Today’s guest poster is financial planner Neal Frankle, who writes about how his daughter got a great college education — and a wide network of contacts — for a fraction of the cost of an Ivy League school. If you’ve got your eyes set on a pricey school for your kids, this may help change your mind.
Are you concerned about the astronomical cost of a college education? If so, I have some very good news. My daughter just finished her degree in Finance and received a world-class education for a fraction of what it would have cost had she attended an Ivy League school. Oh and by the way, she had a far better educational experience at the same time.
Before she started college we learned that graduates of high-priced schools don’t necessarily earn more than state school grads. Still, we were concerned about the social scene at the state school. We knew that it was important for her to be around other high achieving students in order to keep her motivated and working hard.
Fortunately, our daughter solved the problem herself. She got an expensive college education without the price tag. How? By becoming immersed in student government and an honors business fraternity (yes, the fraternity accepted both men and women). She learned that the students involved in these groups were highly motivated, uber-achievers, super responsible and strong role models.
In order to excel in these organizations she had to be:
- Results focused.
- Work well in a team.
What more could any parent want? Most of what I learned in college wasn’t taught in class. My guess is that was your experience as well. My daughter flourished in college . And she had that successful experience because she set herself up to succeed from day one.
My daughter told me that she never would have had the chutzpah to undertake student body politics and honors business organizations had she gone to an Ivy League school. That’s because she felt intimidated. The state school gave her more opportunity to do well than the pricier schools.
Sometimes being a medium size fish in a small pond works out great. My daughter had to deliver even though she had great demands placed on her. She spent time with and learned from the best students on campus. She also has fantastic networking opportunities that will help her for years to come. As a result, she’s highly equipped to succeed in her professional life . And best of all, she doesn’t have any college debt to worry about. Neither do we.
Before you decide on which school to send your children, take a look at the extra-curricular activities. Look for academic opportunities that your kid will feel comfortable getting involved in yet pushed at the same time. I am convinced that dollar-for-dollar, this is a far better way to go.
About Neal: Neal Frankle is a Certified Financial Planner in Los Angeles. He helps clients make smart financial decisions so they don’t have to worry about their future. He also is the editor for WealthPilgrim.com and MCMHA.org. He is a regular contributor to Forbes, Huffington Post and other mainstream media publications.
I have two children in college (and one in high school). We have exhausted their 529 accounts. I have already taken out Parent Plus loans to the extent I can afford at this point due to other financial setbacks. After financial aid, we still need to borrow to cover all the tuition/room and board costs. What are the best options, or what should we look for in obtaining loans for our children? Anything you can provide would be appreciated. I’m overwhelmed at this point.
Hi Nicolette. I get where you’re coming from – it is overwhelming. And you’re smart to recognize when you’ve come to your own limit in terms of borrowing. At this point, the borrowing will fall to your children and the rule to stick to is to make sure they’ve exhausted their ability to take out federal loans before even considering private ones.
I also want you to take another look at your financial aid situation and call the financial aid offices at the schools your children are attending. Talk to a financial aid officer about the financial setbacks you’ve faced – particularly if they occurred after you originally applied for aid – and ask if there’s anything the school can do to help. Then have a very frank talk with your children about borrowing and how much they will have to repay when they graduate from school. Break it down for them so they can see what their monthly loan payments will look like. And if they’re overwhelmed by the thought, talk to them about the fact that they have options. They may want to consider transferring to schools that will offer them more in aid or working while they’re in school (and perhaps taking a lighter course load) to minimize borrowing.
Finally, the website fastweb.org has a terrific database of scholarships and grants and you’ll want to pore through it together. And when your next child goes through the process of selecting a college, make sure a good value is one of the criteria on your list.
How do you choose an executor when you have a blended family? Previously, we made wills and named executors of our wills and healthcare. How do we assign someone to be executor and not offend the other family. Any tips on how to be fair?
I think you’re looking at this situation the wrong way — I don’t think you want to consider how to be fair. You want to pick the best person for the job. This is a heavy responsibility. It’s complex and time-consuming, and family politics shouldn’t come into play.
So I would start by simply making a list. I find it’s the best way to sort out any difficult decision. Write down the names of people you might choose, then list the qualities that would make each person a good executor. List negatives, as well — you’re essentially making a pros and cons list about each candidate. You’re looking for someone who is organized — there is a lot of paperwork involved — honest, and understands your intentions. You want to select only one person, which as you noted, can be difficult for parents who are selecting among children. But it may be easier than you think — parents often assume that everyone is going to fight over this role, but you’d be surprised by how many people would rather avoid the pressure altogether. In the end, you want to settle on one executor and a couple alternates, then ask those people to take on the job. You don’t have to explain the reasoning behind your decision.
Finally, I want to point out that you don’t even have to select a family member. You can select a close friend you trust, who may be able to act as an outsider in this situation. And if you can’t find someone within your circle, you can name an accountant or attorney to the job, though it will cost you a few hundred or thousand dollars, depending on the complexities of the will.
This week we’re happy to have Nancy Berk as our guest poster — Nancy is a pro at college planning, and author of the book College Bound and Gagged: How to Help Your Kid Get into a Great College Without Losing Your Savings, Your Relationship, or Your Mind. Here, she addresses college expenses that aren’t often considered — preparation courses, campus visits, and application fees.
While many parents worry about the cost of their children’s college education, it’s not unusual for college admission anxiety to override financial sensibility even before a tuition bill surfaces. I highlighted plenty of these money drains in my book, and they’re everywhere. While this is just a small piece of the fiscal puzzle, college search and prep costs and school selection mistakes don’t help the college fund. If you’re the parent of a college-bound teen, consider these cost-cutting suggestions to save a chunk of change before dorm drop-off.
Analyze Your Family Situation. When it comes to the college admissions process, it’s easy for parents and teens to become starry-eyed and make emotional choices with bad economic repercussions.
Before the wish list gets drafted, communicate and explore family concerns and limitations including tuition, transportation costs, and special needs. Applying to a school that is incompatible with the budget isn’t a wise move. However, always investigate the financial aid and scholarship data of schools before ruling one out.
Identify Great College Prep Bargains. Never dive into a test prep spending spree, until your teen’s strengths and weaknesses are identified. Is preparation required? If so, what areas should be addressed (i.e., content vs. process)? Math deficits and test anxiety don’t typically involve the same approach. Save money on test prep by asking friends with college students for those unused or gently used SAT, AP, and ACT prep books, CDs, and flashcards. Online study and tutoring options like those offered by the College Board and InstaEdu can also be more cost-effective than “live” options.
Create A College Visit Strategic Plan. Before you gas up and head off for a little collegiate bonding, do some virtual legwork and tour online. Explore college-specific websites and comprehensive sites like CollegeProwler.com and Unigo.com. Then tour local colleges and universities in order to identify your teen’s general preferences (e.g., big school vs. small school). Narrow down the list or increase exposure to options by building college visits into other, already paid for family activities like vacations, business trips, reunions, weddings, and bar mitzvahs.
About Nancy: Nancy Berk, Ph.D. is a clinical psychologist, author, comic, professor and entertainment analyst. Her book College Bound and Gagged: How to Help Your Kid Get into a Great College Without Losing Your Savings, Your Relationship, or Your Mind can be seen in the feature film Admission starring Tina Fey. Nancy co-hosts The College-Bound Chronicles podcast with broadcaster Lian Dolan and writes about higher education and entertainment for sites including Parade Magazine, USA TODAY College and The Huffington Post. The host of the showbiz podcast Whine At 9, Nancy digs a little deeper as she chats with fascinating celebrities and industry insiders. Sometimes they even talk about college.
To say that Americans spend a lot of money on sports is to understate the point only slightly. A sampling of sports spending statistics reveals some whopping figures: the Professional Golfer’s Association (PGA) says that we spend $600 million every year on golf balls alone, while the Fantasy Sports Trade Association estimates fantasy football teams are worth $55 billion due to the time and resources people pour into them. And that’s just for adults. Spending data from 2012 found that parents can spend nearly $700 per child-athlete every year. Multiply that by a couple of siblings, and you’re looking at over $2,000 per year, just for your kids.
So how do you plug (or at least slow) the leak in your wallet that sports spending induces? Losing fewer golf balls and refraining from a fantasy team can be a good start, but beyond that, you might want to take a look at Play It Again Sports, a store that lets you sell gently-used sports equipment and use your new cash to buy new (or even better, discounted used) goods.
“You come into the store, you bring in last year’s gear, we’ll give you dollars for trading that in,” said Steve Murphy, president of franchising at Play It Again’s parent company, the Winmark Corporation.
Murphy says that the store will take “pretty much everything,” assuming the quality is good and the item isn’t too old.
“If you have a five-year-old golf club, that’s probably not something we’ll be able to resell, because the technology is different,” he said. “Five-year-old baseball gloves haven’t changed, so we’re [more] likely to buy it.”
Murphy says that it’s hard to give exact prices for different prices of equipment because the Play It Again staff will need to see and feel the glove (or the helmet, or hockey stick) in order to determine its quality and how much it’s worth. But in general, Play It Again offers to buy old equipment for 30 to 40 percent of its original value.
This means that if you want your old stuff to net you enough money to completely pay for 2013’s equipment, you’ll need to bring more to sell than you want to buy. “If you want this year’s glove for $100, you’ll have to bring in a little more than just last year’s glove [to sell]. If you bring in last year’s glove and a bat and a pair of cleats,” you could net enough money that you don’t have to dip into your wallet for that $100 new glove, he said.
Murphy noted that even if you don’t have any good equipment to sell, it’s still worth taking a look at Play It Again stock, because the savings can be significant. “In general on used sports equipment if they’re buying used from us, you save 50 to 75 percent off what it would cost them new,” he said, further emphasizing that all equipment is “used, but gently used. It’s like buying a used car.”
While fall means the height of football, soccer, and lacrosse season — and a decreased appetite for baseball cleats and field hockey sticks — Murphy says that Play It Again will take any type of sporting good, any time of year. So if you need to save money on the fall sports season, bring in whatever you can now, and don’t worry if your stockpile consists of surfboards, flippers, and other items that people won’t be looking for until the tulips pop up in 2014.
“We’re pretty much buying all seasons all the time, all year,” he said. “If you [come] in end of summer and wanted to unload all the summer stuff, we’ll buy it.”
New research indicates children are developing life-long money habits by the age of seven. Check out the video below to see me break down the important money lessons by age groups and activities with Al Roker and Willie Geist on TODAY.
After this segment aired this morning, a viewer wrote asking me this: “Can you elaborate on the debit card system you mentioned for 11-14 year olds on the Today Show this morning? Is it an actual debit card linked to their own account that is linked to the parent account? Any articles on it or further information on the best way to make it work? Thanks for any information you can provide!”
It’s hard to get all the details on in 4 minutes, so I wanted to elaborate for this viewer and others: I opened accounts at my bank for my kids linked to my checking account. Since I maintain the minimum balance they don’t have to worry about it. The accounts each came with debit cards. Then I set up automatic transfers into the accounts every week for their allowances. They’ve learned to monitor their balances online (they have separate passwords), all about the fees when you use an ATM other than your own bank’s, and how fast money can go when it comes automatically out of a machine. Before they have their licenses, you may have to be the bank for them. So, when they need cash, you give it to them, then have them watch you transfer the money back out of their accounts into yours. It’s worked really well. And when my son took off for college, I didn’t have to add this to the skills he needed to learn.
I hope that helps!
According to new research from the University of Cambridge (published by the Money Advice Service, a UK organization), many money habits are set by age seven. At that stage, the study says, most children are able to “recognize the value of money” and “understand that money can be exchanged for goods, as well as what it means to earn money and what income is.” They are also capable of complex functions such as “planning ahead, delaying a decision until later and understanding that some choices are irreversible.”
Does that mean your ship has sailed if your kids are older? Not at all. The building blocks are set early on, but there’s always time to impart a few good financial lessons. Here, how to do that at every age:
Ages five to seven. At this stage, your kids should be able to understand that money is a limited resource, and that if you spend it, it’s gone. That means we all have to make choices about where and how to spend our money. And once we choose, we don’t get to choose again. How do you pass this on? An allowance is a good start — after all, it’s difficult to learn how to use money if you don’t actually have money. Give your kids an amount that increases as they age. Simultaneously, increase the list of things that they now need to pay for out of that allowance — things that used to go on your tab, like candy and some toys, can now fall on theirs. How much should you give? $1 or $2 a week is plenty at this age.
Ages seven to nine. Delayed gratification is the name of the game. If you can teach your kids to save for a goal, rather than blowing all of their money on small things here and there, it will go a long way to helping them become a financially-successful adult. Explain that saving leads to a bigger reward down the road, and make it a rule that your kids have to save a portion of every allowance. Then help them decide what they are saving for. You don’t want to delay the gratification too long, because actually getting the reward after some hard work is an integral part of the lesson. “It’s not talking to a seven-year-old about saving for the future, because for a seven-year-old, the future is next week,” says Jack Kosakowski, President of Junior Achievement. If they seem frustrated, show them how they can boost savings even further by putting away birthday money or tooth fairy gifts.
Ages nine to 11. By now, kids should be able to understand value, and you can teach them by having a dialogue when you shop together. Show them how unit pricing works (I actually remember this lesson from my mom, and the fun I had doing the math in my head to find a better deal. Kids will do anything to pass the time when they’re being dragged around the grocery store). Explain that similar products are sold under different brand names, and may be priced differently, and have them spot the sale or pick out the one that keeps more money in your pocket. And give them the job of couponing as one of their chores. They can search for coupons online, clip them from the Sunday circulars, and as a reward, you can pass on a small portion of the savings.
Ages 11 to 13. Kids are now ready to work, which research shows helps turn them into more responsible adults. When they’ve earned their money, it’s going to hold a greater value, and they’ll be more reluctant to spend it, which is a good lesson in and of itself. How can they bring in some cash? Outside of the home, babysitting, dog walking and yard work are good options for this age range. In your own home, give them a few jobs that you might otherwise pay someone else to do — they can weed or wash your car.
Ages 13 to 15. It’s time to introduce the power of plastic, because the earlier your kids learn about debit cards, credit cards, and the difference between them, the more likely they are to use them wisely. To get the job done, consider using an electronic allowance. You can open savings accounts linked to your own account (you’ll avoid fees if you maintain the minimum required balance in the main account) and transfer the allowance each month. Then give them a debit/ATM card that they can use to purchase things, and show them how to check their balance online. Finally, use your own behavior as a model: They see you swiping your credit card, but they probably don’t see you paying the bill. Take them through the process with you next time so they understand that there’s real money involved, and if you don’t pay up, the interest quickly gets expensive.
Age 15 to 18. Use college applications as a learning tool — as you and your kids weigh your options, be realistic and honest about how much you think you’ll be able to afford and how much will fall on their shoulders, which means borrowing to make up the difference. Show them how much a loan of the size they’re likely to need will cost in monthly payments after graduation, and encourage them to apply to schools in a variety of price ranges — especially those that may offer scholarships and attractive financial aid packages.
Age 18+. Now’s the time to tackle budgeting, says Kosakowski, and you can do so by sitting down and helping them write one out for the semester. Break the budget down into months and then weeks, so they know exactly how much they can be spending within a given time period. And don’t bail them out if they run into trouble — if you do, I can almost guarantee that it will happen again.
We’re thrilled to welcome Keri Peckham from the blog Time is Money Mommy — she’ll be talking about baby products you can skip. Having a baby is so exciting, but it can quickly make you feel like you’re bleeding money — kids are expensive! We thought her post was a breath of fresh air. You don’t need every product on the market to be a good parent, we promise.
The royal baby’s arrival this summer made me think about the products new parents buy, hoping to make their lives easier or their babies more comfortable. Though Will and Kate have the money to purchase luxurious baby products, baby George left the hospital in a car seat and blanket, which are necessities for any new baby. Their purchases were not even particularly extravagant in comparison to some celebrity babies seen riding around in $1,000 strollers or swaddled in $200 blankets.
My kids are less than two years apart, so I know how easy it is to get sucked in to the multi-billion dollar baby products industry, especially with your first baby. Have you ever been inside a baby store? They are filled with adorable patterns, tiny clothes and blankets fit for a prince.
Baby products’ cuteness and promise of convenience makes it tempting to overspend. I learned that while certain items are essential (car seat, crib and diapers), other baby products are optional. If you’re like me and don’t have a royal budget, consider skipping the five items below to save money when shopping for a new baby.
- Stacks of baby blankets. Babies do need blankets, but they don’t need 50 of them. Have four or five blankets. Infants often go through several outfits each day and with the amount of laundry you’ll do, you will always have a fresh one ready when needed.
- Tummy time mats. Pediatricians suggest that parents place infants on their stomachs several times a day, to help them build up their head and neck muscles. As nice as tummy time mats are, beach towels or blankets serve the same purpose, and you already have them on hand. A no-cost solution!
- Wipe warmers. Infants are likely to cry and wiggle during a diaper change regardless of the temperature of the wipe. We don’t warm our toilet paper, so why set high expectations in the early years? Save your money.
- Bottle warmers. There is no nutritional advantage to warm breast milk or formula. Even if your baby does prefer it warmed, it’s just as easy to put the bottle in some warm water. And it’s free!
- Expensive high chairs. Babies are messy eaters. If you buy a pricey high chair, your baby will make a mess of it, and you’ll be scrubbing $300 plastic. There are several inexpensive options that attach to a dining chair. My Fisher Price version was only $25, and it converted into a booster seat for toddlers. I used it for both kids, so I definitely got my money’s worth.
Preparing for a new baby is an exciting time. Enjoy it, but try to stay on budget!
About Keri: Keri Peckham established the blog www.timeismoneymommy.com to help busy moms (and dads) save time and money, so they can spend more time enjoying life with their families and friends. In addition to blogging, she recently started her own content marketing business. Keri lives in San Diego with her son, daughter and husband.
Most parents are up to their ears in back-to-school shopping right now — and that extends beyond the pens, pencils, and Trapper Keepers (I may sound like I’m dating myself here, but a Google search tells me that these are still out there…whether students are using them is another story).
But kids want — and need, if they’ve hit a growth spurt — more than just the standard school supplies this time of year. Fall clothing is a huge part of back-to-school shopping. Americans spent $8.5 billion at “family clothing stores” in August 2012. And although this year the National Retail Federation expects sales to be down slightly, the organization also predicts that the biggest chunk of shopper’s budgets will go toward new apparel and accessories: 95.3 percent of those with school-age children will spend an average of $230.85 on clothing, along with an additional $114.39 on shoes.
So where should you put that money? Where the sales are, of course:
Old Navy. The back-to-school favorite is bringing back its Super Cash promotion through September 4: Spend $25 and earn $10 Super Cash. Spend $50 and earn $20, and $75 or more will earn you $30 (which is the maximum earn per transaction). This isn’t an immediate savings, but you can return to the store between September 12 and 18 to redeem your Super Cash on an eligible purchase. Keep in mind, here: They’re putting you on the hook to come back and buy more. So your best course of action is to split your shopping list up — if you need $50 worth of stuff, buy $25 on your first visit and $25 on your second, saving $10 on a total of $50 in merchandise.
Kohls. Get 15% off everything with the promotion code LEMONADE online. In stores, you can print a coupon that will earn you the same discount. The deal is good through August 18.
jcpenney. The retailer has partnered with RetailMeNot to offer a coupon code, RMN20, good for 15% off purchases of up to $100 and 20% off purchases of $100 or more. You’ll also get free shipping. The code is good through August 31.
Peebles. These are some good deals: The store is offering several coupons (and corresponding online coupon codes): 25% off purchases through August 20; 40% off a single apparel item on August 21; 25% off up to two apparel items August 21 – 27; and 20% off purchases August 28 – September 2.
Famous Footwear. The shoe store is offering a buy one, get one half off sale, plus an extra 15% off with online code SCHOOL54. To shop in stores, you can print a coupon from the website.
Nautica. It may not be what you traditionally think of when back-to-school shopping, but here’s a reason to put the store on your list: 25% off full-priced styles, plus free shipping on $50 or more. Plus, get an additional 50% off sale items. For both deals, use the code FALL13 at checkout.
Amazon Fashion. Spend $75 on clothing and get 20% off with the promo code 2075APPL, now through August 28. The discount is eligible for items sold and shipped by Amazon.
This week we’re excited to welcome Susan Beacham, an expert on kids and money. I know many of you are helping your kids pack up and go off to college. I was in the same boat last year, and if you can take a few minutes away from the packing frenzy to talk about money, you’ll thank yourself later — I promise.
Heading off to college for the first time launches kids into a new way of living. Money will be an integral part of that new life and having the “money” talk before they leave will go a long way toward helping them navigate this critical resource. Now is the time to sit down and talk about a plan for spending, emergencies, health care away from home and the pros and cons of earning money while at school.
Start the money conversation with a review of the basic needs every college student confronts:
- Eating. Many parents buy a meal plan that covers all three meals for their student. Most students will not eat three meals at the college cafeterias. Especially breakfast. So, reconsider your plans and only buy what will be used. Then, budget for the “off campus” expenses like coffee, lunch between classes when they are not close to the cafeteria and dinner out when they cannot eat one more cafeteria dinner.
- Social. You may not like it, but your kids will want to try out the social scene – and that likely includes the bars in their college town. Underage students are often allowed into a bar if they pay a “cover” of anywhere from $3-$5. Greek organizations are also popular and sometimes a huge cost surprise to students and their families. If your student rushes, make sure they consider the cost of belonging. Also, aside from the hard dues, there are many fundraising costs for special events that kids are asked to pay for. Make this cost more real by giving your child the responsibility to pay. If your student is paying, then they will reign in the cost of the extras and may even opt-out of a badly run organization when it is their money at stake.
- Health. Many schools have a pharmacy on campus where they can transfer their prescriptions. Make sure students check the price of prescriptions at school vs. at home. Fill scripts at the least expensive location.
- Books, school supplies. Lease vs. buy. Word from college students is that many professors do not use the books they initially assign. One hedge against spending money for books you never use is to check out leasing programs. Compare and contrast and see which comes up less expensive.
- Clothes, gifts. College towns have great shops and your student will want to shop there. Sometimes, it is the only game in town for students who are far afield from any other place to buy what they need. Local shops have prices that can be steep so make sure you plan ahead for this cost in your final budget.
After you talk through all of the above, sit down with pencil and paper and create a budget. It does not have to be an excel spreadsheet to start, just a simple, written document that helps you and your student understand and consider the possible expenses that may arise while they are living away from home. Then, talk about reasonable estimates for those costs. Create from that estimate a suggested monthly “draw” that they can withdraw for themselves each month to cover expenses. Set up a time each month to talk about the budget to review and revise.
Kids will seek out ways to make themselves more comfortable while away from home and many of these comforts cost money. Talk about boundaries in advance and your student will avoid common traps and your own budget will not suffer the consequences of their mistakes.
About Susan: Susan Beacham is CEO of Money Savvy Generation (msgen.com) and creator of the award-winning Money Savvy Pig – a 21st century bank that teaches kids about money choice. Susan is an award-winning education entrepreneur and nationally recognized kids and money expert. She is also the author of the award-winning children’s book series, The Money Savvy Club Kids Club books, and creator of the innovative iPhone App for kids, Savings Spree. Follow Susan’s advice on her blog at susanbeacham.com