Have you been thinking about starting your own business, but don't know where to start? Or have you already started your own business, but need some advice on how to take it to the next level?

Accountant and Managing Your Money blogger Jamie Downey, who specializes in the area of small businesses, will be here on Tuesday, Oct. 13, at 1 p.m. to take all of your questions about the world of small business.

It’s fall, time for high school seniors to start the college application process. When you and your child are thinking about what colleges your child should apply to it’s important to think in terms of value. A higher cost school doesn’t necessarily translate into a higher income through life. That may be the case initially, but salaries 10 years out of college are determined just as much by the ambition and drive of the student (now an adult) than what college they attended. What is important is to get an education without strapping you or your student with a lot of student loans, and without jeopardizing your retirement by diverting contributions to the college bills.

There are hundreds of good schools out there, but how do you know which ones to apply to? A college counselor can help you find ones that fit your child’s interests, personality and budget. In addition a good counselor can help you find schools that want your student, increasing the possibility of receiving financial aid. Instead of blindly choosing colleges based on name recognition or a neighbor’s recommendation, talk to your high school college counselor or consider a private counselor, who may be worth the cost in what they’ll save you in tuition. Click here for more information about private college counselors.

On October 9, 2009, Michelle’s Law (H.R. 2851) goes into effect. Passed on October 8, 2008 by President Bush, Michelle’s Law allows full-time college students to take a medical leave of absence without losing the health insurance coverage they receive as a dependent under their parent’s health insurance plan. Prior to the passage of this law, students between ages 19 and 24 could receive coverage under their parent’s health insurance policy, as a dependent, as long as they remained a full-time student. Students who lost their full-time status due to illness or injury were left with the choice of going without coverage under their parent’s plan (because they no longer qualified as a full-time student) or to continue coverage under COBRA, which could be prohibitively expensive for many families. This law prevents the loss of coverage under those situations.

Michelle’s Law was created based on the predicament faced by Michelle Morse. Michelle was a full-time college student who was diagnosed with cancer while attending college in New Hampshire. As Michelle went through chemotherapy treatments, her physician recommended that she reduce her full-time course work at school to deal with the debilitating treatments. However, doing so would cause her to lose her health insurance coverage because her family could not afford the premiums under COBRA. Faced with this no-win situation, Michelle decided to maintain her full-time status. Michelle passed away as result of her battle with cancer. To ensure that other students would not have to go through what Michelle did, Michelle’s family took the issue to their state’s legislature, who passed a law protecting students like Michelle. Other states followed and in 2008 President Bush signed it into federal law.

Here are the details about Michelle’s Law:
- The law applies to full-time students who are covered as dependents by their parent’s health insurance.

- Students are allowed to take up to 12 months off for a “medically necessary” leave of absence without losing their coverage. This also applies to students who reduce their course work to a less than full-time status because of medical necessity.

- In order for this law to apply, the leave of absence, reduction in course work, or change in full-time status must:
* Be medically necessary as determined by the student’s physician;
* Commence while the student is suffering from the illness or injury; and
* Cause the student to lose their dependent health insurance coverage.

For more information about Michelle’s Law visit http://www.michelleslaw.com/.

The National Association of Personal Financial Advisors (NAPFA), a professional association of fee-only financial advisors and advocate for consumer protection in the financial industry is launching a series of free webinars designed to help educate consumers about various personal finance topics and issues.

The series will begin on August 7, 2009 and will run each month for an entire year. Consumers will be able to register to attend the live session online or listen to the recorded session at a later time. Each session will last for 1 hour and start at 1pm Eastern time.

The dates and topics will include:

August 7, 2009 - Money 101: Knowing the Basics

September 4, 2009 - Kids & Money

October 2, 2009 - What is Financial Planning?

November 6, 2009 - Protecting What You Have

December 4, 2009 - Investments: The Basics

January 8, 2010 - Investments: Advanced Concepts

February 5, 2010 - Managing Your 401(k)

March 5, 2010 - Leaving a Legacy

April 2, 2010 - Women and Money

May 6, 2010 - Financial Planning and Small Business Owners

June 4, 2010 - Your Retirement

July 1, 2010 - Financial Windfalls

If you have any interest in learning more about these specific topics, I encourage you to register and attend. With the economy down, you certainly can’t beat the price.

To register for the 2009 sessions or to learn more about NAPFA and these sessions, go to http://www.napfa.org/consumer/ConsumerWebinarSeries.asp.

There's good news on the horizon for those with federal student loans. The government is introducing a new income-based payment program on July 1.

The timing of this program couldn't be better - new college graduates are coming into a very poor job market. With an unemployment rate currently hovering around 9 percent there are plenty of college graduates without jobs, or forced to accept low-paying jobs, faced with student loans averaging $22,000. And they don't have much time to line up work - borrowers must begin to repay their federal loans within 6 months of graduation.

If you are unemployed you can apply to defer your payments for up to 3 years. But what if you have a job, but not a lot of income? Under the Income-Based Repayment plan (IBR) your payments are capped to no more than 15 percent of discretionary income, an amount that is based on the federal poverty guideline. "Discretionary income" is defined as the difference between adjusted gross income and 150 percent of the federal poverty line that corresponds to your family size and the state you live in (from www.finaid.org).

This program applies to anyone with federal loans: the Stafford, Grad Plus and federal consolidated loans. Your loans must be in good standing.

If your reduced payment doesn't cover the interest accruing on the loan the unpaid interest will be added to the balance. And no matter how much you have repaid, the loan is forgiven after 25 years as long as you've made all of your payments.

This program is intended to encourage college grads to accept jobs in low-paying fields, but has the unintended benefit of helping out during this difficult economic time. It will enable those who otherwise might have defaulted on their loan, creating a poor credit history, to keep the loan in good standing until income goes up in the future.

You'll need to contact your lender to enroll in the program. There is a lot more information about the program at www.ibrinfo.org.

A friend asked me last week, “What is the best piece of financial advice you ever received”? Without much thought, I responded, “invest your time, don’t spend it”. I got that sage advice from Jeff Gitomer, an entrepreneur and author of several best selling books. While the idea is not original to Mr. Gitomer, I had never read it so succinctly nor contemplated so thoroughly.

My elderly grandfather is a cosigner for my $25,000 student loan and I am worried about how this might affect his modest estate after he dies. I plan on paying off the loan when the time comes and I assume I will not be in default when he dies. But what if I default after he dies? How long after his death are my grandfather and his estate on the hook? I don't want my mom, uncles and aunts to be burdened with the specter of this cosigned loan.

Good question! Unfortunately, there is not a single universal answer to this. Similar to when a borrower dies, it generally depends on the type of loan or loan program, the guarantor or lender, and the specific terms of the loan. As the economy tightens and lending standards increase, borrowers are increasingly turning to other options to improve the chances of successfully securing a loan. One option has been to seek someone to co-sign the loan. Often this means asking a family member, a relative or a close friend to assist. Although a co-signer may not have primary responsibility for the repayment of the loan, their obligations (or their estate’s obligations) may continue after death.

According to a recent study by Fidelity Investments, more than a third of the nation's parents have decreased the amount they are saving or have stopped saving entirely for their children's college education. Given the current level of financial anxiety out there and the recent increase in unemployment, this statistic really isn't surprising, but with the market down, now would be an excellent time to be investing new money.

The study also found that 60 percent of parents have at least started saving for college but only 30 percent are investing in a dedicated investment vehicle like a 529 plan. This is interesting because the survey results indicated that most parents can afford to pay just 21 percent of expected college expenses, but parents who save in 529 plans can afford to pay for 40 percent of the expected college expenses.

An even more startling statistic was that 35 percent of the parents surveyed expect that they will have to delay their retirement in order to meet college expenses. These individuals are taking a risk that they will be healthy enough to continue working and that they will have jobs to work at.

If parents are saving less, the remainder has to come from somewhere and the study indicates that 55 percent of parents will be expecting their children to work part time while in college, 44 percent plan to have their children live at home while commuting to college, 37 percent will be encouraging their children to attend a less expensive public school and 23 percent will ask their children to graduate in fewer semesters.

Also, more and more parents will be relying on student loans. In 2007, 52 percent of parents planned to rely on loans to help meet college expenses. In 2008, that figure had risen dramatically to 62 percent.

It seems that I have been fielding a lot of questions lately relating to 529 plans. Today I will talk about how to invest your money once you have selected a specific 529 plan.

Every plan is different, but speaking in very broad terms, most plans offer age-based portfolios, target (or static) portfolios, and the ability to select individual funds.

Age-Based Portfolios

With age based funds, you pick the fund that most closely maps to your childs current age. If you have three kids who are five years apart, each child would probably be invested in a different fund. The portfolio of the oldest child would be invested less aggressively than the middle child who would be invested less aggressively than the youngest child.

Typically, the age "bands" are three to five years. A 15 year old child might have a portfolio containing 40% equities, while a 10 year old child might have 60% equities, and a 5 year old might have 80% equities.

Over time, each age based portfolio automatically changes and becomes more conservative. This is the option to choose if you want to invest your money on "autopilot" and not have to be revisting your investment choices.

Target or Static Portfolios

Alternatively, target or static portfolios have a constant allocation. The 100 percent equity fund, for example, would always be 100 percent invested in equities. The 20 percent equity fund would always have a 20 percent equity exposure. Oftentimes these funds are simply labeled "Aggressive", "Moderate", or "Conservative".

These portfolios do not change based on the age of the beneficiary. If you think a portfolio with a 60 percent allocation to equities is "about right" for now and the forseeable future, and you don't want your portfolio to get very conservative as your child approaches college age, these portfolios may be for you.

Lots of people select the 100 percent equity portfolio for a young baby and leave it that way for 10 years or more. When the child approaches the teen years, the parents may switch to a more moderate portfolio. These portfolios are often used by people who want a little bit more control over the investments.

Individual Funds

Finally, many plans offer the ability to pick individual mutual funds and the big attraction here is that you can allocate your money across the different funds however you want. This is my favorite option and it is popular among the "I must have total control" crowd. Usually, there are 15 to 20 fund possibilities and you can tailor the portfolio to include exactly what you want. Depending on which funds are selected, these portfolios may be more volatile than the typically more broadly diversified age based portfolios and target portfolios.

In summary, I encourage you to read the enrollment handbook for any plan that you are considering. Most are very easy to read -- not at all like a mutual fund prospectus. After reading the handbook, you should have a pretty good idea of how you want to invest. And, don't forget that you are free to change your mind. The owner of the account can change the allocations once per calendar year or upon a beneficiary change.

Should I take the money I have invested in mutual funds and start a 529 plan for my 18 month old daughter? What will the tax implications be?

529 accounts can only be funded with cash, so if you wanted to open a new 529 account using money that is currently invested in mutual funds, you would need to sell the mutual funds first.

If you have held the funds for more than one year and they are currently worth more than what you paid for them, you would have a long term capital gain. The highest rate that would apply to these gains would be 15 percent and it is possible that a 0 percent rate could apply (depending on your current tax bracket). If you have held the funds for less than a year, any gains would be taxed at ordinary income rates.

If the shares are worth less than what you paid for them, you would have a loss. This loss could be used to offset other gains and then up to $3,000 in ordinary income. Whatever losses you couldn't use this year could be carried over to future years.

It might be better (and easier) for you to simply open a new account and sign up for automatic monthly contributions. Many plans waive all fees if you commit to making monthly contributions of $25 or $50.

Remember, there is no guarantee that your daughter will attend college. The odds may be good, but if she never goes to college and there aren't any brothers or sisters to transfer the money to, taxes and a 10 percent penalty would be due on any earnings withdrawn from the 529 account that weren't used for qualified education expenses.

One of the advantages of saving for college using a 529 plan is that earnings will not be taxed until they are distributed and if the earnings are distributed to pay qualified education expenses, no federal taxes will ever be due.

For gift tax purposes, contributions to 529 plans are considered to be a gift so in 2008, you can contribute up to $12,000 to an account without the contributions being considered a taxable gift. If you want to make a larger gift, contributions of up to $60,000 are possible if you file a Federal Gift Tax return and elect to treat the deposit as if it were made over 5 years.

I am interested in saving for college for my 8 month old daughter, are 529 plans the best way to save and how do I find the best plan?

Last year, private college costs increased at 6.3% and public college costs increased at 6.9% according to The College Board, so it makes sense to start saving for college as early as you possibly can. Starting before your daughter turns one will reduce the amount you need to save each month. If she goes to a college costing $20,000 per year, you need to be saving approximately $500 per month if you can start now and earn 7% on your investments. Wait 5 years and the monthly savings increases to $750 per month.

I used to be a fan of saving for college by using the Coverdell Savings Accounts and 529 plans because money saved in Coverdells could also be used to pay for private elementary and secondary school expenses if needed, but that won't be the case in 2011. Now, I focus almost exclusively on 529 plans. As I've mentioned in previous posts, I like the Fidelity UFund and the College Savings Plan of Nebraska. Both of these direct-sold plans were recently recognized as top performing plans on Joe Hurley's savingforcollege.com website. The other top plans included:

West Virginia's SMART 529 Plan
Kansas' Learning Quest 529 Plan
Nebraska's TD Ameritrade 529 College Savings Plan
Kansas' Schwab 529 Plan
Missouri's MOST 529 Plan
Indiana's CollegeChoice 529 Investment Plan
Nevada's UPromise College Fund
Utah's Education Savings Plan

This list contains only those plans that are "direct sold", which means that parents invest in the plans directly. The same website also maintains a list of "broker-sold" plans. Direct sold plans tend to have lower expenses, so if you don't feel you need advice about how much to save and what savings vehicle to use, a direct sold plan will probably meet your needs.

Remember that you are free to invest in any state's plan -- you can live in Massachusetts, invest in Utah's 529 Plan, and send your child to college in New York. Many states offer deductions or credits for 529 plan contributions but, unfortunately, Massachusetts does not.

Later this week, I will talk about the broad categories of investment options offered within 529 plans.

Volkswagen is introducing a new minivan to the US market next month and it is also introducing a fairly innovative incentive. If you purchase or lease a Routan minivan by August 31, 2008 and take delivery by November 30, 2008, Volkswagen will deposit $1,500 into an account held by its partner in this effort, Upromise. Money deposited into the Upromise account can then be moved into a Section 529 college savings fund. The cost of the brand new Routan ranges from $24,700 for the S model to $38,400 for the SEL. For more information on this offer, you can visit the Upromise website.

Volkwagen reports that 6,000 people have signed up for the offer so far, but is this really a great deal? Maybe, maybe not. Oftentimes, when dealers are running special promotions like this, they are less willing to "deal" on the price of the car. So, you might get a $1,500 contribution to a 529 plan but maybe if they weren't running a special, you would have been able to pay $1,500 less for the car simply by being an aggressive negotiator. You are probably still coming out a little bit ahead with promotions like these (and the ability to negotiate well) but you probably aren't really getting a $1,500 windfall.

That being said, are there really any "no brainer" ways to grab free cash for college? The Upromise program is probably as close as you will come. Upromise has been around for about 7 years and it has more than 8 million members. The company reports that its members have earned over $425 million in member rewards. Membership is free and you earn credits by shopping at grocery stores, drug stores, gas stations, and restaurants that are part of the Upromise network.

I also like the credit cards that credit a percentage of everything you charge to a 529 account. My favorite is the Fidelity 529 College Rewards Card. 1.5 percent of everything charged on this card gets credited to a Fidelity-managed 529 account. There is an annual maximum reward contribution of $1,500 but you would have to charge over $100,000 per year in order to bump into that limit. Grandparents and other relatives can also get their own cards and their credits can be directed to your child's 529 account. If you pay off your credit card bill each month, this could be a good card for you. With college costs rising so rapidly, every little bit helps.

My step-daughter will be applying to colleges in the fall. What is the best way her father and I can prepare ourselves financially? And how is a student with divorced parents affected in terms of financial aid?

The rules for financial aid for the children of divorced parents can be very complicated. However, the general guideline is that the custodial parent is the person responsible for completing the Free Application for Federal Student Aid (FAFSA) form. If your stepdaughter lives with you and your husband for most of the year leading up to the filing of the FAFSA, your husband is likely the custodial parent. Otherwise, the custodial parent is your stepdaughter's mother.

When it comes to determining financial aid, the Federal government does not consider the income and assets of the non-custodial parent. One the other hand, most private colleges do consider the non-custodial parent's income and assets. So, the distribution of aid from the college itself will probably be determined using both parent's income, but Federal and State aid (which would include subsidized Stafford loans)will be based only on the custodial parent's family income.

If your husband is the custodial parent, you should be aware that your income is considered to be available to meet college needs. This is true even if you were married the week before the FAFSA form was filed and you have four children of your own to support. Most people are surprised to hear this, but it is true. If you haven't planned appropriately, you could find yourself with a very high expected family contribution (EFC) because of the inclusion of your income. To determine what your EFC might be, check out this calculator.

That doesn't mean that the non-custodial parent is "off the hook" when it comes to paying for college. Many divorce decrees specify that the non-custodial parent must pay a certain amount of percentage of college costs. Massachusetts is one of the states where payment of college expenese can be ordered by a judge.

For more information on this topic, check out the FinAid website. Also, it never hurts to contact the financial aid officers at the schools your daughter is considering attending. They should be able to tell you, at least in general terms, how they make financial aid decisions for the children of divorced parents.