education and missions
  • D.Understand the priority of money for financing school and missions
  • E.Understand how to save for education
  • F.Understand how to save for missions
  • G.Understand how to apply for aid

4. A. Key Principles of Personal Finance

  • Elder Richard G. Scott commented:
    • Joseph Smiths inspired statement, I teach them correct principles, and they govern themselves, still applies.The Lord uses that pattern with us. . . Your consistent adherence to principle overcomes the alluring yet false life-styles that surround you. Your faithful compliance to correct principles will generate criticism and ridicule from others, yet the results are so eternally worthwhile that they warrant your every sacrifice (Richard G. Scott, The Power of Correct Principles,Ensign,May 1993, 32).
  • What are those correct principles?

5. Principle 1: Ownership

  • 1. Ownership: Everything we have is the Lords
    • The Psalmist wrote:
      • The earth is the Lords, and the fullness thereof; the world, and they that dwell therein (Psalms 24:1)
    • The Lord is the creator of the earth (Mosiah 2:21), the supplier of our breath (2 Nephi 9:26), the giver of our knowledge (Moses 7:32) the provider of our life (Mosiah 2:22), and the giver of all we have and are (Mosiah 2:21).
      • Nothing we have is our ownits all Gods

6. Principle 2: Stewardship

  • 2. Stewardship: We are stewards over all that the Lord has, is, or will share with us
    • The Lord through the Prophet Joseph Smith stated:
      • It is expedient that I, the Lord, should make every man accountable, as a steward over earthly blessings, which I have made and prepared for my creatures. (D&C 104:13)
    • The Lord through the Brigham Young said:
      • Thou shalt be diligent in preserving what thou hast, that thou mayest be a wise steward; for it is the free gift of the Lord thy God, and thou art his steward. (D&C 136:27)

7. Principle 3:Agency

  • 3. Agency: The gift of choice is mans most precious inheritance
    • President Marion G. Romney said:
      • Agency means the freedom and power to choose and act. Next to life itself, it is mans most precious inheritance. ( Ensign,May 1976, p. 120.)
    • President David O. McKay:
      • Next to the bestowal of life itself, the right to direct that life is Gods greatest gift to man. Freedom of choice is more to be treasured than any possession earth can give.(Conference Report, Apr. 1950, p. 32; italics added).

8. Principle 4: Accountability

  • 4. Accountability: We are accountable for everychoice we make
    • The Lord through the prophet Joseph stated:
      • Verily I say, men should be anxiously engaged in a good cause, and do many things of their own free will, and bring to pass much righteousness.For the power is in them, wherein they are agents unto themselves.(D&C 58: 27-28)
      • For it is required of the Lord, at the hand of every steward, to render an account of his stewardship, both in time and in eternity. (D&C 72:3)

9.

  • On this subject, Elder Neal A. Maxwell stated:
    • The submission of ones will is really the only uniquely personal thing we have to place on Gods altar.The many other things we give, brothers and sisters, are actually the things He has already given or loaned to us.However, when you and I finally submit ourselves, by letting our individual wills be swallowed up in Gods will, then we are really giving something to Him!It is the only possession which is truly ours to give! (italics added,Swallowed Up in the Will of the Father,Ensign,Nov. 1995, 22.)

What is Really Ours?(continued) 10. B.Why Get an Education

  • Level of Education Annual Earnings Lifetime Earnings
  • Not a HS graduate $21,314$852,577
  • High school graduate30,560 1,222,396
  • Two-year vocational 36,833 1,473,335
  • Associate 38,118 1,524,703
  • Bachelors 49,334 1,973,760
  • Masters 57,676 2,307,025
  • Doctorate/Professional$71,573 $2,862,914
    • Source: Give Yourself the Gift of a Degree: Vocational Education Worth Almost $1.5 Million Over Working Lifetime," an EPF News Release from the Employment Policy Foundation : December 19, 2001, Washington, D.C..

11. Why an Education(continued) ?

  • Is education a good investment?
    • President Gordon B. Hinckley said:
      • Now is the season to train your minds and your hands for the work you wish to do. Education can prove to be the wisest and most profitable investment you will ever make. ( Tambuli,Sept. 1989, 49.)
    • He further counseled:
      • Get all the schooling you can. Education is the key that unlocks the door of opportunity. God has placed upon this people a mandate to acquire knowledge even by study and also by faith (D&C 88:118).(Some Thoughts on Temples, Retention of Converts, and Missionary Service,Ensign,Nov. 1997, 49.)

12.

  • Is Education Cheap?
  • Cost Facts:
    • Average U.S. medical school debt in 2006 was $130,571 which rose 8% in one year
    • Average top 50 MBA programs: $27,714 (the price varies between universities)
    • Average cost in tuition, fees and lost salary: $126,700
    • Average annual budget for students of Western United States programs: $24,781
    • Average annual budget for students of BYU in 2008-2009: $21,840(LDS),31,080(non-LDS)
  • Education isnt cheap, but the cost of ignorance is higher!

Why an Education(continued) ? 13. Our Leaders Counsel

  • President Hinckley said:
  • You young people, the little decisions that you make can so affect your lives. Shall I go to school or not? Shall I continue on with my education? That is a big decision for some of you. Our doctrine suggests, although there may be some circumstances that would affect that decision, thatthe more education you receive the greater will be your opportunity to serve . That is why this Church encourages its young people to get the schooling that will qualify them to take their places in the society in which they will become a part. Make the right decisions. Take a long look. (italics added, Pocatello, Idaho, Regional Conference, Idaho State University, 4 June 1995).

14. Why an Education(continued) ?

  • President Hinckley further commented:
  • It is so important that you young men and you young women get all of the education that you can. The Lord has said very plainly that His people are to gain knowledge of countries and kingdoms and of things of the world through the process of education, even by study and by faith. Education is the key which will unlock the door of opportunity for you. It is worth sacrificing for. It is worth working at, and if you educate your mind and your hands, you will be able to make a great contribution to the society of which you are a part, and you will be able to reflect honorably on the Church of which you are a member. My dear young brothers and sisters, take advantage of every educational opportunity that you can possibly afford, and you fathers and mothers, encourage your sons and daughters to gain an education which will bless their lives. (Gordon B. Hinckley, Inspirational Thoughts,Liahona,June 1999, 3)

15. B.Understand the Principles of Financing Education and Missions

  • Principles of financing education and missions:
    • 1.Teach your children to be financially responsible
    • 2.Help your children to contribute to their own and other family members missions and education
    • 3.Develop an education and mission plan that is consistent with your personal goals and budget and then follow it
    • 4.Start early in saving for your childrens education and missions
    • 5.Invest wisely and tax-efficiently

16. Principles(continued)

    • 1.Teach your children to be financially responsible
      • Teach them to work and to earn, consistent with their age and abilities
      • Teach them to share the things they havenone of it belongs to us
      • Teach them to be accountable for their spending
      • Teach them that they earn money based on their workingnot their whining

17. Principles(continued)

    • 2.Help your children to save for their own (an other family members) education and missions consistent with their abilities to earn
      • Encourage your children to set savings goals whereby they can save for their own missions and education
      • Set up investment or savings accounts for your children, and contribute their savings to these accounts
      • Give your children opportunities to earn money that is earmarked, after paying the Lord, specifically for their missions and education

18. Principles(continued)

    • 3.Develop education and mission plans for your children that are consistent with your personal goals and budget, and then follow them
      • Develop an education and mission plan to help save for your childrens education
      • Set aside funds each month from your family budget to fund these accounts
      • Encourage your children to participate.Plans which require work and contributions by children have a better chance of teaching the principles discussed
      • Share this plan with your children

19. Principles(continued)

    • 4.Start NOW and early to save for your childrens education and missions
      • Make saving a key part of your family budget
      • The best time to begin saving for your childrens education and missions is now
      • Begin now and begin early
      • Have your children begin saving for their missions as well
      • Encourage them to contribute to their siblings or other family members missions

20. Principles(continued)

    • 5.Invest wisely and tax-efficiently
      • Use wisdom in your investments
      • Follow the priority of money discussed earlier
      • Think through carefully and write a good Investment Plan for these assets.Then follow that Plan

21. C. Understand the Priority of Money for Education and Missions

  • Is there a priority of money for financing education and missions?
    • Priority of Money for Educations and Missions
      • 1. Free Money
      • 2. Family Money
      • 3. Employment
      • 4. Loans
      • 5. Credit Cards (Last resort)
      • 6. Retirement Accounts (No)

22. 1. Free Money

  • Get free money first--scholarships and grants
    • This is free money which is not paid back
      • If you have to pay money to get a scholarship or grant, it is generally a scam!
    • Grants are need-based--complete the FAFSA
      • Pell Grant: approximately $976-$5,350/year
      • ACG Grant: approximately $750-$1,300/year
      • SMART Grant approximately $4,000/year
      • SEOG Grants not available at BYU
    • Scholarships from schools and private sources
      • You may need a supplemental application
      • Find out which ones you are eligible for on a scholarship search engine and apply for each
    • Armed Forces Scholarships: See recruiting offices

23. 2. Family Money

  • Use personal savings and help from parents
    • If children pay for their education and missions, they will likely use their resources more wisely, as its their money they are spending.
      • Start the process of financial self-reliance as soon as you can.
      • Do as much as you can to help your children, but dont do it all
    • If parents and grandparents can help, that is wonderful.
      • Express appreciation to anyone who helps!

24. 3. Employment

  • Have children work when possible to offset educational expenses
    • Most colleges offer federal College Work Study. Some universities, including BYU, provide thousands of student employment opportunities from their own funds.
    • Undergraduate students enrolled in 12+ semester hours should work no more than 20 work hours per week. This may cover rent and food expenses.
    • BYU students who work full-time at $10/hr while living free at home for 4 months will earn tuition for two semesters.
    • High school students should work no more than 0-10 hours per week while in school. Working more hours reduces GPA and likelihood of attending college. It also increases likelihood of promiscuity, drug abuse and alienation from family and faith.
    • Working summers to save for mission and college is desirable.

25. 4. Loans

  • Use (all) loans wisely
    • There are five main items to be aware of:
      • a. Who pays the interest during school?
        • The borrower or the government?
      • b. When must you start paying back the loan?
        • Immediately or after graduation?
      • c. Who takes out the loan?
        • You or your parents?
      • d. What is the interest rate cap?
        • What is the highest rate you may pay?
      • e.What are the costs?

26. Loans(continued)

  • Subsidized Loans
    • Subsidized Federal Loans
      • Subsidized Stafford Loan
        • a. Government pays interest while student is enrolled in school at least half-time and for a 6-month grace period thereafter
        • b. Repayment begins 6 months after student drops below half-time enrollment or graduates
        • The 6-month grace period is preserved and starts over at zero if the student returns to half-time enrollment before the 6 months expire.Therefore the student controls when repayment begins

27. Loans(continued)

      • Subsidized Stafford Loans(continued)
        • c. Loan is in the students name
        • d. For 09-10, the interest rate is fixed at 5.6%. No interest accrues (grows) while enrolled in school at least half-time or during the grace period. Thereafter, simple interest accrues at 5.6% APR
        • e. Default and origination fees of 1.5% are charged by preferred lenders; fees of up to 3% charged by others
        • f. Subsidized Stafford Loan amounts range from $3,000 to $5,500 for undergraduates and $8,500 for graduate students.

28. Loans (continued)

  • Subsidized Loans
    • Subsidized University Loans:
      • Woolley Law Loan (BYU law school)
        • For full-time law students
          • a.No interest is paid while in school
          • b.Payments begin 9 months after graduation or discontinuance of full-time status
          • c.Loans are in the students name
          • d.Cosigner is required

29. Loans (continued)

      • Marriott School Loan (BYU Marriott School of Management)
        • For full-time MSM graduate students
          • a.No interest is paid while in school
          • b.Payments begin 6 months after graduation or discontinuance
          • c. Loans are in the students name
          • d. Cosigner is required

30. Loans (continued)

  • Subsidized Loans
    • Subsidized University Loans:
      • BYU Short-Term Loans
        • For part- and full-time students admitted to a degree-seeking program
          • a. Must be repaid within the semester loan is received
          • b. Loans are in the students name
          • c. No interest, but a $20 fee is applied

31. Loans (continued)

  • Unsubsidized Loans
    • Unsubsidized Federal Loans
      • Unsubsidized Stafford Loans
        • a. Student is responsible for interest that accrues during school
        • b. Repayment begins after student stays below half-time for a continuous 6 months
        • c.Loan is in students name
        • d.Fixed interest rate 6.8%
        • e. Default and origination fees of 1.5% by preferred lenders; other can charge up to 3%
        • f. Unsubsidized Stafford Loan amounts vary up to $2,000 dependent, $6,000/independent for undergraduates and up to $12,000 for graduate students

32. Loans (continued)

  • Unsubsidized Loans
    • Unsubsidized Federal Loans
      • PLUS Loan: Available for parents of undergraduate, dependent students to help with school-related expenses.
        • a. Parent is the borrower
        • b. FAFSA does not need to be submitted.
        • c. Parent can borrow up to cost of education less financial aid the student receives
        • d.Parent is responsible for interest accruing while the student is in school
        • e.Interest rates is 8.5% fixed APR charged from first disbursement
        • b. Repayment begins 60 days aftersecond disbursement

33. Loans (continued)

  • Unsubsidized Loans
    • Private Loans also called Alternative Loans
      • Caution -- these unsubsidized loans aremuch more expensivethan federal unsubsidized loans
        • a. 14.5% variable interest rate means loan amount can double in five years (Rule of 72)
        • b.Interest starts immediately and accrues
        • c.Students in the borrower
        • d.Interest rates are higher than Federal loans and t here is no cap on how high the variable interest rate may grow on private loans
        • e.They may have higher up-front fees and may require a cosigner.Read the fine print VERY CAREFULLY

34. Loan Comparison

    • Federal Stafford
    • Subsidized 6.0% fixed
    • Unsubsidized 6.8% fixed
      • Like a Credit Card
    • Principle:
      • Federal Stafford, PLUS, Grad PLUS = Less Costly
    • Private Alternative
    • 14.5% variable
    • Doublein 5 years
    • Unsubsidizedonly
      • Like a Credit Card
    • Principle:
      • Private = More Costly
      • APR limit = 25% toInfinity

35. Loans (continued)

    • General rule: federal loans are generally less expensive than private, non-federal loans and a better choice if borrowing is necessary
      • Federal loans enjoy some tax-payer subsidy
      • Beware of aggressive marketing campaigns of private-alternative loans
        • These are very expensive and often catch the unprepared or unaware

36. Federal Grants and Loans

  • Federal Financial Aid Options
    • Federal grant and loan recipients must:
      • Be a citizen, permanent resident, or eligible non-citizen with a valid social security number
      • Have a high school diploma, (GED), or have passed an approved "ability to benefit" test.
      • Be admitted as a regular student in an eligible degree or certificate-seeking program.
      • Register or have registered forSelective Servicefor males.
      • Complete the Free Application for Federal Student Aid (FAFSA)

37. Federal Loans and Grants (continued)

  • Additional federal aid requirements:
    • Be making satisfactory academic progress (SAP),
    • Not be in default on a federal student loan or grant
    • Additional requirements for Pell and Stafford:
      • Pell Grant Eligibility
        • Not already have a baccalaureate degree
      • Stafford Loan Eligibility
        • Undergraduates and graduates; also post-baccalaureate students enrolled in courses required for admission to a graduate program or enrolled in a program leading to a certificate, may be awarded for up to one year

38. Federal Loans and Grants (continued)

  • Individual Development Accounts
    • Free government money to encourage saving.
      • Match $3 (up to $4,500) for each $1 you save
        • You save $1,500
        • They give $4,500
        • Total $6,000
      • Must use foreducation , or home purchase, or to start a business
      • Must attend basic money management class (this course qualifies), be 18 or older, have income to save and meet need criteria
      • State sponsored
      • Utah:www.uidan.org , or (877) 787-0727

39. 5. Credit Cards

  • Credit Cards and Payday Loans
    • Among the most expensive way to borrow
      • They require you to pay it back immediately
      • There is no help in the payment of interest
      • The interest rates are extremely high and you are in school
    • These are theleastadvisable way to finance schooling and are usually the result of poor planning!!!

40. 6. Retirement Accounts

  • Taking money from retirement accounts is NOT NOT NOT NOT NOT recommended
    • (Do you get the hint?)
      • Your first priority is to save for your retirement, and then, if resources are available, to help your children with their education
        • It is not wise to jeopardize your retirement for your childrens education.They can get grants and loans
      • Try to find other alternatives.This is not a good one to even think about

41. D. Understand How to Save forYour Childrens Education

  • College Savings Plans
    • Five major ways to save for college:
      • With Tax benefits
      • 1. Series EE and Series I Government bonds
      • 2. Education Savings Account (Education IRA)
      • 3. 529 Prepaid Tuition Plan
      • 4. 529 Savings Plan
      • No tax-benefits
      • 5.Tax-efficient Investing
      • 6.Custodial Accounts (UGMA/UTMA)

42. 1. Series EE and Series I Bonds

  • Advantages:
    • Earnings are tax-free if used for paying tuition and fees (I bond rates are 0.25% and EE bonds are 0.70% until October 2009)
    • Earnings are not taxed until bonds are cashed
    • Can be purchased in small denominations
  • Disadvantages:
    • 3-month penalty on early withdrawal before 5 years, with minimum holding period of 1 year
    • $30,000 per year maximum in 2009
    • Can only be used for tuition and fees, not other expenses for tax-free status

43. EE/I Savings Bond Phase-out Limits

  • If your income is above specified limits in the year bonds are cashed, you cannot exclude the interest income from your income taxes.The limits are :Married
    • Year Filing SingleFiling Jointly
    • 2007 $65,600-80,600 $98,400-128,400
    • 2008 $67,100-82,100 $100,650-130,650
    • 2009 $69,950-84,950 $104,900-134,900
  • Your modified Adjusted Gross Income is your adjusted gross income adding back certainitems such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions anddeductions for higher-education costs.

44. 2. Coverdell Education Savings Account(ESA)

  • Advantages:
    • Distributions are tax-free (even beyond 2011).
    • You choose your investments.
    • Can be used for eligible elementary, secondary and post-secondary education expenses.
  • Disadvantages
    • Contribution limits of $2,000 per year in 2009, which may phase out as your income increases beyond specific limits ($95-110k single, $190-220k married filing jointly in 2009).
    • Funds must be used by age 30 (but can be transferred to other students).Earnings not used for educational expenses are taxed with a 10% penalty

45. Coverdell Deductibility Limits

  • Education IRAMAGI Phase Out Range ( in 000s)
  • Year AmountSingle RangeMarried FJ Range
    • 2005 $2,000 $95-$110$190-$220
    • 2006 $2,000 $95-$110$190-$220
    • 2007 $2,000 $95-$110$190-$220
    • 2008 $2,000 $95-$110$190-$220
    • 2009 $2,000 $95-$110$190-$220
  • Your Modified Adjusted Gross Income is your adjusted gross income and adding back certainitems such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions anddeductions for higher-education costs.Earnings beyond these limits ($95k single and $190k jointly) result in a phase out of allowable interest deductions, which totally phase out at $110k and $220k).

46. 3. 529 Prepaid Tuition Plan

  • Advantages:
    • You know tuition will be covered, regardless of raises in costs of tuition
    • May be useful if you think your children will not be eligible for financial aid.Can save up to a maximum of $346,500 per child in 2009
  • Disadvantages:
    • May not be offered in the state you/your child wants to attend.
    • Does not allow you to choose your investments.
    • Your children are young, so you could be more aggressive with your money, resulting in higher returns.
    • Assets reduce financial aid dollar for dollar.

47. 4. 529 Savings Plan

  • Advantages:
    • Control of the funds resides with the contributor, who chooses the assets within options provided.
    • Distribution and contribution limits are higher Not considered student assets, increasing aid.
    • States may offer tax deductions for contributions to your local 529 funds (check by state).
    • Distributions are tax-free if used for qualified educational expenses ($346,500 maximum)
  • Disadvantages:
    • May not cover all college expenses.
    • If not used for educational expenses, earnings subject to tax and 10% penalty

48. College Savings Plans Comparison Chart Coverdell and 529 information From Robert Brokamp, the Motley Fool.com, May 1, 2002 49. College Savings Comparison (continued) 50. College Savings Comparison(continued) 51. 5. Tax-efficient Investing

  • Four ways to invest tax-efficiently:
    • 1.Know your tax rates .Calculate the after-tax return on each of your investments
    • 2.Invest long-term .Replace interest/short-term distributions with long-term capital gains/LTCG distributions
    • 3.Invest wisely .Replace interest/short-term distributions with qualified stock dividends/stock distributions (consistent with your risk tolerance)
    • 4.Receive tax-exempt income .Purchase muni/Treasury securities when rates are more attractive than other securities

52. Tax-efficient Investing(continued)

  • Advantages:
    • Can be invested in all types of financial assets, stocks, bonds, mutual funds, etc.
    • Can be used for any educational, mission, or other expense
    • Parent has control of the assets and can use them for any purposes
    • Investments can be made which minimize taxes
  • Disadvantages:
    • No tax advantages

53. 6. Custodial Accounts: UGMA/UTMA

  • Advantages:
    • Can be invested in all types of financial assets, stocks, bonds, mutual funds, etc.UTMA has fewer restrictions and may include real estate
    • Can be used for any educational or other expenses, including missions.
  • Disadvantages:
    • No tax advantages. Currently taxed at parents rate until child is 18 years old.
    • Is considered the childs money as soon as the child is of ageit cannot be taken back by the issuer.
    • I prefer a tax-efficiently invested account

54. E.Understand how to Save for your Childrens Missions

  • There are fewer ways to save for childrens missions
    • 1. Custodial accounts: UGMA/UTMA (Not Recommended)
    • 2.Tax-efficiently Invested Assets (with accounts in each childs names to remind you of their purpose)

55. 1. Custodial Accounts: UGMA/UTMA

  • Advantages:
    • Can be invested in all types of financial assets, stocks, bonds, mutual funds, etc.UTMA has fewer restrictions and may include real estate
    • Can be used for any educational, mission, or other expense
  • Disadvantages:
    • No tax advantages. Currently taxed at parents rate until child is 18 years old.
    • Is considered the childs money as soon as the child is of age (age 21 in Utah)it cannot be taken back by the issuer.
    • I prefer a tax-efficiently invested account

56. 2. Tax-efficient Investing

  • Four ways to invest tax-efficiently:
    • 1.Know your tax rates .Calculate the after-tax return on each of your investments
    • 2.Invest long-term .Replace interest/short-term distributions with long-term capital gains/LTCG distributions
    • 3.Receive stock dividends .Replace interest/short-term distributions with qualified stock dividends/stock distributions (consistent with your risk tolerance)
    • 4.Receive tax-exempt income .Purchase muni/Treasury securities when rates are more attractive than other securities

57. Tax-efficient Investing (continued)

  • Advantages:
    • Can be invested in all types of financial assets, stocks, bonds, mutual funds, etc.
    • Can be used for any educational, mission, or other expense
    • Parent has control of the assets and can use them for any purposes
    • Investments can be made which minimize taxes
  • Disadvantages:
    • No tax advantages

58. F.How Do You Reduce the Cost of Your Kids Education and Sign up for Aid?

  • 1.Encourage parents to begin planning early.
    • We will discuss various vehicles later in this class.
  • 2. Fill out the FAFSA(Free Application For Federal Student Aid) on the net atwww.FAFSA.ed.gov(remember your PIN number).
    • Follow the instructions and do it early (usually after your tax forms are completed). You may submit the FAFSA as early as January 1 for the fall term. The amount of your award is based on the FAFSA results and credit hours, not when you apply.

59. Signing Up for Aid(continued)

  • 3.Talk with your personal financial aid counselor in the Admissions, Financial Aid, Scholarship Counseling Center (D-148 ASB) at BYU.
    • Call their direct line for an appointment at 801-422-7075
    • They will guide you in the process and help you in determining your eligibility for aid
    • You can also go to feedback.byu.edu to submit concerns or questions (24/7), which will be routed to your counselor for a response
  • 4.Look for other available aid on the web.
    • View the following sources and utilize them:

60. Helpful Websites Containing Information about Financing School

  • Helpful Websites
    • FinancialAid.byu.edu
    • Scholarships.byu.edu
    • Opsf.by.edu
  • BYU resources
    • BYU Admissions, Financial Aid, Scholarship Counseling Office (801-422-7025).
  • To have your federal aid in place by fall semester, it is wise to submit the FAFSA by June 1 the same year, unless you are planning to get married soon
    • Make an appointment with a counselor if you have questions

61. Resources for Financing School(continued)

  • www.fafsa.ed.gov- Free Application for Federal Student Aid.This form must be filled out for any federal financial aid.
  • www.fastweb.monster.com matches student profiles to a database of scholarships.
  • www.collegeboard.com connects student profiles to a database of scholarships, internships, and loans.
  • www.srnexpress.com contains resources on scholarships, fellowships, internships, and loan forgiveness programs.

62. Resources for Financing School(continued)

  • www.wiredscholar.com a good website for college preparation and information.
  • www.finAid.org a comprehensive site that has information on loans, scholarships and savings plans.

63. Summary

  • A.Do you understand the principles of personal finance?
    • Ownership:Everything we have and are is the Lords
    • Stewardship:We are stewards over all we have and are
    • Agency:Is one of the greatest gifts we have
    • Accountability:We will all have to give an account of our stewardship both in time and eternity.

64.

  • B. Do you understand the importance of how education relates to your financial goals?
    • Education can prove to be the wisest and more profitable investment you will ever make
    • The more education you have, the greater will be your opportunity to serve

Summary(continued) 65.

  • C.Do you understand the principles of financing education and missions?
    • 1.Teach your children to be financially responsible
    • 2.Help your children to contribute to their own and other family members missions and education
    • 3.Develop an education and mission plan that is consistent with your personal goals and budget and then follow it
    • 4.Start early in saving for your childrens education and missions
    • 5.Invest wisely and tax-efficiently

Summary(continued) 66. Summary(continued)

  • D.Do you understand the priority of money for financing school and missions?
      • 1. Free Money
      • 2. Family Money
      • 3. Employment
      • 4. Loans
      • 5. Credit Cards (Last resort)
      • 6. Retirement Accounts (No)

67.

  • E.Do you understand how to save for your childrens education?
      • 1. Series EE and Series I Government bonds
      • 2. Education Savings Account (Education IRA)
      • 3. 529 Prepaid Tuition Plan
      • 4. 529 Savings Plan

Summary(continued) 68.

  • F.Do you understand how to save for your childrens missions?
    • 1.Tax-Efficient Investing
    • 2.Custodial Accounts (UGMA/UTMA)

Summary(continued) 69.

  • G.Do you understandhow to reduce the cost of education and sign up for aid ?

Summary(continued) 70. Understand What Wise Menand Women Know

  • Are their important principles and knowledge regarding wealth that wise men and women know?
    • If so, what are those things they know?

71.

  • 1.Wise men and women recognize their stewardship
    • They understand the principles of:
      • Ownership :everything they have is the Lords
      • Stewardship : they are stewards over all God has blessed them with
      • Agency : the ability to choose is a God-given gift
      • Accountability : they will be held accountable for all their choices, including their financial choices
    • They recognize that nothing they have is their ownit is all Gods, and they act accordingly

Wise Men and Women Know(continued) 72. Wise Men and Women Know(continued)

  • 2.Wise men and women have their priorities in order
    • They seek first the kingdom of God
      • Theyknow that that the best things in life are free:families, relationships, and the gospel of Jesus Christ.
      • Their first goal in life is not wealth, power, or gratification, but eternal life with their families
    • They seek the true riches firstthe kingdom of God and the gift of eternal life.Then they seek the other riches, if they desire them, but it is for the intent to do goodto help and bless their families and others

73. Wise Men and Women Know(continued)

  • 3.Wise men and women plan their future early and live their plan
    • They prayerfully establish their goals, live worthy of the Spirit, and with His help achieve their goals
      • They prayerfully develop a budget, and follow it closely.They live on less than they make
      • They avoid debt like the plague
      • They build a reserve and save for their goals
    • They seek Gods help in all aspects of their lives, including planning and achieving goals, developing and living on budgets, avoiding debt, building a reserve, and saving for retirement and education

74. Wise Men and Women Know(continued)

  • 4.Wise men and women know it is what they become
    • They know that money is a tool to teach principles
      • They realize it is not what they earn, but what they save, that helps them acquire wealth
      • But more importantly, they know that its not what they save, but what they become, that makes them more like their Savior Jesus Christ
    • They know that money is only a tool, but an important one, in helping them to learn important lessons in life and in helping them become more like their Savior Jesus Christ

75. Wise Men and Women Know(continued)

  • 5.Wise men and women know money cannot buy happiness
    • They know money can eliminate a lot of financial and other problems in life
      • They know that money can provide security for them and their families
      • But they know it cannot buy them happiness.They must find happiness on their own
    • They use money to reduce their financial difficulties, to be secure in their families, and to bless the lives of others.Then they find happiness in the gospel of Jesus Christ, in their families, and in serving others

76. Wise Men and Women Know(continued)

  • 6.Wise men and women understand assets and liabilities
    • Assets are things that have value.They are eitherincome-generating(investments, savings, rentals, etc.) or income-consuming (cars, toys, houses, etc.)
      • They know their choice of assets will largely determine how they will live their lives
      • Liabilities are things they have borrowed for
        • Except for an education and a home, liabilities should be eliminated
    • They maximize income-generating assets, minimize income-consuming assets, and eliminate liabilities

77. Wise Men and Women Know(continued)

  • 7.Wise men and women understand income
    • Earned income is income they earn from their job or vocation.It is a good type of income
      • Passive income is income they earn from their investments, generally businesses or real estate.They generally need to do work to earn this income, but it is less.
      • Portfolio income is income they earn from their investments.They do not need to do any work to earn income from these investments.
    • They realize that the best income is not earned income, but portfolio and passive income

78. Wise Men and Women Know(continued)

  • 8.Wise men and women know they are responsible
    • You were given two great gifts:your mind and your time.It is up to you to do what you please with both.With each dollar bill that enters your hand, you and only you have the power to determine your destiny.Spend it foolishly, you choose to be poor.Spend it on liabilities, you join the middle class.Invest it in your mind and learn how to acquire assets and you will be choosing wealth as your goal and your future.The choice is yours and only yours.Every day with every dollar, you decide to be rich, poor, or middle class.(Robert Kiyosaki and Sharon Lechter,Rich Dad Poor Dad , Time Warner Book Group, USA, 1998, p. 197)
      • They choose to be wise

79. Wise Men and Women Know(continued)

  • 9. Wise men and women give
      • Wise men and women know that life is not measured by what they have or earn, but what they give
        • They learn to give more
      • For what shall it profit a man, if he shall gain the whole world, and lose his soul? (Mark 8:36)
      • They know there is more to life than money.
    • They follow the example of the greatest giver of all time, even their Savior Jesus Christ

80. Wise Men and Women Know(continued)

  • 10. Wise men and women remember
    • They remember how much they have been blessed by God and strive to do what He wants them to do
      • They stay close to the Spirit and do all in theirpower to have faith and be obedient to His commandments
      • Therefore, dearly beloved brethren, let us cheerfully do all things that lie in our power; and then may we stand still, with the utmost assurance, to see the salvation of God, and for his arm to be revealed. (D&C 123:17)
    • They do all then can and then have faith in the Lord and His plan for them

81. Wise Men and Women Know(continued)

  • In conclusion, wise men and women remember two thoughts which are representative of their futures:
      • The Lord through the prophet Joseph Smith gives the truth of what is ahead when he said:
    • For verily I say unto you, that great things await you. (D&C 45:62)
      • And from Robert Browning comes the thoughtful and comforting words:
      • The best is yet to be(Rabbi Ben Ezra, in Charles W. Eliot, ed.,The Harvard Classics,50 vols. [190910], 42:1103).