The Student Financial Times

Dorms and Dollars

2008-08-10T10:40:00.003-04:00

By Noelle Phillips - nophillips@thestate.com

The economy is squeezing college students. Here’s how they can squeeze back.

College students may learn an important lesson before classes get started in a few weeks: Budgeting.

Families already are feeling pinched by rising gas and food costs. Add the expense of sending a kid off to college and something has to bend.

As a result, this year’s crop of college students are cutting back on gear for their dorms, or dipping into their summer job earnings to pay for extras such as televisions and decorations.

Students such as Mark Owens, a 19-year-old sophomore at Benedict College, are learning to bargain-hunt. “Now that I’m in college, one of my favorite grocery stores is the Family Dollar,” he said.

The National Retail Federation expects back-to-college spending to drop 7 percent this season with the average person spending about $599. The NRF reports students are cutting back on electronics, clothes and furnishings.

“Young adults this year more than likely had to fill up their car’s gas tanks with their own money and they were less likely to have part-time summer jobs,” said Kathy Grannis, an NRF spokeswoman. “Young adults are getting a good vision of what it means to have to be frugal.”

For Owens’ freshman year, he racked up on gifts from family and friends such as a bedspread and sheets from his grandmother and a mini-refrigerator from his pastor. He’s reusing most of those things this semester and will wait a few weeks to see what else he might want.

“When you come to school and get in the swing of things, you can go to stores and add what you need,” he said.

Owens is a veteran now, but freshmen and their families have more questions about how to outfit a dorm and how much they should spend.

During this summer’s freshman orientation at USC, parents asked more questions than usual about budgeting for dorm rooms, said Joe Fortune, assistant director for housing.

“I wouldn’t say they were worried about money, but they were trying to budget more than in the past,” Fortune said. “What is really necessary and what is really fluff? I’m sure the fluff is not going away but maybe there’s not as much fluff as in the past.”

Here are some tips on avoiding the fluff from students and those who counsel future students:

MAKE A CHECKLIST

This will help the student focus on what is needed and will help the family stick to a budget. Most schools — and many stores — offer a checklist for students moving into dorms, said Catherine Gentile, a spokeswoman for Bed Bath & Beyond.

NEXT, TALK TO YOUR ROOMMATE

No need to bring two irons, two microwaves and two televisions for a tiny room.

Benedict sophomores Robert Squirewell of Columbia and De’Kylen Jordan of Cincinnati waited until they arrived on campus Saturday to go shopping. They split the costs of a television, entertainment stand, floor lamp, microwave, fridge and carpet.

Not only did they save money but Jordan had fewer things to haul to South Carolina from his Ohio home.

LOOK AROUND THE HOUSE

Families may have sheets, pillows, hair driers and other items that aren’t needed at home but would be perfect for the rough-and-tumble use they’ll get in a college dorm.

FIND IT USED

Squirewell and Jordan also accepted hand-me-downs from former classmates. A four-seat kitchen table fits nicely in their suite and was inherited from their freshman residence hall advisor.

While they failed to find suitable goods at thrift stores, the roommates recommended others give it a try.

LOOK FOR ON-CAMPUS DEALS

Many schools offer special packages for students moving onto campus.

At USC, the Residence Hall Association offers student packages for linens. The packs start with basic pillows, sheets and comforters to deals that include egg-crate foam pads and oversized towels, Fortune said. The linens are offered at a discount and are waiting on students when they move into their rooms.

And the USC bookstore stocks dorm gear, said Andy Shaffer, general manager for the USC Bookstore. “Most people don’t think the campus bookstore can be competitive with its pricing but we are,” Shaffer said. “It’s a way to keep people on campus and save them money.”

BARGAIN HUNT

Retailers know the market is down so they’re offering deals to get college students’ money, Grannis said.

“Do your research,” she said.

Students can do online price comparisons before heading out. And many retailers are offering free or discounted shipping straight to residence halls and apartments.

At Bed Bath & Beyond, students can pick out their supplies at a store in their hometown and place an order that will be delivered to their school even if it’s in a different city, Gentile said.

LEAVE YOUR INCENSE AT HOME

Every school has rules about what is allowed and what is banned from residence halls.

Common no-nos include candles, pets, firearms and toaster ovens. Check your school’s Web site for other things; USC, for example, doesn’t allow weights in its students’ rooms.

“You don’t want to buy something you can’t use,” Gentile said.

Source: http://www.thestate.com/business/story/483409.html

Governor's Competitiveness Council

2008-08-07T17:35:00.002-04:00

By Terrence Stutz/The Dallas Morning News

AUSTIN – Texas schools must improve math and science education in all grades and improve low graduation rates if the state is to remain competitive in the global economy, a panel of business, education and government leaders said in a report Wednesday.

The report by the Governor's Competitiveness Council also called for holding schools fully accountable for "producing results" in making sure their students acquire the knowledge and skills they'll need.

And the 29-member panel said state and education leaders must begin work now on a solution to expected "critical" workforce deficits in six key industries. Among those: energy, computer technology, advanced technologies in manufacturing, and aerospace and defense.

"In a competitive global economy, companies will locate where there is a constant stream of available human resources that can rapidly fill workforce needs," the report said.

But in Texas, the council noted, the state's economy is "creating an employment demand that will far exceed the supply created by the state's skills pipeline. In coming years, this employee supply deficit will be exacerbated by the retirement of the state's skilled baby boomer population.

"If the state's talent development system [schools, colleges and training programs] does not make critical changes at every level to ensure a dependable workforce is available, Texas will not remain a high quality place for doing business."

Gov. Rick Perry commented on the report at a conference Wednesday, signaling his support for the panel's recommendations and promising to work with the Legislature next year in enacting many of their suggestions.

"We need to do a better job developing our state's talent," Mr. Perry said. "In particular, we need to equip our education and workforce systems to get Texans ready for the jobs demanded in the global economy."

Former Bush education adviser Sandy Kress, a member of the council, also spoke at the conference, saying that while Texas schools and colleges have done many things right, they also have failed in key areas.

For example, he said, Texas is near the bottom of populous states in percentage of its workforce with a college degree, and he noted that half of college freshmen in Texas are enrolled in remedial classes. Further, he added, only 18 percent of high school students who took the ACT met college readiness standards in all four core subjects.

"All this data should surprise us and shock us, and should force us to take dramatic and aggressive action," said Mr. Kress, an Austin lawyer and former president of the Dallas school board.

In calling for improved, uniform curriculum standards in kindergarten through 12th grade, the council said a "great disparity" exists in the way standards are now implemented and taught in the state's 1,031 school districts. The State Board of Education is revising the state curricula in core subjects.

"Texas needs to develop or identify model curricula and teaching practices, particularly in science, technology, engineering and math courses," the council said in its report.

Source: http://www.dallasnews.com/sharedcontent/dws/news/texassouthwest/stories/DN-collegeready_07tex.ART.State.Edition2.4d66d29.html

College students and credit cards: A good focus for regulatory reform

2008-08-02T06:11:00.002-04:00

The following editorial appeared in the Kansas City Star on Thursday, July 31:

Oh, the solicitations sound so good . . . easy money, free T-shirts, free meals. Apply Instantly!

But when it comes to credit cards and college students, Congress is right to focus some of its industry reform efforts on questionable tactics used to lure new card-holders.

Bills pending in both the House and the Senate are attempting to better regulate firms soliciting students.

Certainly, 18- to 21-year-olds should have some access to credit. Many in that age range are working and raising families.

Establishing a good credit history can help them as they buy their first homes or start businesses.

And having a credit card for emergencies is smart for many college-age people - especially if they are at a campus far from their hometowns and families.

But many university students are also operating on tight budgets or still financially dependent on their parents.

Those students should not fall victim to unscrupulous credit card companies trolling for easy marks.

And their parents do not deserve to be saddled with debt they did not accumulate.

Some firms are clearly not seeking credit-worthy people when they sign up some students without doing credit checks.

Such practices can lead to debts that the young people can ill afford.

People of all ages can benefit from greater financial literacy. Programs that educate at the middle and high school levels could be very effective in instilling sensible spending habits before credit problems occur.

Credit card issuers should do their part by clearly and fairly explaining policies and ratcheting back costs and fees that have increased while billing periods shortened.

Source: http://www.sltrib.com/opinion/ci_10073058

ACT, SAT Cheaters Seldom Punished

2008-07-21T04:46:00.003-04:00

Agencies that administer college-entrance exams usually just cancel the scores

by Carla Rivera
Los Angeles Times

A group of students at a Los Angeles high school is suspected of cheating on the ACT college entrance exam by paying a former student, who used fraudulent identification, to take the tests.

The testing agency recently began investigating the claims, which could result in cancellation of scores provided to colleges.

But those colleges will not be told why the scores are invalid, nor will the students' high school be clued in.

In all likelihood, the students will retake the test with few consequences, the result of a little-known policy by the ACT and the College Board, which owns the rival SAT, to keep such irregularities confidential.

Kept in the dark

Each year, millions of stressed-out students take the two tests, hoping that a good score will secure them a spot at the nation's top colleges.

But most students know little of what occurs when a score is in dispute.

And the policies of the two nonprofit test companies seem to satisfy no one. Some complain that scores arbitrarily are canceled without evidence, while others criticize the companies for giving a free pass to cheaters.

If a score is invalidated, colleges receive a generic alert like this one sent to the University of California, Los Angeles.

"The ACT cancels scores for a variety of reasons, including illness of the examinee, mistiming of the test, disturbances or irregularity at the testing site. ... It is the ACT policy to treat the ACT's reasoning for canceling a specific score as confidential."

Question of integrity

The agencies say their only concern is the integrity of scores, and that it would be impractical to expose student cheaters or try to exact punishment, such as barring them from retaking the test or noting infractions on transcripts.

"We don't tell schools or anyone else — we simply cancel the score," said ACT spokesman Ed Colby. "What we're trying to do is make sure the scores that we send to colleges are valid. It's not our intention to go around punishing students who make mistakes or who've done something they shouldn't have done."

The Educational Testing Service, which administers the SAT for the College Board, had a similar response.

"The SAT does play a very important role in the college admissions process, and to prohibit somebody from taking the test that might hinder their educational future seems a bit extreme," spokesman Tom Ewing said.

But critics assert that such evasions let student cheaters off the hook.

Sending wrong message

"Their position is thoroughly unaccountable and promotes unethical conduct," said Michael Josephson, president of the Los Angeles-based Josephson Institute of Ethics. "What they're basically saying is, 'Try it. You have nothing to lose.' Why not say to someone who robbed a 7-Eleven, 'Please give back the merchandise or pay for it, but we don't want you to feel bad about stealing.' ?"

He contended that the stakes are much higher than just invalidated test scores.

With students spending hours preparing for the exams and their parents spending money on tutoring, the exams remain important factors in college admission, even though some colleges have stopped requiring them.

"If you put up for auction a guaranteed spot into Harvard or UCLA, people would pay tons of money — that's how much they're stealing when they falsely get a place they don't deserve," Josephson said.

According to the companies, cheating spurs about 2,000 probes out of the more than 3 million tests each year.

"I've known about this for 25 years but did not believe it served anybody's interest to be told there were no consequences for cheating on tests," said Paul Kanarek, president of the Princeton Review of Southern California. "It's not the right ethical message to send."

Source: http://www.chron.com/disp/story.mpl/nation/5896315.html

Want to Save? Shore Up that Credit Score

2008-07-19T08:32:00.000-04:00

From the Associated Press

WASHINGTON -- Americans can save billions of dollars annually on credit card and other interest payments by raising their credit scores, but many consumers still don't know enough about the complex numerical values that represent their credit risk.

Although awareness of credit scores has increased in the last year, it remains poor, the Consumer Federation of America and Seattle-based thrift Washington Mutual Inc. found in an annual survey released Thursday.

The scores, which generally range from 200 to 800, play an increasingly important role in consumers' finances.

They are used by lenders to determine rates for loans, credit cards and other financing. Utilities, landlords and employers also are increasingly checking credit scores.

Washington Mutual estimates that, because financial institutions offer lower interest rates to consumers with better scores, consumers could reduce credit card finance charges by an average of $105 annually if they boosted their credit scores by 30 points. If all consumers did so, total annual savings would reach $28 billion.

One way to raise a credit score is to avoid exceeding the maximum limit on a credit card, the study said.

But credit card issuers have recently cut limits on many cards as financial institutions seek to reduce their credit risks. That can hurt credit scores because the scores are based partly on the balance a consumer carries on a card compared with its overall limit.

For example, if a consumer has charged $4,000 on a card with a $10,000 limit, the consumer's so-called utilization rate is 40%. But if a card issuer reduces the limit to $5,000, that bumps up the utilization rate to 80%, which could lead to a lower credit score.

The Consumer Federation recommends credit card users keep utilization rates below 50%, said Stephen Brobeck, executive director of the group.

Anthony Vuoto, president of WaMu's credit card services unit, downplayed the consequences of the reduction of credit limits, saying it probably affected only a "small minority" of consumers.

Source: http://www.latimes.com/business/la-fi-credit11-2008jul11,0,1968265.story

The Rising Cost of a College Degree

2008-07-17T16:00:00.001-04:00

by Alan Auteri

College costs are going through the roof, outpacing inflation and creating a huge financial hurdle for prospective students and their families. Many factors are contributing to escalating college costs, many of which are beyond the control of those affected most. Parents who provide students with financial support will need deep pockets, a combination of grants and scholarships or a generous loan to afford a higher education.

How much have costs risen on the college horizon? Consider that in 1997, average tuition and fees for a full-time undergraduate student at a private, four-year college was $13,785 and at a public four-year school, a mere $3,111 annually.* Ten years later, the average cost has jumped to $23,712 and $6,185 respectively. These costs do not include what students must pay for room and board, books and transportation to attend school, which easily can run to $10,000 or more annually. The College Board reports that average room and board charges increased $7,280 between 1997-98 and 2007-08, while corresponding grant aid and tax benefits during that same time period rose only $4,940.

Interestingly, there appears to be some regional differences in the cost of higher education. Average tuition and fees at public two- and four-year public institutions in Vermont and New Hampshire, for instance, tend to be much higher than these same fees for schools in California, where the state provides generous financial support to post-secondary schools. The cost of attending private four-year colleges and universities also varies widely in different parts of the country. However, fluctuations may be more related to the prestige of the school and its faculty as well as the cost of living in the surrounding community, which influences professor salaries.

While the elite private universities may seem too pricey, data shows these schools are more likely to have generous endowments that enable them to help more students through grants and scholarships. Just this fall, Harvard, the pinnacle of the Ivy League, pledged that parents who earn under $40,000 will not be required to pay one cent for their child’s tuition, and also extended significant discounts to parents earning up to $120,000 annually. Few schools will be able to match this offer, but comparable big name schools with equally large endowments may follow suit.
The trends show that while college costs are rising across all institutions, tuition and fees at public four-year colleges appear to be rising at a faster rate. Plus, less money is available from state coffers for grants as education dollars shrink within state budgets. The more affordable route of attending a public university, while still less expensive, is not as affordable as it used to be.

More students are enrolled full time at four-year institutions compared to ten years ago, creating more competition for admission into coveted schools. At the same time, state and local appropriations per student declined.

On the bright side, a good percentage of students did not pay the full sticker price for their college tuition. Federal and state grants and institutional and private scholarships help to reduce the overall cost of students attending college. Unfortunately, many middle-income families may not qualify for federal Pell grants because of low income thresholds. These same parents may qualify for federally subsidized (or unsubsidized) loans. However, when the cost of financing $20,000 or more per year is factored into the equation — and interest rates for college loans (if you can get one) are steadily inching upward — the cost of college is even more daunting.

If college costs cause you to doubt the value of a college education, think again. The statistics show a very strong correlation between future earning power and the presence of college degree, suggesting that it does matter in the long run. According to the Census Bureau, individuals with a bachelor’s degree will, on average, earn almost twice as much over the course of their lifetime as an individual who only holds a high school degree. ** What the Ivy League and other pricey schools may not tell you is that you may be able to get as much mileage out of a degree from a state university as one from a more expensive private school.
Whether your child is planning to attend college in the near or distant future, it helps to think about your options for footing the bill for tuition, fees, room and board, books and more as far in advance as possible. Think about your education goals for your children and start saving now to lessen the financial burden of college down the road.

*Source: Trends in College Pricing, data from Annual Survey of Colleges, The College Board, New York, NY, weighted by full-time undergraduate enrollment.
**Source: The Value of a College Degree, Porter, Kathleen, ERIC Digest.

About Federal Student Aid

2008-07-11T11:19:00.000-04:00

Federal Student Aid, an office of the U.S. Department of Education, ensures that all eligible individuals can benefit from federally funded or federally guaranteed financial assistance for education beyond high school. We consistently champion the promise of postsecondary education to all Americans—and its value to our society.

Federal Student Aid plays a central and essential role in supporting postsecondary education by providing money for college to eligible students and families. We partner with postsecondary schools, financial institutions and other participants in the Title IV student financial assistance programs to deliver services that help students and families who are paying for college.

Today, Federal Student Aid performs a range of critical functions that include, among others:

Processing 14 million student financial aid applications each year;
Disbursing more than $80 billion annually in financial aid to students through schools;
Enforcing financial aid rules and regulations;
Partnering with schools, financial institutions and guaranty agencies to prevent fraud, waste and abuse;
Educating students and families on the process of obtaining aid and other college funding;
Servicing millions of student loan accounts;
Securing repayment from borrowers who have defaulted on their loans; and
Operating information technology systems and tools that help manage our $400 billion loan portfolio.
This is a complex, multifaceted mission that calls on a range of staff skills and demands coordination by all levels of management. Consequently, Federal Student Aid—the government's first Performance-Based Organization (PBO)—emphasizes tangible results and efficient performance, as well as the continuous improvement of the processes and systems that support our mission.

Strategic Planning, Performance and Reporting
As a federally designated PBO, Federal Student Aid operates under a congressional mandate to achieve concrete results while improving performance. Since Federal Student Aid became a PBO in 1998, we have introduced many substantial and measurable improvements in how we plan and report our operational and portfolio performance in administering the federal student financial assistance programs. Learn more about Federal Student Aid's Strategic Planning, Performance and Reporting here.

Federal Student Aid Conferences
Each year, Federal Student Aid engages more than 5,000 members of the financial aid community during our Federal Student Aid Conferences. These conferences provide us with direct access to our customers in order to share the most up-to-date information on Title IV programs and Federal Student Aid policies and procedures.

Source: http://federalstudentaid.ed.gov/about/index.html

Debt Concerns Turn Medical Students Away From Primary Care

2008-07-11T08:18:00.002-04:00

By Christina Olenchek

Wesley Flint hasn't decided which specialty he'll pursue when he graduates from Penn State College of Medicine in Derry Township, Dauphin County.

But playing no small role in his decision is that he expects to owe nearly $300,000 in student loans by the end of his studies.

"I think it has some bearing (on my decision)," said Flint, a 27-year-old from Salt Lake City. "It definitely makes those fancy specialties look a lot more attractive."

That is bad news for doctors and policymakers trying to make primary-care services accessible to more Pennsylvanians. Rising medical-student debt is another reason why students will shy from relatively low-paying primary-care fields, such as internal medicine and pediatrics, and instead focus on higher-paying specialties like cardiology and radiology, observers said. A lack of primary-care doctors could force consumers to seek expensive emergency-room and specialist care for general ailments, which could drive up the cost of health care.

"Students with huge debt are not going to choose to go into primary care," said Dr. Daniel Kimball, chairman of the health and public-policy committee of the Pennsylvania chapter of the American College of Physicians. "They're going to look to a field where they can pay off that debt more easily or rapidly."

In 2006, medical-student debt averaged $120,000 for students graduating from a public medical school and $160,000 for students graduating from a private institution, according to the Association of American Medical Colleges (see "A growing burden," page 1). The average debt for a student at Penn State College of Medicine is about $150,000, said Dr. Harold Paz, the college's dean.

The financial pinch for new doctors doesn't end there, Kimball said. There are costs related to establishing a solo practice or buying into a group practice. There are medical-malpractice premiums to pay. Reimbursements from government payers and insurers often are inadequate, forcing doctors to see more patients to make ends meet.

Kimball, former chief of the residency program at The Reading Hospital and Medical Center, said he knew of many residents who initially wanted to go into family medicine but later decided against it because they could make more money elsewhere.

"You add (the other costs) on top of the debt, and it's overwhelming," Kimball said.

Loan forgiveness might be the only way to convince medical students like Kelly Burba to go into primary care. Burba, a 25-year-old from Ann Arbor, Mich., said she is more interested in a career in cardiology or emergency medicine.

"Without loan forgiveness, there wouldn't be enough (money in primary care) to pay back the loans," she said.

Kimball said he believes drastic action might be needed to make medical school less financially taxing to students. The United States could follow the model of other countries that offer medical school tuition free.

"I don't know if we'll ever get to that point," Kimball said. "But there has to be a big relook at how we fund medical care."

Source: http://www.centralpennbusiness.com/weekly_article.asp?aID=84064264.928651.873028.7127463.4956535.178&aID2=67147

SAT® Studies Show Test’s Strength in Predicting College Success

2008-06-18T12:03:00.001-04:00

NEW YORK — SAT® scores, coupled with high school grades, provide colleges with a powerful barometer for predicting academic success, concluded the latest studies of the national benchmark test. Released today, the College Board’s 2008 SAT Validity Studies are the first to reveal information about the full cohort of students who have taken the SAT since the March 2005 addition of a required writing section.

The studies, which evaluated data of about 150,000 students from 110 four-year colleges and universities across the country, demonstrate that the SAT continues to be an excellent predictor of how students will perform in their first year of college and revealed meaningful data specific to the writing section. The new section, which is mandatory for SAT takers, was shown to be the single most predictive section of the test for all students. The analyses also found the writing section to be the most predictive across all minority groups.

“Writing as a college-level skill is a crucial asset for student success, an important message reinforced by colleges that require admissions tests with a writing section,” said College Board President Gaston Caperton. “Colleges not requiring an admissions test with writing are overlooking one of the best predictors of college success to which they have access. Writing should not be optional.”

The purpose of the research was to determine the ability of the SAT to predict college success. These studies focused on the revised SAT, which was introduced in spring 2005. Among the most salient findings:

The SAT continues to be an excellent predictor of how students will perform in their first year of college;
The SAT is a better predictor than high school grades for all minority groups (African American, Hispanic, American Indian and Asian);
The recently added writing section is the most predictive of the three SAT sections;
Writing is the most predictive section of the SAT for every subgroup except ESL students;
The three-hour and 45-minute SAT is almost as predictive as four years of high school grades; and
The best predictor of first-year college GPA is a combination of high school GPA along with SAT scores.
The results are consistent for all types of colleges, with slight differences. (See Table 6 in the “Validity for the SAT in Predicting First-Year College Grade Point Average” study.) Grades are slightly better predictors of academic success at public or less-selective colleges; SAT scores are slightly better predictors at private colleges or more-selective colleges.

Source: http://www.collegeboard.com/press/releases/197359.html

Student Credit Cards: Benefits and Dangers

2008-06-09T00:27:00.000-04:00

By Richard N. Rubinstein, M.D.

Every year, college freshman are bombared with offers for student credit cards. Parents need to talk about in talking about the responsibilities that go with having a credit card, before their son or daughter goes off to college.

I'm not suggesting that it's a bad idea for college students to have their own credit card. Actually, it has many benefits, but it is essential that they get the right card and use it carefully and prudently.

The benefits of a student credit card are clear. Parents won't need to be continually sending money and students will be able to make normal purchases more easily. They will also be prepared for unforseen "emergencies." Moreover, since most credit cards have a preset spending limit, parents can be sure that spending will remain within a pretermined amount. Parents should remember to request a relatively low spending limit, since credit card companies are often too liberal in the spending limits they assign to student credit cards.

Parents may wish to have the student credit card used only for emergencies. In that case, this must be made quite clear to the student.

Some credit card companies offer very low "teaser" rates in the beginning for a limited period of time and then jack up the interest rate to an exhorbitant level afterward. Always check out the interest rate that will apply after the introductory period.

Another pitfall to avoid is paying only the minimum payment each month. Often, the minimum payment only covers the interest for that month, and little or no money goes toward paying the principal. In that case, it may take decades to pay off the balance. In fact, if no money goes toward the principal, the balance will never be paid off!

Many credit card companies offer the ability to manage the account online. This is a very convenient feature. Students can check their balance or make payments from their checking account 24/7.

This feature also allows parents to monitor the account, even from thousands of miles away. This level of accountability adds an extra margin of safety and reduces the chances that the student will get into trouble by over-using the credit card.

Dr. Rubinstein is a practicing psychiatrist and infopreneur.
He helps people apply online for major credit cards and has a very high success rate. You can email him at [mailto:credit@doctorduplicator.com]credit@doctorduplicator.com.

Dr. Rubinstein has over 100 web sites. To find out more about ways Dr. Rubinstein can help you, go to http://www.doctorduplicator.com

Article Source: http://EzineArticles.com/?expert=Richard_N._Rubinstein,_M.D. http://EzineArticles.com/?Student-Credit-Cards:-Benefits-and-Dangers&id=85684

The Fundamentals of FAFSA

2008-06-08T09:54:00.001-04:00

By Gary Marjani

Nearly every college in the United States relies on FAFSA to determine how much financial aid - including grants, loans, and work study - a student can receive. The entire FAFSA process can be a daunting and difficult one for those who do not know what to expect. Before filling out and filing the FAFSA form, it is first crucial to understand what it is and what it does. Otherwise, it is liable to look like so much Greek. The following is an explanation of the fundamental points of the Free Application for Federal Student Aid.

A student's financial aid package depends first and foremost on his or her Expected Family Contribution, or EFC. The purpose of FAFSA is to calculate what a student's Expected Family Contribution is. That is the reason why the United States Department of Education created the Free Application for Federal Student Aid. FAFSA determines what is known as a "need analysis," which is based on a student's financial information. Important factors include income and assets - meaning that a student is not necessarily out of luck simply because they or their parents make a lot of money. For instance, if a family makes a lot of money but most of it goes toward paying bills, leaving only a small amount, then a student can still receive a very good financial aid package. However, this only applies if a student is a dependent student - that is, dependent on his or her parents. Once the FAFSA form is analyzed and processed, the findings are forwarded to the student's university of choice.

There is some form of financial aid out there for every student no matter what his or her income - and no matter what his or her family's income. There are, however, certain eligibility requirements for FAFSA. A student must be either a citizen of the United States or else an eligible non-citizen of the United States. He or she must have a valid social security number, as well as either a GED or a high school diploma. He or she has to have completed the FAFSA form, wherein he or she promises that the federal aid will be used for education. If the prospective student is a male between the ages of eighteen and twenty-five, he must be registered with the United States Selective Service. To be eligible for FAFSA, a student cannot owe any refunds on federal grants, cannot have defaulted on any student loans, and cannot have been found guilty for the sale or possession of illegal drugs, at any time that he or she was receiving financial aid.

The FAFSA form must be completed before a student can receive any financial aid. It is the first and most important step in the financial aid process. FAFSA is the most important thing when it comes to determining how much financial aid a student will receive as well, so it is important to be detailed and truthful when filling it out and extremely prompt in filing it.

Gary Marjani is author of several articles pertaining to student financial aid such as [http://www.studentfinaidinfo.com/faq/fafsa/info.php]FAFSA, [http://www.studentfinaidinfo.com/faq/stafford/loan.php]Stafford Loan, [http://www.studentfinaidinfo.com/faq/salliemae/info.php]Sallie Mae, etc.

Article Source: http://EzineArticles.com/?expert=Gary_Marjani http://EzineArticles.com/?The-Fundamentals-of-FAFSA&id=1156196

Considering Changing Your University Major?

2008-06-07T23:48:00.000-04:00

It is common for university students to find out they do not like the career in which they are matriculated at school. The best way to choose a new career is to find out more about yourself and choose a career that matches your personal characteristics. One of the most common difficulties in choosing a career is not knowing about the lifecycles of the career you chose and not knowing about your own lifecycle.

Lifecycles

For instance, the field of teaching algebra has a lengthy lifecycle. There are few changes in the field of algebra over the years. Those who make a career of teaching algebra tend to have a personal lifecycle of 15 to 25 years. They like things that remain without change. They are most happy in circumstances where there is little change. So, they are drawn into a field where the field and the content of that field does not change for many years.

At the other end of the scale, the field of application software development has a fleeting lifecycle. Most software development projects are only 10 to 15 months. So, the people who will thrive in the application software development field must have a fleeting lifecycle. This field needs people who want to start something, finish it, and then move on to the next task.

In between these 2 ends of the scale are those whose lifecycle is five to seven years. The majority of people fit into this category. These are the people who are the backbone of the labor pool in the USA. These are the people who merchandise, build, uphold, deliver, and provide customer service for most of the goods & services in America's marketplace.

Recognizing your own lifecycle can be simple. If you have a long work CV, you explore your history of positions and find the pattern that you have lived in your positions. Have you had a progression of positions which are in the 5 to 7 years time-frame? Is your work experience organized around situations where you are drawn into projects where you build or maintain? If so, you may fit in the five to seven year lifecycle group.

Have all of your positions been doing one thing? If you have spent more than 10 years doing the same work and you have maintained a level of comfort with the projects and content of your work, you most likely fit in the 15 to 25 year lifecycle group.

If your work CV is a long list of short duration positions which you start, complete, and then move on, you probably fit in the fleeting lifecycle group.

Which is best?

There is no group that is better or worse than the others. Each group fills a need in our economy’s work cycles. Some of these lifecycle categories fit better for certain careers or for certain positions.

If you are a student in university, you don’t have a history to look back on to find out your patterns. You need another way of understanding your patterns and making useful elections about your career. Before that, you should understand a little bit more about these lifecycle categories.

The Alarm Clock

Without knowing which of these categories you are in, everyone carries an alarm clock in their head which lets them know that their cycle is ending. They usually really like their labor and the others they work with, but they find themselves reading the ‘Help Wanted’ section in the newspaper. They start looking for things to be dissatisfied with about their job, the people, the location, the weather, or anything else they can use to think it is time to change their job. They start finding themselves needing to move on to the next labor.

This is the regular way we know that our labor lifecycle is ending, and we need to start a new cycle. But, starting a new cycle does not have to be a new job or career. If you know this is your group, you can plan for the shifts you make from one cycle to the next. If you catch this ‘alarm’ when it first starts to sound, you can make relatively small changes and reset your clock.

For instance, when you get a promotion on the job, your clock is reset, and your cycle begins again. When you get new kinds of tasks on the job, your clock is reset, and your cycle begins again. When you move to a different project in your company, your clock is reset, and your cycle begins again.

But if you do not make the break you need to make, when your lifecycle ends, you start to get depressed. And, the longer you wait to make the change, the stronger the break needs to be to reset your clock. If you need to make the break and you do not make it, you get depressed. The longer you wait before you make the break, the deeper the depression.

When you first notice the alarms that you need the break, the break does not need to be very large. New task assignments or redecorating your workspace are usually enough. But if you wait, you may need to change the company you work for or you may need to change your career.

What Can You Do?

This could be a predicament. Do you want to change your major because you really don’t like this career, or is it because you have ended your lifecycle?

You should obtain a career assessment using a system which helps you understand many of your characteristics including your lifecycle. With this kind of assessment, you can make reasoned choices about your major, your career, and your life.

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About the Article Author

Rodger Bailey, MS, has degrees in Anthropology and Counseling. He has developed The LAB Profile: a career assessment system which provides specific information about your traits on 40 scales, including your lifecycle. Also, read about his work with his Developmental Discovery System™.

Education In America After No Child Left Behind: Where Do We Go

2008-06-06T15:14:00.000-04:00

By Jim Leatherwood

Public schools play a vital role in shaping this nation's
future. As I write this article, we are about to elect a new
President. It is probable that a change in administration will
result in a new policy effecting education. The direction and
quality of this policy will have a lasting effect on our public
schools and on our nation as a whole. So where do we go from
here?

At this moment, sitting in a classroom somewhere in America is
a future Bill Gates, Oprah Winfrey, Warren Buffet, and Martha
Stewart. Will these students have the necessary tools to rise to
the top of their profession or will we become dependent on other
countries to provide leadership in this global economy?
Education may be the determining factor.

"The economy of the future will be dominated by industries in
microelectronics, telecommunications, robotics and biotechnology
– not to mention new fields that haven’t even been predicted." -
NEA TODAY, March 2008

The essential focus in education must be to prepare American
students for the challenge of the twenty-first century
workplace. It is abundantly clear that our drop-out rate is too
high and student performance levels are too low. Identifying
these problems may be the first step toward a solution but
current solutions simply don't work. Under NCLB, academic
testing has become the main focus for education reform. An
emphasis on test results has forced educators to direct their
energy and resources directly toward teaching to these tests.
The irony is that some career-related courses and arts programs
that clearly motivate students to stay in school and perform
have been weakened, or even eliminated, in the process. The
pressure that this type of reform has placed on educators can
negate innovation and creativity in the classroom. Current
policy hinders the teacher's ability to inspire students.

Future planning for education must include a focus on changing
technology and introduce the student to the necessity of
lifelong learning. Programs like Tech-Prep, School-to-Work and
Career Academies have successfully introduced these ideas to
some high school students but have not gone far enough. No plan
is complete without a delivery system that motivates and
inspires students to learn. Such a plan must be implemented long
before high school and have the potential to impact every
student. When students are motivated to learn, test scores will
rise. So where do we go from here?

A successful plan for education will include structured
partnerships. As described in the book Facing the Future
Together, educators should never plan or implement a program in
isolation. Through structured partnerships with those who are
stakeholders in education (business, industry and other agencies
in the community) every program becomes stronger and every
student benefits. Business and industry have an enormous stake
in student achievement. Where will future customers, clients and
skilled employees come from if not from the school system?
Partnerships bring us closer as a community to address our
common concerns and everyone benefits. Since we all have a stake
in the student who exits our school system, the number of
potential partners is almost limitless.

A successful school-business partnership is well structured,
sustainable and clearly designed to show students the connection
between education and the world beyond the school's walls. This
approach brings relevance to learning and helps to keep students
motivated and in school. As previously stated, students will
perform better in class and score higher on tests if they
understand the relevance of subject matter they are expected to
learn.

Taking that first step toward building a successful partnership
can be a challenge but the result is that everyone wins. As a
new administration takes office in Washington D.C. and a new
education policy is formulated we have an opportunity to gain
some of the ground we have lost in recent years. Facing the
future of education together as partners gives us a strong
foundation to build upon.

About the Author: Jim Leatherwood is the author of Facing the
Future Together: Forming Successful School-Business
Partnerships. Website: http://www.successfulschoolbusiness.com;
E-mail: thebrookepress@aol.com.

Source: http://www.isnare.com

Permanent Link: http://www.isnare.com/?aid=260337&ca=Education

The Hidden Cost of College

2008-06-06T07:50:00.004-04:00

If you were asked how many years it takes to earn a Bachelor's Degree from college, you would probably say 4 years right? Unfortunately, if you go by the averages, you'd be off by 2 years. Those 2 extra years can cost you thousands of dollars.

It's No Longer "4-Year College"

According to a study by the U.S. Department of Education, the average time it takes to earn a Bachelor's Degree is now 6.2 years. Only 36% of those who begin public 4 year college graduate in 4 years!

Why is it taking longer? Research shows that there are a handful of key reasons:

Just Enough to Get By
Many students view college as an entitlement. They go to college not because they see value in it, but because it's what is expected. As a result, these students do just enough to get by. Without the motivation, direction, or focus, they take longer to graduate or ultimately, drop out.

Not Prepared
Many students simply aren't prepared for the academic challenge of college. Without planning early in their high school years, they opt out of the more challenging classes that would have prepared them for college. As a result, when they reach college, they need remedial courses to catch up.

"I'll Decide Later"
Some students don't take the time to think through what they'll do after they graduate. Without some idea of their interests and aspirations, they find it easier to postpone decisions about their future. College becomes a comfortable place to hangout until they decide.

Transfers
Studies have shown that students who transfer from one college to another (even once), typically take longer to graduate.

Changing Majors
It is not at all unusual for college students to change their majors. But the further a student is into their college experience, the greater impact changing majors can have on meeting graduation requirements.

Working Their Way Through College
With today's high cost of college, many students are having to work their way through school. Juggling the demands of both school and a job can delay graduation.

The Cost of Delayed Graduation

Based on data from The College Board's 2006-07 Annual Survey of Colleges, if a student takes 6 years to graduate, the cost difference could be anywhere from $33,000 to $67,000 more than planned! The data shows that the average cost of attending a 4-year college including tuition, fees, room and board, books and supplies is:

Public In-State:
4 Years: $65,428
6 Years: $98,142
Difference: $32,714

4-Year Public Out-of-State:
4 Years: $105,216
6 Years: $157,824
Difference: $52,608

4-Year Private College:
4 Years: $133,204
6 Years: $199,806
Difference: $66,602

Don't Pay More Than You Have To

Many factors such as financial aid will determine what you'll actually pay for college. But why spend any more money than you have to? If you focus on the things that you can control to insure on-time graduation, college doesn't have to be a 6 year journey.

Step 1:
Increase Self-Knowledge. The more a student knows about his/her own interests, strengths, and aspirations, the easier it is to focus and direct one's educational path.

Step 2:
Plan Ahead. By taking advanced placement classes in high school, students accomplish two things. First, they increase their chances of getting accepted to the college of their choice. And second, they can actually "place out" of college level classes which can accelerate earning a degree.

Step 3:
Get Guidance. College is a big investment. Getting advice from someone trained in education and career guidance can save you time and money. Guidance can replace guesswork with a planned approach to deciding which college to attend, what to major in, and how to align an education with best-fit career options.

Brian Sanders is President and CEO of [http://www.clearambition.com/students.aspx]Clear Ambition, an online program that helps people make better, more confident decisions about their life direction and career path. Find more information about [http://www.clearambition.com/guidance.aspx]education and career guidance or [http://www.clearambition.com/default.aspx]take a free interest analysis.

Article Source: http://EzineArticles.com/?expert=Brian_Sanders http://EzineArticles.com/?The-Hidden-Cost-of-College&id=923464

Don't Fall Victim to Credit Card Scams

2008-06-05T08:04:00.001-04:00

We all know that there are various scams in operation these days relating to credit cards, ranging from scams to get your details in order to access your credit card account to scams to get you to take out a credit card that you didn't want and never even applied for. The latter is a scam that has recently come to light in a report.

A woman was found to have obtained basic personal details from people under false pretences. She then added some made up details in order to pass off the people as credit card applicants. The reason behind the scam was that the woman worked for a firm hired by a major credit card company, and the firm was paid based on the number of new applicants it secured for credit cards.

The woman had been questioning people about seemingly innocent matters, such as their holidays, armed with a clipboard, telling them that they would be entered into a prize draw for their time. She then made up account details and other details and submitted their personal data for a credit card, which was duly dispatched to them. Whilst the woman was fired from her job consumers are urged to bear in mind how easy it can be for people to operate these scams.

Many consumers fall victim to scams like these. One of the people that received an unexpected credit card as part of this recent operation said that he was approached and asked some basic questions about his holiday, which he was happy to answer. He said: "There was never a word said about credit cards. This woman in her thirties came up to me as I was sitting waiting for my flight and said she was simply doing a survey. It was early in the morning and I was half-asleep but I helped her. I know 100 per cent she never once said she was touting for credit card business."

This shows that not all credit card scams are about obtaining your money - some are about obtaining your business, and without due care and attention with regards to why the person needs your details you could find yourself signing up for credit that you don't need or want.

Remember to keep up to date with the latest credit card news and guides and compare credit card companies to make sure you've got the best deal for you.

Article Source: http://www.articlesbase.com/credit-articles/dont-fall-victim-to-credit-card-scams-439159.html

About the Author:

Reno Charlton, award-winning writer, shares her financial expertise as a contributing columnist for Credit Card Comparison where you can keep up to date with the latest credit card news and guides and compare credit card best buys .

Your Credit Score - Removing the Mystery

2008-06-04T09:02:00.004-04:00

Too many people feel lost when it comes to understanding how their credit scores are calculated and that they are powerless to do anything to keep better scores as a result. The truth is that there is a method to the madness of credit ratings. You can get a grip on the rules and use them to your advantage. The first step, however, is knowing how your numbers are computed and what you can do to get them up and keep them up.

Your keys to ratings' success can be found in five areas: your payment history, the amounts that you owe, the length of your credit history, new credit accounts that you have acquired, and types of credit that you use. Let's look at each one in turn.

Your payment history composes 35% of your score. The obvious key here is making your payments on time all the time. The effects of a late payment will diminish as time passes. If you have trouble with getting things in when you should, figure out why. Is it a money issue or is it a lack of organization on your part? If it's a money thing, you know what you need to do. If it's organization, pay your bills online with electronic bill pay offered through your bank or credit union. The computer won't forget to pay Mr. Visa.

The amount that you owe versus your available credit composes 30% of your score. If you have four cards with limits totaling $10,000 and you owe $2,000, this puts you at 20% of your available credit. This is a good place to be. If you have one card with a $2000 limit and you owe $2000, this puts you at 100% of your available credit. This is not a good place to be. The sweet spot for the premium scores seems to be no higher than 20-25%.

The length of your credit history is 15% of your score. Scorers look at the age of your oldest account, the newest, and the average of all accounts. If you are going to keep some accounts and close others, keep the oldest ones. If you choose to keep the newest instead, you could have just shortened your overall credit history by years.

New credit accounts compose 10% of your score. They look at new accounts as potential avenues for you to get yourself into trouble. Why would you open them unless you were planning to use them, right? If you open multiple lines of credit simultaneously, you are raising a big red flag. You are planning to spend - and spend big.

The types of credit that you have in use compose 10% of your score. The objective here is to have a balance for better results. A good menu for you would include revolving credit, installment credit, and a mortgage. This shows that you can handle multiple responsibilities well. If you can do that, you are a better risk.

Following these hints will help you get where you want to be and stay there. If you are in credit trouble, there are definite strategies to help with that too. It's best, however, to understand how the rules of the game are played before taking the field. This will help to ensure a better outcome for you and keep the headaches away.

Greg Nixon is a high school English teacher who includes personal finance issues into his language arts curriculum. He began the mini-lessons to help his students understand more of how money works.

Please see his blog, The Student Financial Times, for more topics that he covers in class weekly.

Article Source: http://EzineArticles.com/?expert=Greg_Nixon

Finding College Scholarships

2008-06-03T09:43:00.001-04:00

What is the key to finding college scholarships? Know your sources. Higher education is expensive, but every year more and more money is given away to supplement that cost. A quick online search for "scholarships" reveals almost 66,000,000 keyword hits! Well, how do you narrows these down? There are many sources already planned and mapped out for you.

First, check out government online sources. The government alone will provide over $83 billion dollars in aid this year.

Ed.gov - The US Department of Education website has a wealth of knowledge regarding financial aid. Clicking on the "Student Financial Aid" link on the right menu bar will bring you the in depth articles discussing government money. You can learn how to apply for college aid, federal student aid, or federal loans here.

Students.gov - Not only can you find scholarships, but they lay out a full fledge college planning course. Information found here includes military programs ( G.I. Bill ) , career planning, and even state level funding articles.

Fafsa.ed.gov - Fafsa is the "Federal Application For Student Aid" This is the basic government requirement for federal aid. Here you are taught how to fill out the application as well how to follow up your application.

Government funding actually doesn't have a lot of "red tape" to get the cash and the requirements are sometimes a great deal more relaxed that other sources.

Secondly, online search databases are a great place to find scholarship money. There are hundreds of them out there. A quick search for "scholarship search" will pull up more than enough to find good matches. Most of these sites will require in depth personal information down to your address, phone number, or high school. Make sure to check out their privacy policies to see how your information is handled. These search engines will match scholarships to you based on your given personal information. One slight drawback to this type of searching will be the advertising that you have to wade through. You are given to option to skip most ads so it is only mildly annoying. I will only try scholarships databases that are free. You should not be required to pay for this type of information.

Lastly, look around for corporate or business funding. Many corporate and business entities have a employee education program. Both parties have a stake in your education, so feel free to look around for your "ideal" job and find companies that match your ideal. Call them up and see if they offer some employment education incentives. Most companies will fund a portion of your higher education in exchange for so many years of dedicated service. Fortune 500 companies are more than willing to find tax write-offs in education.

Financial aid can be found almost anywhere. Get passionate and make funding your education a full time jobs for a couple weeks. Adopt a "Ain't to proud to beg attitude" if you want to succeed.

Winston Brown is a successful small business owner. He feels that education is the greatest gift anyone can receive. To learn more about him visit his website ScholarshipsPro.com - Financial Scholarships Guide and Discussion Forum

Article Source: http://EzineArticles.com/?expert=Winston_Brown
http://EzineArticles.com/?Finding-College-Scholarships&id=969407

Saving for College Expenses Early Puts Time on Your Side

2008-05-31T21:01:00.001-04:00

Keeping up with the rising cost of college, especially in a dicey economic and market environment, is nothing like the good old days for some people.

"My father was a farmer and when the tuition bill came he always sold a cow," said Merra Lee Moffitt, a certified financial planner with Waddell & Reed in Wyomissing, Pa.

Moffitt's son plans to attend a private university and, with nary a bovine in sight, the family's college savings must get the job done. Unfortunately, too many parents who made earlier projections on rosy scenarios are now tempted to shove college savings to the back burner.

For the full story...

Hispanic Futures Conference Voices Leadership and Change

2008-05-31T20:58:00.002-04:00

"The idea is that with a degree, young Hispanics will be armed with the tools to be leaders and to affect change. "Leadership and Change" was the message of Saturday's Hispanic Futures Conference.

For the full story...

Boost Your Credit Score

2008-05-31T20:56:00.000-04:00

Ever since subprime mortgages became more "sub" than "prime," lenders have been tightening up on credit. The days of the nothing-down, no-documentation mortgage are gone.

Now homebuyers need a down payment and proof of income. What’s more, mortgage applicants need a winning credit score.

Credit scores are also weighed when you want to refinance a home loan or buy something on time. Some auto and home insurance companies will accept or reject you based on your credit score. Even if you’re accepted, the price you pay for insurance may vary according to your credit score.

For the full story...

A Growing Trend: No More College Entrance Exams

2008-05-29T23:33:00.001-04:00

High school juniors and seniors who have dreaded taking college entrance exams are learning that an increasing number of schools are no longer requiring them as part of the application process. ACTs and SATs, two tests nearly universally accepted for years, will no longer be required of incoming freshmen at Wake Forest University and some other schools.

For the full story...

Cost-Cutting Tuition Tips

2008-05-29T19:26:00.000-04:00

If you come up short, go back to the school's financial aid office to ask for more. "When do you stop asking a college for money? Never," said Tony Esposito, president of Lerner and Esposito College Consultants Inc. in Commack.

Look into a payment plan. Some schools let you spread payments out over several months, as long as the bill is paid by the end of the semester, says Cathy Malnichuck, director of financial aid at Farmingdale State College.

For the full story...

The Student Loan CRUNCH

2008-05-29T19:24:00.000-04:00

With more than 60 lenders leaving the federal student loan market, and private lenders tightening lending criteria or walking away from the business altogether, parents and students are facing what one expert called a "credit crunch and college financing storm."

Over the years, many parents have come to rely on private loans to close the gaps in student aid packages, with private loans accounting for 20 percent of all education borrowing.

For the full story...

Teachers Help Teens Become Financially Savvy

2008-05-29T19:22:00.000-04:00

More than 130 teachers from Western New York high schools are now using a Web-based curriculum called MoneySKILL® to help their students develop personal finance skills, thanks to outreach efforts by the School of Management and M&T Bank.

This year’s total represents a dramatic increase from the 16 teachers in a pilot program two years ago.

“We are thrilled to see that participation has really skyrocketed this year,” says John M. Thomas, dean of the School of Management. “We are especially pleased that 71 percent of Buffalo public high schools now have a teacher registered to use MoneySKILL.”

For the full story...

Young People Love Credit Cards

2008-05-27T18:00:00.000-04:00

With the credit crunch affecting spending and homeowners worrying about the stability of their finances, it seems that Britain’s youth are as hooked on credit cards as ever.

Young adults leaving education and entering employment are increasingly relying on credit cards to keep up with their busy lifestyles.

The older generation are reported to be cutting back on spending in a big way, causing many credit companies to worry about their future.

For the full story...

Credit Cards Preferred to Loans: Survey

2008-05-27T17:57:00.000-04:00

Consumers are avoiding personal loans and staying with credit cards even though they have higher interest rates because they cannot be bothered with the loan application, a survey says.

A Citibank survey has found consumers prefer to pay for large purchases with their credit card rather than take out a personal loan.

For the full story...

Plan Can Help Make Graduation a Reality

2008-05-26T21:38:00.000-04:00

It’s that time of year when students across the country are graduating from college. It took a lot of effort to earn those degrees, but it took something else, too — money. It’s this financial aspect of college that may concern you if you have children. How can you take some of the stress out of paying the high costs of higher education?

For the full story...

Online Banking Clicks with Consumers

2008-05-26T21:35:00.000-04:00

Ask Pat Johnson about online banking and you find one very satisfied customer.

"I love the convenience," she said. "If my personal account gets too low, I just click and transfer funds from savings. If I want to put more into savings, it's just as easy."

For the full story...

Teens and the Mysteries of Money Management

2008-05-26T21:31:00.000-04:00

May and June are big money months for high school and college graduates and their younger siblings who are making their First Communions and confirmations. For many of these young people, the cash and checks tucked into congratulatory cards could be the largest amounts of money they’ve ever received.

What they do with the money has some experts worried.

For the full story...

Credit Score Plays Vital Role in World of Personal Finance

2008-05-26T21:29:00.002-04:00

Jeffrey Sheldon, a 36-year-old Purcellville, Va., computer-systems administrator, has an enviable credit score of about 740. But he's planning to refinance his adjustable-rate mortgage in June and knows that lenders will be taking a particularly close look at his credit record.

So when Sheldon shopped for an auto loan last fall, he first compared rates online. Then, he allowed only two lenders to pull his credit report because he knew that lots of inquiries could drag down his score.

For the full story...

Higher Ed, Not High School II

2008-05-25T13:58:00.003-04:00

Thousands of high school graduates in Massachusetts are wasting time in college, taking remedial courses to learn material that they should already know. Despite years of education reform, the state's public schools still have to do more to prepare students for college.

A new report by state education officials sizes up the problem. Of 19,000 students who graduated from public high school in 2005 and went on to a state college or university, 37 percent took at least one remedial course in their first college semester, the report found.

For the full story...

Running Out of Fuel, but Not Out of Ideas

2008-05-25T13:52:00.000-04:00

Gasoline is unimaginably important in our lives in the United States. Without gas in virtually limitless supply, and at prices we could afford, American life would change. We could no longer afford to live so far from one another and from our jobs. We could no longer afford to cruise in cars incomparably larger than those of our counterparts in Europe and Asia. In a way, we would stop being America as we know it.

Maybe this would be a good thing. After all, do we really need to have a 6,000-pound S.U.V. take a 100-pound high school student across town to buy a Diet Coke? Do we really need cars so big that they have flat-screen televisions for the children in the back? Do we really need to pour so much carbon dioxide into the atmosphere? And it’s certainly not great to belch out immense quanta of carbon monoxide, a deadly poison.

For the full story...

State Must Stop the Student Exodus

2008-05-25T12:36:00.000-04:00

As black-robed students line up all over town to receive a diploma and a handshake, it's the perfect time to ask a devious question: How can we do a better job of connecting students to our region's innovation economy and persuade them to stick around after graduation?

Every year, about 74,000 people earn undergraduate or advanced degrees in Massachusetts. Of those graduating from private colleges and universities, about half choose to stay (the figure is higher for those educated at state schools), according to the Association of Independent Colleges and Universities in Massachusetts.

For the full story...

How to Improve Your Credit Report

2008-05-25T12:34:00.000-04:00

Some experts say that you should close old credit cards that you're not using very often. That can be a good idea if you're tempted to max out your credit cards. However, John Ulzheimer, president of consumer education for Credit.com, calls this "probably the worst piece of advice that anybody can follow." That's for two reasons: First, the length of your credit history is determined by the age of your oldest account. The longer your history, the better. So even if your oldest account has some negative information on it, closing it could do more harm than good.

For the full story...

Personal Finance With A Personality

2008-05-25T12:31:00.000-04:00

Money is boring. Tracking expenses, creating and maintaining a budget, and finding the best deal are time consuming and tedious, otherwise we'd all do it all the time, right?

Money is pretty abstract. A plastic card in our wallets can be worth $10,000 while the car we bought two years ago is worth less than half what we paid for it. The value seems arbitrary. Money seems elusive to some people and in too much abundance to others. But money affects us all in profound ways.

For the full story...

How to Borrow Money Responsibly

2008-05-24T15:18:00.000-04:00

When you borrow money, you need to understand the difference between incurring necessary debt and unnecessary debt.

Necessary debt is incurred when you borrow money to purchase an essential item, such as a home or car, which you are unlikely to be able to buy outright with your cash savings alone.

Unnecessary debt is usually taken on to finance something that you do not really need or that you should be able to pay for in cash if you had budgeted properly.

For the full story...

What to Do When Your Kid's College Fund is Tanking

2008-05-24T00:58:00.002-04:00

The stock market hasn't been kind to investors in recent months, and that could be taking a toll on the Section 529 college savings accounts that many parents have set up for their kids. But families need to think carefully before tinkering too much with these tax-favored plans.

Setting money aside in a 529 plan offers tax benefits for families saving for college. A key thing to determine, experts say, is whether it's a good program that has merely hit a rough patch or whether it's basically flawed, with high fees and poor investment options.

For the full story...

Education Agency’s Plan Shores Up Market for Loans to College Students

2008-05-24T00:54:00.000-04:00

Secretary of Education Margaret Spellings on Wednesday announced a plan committing the federal government to buy college loans for the coming school year from student lending companies and to take other measures to ensure that despite troubled credit markets, students will have access to college financing.

The nation’s largest student lender, Sallie Mae, immediately praised the loan purchase plan, and said it would continue or perhaps even increase the breadth of its college lending this year.

For the full story...

5 Ways to Prep for the SAT

2008-05-24T00:53:00.000-04:00

The Scholastic Aptitude Test made its debut in 1926 and has been the bane of many a high school student’s existence ever since. This standardized test takes place seven times a year with the first date occurring in October and the last in June. The last test for this year’s season will take place on June 7.

The SAT tests skills in critical reading, mathematics and writing. According to The College Board, it is one of the most effective measures of a student’s college readiness. For students, it is one of the keys to getting into the college of their dreams. While the test itself takes three hours and 45 minutes to complete, the preparation time for many students extends far beyond that time.

For the full story...

Is Financial Education Doomed to Get Failing Grades in Schools?

2008-05-23T23:29:00.000-04:00

Recently there has been a lot of attention on the lack of financial education in the United States. Some experts have suggested that we need to educate people at an early age in order to reverse this trend. Although providing financial education in schools seems like a logical way to provide financial education to youth; however, some research appears to show that delivering financial education in the schools is not effective.

For the full story...

Transfer Your Credit Card Balance For Free

2008-05-23T23:19:00.000-04:00

A 0% balance transfer credit card is a wonderful thing. True, in a perfect world we wouldn't have debts to deal with at all, but -- in classic Foolish-style -- balance transfers give you the opportunity to get to grips with your credit card debt, without paying a single penny in interest for the entire 0% introductory period.

For the full story...

Take Steps to Keep Money, Credit Cards Safe on Vacation Trips

2008-05-23T23:17:00.001-04:00

As the summer travel season approaches, it's a good time to review the financial rules of the road. Consumers who take a few precautions before they leave home can help ensure that their cash and credit cards are safe and secure, whether their trips take them elsewhere in the country or overseas.

For the full story...

Just-in-Time Billpay Meets Needs of Students' Shallow Pockets

2008-05-21T19:26:00.002-04:00

Internet banking and bill-payment services provider Online Resources Corp. this week unveiled its expedited bill-pay service for financial institutions and walk-up providers to offer to consumers and small-business users, ratcheting up rivalries in the fast-growing realm of last-minute payments.

For the full story...

Creative Ways to Meet College Expenses

2008-05-21T19:23:00.001-04:00

May is graduation month! Many plan to attend college, so let’s look at some ways to curb increasing college costs.

One surefire way to cut college costs is to enroll in a local community college for a couple of years, where costs are often substantially less than four-year institutions. Then, after two years, transfer to a four-year institution. Your child’s diploma will be from the four-year institution, but your expenses won’t.

For the full story...

Saving Today Makes College Costs Easier to Stomach Tomorrow

2008-05-20T20:48:00.001-04:00

Higher education with lower costs is an easy combo to sell.

Two types of "529" education-savings plans are available to help families set aside money for future college costs, and the popularity of those plans - categorized as prepaid or savings - continues to soar.

For full story...

College Dropouts at a Disadvantage with the Competition in Job Market

2008-05-20T19:26:00.003-04:00

A high school dropout applying for a job in sales at Gander Mountain might get hired, but shouldn't expect to move into management.

While the Wisconsin-based company doesn't require a high school education for sales associates positions, its management positions require a college degree plus at least three to five years of management experience elsewhere.

For the full story...

Saving for Retirement Begins with First Day of Work

2008-05-20T19:20:00.001-04:00

Americans are worried that they might not have enough money for retirement, as health care costs rise and inflation erodes the value of their savings, according to a survey released Monday.

The study sponsored by the Society of Actuaries, a professional organization based in Illinois, found widespread economic insecurity among retirees and those approaching retirement.

For the full story...

New college grad? Now what?

2008-05-20T19:15:00.001-04:00

Finals are over, you have packed up the dorm room and said good-bye to friends -- hopefully even landed that first job to put your foot on the career ladder. Now, while you have a clean slate, is the perfect time to get your personal financial life started on the right foot.

For the full story...

Why You Need to Know About 529's

2008-05-19T21:07:00.000-04:00

Lightening the tuition load doesn't get much easier than with 529 plans, which allow families to stash college money in an account where it can grow and compound tax free. Named after a section of the tax code and offered through states, 529 savings plans encourage parents to start socking away money early.

"That's what they do better than just about any financial vehicle out there," says Jackie Williams, director of Ohio's 529 plan and spokeswoman for the College Savings Plan Network. "Think of a 529 as a road map for financing college."

For the full story...

How to "Financial Aid" Your Way Through College

2008-05-19T21:01:00.001-04:00

College graduations are being held on campuses all over the land this month and they are a reminder that, for the next wave of incoming freshman, the complex process of financing their education is just about to begin in earnest.

To simplify it, consider these pointers from Charlene Haykel, CEO of Simply Student Aid, a company that educates incoming college students on the financial-aid process.

For the full story...

So You Want to Borrow Some Money?

2008-05-19T20:59:00.000-04:00

Do you remember when getting credit was as easy as taking candy from a baby? In pre-credit crunch times, banks seemed to dole it out like sweets.

But it has never been quite that simple for borrowers with credit problems or without a credit history. And with lending criteria getting tighter, it looks set to get even more difficult.

For the full story...

One High School Finally Teaches Personal Finance Curriculum

2008-05-18T12:50:00.003-04:00

The business of balancing a checkbook, understanding credit card offers, compounding interest and student loan systems will be just a few issues to be covered in a new course in personal finance to be offered in the 2008-09 school year at Mountain Home High School in Arkansas.

For the full story...

Pick a Credit Card with Rewards That Make Sense for Students

2008-05-18T12:37:00.002-04:00

The wallet-sized shape of reward cards is the same, but the cards come in different forms when it comes to how they pass on financial savings to customers.

For the full story...

How Not to Get Stuck at the Campus Bookstore

2008-05-18T12:17:00.000-04:00

Faced with flagging sales and an increase in fraud, retailers now make it tougher than ever to return items or exercise warranties. But thanks to some little-known credit-card protections, shoppers don't have to get stuck with unwanted or broken merchandise.

For the full story...

Students Who Are Allergic to Saving Money Can Use Online Banking for Help

2008-05-18T12:07:00.003-04:00

Most Americans aren't in the habit of saving money. In fact, our love of credit cards sent our savings rate into negative territory for the first time since the depression in 2005 and 2006, and it has barely recovered.

For the full story...

Great, I'm in College...Now How Do I Pay For It?

2008-05-18T11:58:00.002-04:00

On the brink of the biggest loan and credit crisis higher education has ever seen, the College Savings Foundation (CSF), a nonprofit whose mission is to help American families achieve their education savings goals, is gathering decision makers in universities, government and the financial industry for the first time to discuss the possibility that many families and students may not be able to pay their tuition bills this summer and that the long-term lending landscape for college financing will be forever changed.

For the full story...

How to Harm Your Child's Perspectives on Money Without Really Trying

2008-05-18T01:40:00.002-04:00

Most parents believe that allowing their kids to have credit cards at a young age teaches them a lesson about managing their finances or money. The one thing that the parents should be aware of in terms of giving their children credit cards is to ensure that these kids are given guidance as well as support for them to be responsible in handling their credit.

For full story...

New Ways to Cause Problems for Your Children

2008-05-18T01:29:00.000-04:00

According to recent studies, approximately 8% of all American teens now have their own credit cards in their own names. Is this a good thing? That depends on how well-educated the teens are about credit card use - and debt.

For full story...

More Troubles for Borrowers of Student Loans

2008-05-18T01:25:00.000-04:00

A computer error at student lender Sallie Mae resulted in about a million of its customers being erroneously reported for several days as delinquent on their loans, causing their credit scores to plunge before the problem was corrected, the company said Wednesday.

For full story...

Teens and Credit Cards - A Bad Idea Whose Time Has Come

2008-05-18T01:21:00.002-04:00

If you think getting your child a credit card in high school is a way to teach financial responsibility before the onslaught of college credit-card marketing inevitably overwhelms your kid, think again.

For full story...

Gas Tax Holiday Is No Holiday

2008-05-05T21:07:00.007-04:00

The Presidential candidates have been answering critics about what they will do to lower gas prices if they were to take office. John McCain and Hillary Clinton believe that the gas tax of approximately 18.5 cents per gallon should take a holiday with the school kids this summer.

Barak Obama thinks this is a bad idea, more symbolism than substance. He figures that it will cost the government millions in needed highway funds and put road workers out of a job due to decreased tax revenues.

I agree completely with Obama on this. Look at some numbers. An average car has a 12-gallon tank and gets about 25 miles per gallon. Figure that most drivers are on the roads about 15,000 miles annually.

Using these assumptions, during the three months that the gas tax is lifted, Joe, or Jane, America would save about $30.

This is not enough to make me think that this tax hiatus is a good idea. It is not a panacea for the hole in my wallet when I pull up to the pump. A savings of less than 20 cents per gallon is insulting when its offer is intended to make me think that I'm getting something, when in reality I'm getting the same politicians' shell game that I've gotten for the 24 years that I've been voting.

This is an election year. Each candidate has his and her own remedies for all of society's ills. This gas tax hiatus is a bitter pill to swallow when I'm looking for an aggressive energy plan that rewards conservation rather than offers me a smoke and mirror illusion of savings for consumption.

Is there a spot on the ballot to mark "None of the Above?"

College Graduates Continue To Live At Home

2008-04-29T20:35:00.005-04:00

College graduates continue to show that, despite having diplomas hot off the presses and their futures before them, they are returning home for a period of time in record numbers, according to MonsterTrak's 2007 survey of college students and recent graduates.

Nearly half of the respondents indicated that they would be living with mom and dad for an indefinite period. These numbers reflect several things that are slowing them down in their pursuits of independence.

Many of them have too much debt to make it on their own. High dependence on credit cards and student loans during school have left many new graduates with obligations that are strangling their budgets.

Another issue for them is the high cost of housing and the associated expenses of fleeing the nest. There is rent, utilities, car loans, insurance, gasoline, wardrobe for new jobs, and money typically spent in higher amounts during younger years - movies, dating, traveling, cd's, cellphones, computers, cable tv.

Kids who once thought that they would be free of mom's and dad's roof once they got out of school are re-thinking their view of what it is to be in their early 20's. Our parent's generation was eager to make it on their own and sought fame and fortune during an easier time financially.

The global economy's strains are finding their way to Elm Street in ways not previously considered. With the crunch of smaller budgets, fewer better paying jobs, and bigger installment payment committments, it's no wonder that kids are returning to the same bedroom that they left four years before.

Although young people in other countries have been staying at home longer than is common to US kids, this is something new for many here in the States. It will take some time and patience to get used to. Fortunately, time and patience are free. These two will fit anyone's budget.

Double-Cycle Credit Card Billing Robs Your Wallet

2008-04-27T10:35:00.009-04:00

Suppose that you receive a bill from your card issuer this month for charges that you made last month for a refrigerator - let's say $1200. You send a check as payment for $600, half of the charges. In the next month, when the bill comes for $600, how much will your finance charges be based on? Only the $600 that you owe?

The previous $1200 plus the $600 remaining.

How can banks get away with this? Congress tells them that they can. (Congress oversees banking issues.) There are no laws against it. You can be charged interest twice on the same dollar. Nice business practices the banks have. Would you like to charge your customers one and a half times for the work that you do just once?

Before applying for any credit card, ask the card issuer whether they have double-cycle or dual-cycle billing. The largest companies do. Look for one that does not. You will save yourself a pile of money in the end if you are not in the habit of paying off your balances every month during your grace period.

You have almost unlimited opportunities to say "yes" to bad ideas. Don't make this one of them by taking a credit card from a cardsharp.

What Do I Do with My Economic Stimulus Check?

2008-04-26T09:47:00.013-04:00

In May, the government is going to be sending you a check, as part of its $165 billion Economic Stimulus Package, to jumpstart a sagging economy. The hope is that you will cash your check and go right to the store to buy a television set, a cell phone, some gasoline, jellybeans or a mailbox. Anything as long as you spend the money quickly.

On the IRS' website you will find a schedule of how much money you will receive based on your family size and income. Most couples with one child will get $1500. People who earned above the income limits will receive less, while others who paid no taxes at all will still get a check anyway. (I don't understand this, but this is the plan.)

The question is "what do I do with this money?" The smarter answer is clear: Pay down existing debt. ($1500 credit card balance at 18% with monthly payment of $100 takes 18 months to pay off. Save yourself $300 in interest.) If you have no debt, invest it in your retirement savings program. ($1500 at 8% for 25 years will be $11,010.) Do not buy anything with it.

Think for a moment, what bill do you have that you could put this toward? A credit card? Student loan? Your car? Home equity line of credit? House note? Any balance that you have that has interest attached to it?

You know your own finances. Put YOUR own money where it will do you the most good.

If you decide what to do with the money before it arrives, you won't have the pressure of making a choice later on. One less thing to do.

The Real Cost of Credit Card Debt

2008-04-24T18:03:00.007-04:00

I was astounded not long ago when I discovered how much a $5000 credit card balance actually costs the cardholder over time. (I like doing this weird kind of calculation stuff.) Follow this math down the rabbit hole.

If you have a card with a $5000 balance at 18% and make $100 payments each month, what do you think is the final tally to retire your balance and how long will it take to pay off?

Assuming you make no other charges after you begin to whittle away at the debt, it will take you 93 months, almost 8 years, for a grand total of $9300 paid out. That's an unbelievable $4300 in interest.

Now, if you were to invest $100 each month instead, in a mutual fund that grows at a modest 8% annually, in the same approximately 8 years, you would have $13,400.

To finance $5000, it will cost you $8,400.

Where did I get the $8,400? That is $4300 in interest that goes to the credit issuer plus $4,100 that your $100 monthly investment could have earned, if you had put your money in a mutual fund instead of sending it to the credit card company.

This is a cost of debt that your card companies won't share with you. They don't have to. It's not in their best interest to tell you that they are taking your retirement savings from you slowly and steadily every month.

Get out your latest credit card statement. See how much you paid in finance charges over the last month. If you have multiple cards, this could be scary.

This is money that you are not saving in an IRA, spending on groceries, buying shoes for your kids, giving to your favorite charity, or taking your family out for a movie on a Friday night.

You are your own best advocate. The tools of your defense? A pencil, a piece of paper, and a calculator.

Universal Default Provisions Raise Your Credit Card Interest

2008-04-23T19:38:00.006-04:00

Have you ever heard of "universal default" and its effect on your credit cards' interest rates? It is a term whose meaning you need to understand if you use your plastic from time to time. You could be wearing a target on your wallet and never have any idea.

The particulars of universal default allow your credit card issuer to raise your annual interest rate, although you were never late on any payments on that particular card. This is a reprehensible practice, but one that is growing in implementation every day.

From time to time, your credit card company will check your payment history with your other account holders to see how diligent you are about meeting your obligations. If you have been late on your car, for example, the interest rate on your Visa might jump up to 29%. The credit issuers figure that if you are late with your other payments that you will eventually be in trouble with them too.

Funny how those guys work. When I was in school, if I made an F on a math test, I was not rewarded with an F on an English test too - on an English test that I had not even taken, no less.

One strike and your out. You don't even have to be up at bat.

My recommendation: always be on time, utilize online banking to handle your personal finances, and challenge everything on your card statements that you don't feel is fair. You would be surprised how much you can get done just by making a little noise.

Banking On Online Banking

2008-04-21T20:51:00.011-04:00

If you are one of the holdouts who prefers to send your bill payments by mail rather than doing it through online banking, then this article is for you. It's time to take advantage of yesterday's opportunities.

The ability to handle all of your personal financial needs online at your bank began back in the 1990's. It hardly seems like it's been that long ago. Technology is handling effortlessly, or nearly effortlessly, the mundane tasks that used to tie you up and prevent you from really being productive.

You can benefit from the advantages of automating your finances right away. After creating an account through your bank or credit union, you are able to generate one-time or recurring debits from your checking or savings account to handle the nuisance stuff that bogs you down during the week.

For example, you can put your mortgage payment, car payment, student loan payment, utilities, cell phone, life, health, and auto insurance on "set it and forget it" mode. You'll need to specify a frequency that you would like the debits to be made. Voila! You are done. No muss, no fuss. It's all taken care of.

Here's another good thing too... You will never have to worry about being hit with a late payment fee either. Your financial institution will begin the payment process early enough to make sure that your funds are sent where they are supposed to go in plenty of time.

Okay, so your creditor doesn't accept online transfers? No problem. Your bank will create a check and send it to them the old fashioned way - through the mail. This is what you would have done. Why stress over who puts the check in the envelope as long as it's done?

Costs for the service are nominal and often free from one institution to another. You need to do this online banking thing. You will thank yourself when you start realizing that you now have some free time that you did not before because you were writing checks, buying and licking stamps, and going to the post office at 5:30 am on your way to work.

Besides, in your kids' eyes, you'll look like a rocket scientist for organizing your finances this way. Who are you to tell them any different?

online banking

Personal Finance and Your Car's Oil Changes: Something to Consider

2008-04-20T08:00:00.010-04:00

We agree that regular service and maintenance on your auto is necessary, right? You have to do it or you'll be sitting on the side of the road.

Let's talk about synthetic oils versus regular petroleum based oils as your choice for your car in a way that you may not have considered.

Regular oil changes are about $25-$30 per average car, depending on where you go. These need to be done in the range of 3000-5000 miles. The nature of driving that you do, age of your car, etc., will be a great determiner of your advised maintenance schedule.

Have you considered switching to a synthetic oil? I am not a car person in any way. There will be no discussion here of viscosity, chamber pressure, or detergent oils compared to non-detergent oils. I am not going there. I am looking at this question from the perspective of my use of time, money, our world's environmental climate, and dependence on foreign petroleum.

A typical oil change takes about an hour and costs $30, as I said. You get this maintenance done on your days off work, because your favorite shop is not open on Saturdays. I don't want to spend my time away from my job waiting for car repairs to be completed.

I switched to synthetic oils years ago for several reasons. I can go 7,000 miles between changes and spend less time in waiting rooms on days when I want to be with my kids. Also, even though a synthetic costs more, about 50% more, each visit to visit the mechanic costs less than it did before because I'm going half as often.

Look at the math: In a year of 15,000 miles, that's roughly four oil changes at $30 and four hours wait time. With synthetics, that's roughly two oil changes at $45 and two hours wait time. Benefits of cost and time earned right away.

Last issue, the environment and dependence on foreign petroleum. Synthetics are not petroleum based, so they do not have the same polluting manufacture or disposal concerns. Since they are not regular oils, we can make them here in the US. No need to look anywhere else. We are self-sufficient in this regard.

Less time in the shop, less cost overall, an environmental plus, and our self-sufficiency. This is a no-brainer switch for your personal finances and your car.

Consumer Privacy Rights and Your Peanut Butter

2008-04-17T22:11:00.007-04:00

Do you use loyalty cards at the grocery store or the drug store? Those are the cards that you swipe at the checkout to get an extra 35 cents off your peanut butter.

As well as giving you a reduced cost on the shelf price for your goods, they are used by the grocer to keep track of your purchases to get a profile of your habits. The stores can then use your profile to offer you coupons for the categories of the items that you buy most often. This is called "customer specific marketing."

Also, they can share your information with other companies, even the FBI. If you use those type cards, you might find that you are suddenly getting coupons in the mail for items that you have just begun buying.

The cards are used to monitor how often you come into the store. A friend of mine, not long ago, received poor customer service at a grocer's that requires loyalty cards be used to get lowered prices on featured items. After a 90 day hiatus from the chain, he received a coupon for $5 off his next purchase of any groceries on his next trip to shop.

It is obvious that the store had kept up with his frequency of shopping, realized that he had not been in recently, and sent him an incentive to return. He was suddenly introduced to Big Brother in the potato chip aisle.

My advice, if you have to get a loyalty card to get a discount on your purchases, do not use your real name when you sign up for the card. Stores in my area think that I am Jack Frost, Dylan Pumpkinhead, and Miles O'Miles-Ahead.

Only my son rides in my shopping cart, not Big Brother.

How Can I Raise My Credit Score?

2008-04-16T23:32:00.005-04:00

Credit scoring is a funny thing, although your score may be nothing to laugh at. The models that are used to determine credit worthiness don't always seem to make sense.

For example, if you close numerous credit accounts almost simultaneously, that will adversely affect your score.

If you open numerous credit accounts almost simultaneously, that will adversely affect your score.

Here's a strategy: pay your balances down quickly, close your accounts slowly, making sure that you leave open the oldest account. Part of your scoring is determined by the longevity of the accounts that you hold.

Also, make sure that you keep your monthly balances to no more than 20%-25% of the total amount of borrowing limits that you have available. Those seem to be the magic numbers. If you have $10,000 in limits, do not exceed $2,000-$2,500 in debts.

One last thing, build a balanced credit profile. You want to include a mortgage, an installment debt (a car or student loan), and a revolving debt (credit card or store card) for greatest stability. Stability means responsibility, which means higher scores.

In the end, the point of all this is unnecessary. You want to be debt free. Buy what you can pay for right away. All else, pay for quickly. I would rather be debt free than have an 850 score based on how I handle my affairs.

Freedom is the goal, not how you manage bondage.

Can You Afford To Go College? You Can't Afford Not To Go

2008-04-15T23:41:00.008-04:00

A recent study published by the Commerce Department's Census Bureau found that over an adult's working life, high school graduates can expect to earn $1.2 million. Those with a bachelor's degree do twice as well at $2.1 million. Those who stick out the classroom just one more time and earn a Master's earn about $2.5 million.

Wow.

How many times have you heard a co-worker say that he couldn't go to school because he needed to work to make his truck or motorcycle payment? That scenario is out of kilter for more than a few reasons. But, the biggest thing is this: The co-worker is sacrificing his education, his future earning potential tomorrow, to be able to continue making payments today to retire a loan that he has on a depreciating asset.

Earning a college degree is not for everyone. All do not have the ability, the temperament, or have the need in their current occupation for an advanced degree. If you can truly fit it into your schedule and lifestyle, why not double your lifetime income? In a few years, you will thank yourself. Your family might too.

Can Compounding Interest Turn $35 into $523,738 at Retirement?

2008-04-14T21:31:00.006-04:00

The short answer is that it can be done. Now, how do you do it? Time, patience, and discipline. Not what you were looking for, I'm sure.

I heard on the radio not long ago that only one third of working Americans have any type of retirement program in place outside Social Security. These savings plans included in the study were regular savings accounts at banks or credit unions, mutual funds linked to an IRA, participation in a 401(k) program at work, pension plans, and a Mason jar buried in the back yard. Okay, so maybe not the Mason jar, but the study included many popular options.

Given that Social Security is fast becoming a fairy tale, why aren't more people putting something away for their golden years? You can come up with your own reasons, but one glaring one is that they don't understand the power of compounding interest.

That is how you can turn $35 into $523,738.

If you invest $35 each week, or $150 per month, for 40 years at a modest 8% interest, you will have half a million dollars waiting for you at the end of your working years. That is not a bad exchange.

Think about it... What do you spend $35 on each week without thinking about it? There's a fast food lunch three days out of five, a $4 cup of coffee and a $3 muffin on the way to work, lottery tickets, cigarettes, name brands instead of store brands at the grocery store, failing to combine trips in the car to save gas, cable tv with 500 useless channels, cell phones with 23rd century features that you don't ever use, late fees on video rentals, ATM fees, overdraft/NSF fees, expensive designer clothes, drycleaning, for the ladies - just one more pair of shoes, for the men - one more must-have tool for the toolbox.

Your list of possibles can be a mile long. Take a moment to think about it. Then, think about what you could do with $523,783. If you spend the $35 weekly, in 40 years you will have spent $72,800.

Which would you rather have - $72,800 with nothing to show for it or $523,783 with a world of possibilities at your fingertips? You decide.

Farm Subsidies and Junk Food: An Unintended Correlation

2008-04-13T14:26:00.009-04:00

Much is heard in the news about farm subsidies, but just what are they? The subsidies are monies paid to farmers by the government with no expectation that anything will be exchanged for the subsidy. Essentially, it is like a trip to the grocery store during which you put money on the counter, but take no food home with you when you leave. You are just helping to keep the store in business.

The payments of these subsidies do a couple of things: they ensure that farmers will have a steady income throughout the year and that the consumer's costs for certain foods will remain as low as possible. Overall, they keep the agricultural industries in business and running as cheaply as they do. However, health researchers say subsidies for soybean and corn farmers worsen the nation's obesity problem, particularly in low income areas.

Government financial support moves farmers to grow specific crops, which as an unintended side effect create a cheap supply of unhealthy soybean oil and high fructose corn syrup. These elements for burgers, chips, and soft drinks are the mortar that holds the building blocks together for what the medical experts say is an extremely unhealthy diet.

Again, as a consumer if you disagree with an established policy, you have the choice to buy what you want, when you want it, if you can afford it. That doesn't mean that there should only be good choices available to you. You make your own decisions about what to buy and when.

If you want processed, wheat-based morning pastries made with high fructose corn syrup as an ingredient, then you should have the chance to do that. If you don't want that, buy some imported fruit, get a $4 cup of coffee at a chain bean-a-torium, chew a stick of gum, or go hungry till noon.

Henry David Thoreau wrote his essay "Civil Disobedience" after spending a short time in jail for not paying his poll taxes as his protest to the US-Mexican war, a war that he saw as unjust. If, as your act of civil disobedience, you choose to buy only organic foods and drink water, which are not subsidized by the way, then go right ahead.

Focusing on the evils of the system that perpetuates what some see as a problem is not a productive use of time. Vote with your wallet daily and in the polling booth when you have a chance. When consumer preferences and voter desires change, the government will change also.

"The government made me buy the donut. It's cheap and I'm poor." This is reasoning that doesn't cut it for me.

For more details, click here.

High School Students Need More Interest in Personal Finance

2008-04-13T08:49:00.007-04:00

Teenagers apparently know very little about their personal finances, according to the 2008 Jump$tart Coalition for Personal Financial Literacy survey. The survey was presented to the kids in the form of a 31 question quiz, with the average score for Minnesota teens being a 48%. Over the last ten years, this is a drop of about ten percent for similar material evaluated. If this is indicative of nationwide results, the kids are behind the eight-ball before they even begin their adult lives.

Our children are not ready to enter their working years if they are not fiscally savvy handlers of the money that they earn. Behind every corner, they will find opportunities to fritter away their sweat on any number of shiny objects. They must learn now what to do with their money or someone else will help themselves to their pocketbooks.

Parents have the responsibility of doing alot for their children - teaching them how to tie their shoes, wait patiently in line, and that it is not good to throw rocks at your friends. How to handle your finances is on par with any of these since they are all life-long skills needed for success. You don't wear dress shoes with velcro closures to work, cut in line at the water cooler or throw rocks at HR because they don't get your exemptions right, do you?

Teaching kids about money is essential. My advice is to start early and review often. Growing up is one big class. The test comes at adulthood with usually no review beforehand. "Tuition" for mistakes can be expensive.

For the full story on the quiz results and more advice, click here.
For the quiz itself, click here.

You and Your 401k Withdrawal - Be Careful

2008-04-12T08:01:00.010-04:00

Pension plans are out and 401(k) plans are in. They are offered by employers as a retirement program for workers and first appeared in the early 1980's. These plans are a much better option all the way around to pensions. They are cheaper for the employers and give the workers many more options for investing their money.

From time to time, savers may be tempted to access their funds when they see a need. Generally, their money is tapped for unforeseen expenses such as during hardships to cover costs of living in health emergencies or unplanned job loss.

Hardship withdrawals come with specific rules for distribution. The IRS has its own policies that it follows. Your individual plan may have strict requirements to meet the definition of "hardship" too. Meeting both specifics is sometimes a challenge.

Before taking any action toward a hardship withdrawal, it is a good idea to check the possible outcomes from all angles with a tax professional since there is a 10% tax penalty on the money that you withdraw and the money is counted as income. Weigh your options.

Others may choose to withdraw their money for additional reasons, such as rolling the funds into an IRA. If this is the intention, the transaction must be completed within 60 days or a 10% penalty will result on the withdrawn funds and the money will be counted as income.

For those who need their money for situations that are not defined as a hardship or when the purpose of the money is that it is not to be rolled into an IRA, a 401(k)loan, or lump sum distribution, is your option. The loan must be paid back, typically within a few years. However, if you leave a company with a loan balance, generally you are required to pay the money back in a short amount of time, say one to two months.

All plans are different, each with their own rules. You have to make sure that you know your plan's limitations. Otherwise, the withdrawal process could be very unpleasant.

Click here for the full story.

The Value of International Mutual Funds

2008-04-11T09:05:00.006-04:00

International mutual funds are an essential part of your investment portfolio. If you are limiting yourself to domestic funds, you are missing out on a huge opportunity for your dollar's growth.

Looking to foreign companies for investment opportunities is a wise move. They are not subjected to the same taxes placed on US companies nor are they required to follow the same environmental or other guidelines that hamstring profitability.

Additionally, with the decline of the US dollar, I am uneasy about putting my money in an economy whose currency is likely to be worth less tomorrow than it is today. The rising annual debt, the increasing trade deficit, and the rising fuel costs push me to look outside the US for my investment targets.

Going with international funds also allows me to get a small slice of a global pie. The world's economy is much larger than the US'. This allows me greater avenues to offset loss on the same global scale. National economies have their ebb and flow just as individual stocks do. Some days, one country is up and the next it is down a bit. It will all balance, but overall, the world's economic picture has a much better outlook than viewing one country's alone.

Click here to find out more about how international investing is not at all as complicated or scary as you might think. It just makes sense.

Term Life Insurance: A Better Way to Go for Most

2008-04-10T13:23:00.005-04:00

Term life insurance is the original form of life insurance and is considered to be pure insurance protection.

It builds no cash value, as compared to permanent life insurance. Examples of this permanent life insurance are whole life, universal life, and variable universal life.

Term life insurance provides coverage for a limited period of time, often 10-30 years, and is generally the most inexpensive way to receive substantial coverage. If the insured person dies during the term, the face value of the policy will be paid to the beneficiary. If he doesn't die, he gets to keep making the payments. (I prefer option two: continue making the payments.)

Term insurance works in a manner similar to most other types of insurance in that it pays claims if the premiums are up to date and the contract has not expired. If you do your part, the insurance company will do its part.

Click here for the full story.

How Do I Sell My House When Houses Aren't Selling?

2008-04-10T05:42:00.004-04:00

President Gerald Ford is credited with saying that "things are more like they are now than they've ever been." This is certainly true with real estate today.

Home values are dropping. Requirements for mortgage financing are stricter for buyers. Fewer are buying a home because they are afraid that they can't sell the one that they have. So how do I sell my home then?

First, don't panic. You have somewhere to live. It's important to remember that every market is different. In some, houses sit for over a year without a bite. In others, houses are gone in a week.

Second, get your home inspected and spruce it up before you begin showing it. Inspections will reveal problems that you can take care of before they are deal breakers. A little paint will do wonders to make your home memorable when it shows.

Third, create a marketing plan and interview real estate agents, if you plan to use one. A lonely sign in the yard won't help you. A good agent will offer creative strategies to get you the offer that you want.

Fourth, price your home to sell, not to dicker. This is not a time to ask for the moon. Be in line with your local market. You want a million dollars for your $100k home, but this kind of optimism will price yourself right out of any competition.

Fifth, it's okay to be your own advocate. Really. Tell people that you are selling your house. It's okay to put up your own flyers at the grocery store.

Click here for the full story.

Why Are Gas Prices So High?

2008-04-09T21:38:00.010-04:00

This post is more difficult to digest than my other ones and will require some homework on your part.

Here it goes:

The falling dollar, brought about by a slowing economy fed by the mortgage industry implosion, is causing bigger investors to put their money in commodities rather than the US markets. Stocks are more volatile and react quickly to changes in the national economies. Commodities are seen as hedges to inflation.

What this means is that commodities, oil for example, are great places to put your money during economic uncertainty because oil will always be needed to drive the world's production of goods and services.

A weakening dollar requires that more dollars be spent to buy the same amount of oil that it used to buy. Basically, a five cent hamburger now costs $2.99 because you are buying the same burger with money that is not worth as much as it used to be.

Our anemic currency, coupled with wages that are not keeping pace with inflation, leaves you gasping for air when you write your rent check, light bill check, natural gas check, and now too, your check at the grocery store.

When the economy stabilizes, the mortgage market gets back on its feet, you begin getting raises, and price fluctuations become less frequent, gas prices will level off and begin to fall.

Until then, hold on to your hat. It will be quite a ride...on a bicycle.

Click here for the full story.

Never Too Early to Save for Retirement

2008-04-09T16:36:00.006-04:00

If you are alive, you are planning for retirement. You are either planning by taking active steps to secure a strong future or you are planning by counting on tomorrow to take care of itself. Hoping that the four winds will blow money in your open front door is not the way to go.

Here are some general guidelines to follow from professionals in the retirement planning field:

1. Make a plan today based on priorities that make good financial sense.

2. Eliminate your debts quickly. Also, do not borrow to pay for things that depreciate or have no real monetary value, e.g., a car, a television set, or, worse yet, a vacation.

3. Have the discipline to invest your savings while you are still working.

4. Live a lifestyle that fits your income. If a trip by car to see the in-laws is what you can afford in cash, don't visit them two states away via London on a 14-day excursion "paid for" by Mr. Visa/MasterCard.

Click here for the full story.

How Not to Get Ripped Off When Buying a Car

2008-04-09T14:37:00.008-04:00

If you have a car, you have probably paid too much for it or have gotten bad advice in its financing. You can avoid this nerve-racking, pocket-lightening ordeal by doing one of two things - do not buy a car at all or buy one wisely. Choosing not to have wheels may work for you in New York City, but, in the suburbs, it just won't do. The other option is to buy wisely.

Okay, now how do you buy one wisely? Basically, it goes like this. Get your financing in order, decide what you want to buy, go look for it, make a deal, and don't waver on your pre-search price decisions.

Sounds easy enough, but there are other considerations. For example, how do you know that the car that you are buying is a good one? Where do you get the best financing? How do you know that you are getting the best price on your new or used cream puff? How do you make a deal without compromising your position as the master of all you survey?

Headscratchers all, but there is help available.

Click here for the full story.

I'm in college, Mom. Can I have $56,000, please?

2008-04-09T07:26:00.001-04:00

While costs continue to rise, a many colleges have eliminated student loans from their financial aid offerings and are opting to offer grants instead. Others are waiving tuition for low-income families altogether.

Although free money is helpful, many students will still need to borrow from a the student-lending market that has seen two big changes in the past year. First, funding for many types of loans has ceased. And second, the College Cost Reduction and Access Act of 2007 cut government subsidies to issuers of federal student loans.

So how do you fund college for your little scholar if you need a student loan? Start with federal programs. With smaller fees, lower interest rates, and better terms than private student loans, federal loans are still the best option for most borrowers.

Click here for the full story.

Government Tries to Help Those in Foreclosure - But How?

2008-04-08T20:38:00.001-04:00

If lawmakers are going to provide a lifepreserver in the mortgage crisis, homeowners could be waiting a while. Even if the proposals now being discussed pass in both houses, the bills' differences are great enough that bringing them together into one plan could take weeks.

Even with a single document agreed to by both houses and parties, there's no guarantee that President Bush would sign off on it.

If there is a veto in the works, that means it's back to the drawing board for everyone. This week, they're burning the midnight oil to create legislation that the President might be able to sign.

People are looking to Washington for answers in time to save their homes. Legislators have to realize that a solution must be created. Without one, it could be a long election season for some.

For the full story click here.

Can you make the grade with your credit score?

2008-04-08T14:55:00.004-04:00

If you request your credit score, rather than receiving a number between 300 and 850 as you have in the past, you may now get something very different.

TransUnion will give you a score from 501 to 990 and gave you a letter grade on a scale ranging from A to F. This updated reporting model is called a VantageScore, a score developed by the three credit bureaus: TransUnion, Experian and Equifax.

This variation of the existing evaluation method of your creditworthiness will compete with the FICO score that you are more familiar with.

This new grading will create some confusion if you don't understand it.

Click here to get the full story.