Category Archives: saving FOR college

Chart: What We Can Learn from Billionaires

Chart: What We Can Learn from Billionaires

 

billionaire degrees

 

To make it through college in one piece most students will likely need to bring in some money by working for it. But in terms of wages we face a classic catch-22 situation: Students often pay for college to qualify for a good job but without a good job they cannot pay for college. 

Perhaps this is why I find this data set so compelling. As it turns out, a study of the world’s top 100 billionaires by Trilby Rajna of the UK’s Approved Index revealed that the most popular degree among these rarities was: none at all. Ironically, this finding should be quite encouraging for those who want to go to college. Continue reading Chart: What We Can Learn from Billionaires

The Traditional Job

The Traditional Job

This image is a sarcastic take on the value of a university/college degree

The Traditional Job

When a young person hears “get a real job” the underlying encouragement is to go out and get steady, regularly scheduled, “W-2” employment. College towns boom with such arrangements, particularly in the services and trades sectors of the job market. Finding such work is as easy as picking up the local newspaper, a job-specific classifieds newsletter, or searching out Craigslist and employment websites. Continue reading The Traditional Job

Understanding How Work Works

Understanding How Work Works

landscapers II

Al & Alicia

Work is Not a Four Letter Word

To this point we’ve focused on the resources available to college students that don’t directly involve any “I work, you pay” transactions. This not because a student should avoid work but because college students uniquely have access to other forms of money not readily available to the population at large. It therefore makes sense to explore those first. Whether or not those avenues succeed I highly encourage college students to pursue work with vigor for several reasons. Continue reading Understanding How Work Works

Military Aid: Three Critical Questions

Military Aid: Three Critical Questions

An illustration of a cartoon angry boot camp drill sergeant character

Uncle Sam’s Got Your Back

When researching military benefits you will run into enough acronyms, jargon, overlap, inter-branch disparities and bureaucratic stipulations to make you want to curl up in a corner and suck your thumb. Recruiters can help interpret it all, but also have obtained a reputation for intimidation and pressure that keeps many curious students at bay.

So where does one turn? Let’s explore this together, traveling in a linear fashion and picking up the information we need along the way while letting the rest lie untouched. Continue reading Military Aid: Three Critical Questions

Chart: The Increasing Role of Parental Help

Chart: The Increasing Role of Parental Help

Sources of college funding

This chart comes to us as part of a series of data included in Sallie Mae‘s most recent “How America Pays for College” report. Of note this past year was the big increase in family assistance relative to other college funding sources. The average cost-to-student will run $24,164 in 2015, a substantial increase (about $3,300) from last year. To cover this increase, parental help has also ratcheted up, with an average of $10,365 coming from mom and dad to cover the bills (up about $1500 year over year).

In fact, parental resources have now become “… the number one source of funding, surpassing scholarships and grants for the first time since 2010.” According to Sallie Mae parental assets now account for 32% of total funding versus 30% from scholarships and grants. Also interesting to note, student efforts account for a full 27% of the total, split between income, savings, and borrowing.

In other words, with bills running almost $100,000 over a four-year period students and/or their families can expect to cover well over half of that total on average. Thing is, the “average” family I know doesn’t have that kind of money available. Thus I see over and over again students running off to college with everything they can muster financially thrown into the maw, only to return home a year or two later broke, confused, and frustrated at the experience. The nationwide data seems to support this trend.

Families must be vigilant as they plan their help to avoid this fate. For this reason I highly recommend exploring other options for boosting assets and decreasing costs. Also, it becomes extremely prudent to map out not only what students and parents have to offer, but to budget when the proceeds shall be applied to the college experience in order that the student can explore their options knowing the price point they must hit on a per-year basis.

 

 

 

Hack Your Brain and Save Your Money

Hack Your Brain and Save Your Money

old saw cutting in skull

Once upon a time as a young lad I couldn’t keep money in my pocket any more than I could a handful of water. Money in, money out, even as the specter of college loomed large on the horizon. As a result I showed up to school with only a week or two’s worth of summer paychecks in the bank, an amount far short of what I could have brought to the table had I been more prudent. After limping to graduation I found things had changed significantly in this regards: I could stretch my meager hourly wages as a laborer a long ways.

So it was with particular interest that some time ago I posted a chart detailing the fact that college graduates, as a whole, tend to save greater percentages of their income than their lesser-educated counterparts. Why? Is it because their relatively higher incomes allow this? Because something fundamentally happens in college that contributes to one’s ability to save? Or, perhaps, because only those who learn to save/control spending survive?

Whatever the case today’s students don’t have the luxury to fart around. Affording an education requires preparation, including all of the various strategies we’ve been exploring in these pages, and it requires rigorous financial discipline. Among other things, students need to learn to save to get ahead of the big bills coming their way. But how?
Continue reading Hack Your Brain and Save Your Money

Establish a 401(Kid)

Establish a 401(Kid)

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Let’s face it: few kids save much, if any, of their part time and summer job incomes toward college. This much to the chagrin of their parents who see college costs looming on the horizon. After all, parents also feel some pressure when tuition bills come due and the student has nothing left to contribute.

How to bridge this gap? In particular, how can parents motivate students to forego near-term doodads and pleasures for the sake of longer-term priorities? Continue reading Establish a 401(Kid)

Moving Beyond Just Giving Fish to Kids

Moving Beyond Just Giving Fish to Kids

Fisherman of Lake in action when fishing, Thailand

∼ Give a man a fish and feed him for a day. Teach a man to fish and he’ll eat for the rest of his life ∼

We’ve probably all heard this saying at one point or another. It relates a poignant and pithy philosophy of giving we should all take to heart. Any time someone else needs our resources we can either meet that need from our reserves- just to be back at square one the next day- or we can take a little more time with that person to teach them how to meet that need on their own forevermore. There’s also an unstated but relevant practical corollary to this idea we should note: if men want to catch fish for themselves they not only need the skills to perform the task but also the equipment.

How can we apply these principals regarding men and fish to kids and college funds? Continue reading Moving Beyond Just Giving Fish to Kids

Family Help: Intro

Family Help: Intro

family

The Temptation & The Fall

Perhaps no single set of financial issues vexes parents of teens more those regarding the funding of college. Decisions to help someone in big ways never come easy, and in this arena parents face immense pressures, internal and external, in addition to their innate desires to get their newly adult kids to a good place.

As a result too many parents fuel their kids’ college careers without much regard to their own needs. In doing so they often ensure their kids don’t have to move back in with them later only to find that later they have to move in with their kids. When parents want to help, how do we know how much is too much? Continue reading Family Help: Intro

Avoid Penalties on Your Savings

Avoid Penalties on Your Savings

pink piggy with ball and chain

 

I would love to simply tell families and students to save all they can for college and leave it at that. Unfortunately, saving up for school isn’t the straightforward objective it should be wherein X dollars in the bank equals X dollars in money available for college. Thanks to the complicated treatments of income and savings in the FAFSA and other financial aid calculations, placing the funds in the “right” or “wrong” spot can affect one’s bottom line for better or for worse in other ways.

Currently about 85% of students get financial aid in some fashion, which is a large reason why the actual per-student cost of college is typically 1/2 to 1/3 of the sticker price. Being mindful of how and where to save for college with financial aid in mind will also affect your savings on college.

A person who understands the financial aid formulas can then make legal and reasonable shifts in asset placement prior the filing of forms or taxes. (For purposes of our discussion we’ll focus on the FAFSA, though a limited number of schools use different forms.) Let’s explore just two of the bigger FAFSA considerations, after which appropriate asset placement strategies should all but become obvious.

Continue reading Avoid Penalties on Your Savings