Posted by, Richard Rossi
Several years back I was forced to re-locate as my employer began to cut back work hours, leaving many of us with bills to pay and no way to do it. We needed a change.
It was time to move, relocate where the living is easy and the cotton is high.
We had planned our move carefully. Knowing that both our kids were interested in attending college, we figured it was a chance to get in-state tuition at a high caliber school. Our current state of residence provided no such opportunity.
Considering the inevitable tuition expense and potential employment opportunities, we settled on North Carolina as a destination.
While I was able to find new employment (albeit at a lower salary than before), the lower cost of living offered us some amenities we had not previously enjoyed. For example, we went on a family vacation.
My eldest son, the one who would carry the family torch, would soon be attending college. He had performed well in high school, well enough to give himself numerous quality, in-state schools to choose from. And so, after careful deliberation he chose…an out-of-state school. With out-of-state tuition costs.
Apparently it’s the cotton that was easy and my wife and I who were high. We would have to borrow.
Here’s the good news. We found that there were options, even for middle class folks like us. I had used a free tax prep service a few months back with the caveat that I open an account with a local credit union. I went to the credit union looking for answers.
If we borrow the wrong way, my son the torch carrier could end up burning down the village from around us. But if we’re smart, we could actually have something left over after he graduates in four years. Here are our two best options:
Use the equity in our home
Interest rates are at an all time low. Really. And the interest expense is tax deductible up to a point. So long as your
total borrowed of all mortgages does not exceed the total value of your home, the interest from your home equity loan can be written off on your 1040.
Early Withdrawal from our Roth IRA
Few of us knew that the real estate market would collapse like a lawn chair on the set of “The Biggest Loser”. If you can no longer borrow against your home but you have a Roth IRA, you may have another option. We’ve all been warned of the early withdrawal penalty associated with this investment product, but did you know that there are exceptions made for
college tuition expenses? Consult a professional, but be aware that this is a very real option for many of us.
Glad I got that out of the way. I think I’ll sit out on my back porch with a cold beer and look out over the cotton fields. They’re kinda pretty this time of year.
Richard Rossi is a guest blogger, published humor writer and children’s book illustrator from Greensboro, North Carolina. You’ll find his work at his website, www.rossibook.com.
