College Planning Starts Now: 5 Common FAFSA Mistakes to Avoid

Screen Shot 2014-01-27 at 2.15.08 PMJanuary is the month that millions of families disclose their financial data to the Department of Education through the Free Application for Federal Student Aid (FAFSA). Given that the FAFSA has been called the gateway to financial aid, and considering the ever-increasing costs of college, it is imperative to minimize mistakes in completing it. Here are five common FAFSA errors to avoid.

1. Failing to Submit Because of High Income

Many times families will not complete or submit the FAFSA, believing they make too much money to qualify. Income is only one of seven factors used to determine aid eligibility; always complete the FAFSA regardless of income.

2. Waiting Too Long to Submit

A mistake many make is to wait until they have all of their financial documents in place, and taxes done, before submitting their FAFSA. Since some money is on a first-come, first-served basis, it is imperative to submit as early in January as possible with estimates of your finances (which the Department of Education fully expects).

3. Submitting Incorrect Info for Divorced Parents

In a divorce situation, whose financial information is used? It is the income and assets of the household (including step-parent info) in which the students spends the majority of their time and receives the majority of financial support.

4. Understating Income

If you contribute to a 401(k), 403(b), or any other pre-tax retirement account, you must add back any contributions in the previous year to your income for FAFSA purposes. This in effect produces a higher FAFSA income than what might be shown on your tax return.

5. Overstating Assets

Many families mistakenly include retirement assets and home equity as part of their investments or net worth, when in fact neither should be included here.

And last but not least, please be sure to complete the correct FAFSA application. Remember to complete the FAFSA for the year your student will be in college for the upcoming fall school year, NOT the school year they are currently in. This is a huge, but common mistake. Make this one and your student will receive no aid in the following Fall. Let’s start off 2014 the right way for our local businesses!

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Luanne Lee is a licensed College Planning Relief® specialist with over 20 years in business and personal financial services. She is a proud mother of two young adults, two grandchildren, 3 dogs and 2 cats in the country near Loudoun.

A New Year’s Resolution

I Heart Buying LocalEach January, we make resolutions for the New Year, with every intention of keeping them. For most of us, those resolutions fade away to memory before the daffodils poke their heads out of the ground. This year, I would like to challenge you to make a commitment to an important resolution for the entire year – one that will not only help you enjoy the community around you more, but will also help your community thrive: buy local.

Buying local obviously supports the storeowners who live in your neighborhood, and maybe even across the street. But your purchases also allow them to hire employees and work with other local vendors, creating a strong and vibrant community. In contrast, large national chains rarely make community-level choices if those decisions don’t benefit them financially. So it really comes down this: Wouldn’t you rather support your neighbor’s business instead of a disinterested Fortune 50 company located far away from your community?

If you answered yes to this question, then the next question is – how should you get started? The easiest way is to buy groceries from local grocery stores and fresh produce and meats from food co-ops. You can even have the food delivered to you, taking away the argument that it takes too much time to go to different stores to buy different items. Moreover, your purchases support your community as well as the environment because local goods don’t require additional fuel and energy costs to get to you.

Need a gift? Try looking in one of the numerous and unique stores that line the streets of our towns. You’ll support the storeowner and the recipient of your gift will appreciate a unique gift that can’t be found in a box store. Everyone likes to feel special, and a unique local gift is a great way to let someone know how much you care. If you remodel or renovate your home this year, consider using locally sourced materials instead of materials shipped half way around the world. Be kind to the environment, too, and have

reusable and environmentally friendly plastic boxes delivered to you instead of using cardboard to store your stuff during the remodel. The convenience of having them picked up after you finish your remodel is an added bonus!

Do you have some clothing or furniture to donate? Any food items to share? Instead of sending them to the national charities, consider some of the small local charities, which can immediately use donations to help people in our community.

There are so many ways we can help make our community better. Let’s start off 2014 the right way for our local businesses!

Screen Shot 2013-10-29 at 8.28.41 AMABOUT US

Janice Gambaccini and Stephanie Zimmermann are sisters and co-owners of a local business called Lend A Box, LLC, which delivers environmentally friendly moving boxes to customers before they move and picks them up after the move is complete. Janice and Stephanie have lots of great ideas for local places to shop and eat – just ask them!

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