Blog
Does Money Grow on Trees?
Jordan M. Waite, Intern
April 10, 2012
Sadly, money doesn't grow on trees. But growing your own fruits and vegetables may be one way to save on your grocery bill. One study breaks down the average costs and savings from cultivating a garden. In the research article entitled, "The Impact of Home and Community Gardening in America," the National Gardening Association explains the numbers and shows the statistics of gardening. This study suggests an individual or family could save money on their grocery bill by gardening.
While the number one reason people garden is to have better tasting food, the second most common reason people garden is to save on their monthly grocery bill.
So then, who are these gardeners? Interestingly, 43% of gardeners are college graduates; as compared to 36% of gardeners with some college, and 21% of gardeners only have a high school degree. While we don't know the exact reason most gardeners are college graduates, one theory is college graduates recognize the health benefits and possible financial benefits of cultivating home-grown, organic fruits and vegetables.
How does one go about calculating how much a garden will cost and how much someone can potentially save from gardening? The research suggests a well-maintained garden can yield an estimate of 1/2 pound of produce per square foot of a garden. The average price of in-season produce is $2 per pound. The average garden size is 600 square feet. The initial investment (or cost) of gardening is $70. So, $2 x 600 square feet x 1/2 pound of produce per square foot = $600 return. Of course you subtract the initial investment of $70, and you come to a total savings of $530 from your grocery bill. The amount of your savings will fluctuate depending on the size of your garden.
Looking at just the numbers, gardening may seem like a way to save money. But economists will remind you that time is money. The average gardener spends three to five hours a week gardening. If you make a high wage per hour, it may be more financially advantageous to spend those hours working at your job instead of gardening, and purchase your produce at the grocery store.
But for most college students, it is unlikely to have a job that makes much more than minimum wage. So it may be beneficial for students to garden and save on their grocery bill. But the problem they run into, besides times constraints, is the availability of a place to plant. Many students live in apartments and don't have a backyard to plant a garden.
One option college students have is to participate in a community garden. In Salt Lake City, there are a couple options: Wasatch Community Gardens or Sugar House Community Gardens, to name just two. Typically you pay a flat fee at the beginning of the year, and are given a spot to plant. You tend to your little plot of land and grow fruits and vegetables. Quite often other community gardeners will trade extra produce with each other, allowing you to have a variety of fruits and vegetables.
When deciding whether you want to plant a garden, not only should you consider the financial factors, but also consider the factors that are more difficult to place a dollar value on. You can learn new skills, spend time outside in the sun, and have organic and better tasting foods, to name just a few benefits.
For more information about gardening, visit garden.org, wasatchgardens.org, or sugarhousecommunitygarden.blog.com.
Investing Options for College Students on a Tight Budget
Jordan M. Waite, Intern
March 15, 2012
Investing while still in college may seem like an unlikely option for most students. Many of us are responsible for funding our college expenses by ourselves with little to no help from our parents. After paying a couple grand for tuition, several hundred for books, then rent and food, and other expenses, it may seem like you have little to nothing left over at the end of the month to invest. But even with a small amount of money, college students have options to invest.
First, make a budget if you don't already have one. Without a plan, our good intentions rarely happen. Someone who has a specific exercise plan to lose weight is much more successful than a person who wants to lose weight without a plan. Likewise, someone with a budget is much more successful in reaching their financial goals than someone without a budget.
Second, create an emergency fund. Everyone needs a safety net for the unexpected events in life. Dave Ramsey, personal finance guru, recommends college students have at least $500 to a $1,000 in a liquid account, like a savings account. There is no sense in investing if you don't have an emergency fund. If something happened to you and you didn't have an emergency fund, you would have to sell your investments to pay for that emergency. Then, you could also be hit with a penalty for withdrawing your investments early.
Third, pay off all high interest loans, such as credit card loans, before you invest. Compound interest from investing can help you build wealth. Conversely, compound interest from high interest loans can limit your spending power and slow the amount of wealth you can build. So before deciding to invest, you should look at all you debts and make a plan to pay off your high interest loans as quickly as possible.
Finally, invest! Some people think you have to have a lot of money to invest. That is a false idea. Anyone can invest, even if they only have small amounts - 10, 15, or 20 dollars - to invest. You don't have as many options for investing with small amounts of money, but you still have options. And the sooner you get into the habit of investing, the quicker you will build wealth.
Consider Dividend Reinvestment Plans, also known as Drips. They allow you to buy stocks directly from the company, bypassing brokers and their fees. This is a great idea for those who want to automatically invest small amounts each month, which is a method called dollar-cost averaging.
Also consider opening a Roth IRA. Like Drips, you can automatically transfer small amounts of money each month to your Roth IRA, and when you've saved up a couple hundred collars, you can invest in mutual funds, stocks, etc. The benefit of a Roth IRA is your earnings grow tax free. When you retire and begin to cash out your investment, you don't have to pay taxes.
The more money you have to invest, the more options there are for you to build wealth. But even college students on a tight budget can start the habit of investing small amounts of money and build wealth. All it takes is doing a little homework and finding the option that works best for you.
For more information about investing options for students, visit www.fool.com.
"Certainty? In this world nothing is certain but death and taxes."
Jordan M. Waite, Intern
February 10, 2012
Benjamin Franklin was quoted facetiously saying, "Certainty? In this world nothing is certain but death and taxes." Whether you love or hate taxes, most all of us are required to file taxes. In January and February your mailbox will fill up with tax documents. Each document is one piece of your tax puzzle. Sometimes it can be confusing to know where all the pieces go, but with a little help, you can complete that puzzle.
There are many online resources, like www.irs.gov, that can help you know how to complete your taxes. But even using the IRS website can be confusing. Finding a tax professional to complete your taxes is a sure way to know that your tax return will be completed accurately. But that can be an expensive way to complete your return.
Luckily for students at the University of Utah, there is a program that will file your taxes for free. This program is called the Volunter Income Tax Assistance. VITA allows students and other who make less than $57,000 a year, to have their taxes completed by a VITA-certified volunteer tax professional, thus reducing the cost and saving students money.
When you decide you're ready to put together your tax puzzle, here are some common documents you might use: W-2s, which shows your wages you've earned last year, 1099s, which shows the interest you've earned during the year, and 1098s, which shows the tuition and interest you paid during the year. There may be other required documents depending on your financial activity for the year.
Here are a few credits you as student need to be aware of:
The American Opportunity Credit is a refundable credit for undergraduate students to offset educational expenses. The students can receive up to $2,500 in tax credits for the first $4,000 of qualifying educational expenses (100% of the first $2,000, plus 25% of the next $2,000, for a maximum credit of $2,500). A student qualifies for teh credit if they are enrolled at least half-time in college. Up to 40% of the credit is refundable ($1,000), even if your tax liability is zero.
The Lifetime Learning Credit is a tax credit for anyone who takes at least one college class. The student can receive a tax credit of 20% of tuition expenses, with a maximum $2,000 tax creditson the first $10,000 of college tuition expenses. Unlike the American Opporunity Credit, the student need not be in the first four years of undergraduate classes This credit is not refundable.
The Student Loan Interest Deduction directly reduces your income, as well as other deductions, to find your adjusted gross income. You can find the student loan interest you paid on form 1098-E which your lender will send to you.
There are other credits and deductions to consider depending on your circumstances. To find a complete list of credits and deductions, visit www.irs.gov or speak with a tax professional.
For times and locations of VITA locations, visit our website: www.asuupmmc.utah.edu. Good luck filing your taxes!
New Year Resolutions That Last the Entire Year!
January 15, 2010
It's that time of the year when many of us make resolutions to improve our lives. For the majority of us, we make goals to lose weight, stay fit, get out of debt, get organized, etc., but normally our goals only last a few months. In a recent study conducted by Richard Wiseman, Professor of Public Understanding of Psychology at the University of Hertfordshire, 52% of participants were confident they would succeed in their New Year resolutions, but only 12% actually achieved their goals.
The study revealed men were significantly more likely to succeed when creating S.M.A.R.T. goals - Specific, Measurable, Achievable, Realistic, and Time based. Also, when focused on the reward of success, they were more likely to succeed.
The study also revealed that women were significantly more likely to succeed when they made their goals public. Sharing goals with family and friendsd and writing their goals down, were some of the actions women take to be successful.
There is no better time than in 2012 to get your finances in order. It might seem like a difficult task to get out of debt and save for your future when the economy is still struggling and your budget is already tight, but small goals can help you reach your overall goals of financial security. Here are some ideas to help:
Identify Your Values
How can you make goals if you don't know what is important to you? Spend some time thinking and writing out what is important to you. Recognize why these things you have written are important. This will help you know what goals to set.
Get Organized
This may be the most difficult and boring part, but the most important. Sit down with your values written out, financial documents, and your partner (if in a relationship), and make some goals. Be specific with dates and amounts. Look at the big picture while making short-term and long-term goals.
Automate Your Goals
Once you have decided how to pay down debt, how to increase your emergency fund or retirement, or how to save for that big ticket item, automate the transfer of money. Have your paycheck directly deposited into your checking account. Then set up automatic transfers from your checking to the different accounts or loans you have - student loans, car payments, retirement, emergency, savings, etc.
Plan for the Future
Now most of the work is done. Your values have been identified, your goals are set, and the automatic transfers happen each month. All you have to do now is periodically sit down and re-evaluate your goals and make necessary changes to reflect your current situation
A year from now you will be amazed the amount of debt you have eliminated and the money you have saved. Automating the transfer of oney and periodic re-evalutations will help you keep your financial New Year resolutions the entire year.
