Try-It-Out Tuesday: Creative Ways to Save on Prom Season
On Friday, we told you about the expected cost of prom season this year — according to Visa, $1,139 per family, lest you’ve forgotten — as well as some timely deals that can help you save on some of the big-ticket items: the tux, the dress, the pre-dance meal. However, saying yes to the (prom) dress doesn’t mean the spending stops there. In fact, it’s often just the beginning.
While Visa didn’t ask families what they planned to spend on “incidentals” like makeup, hair styling, flowers and a fancy limo, these smaller items can quickly add up. Here are some savings strategies to keep the costs in check:
Flowers: Nic Faitos, owner of Starbright Floral Design in New York City, says that roses and orchids are the two most popular types of prom flowers (whether for a boutonniere for the guys or corsage for the girls). However, he noted that not all orchids are created equal: there are over 1,500 types of orchids grown commercially in the U.S, and of those 1,500, he considers the phalaenopsis orchid to be the most delicate and exquisite. As such, including it in a boutonniere or corsage will set you back more than if you were to go with a dendrobium orchid — which just as beautiful, but more commonly grown and therefore more cost effective. If you’re looking to keep flower costs to a minimum, know which type of orchid you’re getting. It could mean the difference between a $20 corsage and $40 corsage.
Faitos’ other word of caution? Keep it simple. “Adding bling adds to cost of corsage — not just cost of what you want to add, but also the intricacy of labor,” he said, citing add-ons like crystals, rhinestones and other items that bring extra sparkle to prom flowers. “A floral designer who makes corsages has the skill set of a jeweler; it’s detailed work that takes a long time. Because you’re adding an item to the live product, it adds to the cost.”
Hair and Makeup: The cost of getting your hair and makeup styled like your favorite celebrity will range depending on what you’re getting done and where you live, but according to PromGirl.com, can set you back by as much as $275. If the thought of leaving your tresses in the hands of your YouTube-guided sister makes you quiver but the thought of paying nearly $300 makes you queasy, consider a semi-pro: a beauty school student. The Aveda Institute has locations all over the country, and while prices do vary according to location, an updo at the Jean Madeline Aveda Institute in Philadelphia is just $25.
With enough planning, you can also get a professional makeup application done for free. Clinique, Smashbox and Bobbi Brown all offer a free makeup application at their cosmetics counters; call the one in your area to secure an appointment, free of charge. Note that tipping is not allowed and no purchase is required. (You may feel like you’re supposed to buy something but the companies say you do not have to!)
The Limo. Ann Hoey, CEO of Limos.com, says that the trend in prom transportation is favoring larger vehicles, like stretch SUVs and party buses. And while these do allow for “tricked out” features like flat-screen TVs and neon lights (not to mention hot tubs), these larger vehicles prove to be more cost effective than a traditional stretch limo or even car service sedan. “The stretch SUV, you’re paying anywhere from $125 to $200 per hour,” she said, noting that these vehicles can accommodate 10 to 14 people, compared to a capacity of 18 to 20 people in a bus. “A party bus will run you $150 to $250 per hour, but the price per person is a little bit less.”
While it can be difficult to wrangle 18 to 20 teenagers and get them to decide on one thing, Hoey says that like any big purchase, the key to booking a stretch SUV or party bus is to be decisive. “Be very clear and not wishy washy,” she said. “Do you want an iPod station, do you want a TV? Have a clear understanding of what you want ahead of time so that when it comes time to purchase you’re locking up the right thing.”
Try-It-Out Tuesday: Tuition.IO Shows What You Owe
As graduating college seniors no doubt know, early May is the time for the checking off a long list of to-dos. Pick up cap and gown? Check. Submit senior thesis? Check. Take stock of student loans?
… Bueller?
While a six-month grace period means that organizing a pile of loans doesn’t seem as pressing as say, turning in that final Classics paper before graduation, it’s something that should happen sooner rather than later. That’s the advice of Brendon McQueen, creator of a new student loan organizing site called Tuition.IO.
“I would have everyone out there immediately figure out who you owe and if you’re able to pay for it,” McQueen said.
He’s speaking from experience: after graduating from Columbia in 2009, he knew he had student loans — about $120,000 worth — but had know idea who he owed, if he had any power to negotiate the interest rates or the ability consolidate the individual loan amounts.
“We’re talking about incredibly fundamental questions,” he said. “I thought, ‘If I’m having this problem, there must be a ton of other people out there having a similar problem.’”
It was the effort to fix that problem that led to the creation of Tuition.IO. The site (which is a pun: “Tuition I Owe”) is free to use, and works like this: after signing up, you’re taken to an “organize your loans” page. To figure out how many federal loans you have, you’ll need to enter your social security number (the site uses VeriSign, the same type of encryption that banks use for online transactions), and your National Student Loan Data System PIN. (You or a parent received the pin when completing the FAFSA, so check your records or request a duplicate pin through the Federal Student Aid website.)
Once you add any private loan information, Tuition.IO takes you to an account overview, which, using a graph, shows you how much you owe, when the balance will be paid off, and, through a slider, how much faster you could pay off the balance if you added an extra $50, $100, or even $500 per month. There are also tabs where you can learn the pros and cons involved with consolidation, deferment, forbearance, and even loan forgiveness for public service.
McQueen says that it’s that last subject — loan forgiveness for public service — that has piqued the interest of many users. Many teachers and soldiers with student loans don’t seem to realize they can take advantage of some of these forgiveness programs, he says. “The crazy part is people aren’t even [getting] enough information to ask the important questions.”
If the numbers are any indication, people are, at the very least, learning that Tuition.IO can help manage their debt load. In September of last year, when Tuition.IO did a demo at the technology conference Finovate, they had roughly $60 million in aggregate user debt; now, they have $500 million in aggregate user debt. “We get a ton of emails from people just saying, ‘Thank you thank you thank you for creating this!’” he said. “And of course, that always feels pretty good.”
As for McQueen’s own hefty loan balance — is it down to zero?
“I have not paid off my loans, but I just consolidated, and I’m about to jump into income-based repayment. So I’m improving my situation,” he said. “Slowly.”
Wednesday Welcome: What Gets Done?
This week we stray from our typical format of welcoming bloggers to share a post from Shari Storm, an executive at Verity Credit Union and the author of “Motherhood is the New MBA: Using Your Parenting Skills to be a Better Boss.” We love this perspective and knew you would, too!
A few years ago, I was sitting in an executive team meeting and we were talking about how we could get our front line staff to consistently do a certain task.
Someone posed the question, “Well? Do we measure it? Because, like they say, what gets measured gets done.” I’d been in business for many years and had heard that phrase umpteen times. Suddenly, I thought to myself, is it true?
I mean, I step on the scale every single day. I measure my weight once, twice, sometimes even three times a day, and I’m not getting any skinnier.
At that point in the meeting, my mind wandered to my three daughters, who were 5, 3 and 1 at the time. My husband had been struggling to get them to bed every night. A few weeks before, I had seen one of those nanny reality TV shows – you know the ones, where the children are little monsters and 23 minutes and a British accent later they are little angels. The episode I had seen dealt with getting the children to bed.
The secret to the success of the bedtime ritual was this sticker chart. The nanny put up a sticker chart and the kids got a sticker for each part of the bedtime regime they performed in a timely manner. So I went out and got me a sticker chart. It’s the epitome of the theory “what gets measured gets done.” Because when you say that, you are really saying that what gets quantified and rewarded is what gets done.
I put up my sticker chart. One side of the graph had things like put on pajamas, brush teeth, brush hair. The other side had each girls’ name.That sticker chart bombed! It made bedtime even worse. The girls fought over the stickers. The little one put stickers where they shouldn’t be. It was a mess.
Then one night, when it was my husband’s turn to put the girls down, I overheard something at the end of the hall. “Eeny, meeny, miney, mo… my mother says to put on your pajamas.” Each girl had a foot in a circle and he was playing that old game that we used to play as kids. They were LOVING it! We played it every night for weeks, completely eliminating the bedtime drama.
When I observe my kids, I note this truism: What is fun gets done. Have we strayed so far from what we were as children that we spend the entirety of our day working on what our bosses are measuring and mandating?
Thought-Provoking Thursday: When Will Kids Be Financially Independent?
Has empty nest syndrome officially gone the way of the dodo? There is, after all, much evidence that the Millennial generation is returning Chez Mom-and-Dad in droves: Failure to launch, wrote Forbes in 2012. “Cluttered nest syndrome” and “babygloomers,” a Philadelphia magazine writer recently complained. And according to new research, more teens than ever before say they’ll be dependent on their parents until they turn 25 to 27.
The Junior Achievement USA (JA) and Allstate Foundation’s 2013 Teens and Personal Finance Poll found that 25 percent of teens say they won’t be financially independent until age 25 to 27. This is a big jump from last year’s findings, in which only 12 percent of teens predicted they’d be financially dependent until age 25. What’s more, JA and Allstate found that 42 percent of teens say they don’t budget because they’re “not interested,” and 41 percent say they’re unsure that they’re using credit cards successfully. This begs the question: how can children ever become financially independent if they haven’t mastered the basics?
“Our experience has been that most parents feel ill equipped to talk to their kids about money,” said Jack Kosakowski, CEO of JA. “It’s a vicious cycle. Kids raised without [money] experience, they don’t pass it on to their kids and the cycle continues.”
This isn’t to lay all the blame on parents — Kosakowski noted that when any adult (even a teacher) tries to teach kids about money, they tend to overcomplicate the lesson, obscuring what he sees as the three most essential points: you can’t spend more than you earn, you should save a little bit out of every revenue source you have (even if it’s 50 cents, he noted), and what it means to be responsible credit card user.
“When adults try to teach budgeting, they talk about house payments, which kids can’t relate to,” he said. “Making it real is critical to kids grasping it.”
Kosakowski recommended using examples kids can relate to, like smartphones and designer jeans: “If I buy a cheaper pair of jeans at $40 or $50 versus designer jeans at $110, what can I do with that difference?”
The JA and Allstate study also found that 52 percent of teens think students are borrowing too much money to go to college, yet only nine percent reported that they’re actually setting money aside for their own education.
“We wonder why kids are ending up with college debt,” Kosakowski said. “Parents should think about that as soon as they have a child. [Then,] as soon as they start getting into upper elementary, middle, and certainly high school, that’s a great way to have a money talk. It’s never too early.”
Morning Joe: The Economic Impact of Dads Who Lean In
Is the key to a better economy dads who do more diapers? According to a fascinating new piece by Catherine Rampell in the New York Times Magazine, the answer to that question might be yes. This morning, I went on Morning Joe to talk a little more about this issue. Check out our discussion in the video clip below.
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Thought-Provoking Thursday: Is Helping Your Kid With Tuition Lowering His GPA?
As March winds to a close, high school seniors across the country will receive letters from colleges that will decide their next four years. Shortly thereafter, a second letter will come — and it’s even more important than the one saying “accepted” or “rejected.” This letter is the one from the financial aid office, the one that determines the expected family contribution. And according to new research out of the University of California, Merced, it can also play a role in determining the student’s GPA.
In “More Is More or More Is Less? Parent Financial Investments During College,” sociology professor Laura Hamilton found that financial help from parents is linked to lower GPAs. In studying a group of roughly 12,000 students, Hamilton found that the students whose parents give the most money wind up with an average GPA of 2.95 — a number that will not help post-graduation job prospects or admission into graduate programs.
“Employers throw out anything below a 3.0,” Hamilton said.
Lest parents take this as a sign they can put away their checkbooks and start applying for loans, Hamilton clarified that she’s not just talking about parents who can afford to bankroll the full cost of tuition — “parental financial aid” can mean Parent Plus loans and even loans taken out with the student as a cosigner.
It’s an interesting take – particularly with the words “student loans” and “crisis” appearing in more headlines on what seems like a weekly basis. Are parents to take from this that they’re actually better off not trying to save as much for college as they possibly can?
Not quite. But what they do need to do is talk to their kids about what it means to be paying this tuition, and what it means if loans are part of that payment package.
“A lot of times, students don’t worry about [paying back loans] until after college,” Hamilton said. “As tuition rises, parents either have to pay, or they have to pull out loans. Neither of these things are helpful for grades… you can kind of put them off.” In other words: if a student doesn’t understand the cost of attending college, he or she won’t try as hard to justify that cost with a stellar academic performance.
In an interesting twist, Hamilton’s study also found a positive correlation between parental financial aid and graduation rates — that is, money or loans coming from a parent makes a student more likely to complete their degree.
The connection: Social life. “A lot of the money parents give end up getting sliced into the social experience,” Hamilton said. In other words, pizza and beer — not to mention extracurriculars that can take up more hours than all classes combined. And the more fun your child is having, the more he or she is going to want to stay. “No student wants to drop out of college. College is really fun, right? If you invest the money in your kids, they’re going to be motivated to stay.”
So what’s a confused parent to do? Hamilton suggests modeling funding off of scholarships or merit-based grants. “If you say, ‘this is your job, I expect you to get a 3.0; if you don’t I’m withholding your money,’ you would probably get a positive effect on students’ grades, and they stay in school,” Hamilton said. “I saw this in my other study. Parents that gave a lot of money but set standards, their kids did really well. Parents that didn’t hold them accountable, their kids got in trouble.”
Try-It-Out Tuesday: “2 + 2” Replaces “Once Upon a Time” with Bedtime Math
When Laura Bilodeau Overdeck’s first daughter was old enough for a bedtime story, the ritual didn’t end with “happily ever after.” Instead, Overdeck added one tiny postscript, in the form of a math problem. It started out small — counting ears and legs on stuffed animals, for instance — and grew in complexity as her daughter got older. Overdeck (who has a degree in astrophysics and is married to a mathematician, it should be noted) continued the tradition with her second child, but didn’t realize that she was sitting on something more than a quirky family habit until her third child came along.
Jealous of his older siblings and their bedtime math challenges, the young son came into Overdeck’s room one night and started yelling that he, too, wanted a math problem.
“It made us realize we have a culture in our house where math is not this dry tedious thing,” Overdeck said. “In our house math is playtime, it’s leisure.”
It was a culture that other friends wanted to replicate in their own homes, so after a year of getting requests to put pen — or in this case, math problem — to paper, Overdeck launched Bedtime Math. She describes it as “a movement to get people to think of math the way they think of the bedtime story,” which in its current form is a website and a daily email. However, Bedtime Math the book hits bookstores this June, and Overdeck is excited for the possibility for growth.
“I think its time has come,” she said. “I recently learned that among U.S. undergrads, there are more kids majoring in leisure studies than all physical sciences put together. Who’s going to cure cancer? Who’s going to put a better antenna on the iPhone?”
Despite these lofty goals, Bedtime Math is not a lecture. The daily emails Overdeck creates center around a fun fact — a recent one told the story of how rubber bands came to be invented – and transition in to word problems for “wee ones,” “little kids,” and “big kids.” Overdeck doesn’t put age or grade brackets on the problems because she knows that there might be older kids struggling with basic math and young kids tackling problems that are meant for older grades. She also has readers who don’t fit into any grade at all.
“We have adults on our website who don’t even have kids and they just do it as a brainteaser,” she said. “We had an 80-year-old guy call our office and say he loves doing the math problems. They just want to keep their brain going.”
Overdeck doesn’t have any formal teaching training, but her career path has uniquely situated her to run an organization like Bedtime Math. The daughter of a public school teacher, she went to The Wharton School at the University of Pennsylvania to get her MBA in order to help reengineer public schools. Instead, she got “sidetracked” into consulting for telecommunications companies — but this “sidetrack” afforded her an inside look at product development and the challenges that arise when companies ask consumers to adopt something new.
“I think the number one hurdle — and I remember hearing this — is people’s inertia. It is very hard to get people to break a habit or start a new habit,” she said. “We’re essentially asking them to start a new habit. It’s very hard.”
And yet, Bedtime Math has gotten an overwhelmingly positive response. Over 25,000 people have subscribed to Overdeck’s nightly emails, and 200 libraries have used Bedtime Math to put on math-themed pajama parties, complete with tangrams and dominoes. Overdeck suspects the success is tied to the fact that kids love anything that feels out of the ordinary — and once the kids are hooked, the parents are happy to follow along.
“Within days I had people write and say that their kids were bugging them for the math problem,” she said. “If a kid wants to do math, no parent is going to say no.”
Morning Joe: Struggling to Build Wealth
According to new research from the Urban Institute, people in their 30′s and 40′s are falling behind when it comes to building wealth. The other morning, I went on Morning Joe to talk about this troubling trend as well as the specific things — like housing — that are tripping people up. To see our full discussion, check out the video clip below.
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Thought-Provoking Thursday: “You Just Don’t Understand” Doesn’t End With The Teenage Years
With all due respect to the Bard, it’s not just the course of true love that never did run smooth — it’s intra-family communication. In other words, talking to mom and dad.
According to Fidelity’s Intra-Family Generational Finance Study, parents and their adult children are as at-odds with each other as they were during the kids’ turbulent teenage years. The only difference? Instead of arguing over allowances and curfews, parents and their adult children don’t see eye-to-eye on how, when and how much they should discuss family finances.
After surveying 975 parents and 152 adult children, Fidelity found that the differences in opinion are as widespread as they are deep. For instance: Sixty-eight percent of parents and 60 percent of adult children are more comfortable talking with a financial adviser than with each other. Nine in ten parents and adult children agree that having open financial discussions is important, but only one-third of those parents and children agree over when these discussions should take place. On average, adult children underestimate the value of their parents’ estate by more than $100,000. And perhaps most concerning of all? Ninety-seven percent of parents and adult children disagree on whether the adult child will take care of their parents in the event of an illness.
Kevin Hevert, vice president of retirement products at Fidelity, suspects that a large portion of the misunderstanding stems from the fact that parents and children make a lot of assumptions about the other’s situation — and that there’s not enough real detail shared to clarify these assumptions. He suggests circumventing this problem by pegging financial discussions to milestones and other notable life events.
“For myself, when I got new jobs, I could talk to my father about how I should set up my retirement accounts and what benefits I should take,” he said. “As a father, I’ve got kids who recently graduated high school, and those [changes in their lives] created opportunities as well.” He noted that when his son’s first tax refund came in, he used it to open the door to a conversation about saving for the future.
Hevert recognizes that retirement and estate planning can be stressful subjects to broach, but talking about it can be the best way to relieve that stress. One part of the study found that even though two-thirds of parents surveyed say they have already factored potential healthcare costs into their retirement strategy, they have not fully communicated their “eldercare” strategy to their adult children. This disconnect doesn’t have to exist.
“It keeps people up at night, wondering if their parents are going to be okay,” he said. “You gotta get on the same page.”
AOL Daily Finance: College Students’ Money Secrets
Tuition. Room and board. A meal plan. Think you know exactly where your money is going when your kid goes to college? Think again. In my latest Daily Finance article, I uncovered the five money secrets your college student doesn’t want you to know. Take a look!