From our friends at LSS Financial Counseling

Getting the most out of the energy you consume can save you significant money on your monthly utility bills. Heating and cooling your home use more energy than any other activity – typically about 35%–40% of your energy consumption, according to the U.S. Department of Energy (DOE).

Unfortunately, too much of that energy and the money spent on it can be wasted. According to energy.gov (the DOE’s website), of the $2,000 the average American spends paying for energy annually, $200 to $400 could be lost due to drafts, air leaks around openings in the house and outdated heating and cooling systems. To me, this is like leaving a window open 24/7 all winter long.

Fortunately, it is possible to reduce your energy waste and utility bills. The U.S. Environmental Protection Agency estimates that homeowners can save an average of 15% on heating and cooling costs (or an average of 11% on total energy costs) just by sealing openings in their homes and adding insulation.

Here are steps you can take to use less energy and keep more money.

Find the Sources of Your Problem

The first step is to figure out where you’re using energy and where savings are possible.

You can have a professional home energy audit done, which may be free or low-cost through your utility company. In addition, the U.S. Department of Energy (DOE) has information on reputable individuals and companies who perform audits. Check with your state or local energy or weatherization office for contacts and recommendations.

If you are a do-it-yourselfer, make the assessments on your own. Here’s how:

• Hold a lit incense bundle or stick near the windows and doors to test for air leaks. The smoke will tell you where the leaks are. You can also use a lit candle and watch the flame; just be careful not to light the curtains on fire!
• Check around your ceilings, lighting and plumbing fixtures, switches and electrical outlets. Look for gaps, improperly applied caulk and weather stripping, as well as doors and windows that don’t close tightly.
• Also, check the seams in your duct work to see if you are losing heat on its way to the rooms in your home.

Keep the Heat in

Once you have found your problem areas, you can use inexpensive products to seal the leaks. Many of the tips below come from energy.gov. Also, there are videos and guides with step-by-step instructions on YouTube and energy.gov on sealing windows and doors and other do-it-yourself energy conservation projects.

• Weather strip doors and windows.
• If the leak is under the door, put in a draft snake. If you haven’t heard of this, it is a fabric tube that you can place at the bottom of the door to block cold air from coming in underneath. You can purchase one from most discount stores, or you can get creative and make your own! There are many patterns online; some patterns are even no-sew.
• Caulk and seal air leaks where plumbing, ducting or electrical wiring comes through walls, floors, ceilings and soffits over cabinets.
• Install foam gaskets behind outlet and switch plates on walls.
• Use foam sealant on larger gaps around window trims, baseboards, and other places where air may leak out.
• Check for open fireplace dampers, and make sure they properly close.
• Install tight-fitting window treatments, and look into purchasing thermal curtains for additional help in keeping the warmth in and the cold out. Thermal curtains are available almost everywhere curtains are sold. 
• Open curtains on sunny winter days to give the furnace a break. Close them at night to protect against cold drafts.
• Consider adding insulation to your walls, attic, roof and foundation. A well-insulated home is crucial for reducing the heat flow in and out of your house. The DOE’s website and the Federal Trade Commission have information on types of insulation, tips on adding insulation and recommendations on where to add insulation.

Consume Less Energy for Heating

In addition to reducing the amount of heat leaving your house, use these tips to cut the use of heat inside your house.

• Switch to reverse: Heat rises, and you can push that warm air back down simply by flipping a switch on your ceiling fans. Run the fan on the lowest speed to move the air down slowly. 
• Maintain your furnace: Keeping your furnace tuned and clean will help ensure it performs at its best.  Replace the furnace filter once a month or as recommended. A clogged filter can make furnaces work significantly harder.
• Keep the rest of your heating system clean, too. Clean warm-air registers, baseboard heaters and radiators as needed; make sure they’re not blocked by furniture, carpeting or drapes.
• Get a programmable thermostat: We all know that turning down the thermostat while the house is empty can help save energy, but it can be hard to remember to turn down the heat as we scramble out the door in the morning. A programmable thermostat solves this problem. Set it to turn down when you normally leave the home and at bedtime. Set it to increase the heat in the morning when you get up so you can wake up to a warm home. If you are into technology, consider buying a smart thermostat. This device automatically adjusts the programmed settings, depending on your schedule.
• Be fashionably cozy: Dress for winter. Layering up and wearing sweaters lets you turn down the heat and still be comfortable. Each degree that you turn the heater down will generate 1% in energy savings, according to the DOE.
• Reduce water heating costs: According to the DOE’s energy saver guide, this is your second largest home energy expense — typically around 13% of your energy consumption. This guide suggests several ways to cut water heating costs: 1) Insulate your water heater tank and hot water pipes leading from it. 2) Set your water heater temperature to 120ºF, a temperature considered safe for most of the population. 3) Install aerating, low-flow faucets and showerheads.

I encourage you to try any or all of these tips. I know from personal experience that you will see savings. Who wouldn’t want to cut their heating costs this winter?

Still have questions about saving money this winter or year-round? Give us a call at 800.528.2926 to set up a free, confidential phone or virtual appointment, or get your support online. We can assist you in creating a budget that will help you prepare for unexpected expenses all year long.

Author Ashley Hagelin is a Certified Financial Counselor for LSS Financial Counseling.

From Our Partners at LSS Financial Counseling

If you are paying off student loans, you probably have noticed recent headlines about making student loan forgiveness possible for more borrowers. The U.S. Department of Education (DOE) is making (temporary) fixes, officially called a waiver, to the Public Service Loan Forgiveness (PSLF) program. Here’s your guide to understanding the DOE’s changes and navigating the system so you can get your payments counted towards forgiveness.

If these changes affect you, it’s crucial that you take action as soon as possible. The waiver will end on October 31, 2022.

What is Public Service Loan Forgiveness (PSLF)?

College graduates working for government agencies and non-profits are typically paid much less than their counterparts in private industry, yet they need the same level of education. Congress passed legislation in 2007 creating the Public Service Loan Forgiveness program to make public service more appealing to graduates. PSLF offers forgiveness on the remaining balance of qualifying federal student loans after 120 qualifying payments, while working for a qualifying employer.

What Changes is DOE Making to PSLF?

The Department of Education created this waiver — finally — after years of complaints and a dismal rate of loan forgiveness. PSLF has been riddled with poor communication about program processes, confusion over what payments qualify for forgiveness, poor servicing and administrative foot dragging. The DOE has approved a mere 1% – 2% of PSLF applications since the first loans have been eligible for forgiveness in October of 2017. That’s only 16,000 borrowers out of millions who work in public service!

According to the press release from the Department of Education, its changes to PSLF will:

• Count all prior payments made by student borrowers toward PSLF, regardless of the federal loan program.
• Simplify what it means for a payment to qualify for PSLF.
• Eliminate barriers for military service members to receive PSLF.
• Review denied PSLF applications.
• Identify and correct errors in PSLF processing.

Here’s what didn’t change:

• You must be employed by a government agency, a 501(c)(3) nonprofit agency or other non-profit organization that provides a qualifying service.
• You must work full-time.
• You must have qualifying loans.

What Are Qualifying Loans?

Normal PSLF program rules define qualifying loans as those made through the William D. Ford Federal Direct Loan Program. They can be Direct Subsidized, Direct Unsubsidized, Direct Grad PLUS Loans, or Direct Consolidated Loans. Do you a see a pattern here? They’re all federal Direct Loans.

One of the biggest barriers for borrowers to qualify for forgiveness was having Federal Family Education Loans (also called FFEL or Stafford Loan programs) and/or Perkins Loans. If you attended college before June 2010, you might have FFEL Loans, and if you attended before October 2017, you might have Perkins Loans. Neither loan program exists now.

The waiver makes FFEL and Perkins Loans eligible for forgiveness. Private student loans do not qualify.

What Are Qualifying Payments?

Under normal PSLF rules, qualifying payments are on-time payments made under either a 10-year, standard repayment plan or any of the federal Income-Driven Repayment Plans, in which your monthly loan payment is based on your income and family size. The payments do not have to be consecutive, so if you leave public service for a while and then return, you can resume your payments where you left off. All of that still holds true.

Under its waiver, the Department of Education expands the definition of “qualifying payment.” Any prior payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment. For individuals who have certified some employment for PSLF, the Department says they will “automatically adjust PSLF payment counts for payments made on or before October 31, 2022. Borrowers who haven’t yet certified employment or applied for forgiveness, but do so by October 31, 2022, will benefit from the same temporary rules.”

What is Qualifying Employment?

Anyone who works full-time for any government agency (federal, state, county, city or Tribal) or a 501(c)(3), tax-exempt nonprofit agency has qualifying employment. Other nonprofit organizations that are not tax-exempt are also qualifying employers if they provide what the federal Internal Revenue Code defines as “qualifying public services.” This includes employment in:

• Military service
• Public safety and law enforcement
• Emergency management
• Public interest law services
• Public education, other school-based services and early childhood education
• Public services for individuals with disabilities and older adults
• Public library services
• Public health

Nonprofit organizations that are not qualifying employers include:

• Labor unions
• Partisan political organizations
• Government contractors working for private, for-profit companies
• Nonprofit organizations that are not tax-exempt and do not provide a qualifying public service as their primary function

Full-time employment means you work in any position for one of the above qualifying employers for an average of 30 hours per week. You may also be considered full-time if you work for two different qualifying employers and you average a total of 30 hours per week. Under normal PSLF program rules, a borrower must be employed at a qualifying employer when they receive forgiveness; the DOE now waived that requirement until October 31, 2022.

On July 1, 2021 the Department also changed their regulations so that time engaged in any form of religious instruction, worship services or proselytizing may now be counted as full-time employment. Unlike the temporary waiver rule changes, this rule change is permanent.

What Are My Next Steps?

If you have loans other than Direct Loans or Direct Consolidated Loans:

• Look up your financial aid summary to identify your loans.
• If you have FFEL and/or Perkins Loans, consolidate those together. Do not include your Direct Loans.
• Request an Income Driven Repayment Plan for future payments.
• Complete a PSLF Form through the PSLF Help Tool.

If you believe you work for a qualifying employer and you previously tried to certify employment for PSLF but were denied:

• Use the PSLF Help Tool.
• Submit a new form through this site.
• This site also has a list of employers the department has already determined as eligible.

If you haven’t yet certified that you work for a qualifying employer or applied yet for loan forgiveness:

• Go to the PSLF Help Tool and complete a PSLF Form. 

Where Can I Go for Current Information or More Assistance?

While these changes are a fantastic step forward, they don’t resolve all issues and they are temporary — only in effect for payments made on or before October 31, 2022. Keep up on all the details by visiting StudentAid.gov. If you are having challenges working with your loan servicer, go to the Feedback Center at Studenaid.gov, where you can file a complaint or get the Federal Student Aid Ombudsman involved.

You can also meet with one of LSS Financial Counseling’s experienced counselors for individualized answers on your federal student loan debt and any other student loan questions. Our counselors are certified by the National Foundation for Credit Counseling (NFCC).   With Financial Choice, appointments are always free; call 800.528.2926 to set up yours.

Have you fallen behind on your rent and utilities during the COVID-19 pandemic, or are you worried about future rent/utility payments? If you answered yes, you could benefit from RentHelpMN, a new state program from Minnesota Housing.

Eligible Minnesota renters can receive help with rent, utility bills and additional housing costs (e.g., late fees) beginning March 13, 2020 and after. If you qualify, you could receive up to 15 months total assistance. Payments for past-due rent will be made in 3-month increments. Covered utilities include gas, electric, water, sewer and trash removal and will be paid once they are approved. Phone and internet services are not included.

RentHelpMN is currently in Phase 1 of the program, in which only Minnesotans who currently are behind on rent and utilities can apply for assistance. (In Phase 2, Minnesotans who are not past due on rent and utilities can apply if they are at risk of falling behind on future rent and utility payments.)

Eligibility Guidelines

• You must be a current Minnesota renter.
• You must be impacted negatively by COVID-19. This could include job loss, eligibility for unemployment insurance, reduced work hours, increased costs, financial strain from caring for children while schools are closed, and financial strain because of health challenges.
• Your annual household income must be at or below 80% of the Area Median Income in your area. (If you are receiving government assistance, e.g., food support, housing subsidies, General Assistance, you likely will be eligible.)

Additional Information for Renters

• The RentHelpMN renter’s checklist has information regarding income guidelines and a list of documents renters will need when they apply.

• The RentHelpMN website has a page with answers to frequently asked questions.
• You can apply online, or you can request that a paper application be mailed to you.
• Call or text 2-1-1 if you have any additional questions regarding the RentHelpMN program or need support in applying. Multilingual staff are available to answer questions from 8:00 a.m. – 8:00 p.m., Monday through Saturday. LSS Housing Services will be one of the agencies administering the program.

How Landlords Can Help

If you are a landlord and your tenant(s) are currently struggling with their housing costs, you can help them by doing these 3 things:

• Increase awareness of RentHelpMN. Spread the word about this program to through personal contacts with tenants, listservs, emails, social media, flyers and other marketing tools you might have.
• Support tenants to get them ready to apply. Provide your tenants with the necessary documentation to apply, such as their lease and rental payment history. If your tenants need a computer with internet access, a scanner or copy machine to submit their application, make your equipment available to them if you can.
• Get your documentation ready. After your tenants submit their application, you will receive a request to submit additional documents to help complete the process. The RentHelpMN landlord’s checklist has more suggestions for increasing awareness, details on how you can assist your tenants and a list of required documents you need to submit.

If you would like assistance in creating a realistic budget, reducing debt, improving your credit and/or managing student loan payments, LSS Financial Counseling is here to provide that free, confidential support. Contact us at 800.528.2926, or get all your support online.

A great guest post from our friends over at LSS Financial Counseling!

It’s your favorite online show binge watcher here. In this blog, I’ll refer to a new competition show based on a favorite childhood game, “The Floor Is Lava.” Instead of kids hopping on couches, flinging cushions and getting yelled at by a parent, teams leap from drawers to couches (or planets to rocket ships), while avoiding a fall into a pool of red slime. This “lava” may be fake, but the face plants are real.

Similarly, when you are a parent navigating the world of student loans with your child, you may feel stressed jumping from the Free Application for Federal Student Aid (FAFSA) platform to the college’s financial aid “couch,” wondering why you are tired and slightly sweaty.

Take a few lessons from the “Floor is Lava” show to avoid some potential slippery situations.

1) Assess your surroundings; where is the end?
Successful teams on the show take the time in the beginning to assess the different routes of the course and figure out how to effectively get to the finish line. Those who yell, “I’m just gonna go for it!” end up with a mouthful of goo.

Lesson for parents: Calculate the total cost of the degree your child wants to pursue. Review the FAFSA award to figure out the total amount of grants and loans for each year. The gap between grants/loans and the cost of the degree is considered the student’s, and in many cases the parent’s, responsibility.

If you plan to take on this responsibility, you currently have three options: Direct Federal Parent Plus loans, private parent loans or out-of-pocket payments. If you go the loan route, visit FinAid.org, and use their calculators to estimate future student loan payments. Be aware that payments for parents begin right away once the loan is dispersed, NOT when the child is finished with school. Also, keep in mind that private loans have fewer options should the payment become unaffordable down the road.

2) Set expectations and know your limits.
On the game show, some of the contestants prefer using their arm strength, while others rely on their balance. However, contestants are most successful when they are honest with themselves about what they could realistically do.

Lesson for parents: OK, so you’ve calculated these numbers:

▪ How much will you need to take out in Parent Plus or private loans?
▪ How is your credit score?
▪ Will the payment be affordable now and in the future?

It’s not always easy to assess your budget and credit, but it’s important to know what you can afford and the maximum amount of help you can provide. This will allow you to have honest conversations with your child about a realistic school choice for them.

As a financial counselor, I have heard parents say, “The school tells me the student can take over the parent loans,” which is partially true. While the student can make the payments on the parent’s behalf, the loan remains in the parent’s name and on the parent’s credit report, and the parent is 100 percent legally responsible for that loan. If the student has good credit and a steady income, they might be able to refinance the loan into their name, but it’s not guaranteed.

Be perfectly clear with your child whether they need to pay your loans. More importantly, be ready to pay them yourself if that never happens.

 

3) Teamwork is necessary; don’t feel like it’s all up to you.
And now, back to the show. One team member just stands at the starting line yelling at other teammates. While the other two hop around and figure things out, the third member continues to stand there and yell. Finally, the yeller makes a move and jumps halfheartedly, sinking into the lava, along with the team’s chance of winning.

Lesson for parents: I often hear parents say about helping their children financially, “I don’t want to disappoint my child.” They want what’s best for their kids, and the parents sometimes sacrifice their own financial future in the process. Many times, the (now adult) child hasn’t done anything on their own to help themselves because they were waiting to be bailed out. To help avoid this, it is important for your child to be invested in making college affordable, too.

Has your child applied for extra scholarships and grants or looked for a part-time job to help with living expenses? Is a four-year degree something they really want, or do they feel pressured to “go with the flow” and get a degree just because that’s what their friends are doing?

What about more affordable options? It can be much cheaper for your child to go to a community college the first two years, then transfer to the college/university of their choice. Or, there are many trade job opportunities that require a two-year degree and/or on-the-job training instead. If you find yourself working harder than your child to make this happen, take a step back to make sure they’re just as committed.

 

4) Timing is of the essence.
Let’s go back and see what’s happening with our contestants. At the finish line, there are two steps jutting out to help the team. As time ticks by, the steps slowly sink into the “lava,” making the game even harder and forcing the group to take bigger risks to complete the course successfully.

Lesson for parents: It costs more to wait to pay off these loans. If you can’t afford your Parent Plus loan payments right away, you can put them into deferment, but interest accrues the whole time. That means your payments will be higher in the future and the loan balance will increase when you’re temporarily not making payments. If your credit isn’t great and you qualify for the parent loan, you will likely get charged at a higher interest rate. Therefore, keep working on improving your credit and finances. If/when you improve your credit over time, you may be able to refinance to save money in interest.

 

5) The takeaways
Taking out loans for your child’s education can be exactly like “Floor is Lava” — sort of. Focus on the key takeaways:

▪ Work together as a team.
▪ Communicate openly about your/your child’s capabilities and limitations.
▪ Always keep the big picture in mind, including current/long-term loan affordability, the overall loan cost and your child’s educational/job goals.

This process can be overwhelming, but you don’t have to do it alone. LSS Financial Counseling is here to help. We have certified student loan counselors who can review your overall finances and credit, create a realistic budget with you, and present all your options so you can help your child and maintain financial stability. Call us today for your FREE, confidential session at 800.528.2926.

Kim Miller is a certified financial counselor with LSS Financial Counseling and a continuous binge watcher of online shows.

With teenagers, especially older ones, the likelihood that they are earning money outside of the home is greater. And if they aren’t at the moment, they will be soon.  Chances are they have a want-list as big as they are—from certain clothes and electronics all the way to their own cars. So, it’s best to give them a dose of real-world experience.

Keep up the work with needs versus wants, how credit works, and the balance between earning/spending/savings. If they have the means to spend, show them how to take advantage of sales and make tradeoffs to fit their budget for their needs.

If you are comfortable with it, let them see your actual household budget—what comes in, what has to go out, and where to divide the rest of it up. Show them how to manage bills, balance checkbooks, how to financially “adult” and show them how it all works. At the very least show them how to schedule their inflow and outflow of their money so they aren’t caught short in their account.

Bring them with you when you apply for a loan. Let them see the process of what’s being asked and what’s being required for you as a borrower. It’s also a great comparison-shopping experience, between different rates and terms they can see what happens when you shorten the term (higher payments, less cost overall) versus drawing it out longer (lower payments, more cost overall). It’s important they learn the world of lending—what it means to borrow, how interest works, and the importance of paying back on time.

Financial goal planning goes hand-in-hand with life goals. Distinguish between short-term goals (less than a year), mid-term goals (1-3 years), and long-term goals (3+ years). Help them with their goals and plotting out what it’ll take to reach them—both from a logistics and financial perspective.

Next week, they may be fresh out of the nest, but they’ll still be coming to you with questions. . .

Moving on to Middle Grade kiddos. This is a great age to really set up some solid lessons—they’re likely getting money from somewhere (i.e. allowance, indulgent grandparents, neighborhood jobs, etc.) and they have the basics of how money works as a tool. Time to make the lessons a little more adult-like.

-Keep reinforcing Needs versus Wants. As simplistic as it might sound, many people (read: adults) struggle with this. The more you go over this, the more likely it’ll stick in the long-run.

-Explain how credit works—the buy now, pay later concept—it can be a thrill to get something without parting with your money straightaway, but it needs to be paid back. Reinforce the notion that they should pay any credit on-time without fail and in-full whenever possible. Make a practical lesson out of this: “I will lend you $20 today to be paid back on X day. If you way it back three days later, you’ll owe me $22 which includes interest and a late fee.”

-Let them see how the “cashless” world works. How do paper checks and debit cards (which comes out of your account with money you have) compare with a credit card (using a credit line you have which has expectations and deadlines for payback).

-Give them a task when shopping. School shopping is ideal for this since they’ll have opinions on what they need/want. Draw up a list of what is needed for them to work off of and a set dollar amount to use to complete it. But, make it a bit of a challenge: force them to make a few trade-offs to complete their list at or under budget.

-This is the prime age for a Savings Challenge: they will likely have something larger they’ll be saving for. Set rewards as they hit benchmarks along the way to reinforce delayed gratification. “If you keep that $100 you’ve saved and not touch it for another month, I’ll put an additional $10 in your account. Alternatively, you can set savings matches: “If you save $20 of your birthday money and leave it in your account for a month, I’ll put another $20 in your savings.”

Next week, we’re hitting the teen years where things can get real.

A 2013 Charles Schwab Kids and Financial Literacy Study found that most kids form their life-long approach to money around age 7. That being said, it’s never too late or too early to start teaching money concepts.

When’s a good age to start? A good rule of thumb from youth educators says a good time is when kids realize that money is used to buy things (around ages 2-3). Even if your kids are older than 3—and even if they are older that the 7-year old mark—now is always the best time to start teaching your kids about money and financial concepts.

In this post, we’ll be looking at working with small children and the younger grades. Again, you know your child best in terms of their comprehension and attention span. Use everyday teachable moments to discuss some of the very basics about money.

-Allow kiddos to count and sort out coin and bill denominations. It’s a great way to get them working on simple addition and subtraction.

-Explain the basics of an economy—what bartering is and how we trade what we have (usually money) for what we need or want.

-Start reinforcing the concept of Needs Versus Wants and how to delay gratification. These are important life skills which can be practiced in everyday life.

-Play store with them—“buy” things and have them make change.

-Comparison shop and show them how much money could be saved by finding alternative products or substitutions.

-Set a Savings Challenge with them. Even at young ages, kids have more expensive items (toys, bikes, etc.) they’d like to purchase. Offer to match their savings for the item or give them opportunities to earn more money by taking on additional chores.

Next week, we’ll take a look at the Middle Grades and how to help them translate some of the abstract money concepts into more advanced learning!

As parents are becoming more integrated with their kids’ education, many are choosing to incorporate real-life lessons in their planning. Why not give money lessons a whirl? There’s nothing special you need—if you’re working, managing bills, and in general, living—you’ve got the tools you need.

In this short series, we’ll be covering some basic money concepts you can use across age ranges.

To make the topic stick, think about ages and stages. You know your child’s level of attention span, level of interest in details, and their comprehension. Some kids may gobble the information up, some may need a few lessons before concepts really stick.

Try to make teachable moments a part of every day life. Though they aren’t likely going out grocery shopping with you these days, you can still go over the concepts of price comparison or coupons while online shopping. Start with the simple things and work up towards the bigger stuff.

There are three components you’ll want to cover: Earning, Spending, and Saving.

Let’s break down Earning.

Allowances are a big part of this for most kids. Most parents have a base layer of chores—call them “Citizen of the Household Jobs” that are basic expectations. As in, “Since you live here, we expect you to have your bed made every day.” However, they may earn extra for paid chores such as helping with dishes, cleaning up after pets, or additional responsibilities.  The amount you pay and how you pay is strictly up to you.  Whether it’s “all or nothing” pay scheme or “pay per job” is also up to you. What’s important: Make sure you pay them on a consistent basis and that they know what level of completion you expect on these jobs.

Gift Money is also a part of most kids’ earning experience. Whether they get some fun money from grandparents, birthday and holiday gifts, it all adds up.

No matter how the earnings come in, practice with kids the importance of splitting their money between savings, spending, and sharing.

Next up: How to Teach the Little Ones About Money!