Part 1 – Income

One of In the Money’s readers, Sam, recently asked for me to discuss some points and suggestions for financial aid applications.

This post is meant for those who are applying for financial aid for higher education whether you are a student or a parent of a student. It is important to know the basics of how to maximize your financial aid award. Keep in mind that you should always be honest on your financial aid applications as the penalties of getting caught is considered fraud and has very severe punishments. As a general rule, you should file your FAFSA as soon as possible since most colleges have a limited amount of institutional grant funds to award and when that is gone, students are only eligible for federal and state grants and loans.

In this part, I will discuss the most basic principle to maximizing your financial aid eligibility: reducing your income in the tax year prior to the academic year that financial aid is requested. Here are some tips associated with this principle:

1. Do your taxes early – when you fill out your Free Application for Federal Student Aid (FAFSA) you need to include income numbers. Clearly, the more income you have the higher your expected family contribution will be which means less financial aid award money. To avoid overestimating your income, do your taxes early so you have the right numbers.

2. Do not pay educational expenses with money from your retirement fund – Retirement funds are sheltered from the need analysis process so try to leave them alone or if necessary, borrow against your retirement plan instead of taking a disbursement from it since you can be penalized for taking a disbursement.

3. Try to avoid capital gains in tax year prior to academic year – Capital gains such as gains from selling stocks are considered income. Try to avoid selling your stocks in the year prior to the academic year as it will raise your income.

4. Simplified Needs Test – If you fit into both of these categories, you can increase your eligibility for federal financial aid by a lot:
a. The parents’ adjusted gross income (AGI) is under $50,000
b. All family members are eligible to file an IRS 1040A or 1040EZ income tax return
If the parents’ income is close to $50,000, they should consider taking steps to lower their taxable income by either taking a capital loss through selling off bad investments, reducing their salary if they run their own business, or making a larger contribution to retirement funds.

Next time I will go over another important principle regarding assets.

I received an email from John, a reader, about the effects of cancelling one of his old credit cards on his credit score. So, I decided to post a number of “fast facts” about credit scores. In this post, I will address John’s question about credit cards and his credit score.
The quick answer to this question is that you probably do not want to cancel the old credit card that you do not use. There are two main reasons for this. One of the ways that your credit score is calculated is through your credit history. The credit cards you have all show your payment history and the longer it is, the better it is for your score. So, cancelling an old credit card could hurt your score because it will shorten your credit history.
Another portion of your credit score is calculated through a ratio that compares the amount of credit you use and the amount of credit available to you. It is usually better for your credit score if you have a smaller ratio of used credit to available credit. This means that if you cancel that credit card for which you have a certain credit limit, it lowers the amount of credit that is available to you which in turn raises the ratio.
At the same time, you don’t want too much available credit so don’t go signing up for a bunch of credit cards. Feel free to comment with any specific questions you have about credit scores and I’ll be sure to cover that topic in a future post about credit scores.

Preparation is the bulk of the work in getting the charges dismissed in court. Things to do before you even look to prepare for court are:

· Any automotive administrative work (e.g. registration renewal, inspection, etc)
· Resolve any outstanding parking tickets before the trial
· Review your upcoming schedule so you know what conflicts you would have with a court date

Next, you need to enter your plea and set the court date. There are three typical ways to enter your plea with the court:
· Personal appearance at the Court Clerk’s Office to request a trial date
· Appear before the Judge and enter your not guilty plea and ask for a trial date
· Mail in a copy of the citation along with your request for a trial date

You will most likely need to post bail in the amount of the fine. Once you are given a trial date, you need to understand that you have the Constitutional rights of a “fair and speedy trial.” A speedy trial is accepted to be 45 days from the date you entered your plea. The prosecution of the court may contact you to change the date of the trial and waive your right to a speedy trial. You do not want to waive this right.

· Sometimes your citation includes the officer’s vacation dates as a courtesy to the court. This is GOLD! Pick a date right in the middle of the vacation dates and count back 40 days. This is the date you want to enter your plea at the Clerk’s office. The vast majority of trial dates are set 40 days after you enter your plea. If all goes well, the officer will be on vacation when you go to court and you simply motion to dismiss due to no prosecution witness. However, this is very optimistic. What will most likely happen is the prosecution will try to reschedule/push back your trial date. If they push your trial back past 45 days, you need to research the local case law that shows that the officer’s vacation time is not a good cause for the purpose of continuance. You then go to court and cite your case law findings and motion or a mistrial since they denied you the right to a speedy trial.

You need to be prepared if the officer actually does show up to trial so do not forget that you have the right to Discovery. Check with your local court clerk’s office to follow the procedure for a discovery subpoena. You can request the following information:

· Radar – Repair records, manufacturers manual and specifications, calibration log and the Department’s FCC License to operate the radar unit
· Tuning Fork – Certificate of accuracy and repair or calibration records
· Police Officer – Arrest record, daily log for the date of your offense, radar training record and operator’s certification and copies of both sides of your original citation.
· Patrol Car – Speedometer calibration certificate and repair and maintenance records

Clearly, getting all this information would be a big pain in the you know what. The prosecution could counter this request and refuse to provide this information. Then, you just need to go to your trial and motion to dismiss the charges because you were denied your discovery rights asking the prosecutor what he is trying to hide by denying you access to these documents. If this motion is denied, you can motion for a continuance to give yourself more time to prepare for the trial.

Now, say you do get the documents that you requested. You can spin the information on all these documents to your favor. Take, for example, radar repair records. If they were frequently repaired, you could argue that the unit had chronic problems. If there wasn’t any repair you could say there was a lack of maintenance of the unit. Another example is the officer’s radar training. They are supposed to have 24 hours of classroom instruction and 16 hours of field training. However, most officers are department trained for a very short period of time. This can be used to discredit the officer’s testimony in court. The list goes on for the things you can do in this situation. Check on http://www.worldlawdirect.com/ to get the full list.
Usually, there are two directions that traffic tickets are argued: a case of mistaken identity of the vehicle or a false radar reading.

The following should be the order of your strategy:
1. Lack of prosecution witness – This is the best case scenario. If the police officer doesn’t show up, the prosecution has no witness, and can motion to dismiss.
2. Prosecution fails to prove the case against you – You need to check the actual vehicle code section that you are charged with violating. If the prosecution fails to prove every item in the code section, you can motion to dismiss.
3. Prove a factual error – This is where you need to be able to prove a factual error such as you were not the driver, you were not driving at an unsafe speed, the radar reading was inaccurate, and etc. This can be proven through evidence such as the radar unit was not calibrated or proving a procedural error of the police officer.

It is important to be prepared for the trial. Make a checklist for yourself of the different strategies to follow. If the officer shows up, no problem, just move on to the next strategy. Hopefully, this series was helpful to you in fighting a speeding ticket. Have you or anyone you know tried these tactics before?

Here are 3 simple ways to save some money. Nothing crazy, but they definitely make a difference.

1. Save your coins – I don’t use cash very often, but when I do, I put all my coins in a jar when I get home. So many people hate getting change and saving it so they either lose it or just not want it. Since I was a kid, I always saved my coins and once a year, I would get coin rolls from the bank and roll them up. This usually amounts to $80 – $100 each year. Doesn’t sound like much, but every bit helps.
2. Bring your lunch to work– I found that the cheapest lunch I can probably purchase is around $5. Depending on what I pack for lunch, I can usually make my lunch for around $2. This is a savings of $3 a day. Multiply that out and that is $15/week. Over the course of the year, you could save hundreds of dollars.
3. Drive differently – I think people accelerate too fast when they drive. There is no need to accelerate that fast out of a red light. You are not going to save yourself that much time. Each time you accelerate that fast you use a lot more gas than is necessary. It is hard to track how much money you can save doing this, but try changing the way you accelerate your car. Keep your RPMs down to under 2 RPMs when you accelerate and see how many more miles you can drive each fill-up. I think you’ll be surprised by the amount you save.

In a previous post, I mentioned what to do when you are pulled over for speeding.

Some of you may ask why you should spend the time to fight the ticket. The most obvious answer is because many speeding tickets have points on them that will cause your insurance premiums to skyrocket. This could end up costing you thousands of dollars in the next few years as you wait for them to get wiped from your record. Other reasons could be because you don’t want to pay the fine or the officer who stopped you was a jerk.

If you want to avoid paying a fine and having your insurance premiums increased, there is really only one way to plea: not guilty. If you plead not guilty, the burden of proof is now on the prosecution to prove “beyond a reasonable doubt” that you committed the offense.

Sometimes people try to use the “necessity of speed” defense. Basically, they argue that they were speeding because the surrounding traffic was driving above the speed limit and it was actually not safe to drive at the speed limit. Do not do this as it has a low chance of success. Just go with the not guilty plea and use the strategies from the next post in this series to fight the charges.

*Disclaimer: I have no law expertise and am merely summarizing information from another website. This information does not constitute legal advice.