Solving 3 big money challenges |
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Once you find your ideal home, get it inspected. However, remember that inspections may not include certain tests, like mold or radon, warns Brion Grant, president of American Society of Home Inspectors, or ASHI.
"Every inspector will have a different method to do
inspections, so it's incumbent upon them to talk to the buyer and
find out what they want," Grant says.
You can find inspectors who must meet professional criteria at the American Society of Home Inspectors Web site.
Finally, pick the right lawyer as you enter contract negotiations.
"Don't just look for the lowest-cost provider," says Tyson. "Get someone who does a lot of residential real estate work."
For more information about buying a home, check out Bankrate's Mortgage channel.
2. Saving for college
The price of higher education continues to escalate. In addition, most financial aid comes in the form of loans -- which need to be repaid -- rather than scholarships.
The first rule of thumb when saving for college is to maximize every dollar you save. For long-term savers who don't need to pay for college immediately, that means stocks or stock mutual funds, despite the market's recent downturn.
Stocks have historically gained 9.62 percent annually, while bonds have typically earn 5.69 percent a year, according to Morningstar.
While it's better to save often and early, any amount
can help, even if you've procrastinated for years, says Jack Joyce,
director of training and information services at the College Board.
"Putting something somewhere, at any point of the process, is certainly better than simply throwing your hands up and saying, 'We've only got four years,'" Joyce says.
However, it's important to tailor your investing to your individual situation. If you've put off saving and your child is now just a few years away from college, don't play catch-up by socking all of your money into risky investments.
Stocks sometimes endure long periods of decline, so
money should not be invested in the stock market unless you can
leave it to grow for a minimum of five years.
Bankrate's college
savings estimator can help you craft the right savings plan
for your child.
Watch out for costs. It's simple. Taxes and investment expenses can erode your stash. Consider minimizing costs with Coverdell and 529 college savings plans, which allow earnings to grow tax-free. Withdrawals also escape taxes as long as they're used for bona fide education costs.
You can put up to $2,000 per year into Coverdells.
On the other hand, 529 plans let you save far more -- in many cases
more than $300,000 per beneficiary. Moreover, if you save in a 529
plan sponsored by your home state, you may also be able to claim
a state tax break for your contributions, in addition to your federal
tax reduction.
For a summary of plans, including investment options and costs, go to Savingforcollege.com, a Bankrate company.
Depending on how well you do, savings may cover your
education tab. If not, there are ways to build on your savings.
Government loans are relatively cheap and come with
fixed interest rates. Advanced Placement courses in high school
can accelerate a student though college and trim costs. For more
alternatives to pay for college, see Bankrate's story "Doing
the student loan shuffle."
For more information on saving for college, visit Bankrate's College Finance channel.
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