Q&A: $4K / Month for Daycare, Graduating Debt-Free & HSA vs. Roth IRA
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What is the episode’s opening overview and how can listeners submit questions?
welcome back to the rich habits podcast question and answer edition these are our thursday episodes where every thursday we answer your questions as if we were going through whatever you might be going through i'm sick right now robert feels fine so we're recording and we're gonna get through this it's gonna be an awesome episode and we're gonna answer a ton of questions And we're going to have a great, great, great outcome. Now, if you have a question to ask us, email us at richhabitspodcast at gmail.com or DM us on Instagram at richhabitspodcast. Robert, we've got like 40 something thousand followers now, 42,000, 43,000 followers on Instagram. We are, we're popping, we're popping off.
Yeah, it just goes to show you that people do care about learning what to do about finance, business, and mindset. And we're right smack dab in the middle of it, trying to help everyone figure all this out.
So Robert, our first question here comes from Veronica. Veronica says, hi guys.
How should a recent scholarship graduate handle a $13,000 refund and potential tax implications?
I've recently started listening to the podcast and I love all the tips and tricks you all provide. I'm 22 years old and I recently graduated college where I was a scholarship athlete. I recently received a $13,000 refund from the school as a back scholarship. I'm not sure exactly how it works with taxes if I have to pay something on receiving that. However, I do want to put this money in some sort of investment or savings account and would really love to hear your thoughts on how to approach this. I'm also going to medical school. school in the next couple of years, and I want to make sure I'm setting myself up for success financially. Thank you all for all you do. Best, Veronica. Robert, I'll let you kick this one off.
Yeah, congratulations. That's really cool that you're getting ready to go to medical school. And I think for me, the first thing I would do is just hold the entire $13,000 in a high-yield savings account until you confirm exactly how the school is classifying the payment. Because there is a world where where if you get this refund from the scholarships, it can be tax free, but it also can be taxed, especially if you're using it for normal household groceries, rent or whatever. So you need to understand where it's being classified for your college and your situation. I think one way to look at this would be to ask these questions. What academic year does the scholarship apply to? What expenses was it intended for in the first place?
And have they issued you a form 1098 T just yet? So if this income ends up being left over scholarship money and that falls under the IRS filing for the amount of money you make, because I don't know if you have a job or anything yet. then you would be in that non-taxable position. So just get all of the facts, put the money in a high-yield savings account for now, and I think you'll be just fine. And absolutely, once the dust settles and you know what you're doing here, I would get that money invested and get the Roth IRA up and running and get it into that basket of index funds we talk about all the time.
I think that's a great breakdown. Those are the key questions to be asking, right? Like, what academic year does this scholarship apply to? What expenses were it intended to cover? And are you all going to issue or maybe revise an already issued Form 1098-T? Because what Robert said, you know, around the scholarships being tax-free, generally, if they are covering tuition and required books and fees and supplies and required things, like, yeah, rock and roll. Like, congrats on your $13,000. You deserve it. But on the same token, maybe that money was spent or was supposed to be spent on something else. So just get a little bit more clarity there. Once you understand where that money was supposed to go, you should be fine.
The last thing I want to do, though, is spend all of this $13,000 or have it be allocated places and find out that I might have to owe a little bit of money in taxes on this $13,000, assuming you're working and whatever's going on here, right?
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Chapters
8 chapters
1
What is the episode’s opening overview and how can listeners submit questions?
0:00–0:55
2
How should a recent scholarship graduate handle a $13,000 refund and potential tax implications?
0:55–3:59
3
Is it financially viable to pay $4,000 a month for daycare while saving for retirement?
3:59–6:06
4
What strategy should a student use to graduate college debt‑free while investing a $23,000 tuition gap?
6:06–9:57
5
Should I prioritize building my HSA before maxing out my Roth IRA?
9:57–10:30
6
What’s the best way to set up a long‑term investment account for a 10‑year‑old (UGMA vs. “Trump” account)?
10:30–11:31
7
Can I contribute to a Roth IRA while paying off high‑interest credit‑card and student‑loan debt?
11:31–13:15
8
How do the hosts wrap up the episode and encourage community engagement?
13:15–37:12
Speakers
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