All posts by Kurt Kirton

About Kurt Kirton

Song and book writer from MS now living in Nashville, TN. Marketing and graphic design background. Regular blogger on topics surrounding the subject of job searching.

LIFE 101 FOR THE NEW MILLENNIUM: Unpacking & Understanding Car, Life, & Health Insurance

Advice, Budgeting & Money, , , , , , , , , , , , , ,
car life health insurance
Photo by KnG Đà Nẵng/K&G Studio

Insurance may seem like a waste to some new grads, but it definitely comes in handy when disaster strikes. In this post, I’ll focus on three types: life, car, & health.

1. Life insurance – Personally, I don’t have a life insurance policy since I don’t have a spouse or children and have registered with my local public medical center for a body donation. But those with a family will probably want to leave them some funds for funeral costs, bills, debt reduction, a child’s college fund, etc. If life insurance is not offered by your employer, you can start by checking with your parents as far as finding good agent.

2. Car insurance – Once you are no longer a dependent of or living with your parents, you must secure your own car insurance. The cost of your car insurance will depend on many factors including your gender, where you live, and what you drive. The fewer accidents you claimed on your previous insurance you’ve had will help keep your rate down. Men can usually expect to pay a higher rate.

You may be able to get somewhat of a discount if you use the same insurance company your family does or if you use the same insurance company for as many of your different insurance policies as you can. You should be able to reduce your premium by paying your policy bi-annually or annually vs. monthly. Again, check with family or friends for a recommendation, and shop around for the best rate with an idea of how much you’d like your deductible (the amount you’re responsible for before insurance kicks in) to be.

3. Health Insurance – At age 26, you must secure your own health insurance. Going without insurance is tempting fate, and your yearly tax return will eventually be impacted under the current healthcare law, effectively penalizing you for not carrying health insurance.

It’s always cheaper to take the health insurance offered by your employer than paying for your own independent policy, and www.healthcare.gov insurance is usually not available to those who’s employers offer coverage. So get into your employer’s health and dental plans as soon as you’re eligible.

Depending on the plans offered, you can choose how much coverage you have. Usually the higher your deductible, the more you’ll pay before insurance kicks in (in the way of yearly minimums that must be met), but this can lower your monthly premium (how much your employer deducts from your pay for insurance.)

80/20 is a standard coverage figure you’ll often see meaning 80% of an expense (like an ER visit or surgery) is covered by insurance and 20% by you. Some employers offer Flex Spending Accounts, so look into taking advantage of that as well if you expect frequent doctor or specialist visits and/or needs for prescriptions. A significant savings on prescription drugs is included which is very handy for drugs that have high out of pocket costs (the cost to those with no insurance.)

 

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Looking for a new job? Want to get the one you want faster? Check out my new book, Here Today, Hired Tomorrow.

LIFE 101 FOR THE NEW MILLENNIUM: 7 Things to Consider When Buying Your First Car

Advice, , , , , , , , , , ,
buying your first car
Photo by Foxy Belle

If you’re a grad who did not have a car—perhaps you rode with a friend and lived on campus, or were in a city with bounteous public transportation—let’s talk about buying your first one. Perhaps you’re moving to a city where the aforementioned situations are not the case or are starting a family and now need a car of your own.

What you can afford: First, figure out what you can afford in a monthly payment and how much you have to put down. If you have nothing to put down, maybe you should back burner the car idea until you can get a down payment saved up that’s satisfactory to the institution making the loan (be it a car dealer or bank.) Will you need to have a parent co-sign to secure the loan?

Used or new: Can you afford a new car, or would you rather go used? If you answered used, try to stay with a program car or a used car with low mileage to avoid the issues that frequently accompany an older car.

Vendor: Ask your social network, family, and friends to recommend a dealership they trust. Or decide whether you’d like to check around locally (online, newspaper, or car sales booklets) and buy from an individual who’s selling. If so, keep in mind there is no warranty going this route, and the Lemon Law will most likely not apply.

Resources: You should be able to find information about most models you’re considering at www.consumerguide.com. Check the history of the car you choose by entering the VIN (which should be on a plate at the bottom of the driver’s side of the windshield) at www.carfax.com.

Financing: Your credit history will come into play when you go for the loan. Check the interest rates at a few banks—starting with your own—in addition to the dealer’s financing. I recommend putting the car on a 5-year loan; then if you’d like to pay it off early, you can make payments against the principle. I personally would rather not lease a car. You can read more about that option here.

Transaction: After you’ve whittled down what you want and where you’ll buy, I’d recommend taking a parent or friend with you for support. With most dealerships, you’ll want to haggle to get the price as low as you can. With new cars, check on any rebates or special offers for recent grads as well as the length of the warranty and what it covers. The dealer’s auto shop will be handling any issues your new car may have during the warranty period.

Wrap-up: To avoid a traffic ticket, be sure to get a new temporary license plate from your County Clerk if your actual license plate is not ready by the expiration of your temporary one. Like Mississippi, your state may require an inspection sticker, so ask about that if you’re not sure. You may also want to have a mechanic look over a used car and repair any minor issues. It’s also a good idea to have an alignment done early on (and of course to have the oil changed every 4,000 miles or so.)

What other advice would you give? What’s been your best experience with buying a car?

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LIFE 101 FOR THE NEW MILLENNIUM: One Word – Taxes

Advice, Budgeting & Money, , , , , , , , , ,
taxes, tax return, filing
Photo by William Billard

A NOTE ABOUT THIS SERIES: My recent posts on budgeting got me thinking about a very helpful article I was given after graduating from college. It covered several important real world topics that new graduates take on after finishing college. Since most of the topics involve money, and that ties so closely to work and earnings, I feel this series will be helpful and relevant. Further, one of the core audiences my book can help is recent grads. Please pass this article on to anyone you know that is or will soon be a recent graduate.

The first type of tax I’m sure you’re familiar with is sales tax. With few exceptions, we all pay it on things we buy. It varies by state (here in Tennessee, we have one of the highest sales tax rates.)

Unless you’ve started your own business (see this earlier post ), the only other tax you should have to be concerned with at this point is federal income tax—and state income tax if your state has one. These taxes must be filed every year before April 15th. This table will help you determine whether you’ve earned enough taxable income to be required to file Federal.

When you start a new job, one of the forms you’ll fill out is a W4. This allows you to determine how taxes are withheld from your earnings. If you do have dependents, claim them. Claiming more dependents holds out less tax from each paycheck. So, if you’re filing as Single and you would rather sway toward not owing tax and more toward getting a tax refund each year, don’t claim Single and 1 (yourself as a dependent) on your W4; just fill it out for Single and 0. When claiming dependents, be sure you’re not claiming a dependent whom someone else is also claiming.

Most of you will be able to take the standard deduction. The standard deduction is a dollar amount or threshold that will factor in to how much tax you owe—or the amount of money you’ll get back as a tax return. This figure can vary year to year.

Keep track of how much money you tithe and give to charities and such throughout the year since some organizations may not send out a year-end summary for you, or you may end up missing an e-statement in your Spam folder. Also keep up with mileage driven for volunteer work you do. If you don’t have enough of these type items to surpass the standard deduction figure, you’ll use it to figure your taxes. Here’s more information from the IRS on the standard deduction.

Most of you should be able to use a 1040EZ form to prepare your taxes. You’ll need a regular 1040 form if your taxes are more involved; here’s a good article to help you determine which to use. You should be able to get these forms at your local library; call first to check, and save yourself a trip.

If your taxes are fairly simple, you can probably file them yourself on a site like taxact.com or turbotax.com. If not, you can use a local tax establishment like Liberty Tax or H&R Block; however, a freelance/independent tax preparer usually costs less. Ask your parents or social network for help finding a recommended one. Look for a tax preparer, not a Tax Attorney.

When you begin to file your taxes, you’ll need a 1040 form, your W2 forms from any job you worked, any 1099 forms you receive (forms issued for contract work if you’ve earned, in most cases, more than $600 in a year), all investment (some are various types of 1099s) and charitable giving statements you receive, and the total mileage you drove for volunteer work.

As you (or your tax preparer) enter everything for your federal tax filing, you’ll be asked questions about things like whether you bought a car or home during the tax year (your answers may factor into your tax return as well.) Then at the end, you’ll find out either how much you owe (this amount must be paid to the IRS and postmarked by April 15th) or how much the IRS owes you (how much money you can expect to receive back from the government.) You can choose a hard check or direct deposit (faster) by which to receive this money. Then, make sure to file your state tax return as well if your state requires one. Keep a copy of your tax return form.

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