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is a part of the general insurance system of risk financing to protect the purchaser (the "insured") from the risks of liabilities imposed by lawsuits and similar claims.

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is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft.

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pays a specific lump sum to your loved ones for a specified period of time

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Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly.

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a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.

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the fraudulent acquisition and use of a person's private identifying information, usually for financial gain.

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a federal agency, established in 1914, that administers antitrust and consumer protection legislation in pursuit of free and fair competition in the marketplace.

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The Federal Trade Commission Act was one of President Woodrow Wilson's major acts against trusts. Trusts and trust-busting were significant political concerns during the Progressive Era. Since its inception, the FTC has enforced the provisions of the Clayton Act, a key antitrust statute, as well as the provisions of the FTC Act, 15 U.S.C.

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a compulsory contribution to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions.

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The legal definition of Tax is A payment to a public authority, required by statute, for a public purpose.

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is a fixed income investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate

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Owning a bond is essentially like possessing a stream of future cash payments. Those cash payments are usually made in the form of periodic interest payments and the return of principal when the bond matures.

In the absence of credit risk (the risk of default), the value of that stream of future cash payments is simply a function of your required return based on your inflation expectations. If that sounds a little confusing and technical, don't worry, this article will break down bond pricing, define the term "bond yield," and demonstrate how inflation expectations and interest rates determine the value of a bond. (See also: Managing Interest Rate Risk)

Measures of Risk

There are two primary risks that must be assessed when investing in bonds: interest rate risk and credit risk. Though our focus is on how interest rates affect bond pricing (otherwise known as interest rate risk), a bond investor must also be aware of credit risk.

Interest rate risk is the risk of changes in a bond's price due to changes in prevailing interest rates. Changes in short-term versus long-term interest rates can affect various bonds in different ways, which we'll discuss below. Credit risk, meanwhile, is the risk that the issuer of a bond will not make scheduled interest or principal payments. The probability of a negative credit event or default affects a bond's price - the higher the risk of a negative credit event occurring, the higher the interest rate investors will demand for assuming that risk.

Bonds issued by the United States Treasury to fund the operation of the U.S. government are known as U.S. Treasury bonds. Depending on the time until maturity, they are called bills, notes or bonds.

Investors consider U.S. Treasury bonds to be free of default risk. In other words, investors believe that there is no chance that the U.S government will default on interest and principal payments on the bonds it issues. For the remainder of this article, we will use U.S. Treasury bonds in our examples, thereby eliminating credit risk from the discussion. (See also: A Look At Government Bonds And National Debt)

Calculating a Bond's Yield and Price

To understand how interest rates affect a bond's price, you must understand the concept of yield. While there are several different types of yield calculations, for the purposes of this article, we will use the yield to maturity (YTM) calculation. A bond's YTM is simply the discount rate that can be used to make the present value of all of a bond's cash flows equal to its price.

In other words, a bond's price is the sum of the present value of each cash flow, wherein the present value of each cash flow is calculated using the same discount factor. This discount factor is the yield. When a bond's yield rises, by definition, its price falls, and when a bond's yield falls, by definition, its price increases. (See also: Get Acquainted With Bond Price/Yield Duo)

A Bond's Relative Yield

The maturity or term of a bond largely affects its yield. To understand this statement, you must understand what is known as the yield curve. The yield curve represents the YTM of a class of bonds (in this case, U.S. Treasury bonds).

In most interest rate environments, the longer the term to maturity, the higher the yield will be. This makes intuitive sense because the longer the period of time before a cash flow is received, the greater the chance is that the required discount rate (or yield) will move higher. (See also: Bond Yield Curve Holds Predictive Powers).

Inflation Expectations Determine the Investor's Yield Requirements

Inflation is a bond's worst enemy. Inflation erodes the purchasing power of a bond's future cash flows. Put simply, the higher the current rate of inflation and the higher the (expected) future rates of inflation, the higher the yields will rise across the yield curve, as investors will demand this higher yield to compensate for inflation risk.

Short-Term, Long-Term Interest Rates and Inflation Expectations

Inflation - as well as expectations of future inflation - are a function of the dynamics between short-term and long-term interest rates. Worldwide, short-term interest rates are administered by nations' central banks. In the U.S., the Federal Reserve Board's Open Market Committee (FOMC) sets the federal funds rate. Historically, other dollar-denominated short-term interest, such as LIBOR, has been highly correlated with the fed funds rate.

The FOMC administers the fed funds rate to fulfill its dual mandate of promoting economic growth while maintaining price stability. This is not an easy task for the FOMC; there is always debate about the appropriate fed funds level, and the market forms its own opinions on how well the FOMC is doing.

Central banks do not control long-term interest rates. Market forces (supply and demand) determine equilibrium pricing for long-term bonds, which set long-term interest rates. If the bond market believes that the FOMC has set the fed funds rate too low, expectations of future inflation increase, which means long-term interest rates increase relative to short-term interest rates - the yield curve steepens.

If the market believes that the FOMC has set the fed funds rate too high, the opposite happens, and long-term interest rates decrease relative to short-term interest rates - the yield curve flattens.

The Timing of a Bond's Cash Flows and Interest Rates

The timing of a bond's cash flows is important. This includes the bond's term to maturity. If market participants believe that there is higher inflation on the horizon, interest rates and bond yields will rise (and prices will decrease) to compensate for the loss of the purchasing power of future cash flows. Bonds with the longest cash flows will see their yields rise and prices fall the most.

This should be intuitive if you think about a present value calculation - when you change the discount rate used on a stream of future cash flows, the longer until a cash flow is received, the more its present value is affected. The bond market has a measure of price change relative to interest rate changes; this important bond metric is known as duration.

The Bottom Line

Interest rates, bond yields (prices) and inflation expectations correlate with one another. Movements in short-term interest rates, as dictated by a nation's central bank, will affect different bonds with different terms to maturity differently, depending on the market's expectations of future levels of inflation.

For example, a change in short-term interest rates that does not affect long-term interest rates will have little effect on a long-term bond's price and yield. However, a change (or no change when the market perceives that one is needed) in short-term interest rates that affects long-term interest rates can greatly affect a long-term bond's price and yield. Put simply, changes in short-term interest rates have more of an effect on short-term bonds than long-term bonds, and changes in long-term interest rates have an effect on long-term bonds, but not on short-term bonds.

The key to understanding how a change in interest rates will affect a certain bond's price and yield is to recognize where on the yield curve that bond lies (the short end or the long end), and to understand the dynamics between short- and long-term interest rates.

With this knowledge, you can use different measures of duration and convexity to become a seasoned bond market investor.

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Understanding Interest Rates, Inflation And Bonds

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Owning a bond is essentially like possessing a stream of future cash payments. Those cash payments are usually made in the form of periodic interest payments and the return of principal when the bond matures.

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a stock exchange.

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Stock trading computer systems, binary platform demo, stock market definition, silver trading strategies

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learn about career options, top forex trading platform, become a broker insurance, stock traded on nyse, stock market definition, best options trading platform in india

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is a detailed report of an individual's credit history prepared by a credit bureau. Credit bureaus collect information and create credit reports based on that information, and lenders use the reports along with other details to determine loan applicants' credit worthiness.

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A positive credit history is more important than ever. You need good credit to get approved for a mortgage loan, rent an apartment, buy a car, qualify for a good insurance rate, and sometimes even to get a job. More businesses make use of your credit history to decide whether to do business with you.

If you have bad credit or no credit at all, your goal is to build a positive credit history so you can easily have your applications approved. Building a positive payment credit history isn't not magic. You can't directly add things to your credit report, even if they're bills you actually pay each month. Instead, you must depend on your creditors and lenders to send updates to the credit bureaus based on your account history.

There are three major credit bureaus in the U.S.: Equifax, Experian, and TransUnion. Creditors you have accounts with with may report your credit history to one or all three of the bureaus based on their existing relationship with that bureau. Bureaus don't share information with each other under normal circumstances so there's a chance some of your accounts may only appear on one credit report.

Every month or so your credit card issuers and lenders send the credit bureaus an update of your account status. They tell the credit bureaus your current balance, payment history, and other details about your accounts. This is the information that helps build a positive credit history, assuming your account details are positive. Positive credit information includes timely payments and healthy credit card balances.

It takes time to add positive information to your credit report so don't expect it to happen overnight, or even in a few weeks. You can help the process by being financially responsible and patient with the process.

You need open, active, positive accounts to build a positive credit history. If you don't already have open accounts, you can try applying for the types of credit cards or loans for people with no credit or bad credit, like a secured credit card or retail store credit card. And, if you can't get approved on your own, a relative or friend may be willing to co-sign for you or make you an authorized user on one of their credit cards.

While you're trying to build a positive credit history, you should avoid the things that will hurt your credit. This includes late payments on all your bills, high credit card balances, and too many credit card applications.

Don't be afraid to start small. Expect to get only small credit limits and loans, in the beginning, i.e. less than $1,000. Creditors and lenders will give you more credit once you've shown that you can be responsible with a little bit. Once you've successfully opened a credit card or loan, don't use up too much of your available credit and pay back what you borrow on time each month.

If your credit report contains negative accounts that should be positive, you can use the credit report dispute process to have the information corrected. For example, your credit report may show that you were late on a payment that you're certain you paid on time. To correct credit report errors, you need to send a dispute letter to the credit bureaus citing the error and providing a copy of any proof that shows the information is indeed incorrect.

The bureau will investigate and revise your credit report if the investigation supports your claim. If not, you can follow up with a dispute directly with the business that reported the error.

Not all the bills you pay each month get reported to credit bureaus regularly. For example, your cell phone, cable, and auto insurance payments don't help build a positive credit history, even when you pay on time. However, if you default on these payments (by becoming several months delinquent), the late payments could be added to your credit report and hurt your progress toward building a good credit score.

Watch out for credit repair scams and ploys about improving your credit score. Credit repair companies don't have any privileges with your credit history that you don't also have.

Building a positive credit history isn't as hard as it seems. Open up an account and pay the bill on time every month and you're building a positive credit history. With time your credit score will improve and you'll be able to afford bigger credit card limits and loans.

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Here Are the Steps to Adding Positive History to Your Credit Report

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A positive credit history is more important than ever. You need good credit to get approved for a mortgage loan, rent an apartment, buy a car, qualify for a good insurance rate, and sometimes even to get a job. More businesses make use of your credit history to decide whether to do business with you.

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An annual percentage rate (APR) is the annual rate charged for borrowing or earned through an investment, and is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan.

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is a valuation performed by lenders that determines the possibility a borrower may default on his debt obligations. It considers factors, such as repayment history and credit score.

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a small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit.

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an account at a bank against which checks can be drawn by the account depositor.

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Checking Account Overview

Have you ever been nervous to carry a large amount of cash in your pocket? Have you had a job that required direct deposit? Ever wondered if there was an easy way to pay monthly bills or track your expenses? If you answered 'yes' to any of these questions, a checking account is probably a good idea for you. Let's explore checking accounts so that you can understand the different types and pick the one or two that are best for you.

A checking account is a financial account that offers easy access and security of your money for daily transactional needs. It allows you to deposit your paychecks and withdraw money for vacations, going out to eat, or anything else you would like to spend your money on. If you want to utilize a debit card or get cash out of an ATM, you must have a checking account opened at a financial institution. These accounts usually have a minimal fee or no fee at all and are an essential part of most people's financial lives.

Checking accounts have different options or packages to help meet the needs of different individuals. To determine the best choice, it's important to understand the different types of checking accounts and some of the unique features of each.

Types

Basic Checking

As the name implies, these accounts offer the basics. If you're looking to use a debit card, get cash occasionally at an ATM, and write a few checks, this may be the account for you. These accounts are likely to have a small monthly or yearly fee which can be waived if you have a minimum balance or if you direct deposit your check every month. These accounts usually pay little to no interest.

Interest-Bearing or Money Market

These accounts are similar to basic checking accounts, but will usually pay a higher rate of monthly interest on your account balance. The trade-off is that you usually have to maintain a higher minimum balance in your account to avoid monthly service fees and get the stated interest rate. For example, a basic checking account may only require a $100 balance to have monthly services fees waived, whereas an interest-bearing account may require a $1,000 balance to have fees waived and to collect interest.

These types of accounts are best for individuals who are not worried about maintaining a higher balance and do not write a lot of checks or plan a lot of monthly withdrawals. Sometimes it may make sense to have a basic checking account for daily transactions and a money market or interest-bearing account with your extra money.

Free Checking

For obvious reasons, this is a popular type of checking account. Free checking accounts have no monthly service charges or additional fees regardless of balance, number of checks written, or other activity. You can direct deposit, usually pay bills online, and write checks through these types of accounts, just like you could with a basic checking account. However, these accounts will usually pay the lowest amount of interest compared to any other accounts.

Joint Checking

If you are married or want someone else to have equal access to your account, a joint account may be a good option. Most types of checking accounts offered by banks have a joint option.

Student checking

Many banks have special accounts for students. These accounts usually include various perks that can range from free checks, no charges for using an ATM, and special rates on other loans or accounts through the bank. A similar account can be offered for seniors over 55 or 60 years of age.

How It Can Help You

Liquidity

Money held in most checking accounts is very liquid. You can usually get access to the money the day that you need it. Other types of accounts may take longer to withdraw or access your money.

Bill Pay Made Easier

Not only can you write checks to pay bills, but with advancements in technology you can now set up and pay all your monthly bills with a few clicks of a computer button. This saves time, can be more secure, and can save money on postage.

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what is a checking account? - definition

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types & advantages - video & lesson transcript | study.com

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What is a Checking Account? - Definition, Types & Advantages - Video & Lesson Transcript | Study.com

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Have you ever been nervous to carry a large amount of cash in your pocket? Have you had a job that required direct deposit? Ever wondered if there was an easy way to pay monthly bills or track your expenses? If you answered 'yes' to any of these questions, a checking account is probably a good idea for you.

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expend money with the expectation of achieving a profit or material result by putting it into financial schemes, shares, or property, or by using it to develop a commercial venture.

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Income Investing Definition from Financial Times Lexicon

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an economy of or reduction in money, time, or another resource.

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What Is a Savings Account and How Does It Work?

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A savings account is a bank or credit union account designed to keep your money safe while providing interest. Learn how savings accounts work.

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an estimate of income and expenditure for a set period of time.

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The definition of Budget: An estimate of income and spending for some period of time. Example: Sam...

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Every so often, I stop and take stock of my financial situation by double-checking where my money is going. I don't have an exact spending plan down on paper; my style involves making sure all the important stuff (mortgage payments, Roth IRA contributions, insurance, emergency fund, groceries, bills, etc.) is covered, and then I pretty much spend until the rest of the money is gone for the month.

But that doesn't mean I don't review my expenses occasionally. I also look at my spending and decide whether or not I could increase certain contributions. If I'm going to do this, it means that I need to re-evaluate my monthly income and spending, and make sure I have the resources available to change things up a bit. Recently, I wanted to bring my Roth IRA contributions up to the max, so I had to look at what was happening with my spending.

Upon first review, I thought everything was great. But, when my new, higher contribution came out of the account the following month, I was dismayed that there didn't seem to be quite as much left over as I thought there should be.

The culprit? A variable expense.

Don't Forget Variable Expenses

We all have variable expenses. Rather than being fixed, like your car payment, the cost of variable expenses changes each month. This can be the variation in what you spend on groceries, as well as the items that you only pay periodically. In my case, the variable expense I forgot to plan for was an insurance premium payment automatically deducted from my bank account once a year.

When you're planning your budget, it's important to account for these variable expenses. Look back through the last three to six months' worth of spending in order to get an idea of where you are. If last month's electric bill was the lowest in the year, you don't want to base your spending plan off that less-than-typical number. Instead, add up what you spent on electricity over the last six months and then average it out. That will give you a far more accurate estimate of what you pay regularly for your utilities.

Don't forget periodic expenses, either. Many insurance policies bill every six months, or every year, rather than monthly. Make sure you account for that by looking back through your spending. You can check your bank account or use personal finance software to help you keep track of where the money is going and how regular the expenses are.

As you put together your spending plan/budget, don't forget about the variable expenses. It's tempting to just look at your last month of income and expenses, but it's rarely enough to give you a true idea of your financial picture. By checking back through three to six months of expenses and making a list of all your periodic expenses, you can more effectively plan your financial future.
How do you account for variable expenses?
Tagged as: Better Yourself, Budget, Spending

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Creating a Spending Plan: Don't Forget Your Variable Expenses

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Every so often, I stop and take stock of my financial situation by double-checking where my money is going. I don't have an exact spending plan down on paper; my style involves making sure all the important stuff (mortgage payments, Roth IRA contributions, insurance, emergency fund, groceries, bills

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Fixed expenses or costs are those that do not fluctuate with changes in production level or sales volume. They include such expenses as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, and advertising.

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The expenses that occur in businesses are classified into two types - fixed expenses and variable expenses.

Fixed expenses are those expenses that do not change when there is a change in production or sales level. Expenses like rent, insurance, payment on loans, management salaries, advertising are examples of fixed expenses. They change over a period of time.

Variable expenses are those expenses that change with each unit of production and it is directly proportional to the level of production. When there is an increase in production of goods, then the variable costs will also increase and vice-versa. For example expenses like production wages, raw materials, sales commission, shipping costs etc. are examples of variable expense.

What is Fixed Expense?

Fixed expenses are those that will remain same despite any change in the sales amount, production or some other activity. They are expenses that will have to be paid by the company even though there are any changes in business activities. They remain constant for a specific level of production over a certain period of time. However, it may change if the production level increases beyond a limit.

For example,

The monthly rent of a retail shop is a fixed expense and it is not dependent on the number of sales that takes place every month. Whether the sales are less or more, the monthly rent that has to be paid will be fixed.

The cost incurred for setting up plants and machinery are considered as the fixed expense, as this cost will not change with the production level.

These expenses will be quite steady and will not tend to change every month. The expense will remain fixed within some radar of activities, but it will change after the certain limit. For example, the rent and salary paid to staff will remain fixed every month. However, when the sales increase there might require some additional space and staffing this increase in the rent and salary expense. But these expenses will remain fixed over a period of time. Changes will happen when there are likely to change any event.

Some fixed expense like advertising and promotional expense are assumed or incurred at the decisions of the management of the company. It is understood that all reserved fixed expense will suffer even if the sales fall zero. Even though the sales and production expense are the main factors that regulate the variable expense that are incurred by the company, these costs will also fluctuate with regards to few other factors like updates in the price of suppliers, promotional offers etc.

It is essential to recognize the various types of expenses as and when there is an increase in production or sales price. The fixed price will remain unaffected when the sales increases but the fixed cost per unit will drop.

Consider for example a potato chips manufacturing company. If it has total fixed expenses of Rs. 10000 and produced 100 packets of chips, then the full amount of Rs. 100 as the fixed expense will be applied to 100 packets of chips. If the same manufacturing company produced 200 packets of chips then the fixed cost per packet will drop to Rs. 50.

Examples of fixed expense
1) Real Estate
Almost all businesses will require the owner of the business to pay rent for the space that is used to conduct the business. Tax deductions can be incurred for rent that is used to conduct the business. This amount that the business pays as rent is the fixed expense which is not dependent on the performance of the company. However, the rent might increase over a period of time which is due to economic growth and it is based on the agreement signed.
2) Utilities
Costs involved in utilities may be of the variable, fixed or mixed. Consider, for example, internet and telephone bills. It will usually be a monthly rate and will not change. Even if it changes it will be a slight change.

Consider electricity charges for offices or retail spaces. It is a fixed amount and if it varies every month, the variations will be minimal.
3) Payment to employees
A non-commission based pay is a fixed expense. Some sales representatives receive pay based on commission. This commission will rise and fall with respect to the sales volume. But they also receive a portion of their pay as fixed payment.
4) Debt expense
Some businesses will have debt. In such case, the interest that is paid is a fixed expense.

Importance of fixed expense

A company that has focused on a quite large amount of variable expense will predict more profit per unit in comparison to a company with a large amount of fixed expense. This implies that if a firm has more fixed expense, profit margin will be held when there is a fall in sales which is likely to add a level of risk to the companies' stocks. Equally fixed costs will also allow a company to experience the increase in profit as and when the income increases, they are applied at a constant cost level.

Consider the company that manufactures potato chips. Let us assume that the cost the company spends on manufacturing 100 packets of chips per month is Rs. 1000.(Assume that the cost of a packet is Rs 10). Rs. 1000 includes Rs. 500 on administration, insurance and marketing expenses that are usually fixed expense. If the company changes the decision to increase the production to 200 packets per month, then its total production cost will rise to Rs. 1500 (Cost of one packet of chips will be Rs. 7.5), as it can distribute the fixed costs of Rs. 500 over more units. Even though the company total cost increases from Rs. 1000 to Rs. 1500, the individual packets of chips will become less expensive to produce and hence the profit increases.

Thus as seen in the example, fixed expenses are an important component to project profit and also to calculate break-even point for a business.

It is normally good to keep fixed expenses of a company as low as possible, particularly at the time when the business starts. This is because, during the first year of the business, the businesses income will be low as it will take some time for the business to establish and get customers. At this stage, maintaining low fixed expenses will help you to save money till the sales pick up.

Typically fixed expenses will generally differ based on the business. The businesses which depend on people other than physical assets like website design, tax preparation etc will not have many fixed costs. Companies like airlines; auto manufacturers etc. will have high fixed costs.

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What is fixed expense? Examples of Fixed expenses and its Importance

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Fixed expense are those expenses that will remain same despite any change in the sales amount, production or some other activity. They are expenses that will have to be paid by the company even though there are any changes in business activities. They remain constant for a specific level of production.

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income remaining after deduction of taxes, other mandatory charges, and expenditure on necessary items.

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Student Debt Relief | Student Loan Forgiveness

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Discretionary income is a term that is used a lot in regards to student loans. It's used when calculating student loan payments under all of the income driven repayment plans. It's also something that changes annually based on certain factors both within and outside of the borrowers control. It is important to understand what is discretionary income, how it's calculated, and how its applied to your student loan payments.

What exactly is discretionary Income?

Discretionary income is the amount of income remaining after deduction of taxes, other mandatory charges, and expenditures on necessary items. It's essentially the income you have left over after paying all necessary and required living expenses. It does not account for personal items such as electronics, vacations, or various shopping someone might do. Discretionary income doesn't include things like available credit limits or loans, it only looks at your actual income. For the purpose of student loans, discretionary income is your adjusted gross income on your tax returns subtracted by 150% of the poverty guideline for your family size.

What is the poverty guideline?

Every year the government releases a poverty guideline for the 48 contiguous states, and individually for the states of Alaska and Hawaii. Alaska and Hawaii have a higher cost of living so their guideline is individualized. The guideline is calculated by using the most recent census data and then adjusting for inflation against the annual Consumer Price Index (CPI) for annual updates. The poverty guideline is not supposed to be a cost of living. It's literally the income that is considered to be living in poverty.

How to figure out your discretionary income

Your discretionary income is simply your adjusted gross income found on your most recent tax return(line 37 on form 1040) minus 150% of the poverty guideline for your family size. To calculate your discretionary income, you need to know a few things.

* Your adjusted gross income as reported on your taxes
* Your family size as reported on your taxes
* The poverty guideline for your state.

When you have all these, the calculation is easy. It's simply your income subtracted by 150% of the poverty guideline for your state and family size. Here is a chart which shows the 150% poverty guideline for various family sizes
150% of the poverty guideline for 2017:

*For family member over 8, add $4,180 for the 48 contiguous, $5,230 for Alaska, and $4,810 for Hawaii

Now, using the table above we can see that depending on which state you live in, and how big your family size is, the poverty guideline will change. These numbers will slowly rise every year as the guideline is adjusted according to the CPI. This would mean that theoretically if your family size doesn't change and your income doesn't change, your student loan payment should be a bit smaller on an annual basis. We will discuss this in more detail a little bit further down the page.
Discretionary income based on family size and adjusted gross income (AGI) for the 48 contiguous states:
How discretionary income is connected to student loan payments

If you have federal student loans, you should know that there are multiple repayment plans available to most borrowers, many of which are calculated using your discretionary income. The goal of these repayment plans is to reduce the number of defaulted student loans and make payments more affordable. When the student loan payment takes into account a person's income, family size, and necessary expenses, it's a more customized payment depending on each individuals circumstance. To calculate your annual student loan payment in any of the income driven repayment plans, simply take your discretionary income and multiply it by the percentage used for your repayment payment plan. For example, if your discretionary income is $14,370, your annual payment in the REPAYE would be $1,437. Divide that by 12 to get your monthly payment or $119.75 in this case. If you were not in the REPAYE and in the IBR, we would use 15% of your discretionary income of $14,370 as a payment, which would equate to $2,155.50 annually or $179.63 per month.
Here is a table showing each repayment plan that takes into account discretionary income, and what percentage of that income is used to calculate the annual student loan payment
Discretionary Income Will Change Annually

Discretionary income can and will change annually, which is why all the income driven repayment plans require an annual recertification of your income. Discretionary income will change as the poverty guideline changes annually to adjust for the CPI, which will impact your payment. Also, as your income changes, so will your discretionary income. And lastly, when your family size changes your discretionary income will change. This confuses many borrowers when they unexpectedly have a new payment amount in the following year. It's extremely important to remember to recertify your income annually or your servicer will place you into a standard repayment plan, likely increasing your payment as well as losing some forgiveness benefits.

Conclusion

Understanding the various terms in regards to your student loans is critical. Knowing how to calculate your discretionary income, and how it may change annually will allow you to know exactly what you should be paying on your student loans, as well as predicting future payments in upcoming years. If you know the repayment plan type you are in and what percentage of your discretionary income is used to calculate your payment, you should never be surprised by your student loan payment and make sure that no errors have occurred on the servicing side to cause you to pay more than you must be paying by law.

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Discretionary Income - What it is and how to calculate it

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Discretionary income is a term that is used a lot in regards to student loans. It's used when calculating student loan payments under all of the income driven repayment plans. It's also something that changes annually based on certain factors both within and outside of the borrowers control.

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income remaining after deduction of taxes and other mandatory charges, available to be spent or saved as one wishes.

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The Centre for Economics and Business Research (CEBR) said soaring inflation coupled with low pay rises means household peacetime disposable income is at its lowest since 1921.

Rising food, clothing and energy prices mean the average British family will have £910 less to spend this year than they did in 2009.

The CEBR calculates that household disposable income will fall by 2pc this year, more than double last year's fall of 0.8pc and the biggest drop since the savage 1919 to 1921 post-First World War recession.

It forecasts inflation will average 3.9pc in 2011, its highest since 1992, as January's increase in VAT from 17.5pc to 20pc and the rising cost of oil and other commodities continue to drive up prices.

At the same time, salaries will rise just 1.9pc as unemployment remains high and the public sector makes cut-backs.

Douglas Williams, chief executive of the CEBR, said: "The virtually unprecedented peacetime squeeze on real household incomes, combined with [our] more realistic forecasts for exports and investment growth means that GDP growth will be subdued for the next two or three years."

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UK disposable income falls to lowest since 1921

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The Centre for Economics and Business Research (CEBR) said soaring inflation coupled with low pay rises means household peacetime disposable income is at its lowest since 1921. Rising food, clothing and energy prices mean the average British family will have £910 less to spend this year than they did in 2009.

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Net pay is the amount of pay remaining for issuance to an employee after deductions have been taken from the individual's gross pay

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Calculating net pay is an important step in comparing competing travel nursing pay packages and ultimately deciding whether or not to accept a particular travel nursing job. The importance of net pay is relatively unique to travel nursing. This is due largely to the fact that levels of tax-free compensation vary so greatly. However, there are other important factors to consider. Here we'll discuss the factors that affect net pay and provide a strategy for calculating it.

What is net pay and how should it be calculated?

It's important to define net pay because we want to make sure that we're making apples-to-apples comparisons when comparing compensation packages. The standard and perhaps best approach is to focus on weekly net pay. Weekly net pay is the estimated net amount that will be deposited to the travel nurse's account for working the contracted weekly hours. While this might seem really straightforward, you must be careful to clearly define the parameters.

Remember, the pay package can be comprised of many variables. As a result, you may run in to some recruiters who factor in variables like travel stipends or medical benefit costs to their weekly net pay quotes. However, these variables are most likely not going to be paid on a weekly basis. Recruiters do this because they're intent on portraying the full value of their compensation package.

While this may seem disingenuous, this approach is not without merit. Recruiters are concerned that a centralized focus on weekly net pay might overshadow some of the other compensation variables they're offering. For example, they might be offering a much higher travel stipend than other agencies, or they might provide top-notch medical benefits that are more expensive than others, or they might be offering a completion bonus. This is why it's so important to get your compensation quotes in writing. In doing so, you'll be able to run equal calculations and make your own comparisons.

For our purposes here, we're defining weekly net pay as only the amount of money that will be deposited to the travel nurse's bank account for working the contracted hours. However, you must remember to consider all of the other variables when comparing the total value of competing pay packages.

Now that we've defined net pay, let's take a basic look at how it's calculated. First, we're going to calculate the gross taxable wage per week. Next, we're going to calculate the weekly taxes that will be paid on the gross taxable weekly wage and subtract the taxes from the gross weekly taxable wage. Finally, we're going to add the remainder to the tax-free stipends to arrive at the final weekly net pay figure.

Sample Travel Nursing Pay Packages

Let's begin with two sample pay packages so that we have something to refer to throughout our discussion.

Sample #1

The assignment is for 13 weeks at 36 regular hours per week for a total of 468 anticipated hours. The agency offers the following:

Taxable base rate: $20/hour

Tax-free housing stipend: $1900/month (paid weekly)

Tax-free M&IE stipend: $250/week

Sample #2

The assignment is for 13 weeks at 36 regular hours per week for a total of 468 anticipated hours. The agency offers the following:

Taxable base rate: $15/hour

Tax-free housing stipend: $2100/month (paid weekly)

Tax-free M&IE stipend: $300/week

For the purpose of calculating weekly net pay, the first thing we have to do is breakdown the monthly housing stipend to a weekly figure. It's highly recommended that you require your recruiter to perform this calculation for you in order to avoid any miscommunication. However, If the agency is portraying this figure properly, then you should be able to multiply the monthly figure by three and divide by 13 in order to arrive at the weekly calculation. Remember, three months is 13 weeks and there are 4.33 weeks in a month. So we're looking at $438.46 for Sample #1 and $484.62 for Sample #2.

Our next step is to calculate the total weekly dollar for the tax-stipends. Essentially, we need to add the housing stipend to the M&IE stipend. For Sample #1 we're looking at $438.46 (housing) + $250 (M&IE) for a total of $688.46 per week. For Sample #2 we're looking at $484.62 (housing) + $300 (M&IE) for a total of $784.62 per week.

How to calculate the estimated taxes for travel nursing pay

Now we're ready to calculate the taxes that will be taken out of the weekly pay check. We need two things to accomplish this. First, we need the gross weekly taxable wage. To calculate the gross weekly taxable wage we simply multiply the taxable base rate by the number of contracted weekly hours. For Sample #1 we're looking at $20 * 36 hours for a total of $720 per week. For Sample #1 we're looking at $15 * 36 hours for a total of $540 per week.

Next, we need to calculate the estimated taxes that will be paid on the weekly taxable income. To accomplish this, many recruiters and travel nurses will rely on a ball-park tax rate figure. For example, they might estimate that the tax burden will be 20%. They will then multiply the gross weekly taxable wage by 20% to determine the estimated tax burden. So for Sample #1 we're looking at .2 * $720 = $144.

This approach is not recommended for two reasons. First, taxes are progressive. This means that the more money you make, the higher your tax rate is and vice-versa. Second, states have substantially different state tax rates. Both of these issues can throw your calculations off significantly.

Using an online paycheck calculator is a much better alternative. The most popular online paycheck calculator is found at paycheckcity.com. From their homepage menu you can select Calculator, then Standard, then Hourly Paycheck. Enter the information as applicable and select Calculate at the bottom of the calculator. It will provide a much more accurate estimate of your tax burden.

Below are images of our results for Sample #1 and Sample #2. You can see that we've selected Arizona as the state and you can also see the other parameters we used for our tax status. Yours maybe different than what we've selected so be sure to enter parameters that are unique to your situation. This is part of the beauty of paycheck calculators.

Calculating net pay

As mentioned above, we simply subtract the estimated weekly taxes from the weekly taxable wage and add the remainder to the total weekly tax-free stipends to calculate weekly net pay for a contract. For Sample #1 we're looking at $720 - $167.59 = $552.41 + $688.46 = $1240.87 net weekly pay. For Sample #2 we're looking at $540 - $121.96 = $418.04 + $784.62 = $1202.66 net weekly pay.

As you can see, Sample #1 offers the higher net pay. However, you must still remember to account for the all of the remaining compensation variables when determining which contract offers the better deal.

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How to Calculate Travel Nursing Net Pay " BluePipes Blog

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Calculating net pay is an important step in comparing competing travel nursing pay packages and ultimately deciding whether or not to accept a particular travel nursing job. The importance of net pay is relatively unique to travel nursing. This is due largely to the fact that levels of tax-free compensation vary so greatly.

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Gross pay is the amount of money your employees receive before any taxes and deductions are taken out.

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Basically, gross pay refers to all the money your employer pays you before any deductions are taken out.

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a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker.

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2018-2019 Salary Schedule

Please review the proposed Salary Schedule and send any comments or concerns to Mrs. Sheila Jones, our CSFO at (sheilajones@jefcoed.com).

Comments and concerns will need to be received by Thursday, June 7th at noon, please.

2018-2019 Salary Schedule - PROPOSED.pdf

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2018-2019 Salary Schedule Please review the proposed Salary Schedule and send any comments or concerns to Mrs. Sheila Jones, our CSFO at (sheilajones@jefcoed.com). Comments and concerns will need to be received by Thursday, June 7th at noon, please. 2018-2019 Salary Schedule - PROPOSED.pdf

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a fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.

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If cryptocurrencies are indeed a worthy and usable substitute of fiduciary currencies, people should be able to live a normal life and buy goods and pay for services with them, just like with state currencies nowadays. But as adoption is just not there, using cryptocurrencies for everyday purchases does present certain downsides and certain advantages, and while not as comfortable as a state-backed currency, it is possible to live being paid in cryptocurrency today.

One might say that no one would want to collect his allowance in cryptocurrencies; for normal people, it really does not make sense; only if you are investing part of that allowance immediately; but for freelancers in certain parts of the world, cryptocurrencies are the most attractive way of collecting their allowance for several reasons: first, the unbanked can be their own bank and receive their allowance without a third certificating the funds; second, they can bypass currency control measures like the ones imposed in Venezuela, and third, in inflationary economies, it helps people to preserve the value of their money, even with their clear volatility.

But, apart from this, how does a person that collects his pay in cryptocurrencies lives a normal life? According to an article by Bitcoin News, there are three important tips for surviving in this way:

First, try to find merchants who will accept the cryptocurrency of your wage for payments. This is a valid choice and the one with fewer caveats; you won't have to deal with exchanges or fees, and you will be able to purchase your good and pay services with no drama. The obvious downside is that most small merchants do not accept payments with crypto.

The second choice, is to try to use a payment service that offers crypto to fiat exchange services via a credit or debit card at the time of the purchase. The obvious advantage is that being a credit card, is that it is accepted in every establishment that accepts fiduciary currency cards. The downside is that most of these projects are not universally accepted in every country, because they function like a just-in-time exchange, and exchanges are not legal in many countries. examples of these projects are the Monaco suite of products, and Bitpay cards, among others.

The third and most obvious one is to exchange your wage in cryptos to normal currency via a cryptocurrency exchange. This is cumbersome because you will have to identify yourself in the exchange platform and then sell your cryptos, with the exchange taking a fee of everything traded, and some of these operations are taxable by law. But this is the nicest option, because you will be able to buy everything you want with the normal currency gained from a transaction.

So, living with a wage paid in crypto is indeed possible, you just have to be careful and always consider the volatility of your money to make the right choices handling it.

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Living with a Cryptocurrency Wage Now: It Is Possible!

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If cryptocurrencies are indeed a worthy and usable substitute of fiduciary currencies, people should be able to live a normal life and buy goods and pay for services with them, just like with state currencies nowadays. But as adoption is just not there, using cryptocurrencies for everyday purchases does present certain downsides and certain advantages, and ...