What to consider when choosing a college for your child

When your child starts to near the end of his or her high school career, it is the natural step to look into colleges for them. This is such a large step in their life journey and seems to cause a lot of stress. There are many things that you need to consider to make their college experience perfect. When looking into everything it is important to make sure that not only are you making the decision but obviously your child needs to be making the decision as well. You are the adult and know what’s best in the long run but your child is the one who needs to be happy where they end up. Please make sure to consider the following when looking into colleges for your child.

Money

The first thing you and your family may want to consider is what type of school you can afford. You are most likely on a budget. What are you willing to spend? Will your child be financing their tuition or are you going to chip in. All of this must be considered before looking into schools so their choices can be narrowed down. It would be awful for your child to fall in love with a school that you or he/she couldn’t afford. It is best to know your limits and go from there. There is a wide range of costs for colleges and universities. Some could be a few thousand a year but some could be $40k. There are ways to save some money, like state schools that offer savings to in state students or certain organizations that offer scholarships to students.

Location

Another factor that can narrow your search is location. Where would your child like to have their college experience. Would they like to be close by to you, or far away? Would they like to be in warm or cold weather? In the city or rural area? There are many types of colleges and universities in many different locations. It is important to look into location factors of each school to narrow down your search.

Size

Every child has different wants and needs and the size of school is one type of preference that can be different depending on the student. Some may need a smaller school to keep them on track with their grades and may not want to get lost in a crowd. Some however, may want the large school so they feel independent and free. Whatever their preference may be, it is important that they think about it and know what it is before picking a school.

All of these elements add up to your child’s perfect school. When considering these factors they will be able to determine what makes them happy and also what makes you happy. So be sure to discuss these topics when narrowing down your choices.

I’d do it differently

I entered college, fall 2003, a young and ambitious accounting major. I picked accounting because I  knew they made a lot of money and I was pretty bada$$ with a TI-83. While I did well in my first macroeconomics course, I quickly realized that “business” related subjects were of no interest to me. My introduction to psychology course, however, was a different story. I was fascinated by the content. I loved learning about the brain and how people work. I changed my major after my first semester, and eventually walked across the stage with a B.A. in Psych.

I don’t regret being a psych major for one minute. I loved my classes, LOVED my professors (I actually played tennis with them every Tuesday and Thursday morning), and just generally loved the whole psych department. That said, if I traveled back in time to 2003, I am 99% sure I would not graduate with a degree in psychology.

While I may have loved the content and the people in my major, I didn’t really love the career fields psych generally leads to (i.e. counseling). I almost feel like my degree limits my potential, especially when it comes to job hunting. My degree does very little to highlight my strengths. When a recruiter reviews my resume and sees a B.A. in Psychology, he is not going to know that I also took Organic Chemistry, Physics, Calculus, Statistics, and Biochemistry (none of which were required by my major). While I could have taken “bowling”, “Intro to photography”, or some other class to satisfy the credits required to graduate, I decided to take challenging courses for my general electives.

Do I believe your major is the determining factor in one’s career potential? Absoultely not. But there are positions I would love to apply for, but can’t, simply because I don’t have a degree in business administration or the like. Take for example the Finance industry. It would be darn near impossible for me to land an interview for any kind of legitimate position in the financial sector… even though I may be more knowledgeable and capable than other applicants with business related degrees. Ten years down the road, I’m sure my education will become less of a factor with prospective employers, but when you are 24 years old, and have only a few years of work under your belt, you better believe your education is going to be HEAVILY considered.

That said, I refuse to let my degree be a limiting factor in my career growth. There are a million different means by which I can prove to my prospective employer that I really am the best candidate for the job, even if my degree is not specifically related to the field. And you better believe I will be highlighting each of those strengths during my next interview.

If I had the opportunity to do college again I would probably get my degree in Statistics or Math. And I would probably have gone to a state school instead of a private college (although I totally loved my school). Gosh, this makes me want to go punch a business major in the face (only kidding). Okay, I’m done dwelling on the past. Time to move forward.

What was your major in college?

If you could do college again, would you choose a different major?

If you didn’t go to college, do you wish you did?

Anyone out there that went to college, wish they hadn’t?

p.s. if you are wondering if you blew it when you picked your major, take a look at this chart of the ten “worst” college degrees…

College Degrees                Starting Salary

  1. Social Work                        $33,400
  2. Elementary Education         $33,000
  3. Theology                            $34,800
  4. Music                                 $34,000
  5. Spanish                              $35,600
  6. Horticulture                        $37,200
  7. Education                           $36,200
  8. Hospitality/Tourism           $37,000
  9. Fine Arts                            $35,800
  10. Drama                                $35,600

Financial unredo (yeah I made “unredo” up)

If you’ve been scoping PF blogs for a while, you’ve probably seen some posts realted to financial do overs. Ya know, a time in your life that you made a terrible financial decision and desperately wish you could rewrite the past. I thought today we could take a fun little twist on that topic and ask what would you financially unredo.

Yes I know, unredo is not a word. But I’m a Ninja, and one of the perks of being a ninja is this: Ninjas can do whatever the heck they want… including make up words, drink soda and eat pop rocks at the same time, and sleep with their eyes open. Let me define unredo for you.

Unredo transitive verb-  to not want to do over again (although common sense says you should)

Are you catching on yet? What is one particular financial decision you’ve made, that you know you should want to redo, but deep down inside you are kind of glad you made the “mistake”.

Here’s my financial unredo…

I’m really glad I only worked a few hours a week while I was in college. This was a terrible financial decision, because part-time  campus jobs, don’t pay squat. Needless to say, I graduated with $28,000 in student loans. Financial wisdom (whatever that means) would say, go to a cheaper school or at least work full time to cover the bills. But if I could do it over again, I probably wouldn’t change a thing. Afterall, $28,000 isn’t that much to pay for four years of pure crazy awesome fun right!?

To see a second example of a financial unredo, you can check out my post about my favorite dumb but fun expense.

Now that you hopefully understand what I’m asking, I would be tickled with warm fuzzies (that sounded pretty gay) if you all share a financial unredo from your life. Did you buy a new car, realize it was kind of stupid, but like it too much to wish you could change the past? Whatever your unredo is, I want to hear it!

Bigger isn’t always better

I love when people say “Bigger is better.” I mean, we all know the popular Texan slogan “Everything’s bigger in Texas.” We are told we need to make a BIG income, so we can buy a HUGE house, with a LONG driveway, to park our EXPENSIVE cars in. Unfortunately, success is often measured by appearance and not by personal accomplishments. Today, I make my case for a few areas where bigger is not my priority.

Income. Like every other college graduate, I was determined to enter the workforce and bring home a big salary. The grim reality… that didn’t happen. I started my job at a solid $38K/yr (quite a bit less than the $80K/yr I felt like I was worth). But now, after a few years in the work force, and a couple promotions later, I’ve learned BIG income can mean BIG problems. After a few more years, I could begin to explore the option of pursuing supervisory type positions. They make more than I can in my current field, but their increased salary just isn’t worth it.  Sure they make $15k/year more than I will, but they don’t get to work from home, they don’t get a work vehicle, and they are responsible for a whole crap-ton of issues I would never want to deal with. Yes, they make more than me, but in my eyes, the “bigger” income is not worth the increased responsibility.

Home size. Who doesn’t drive by a ridiculously beautiful white mansion with big columns and think “Ah, that must be the good life”? I know I am guilty of “mansion envy” every now and again. But when it comes down to it, I don’t ever plan on living in a house with twice as many bedrooms as people living in it. A larger home means larger everything (i.e. property tax, maintenance costs, utility bills, more furnishings, etc). I live in San Diego in a small 2 bedroom apartment with a roommate. I hate having to dust my tiny living quarters as is, I couldn’t imagine having to dust a 5,000+ sqft home. I’ll take a moderate sized home over a mega mansion any day of the week.

Student Loans. I don’t know what clever marketing scheme the college recruiters conjured up, but they are geniuses. People are graduating from college with six figure student loans for an undergraduate degree in art therapy. WTF do you do with a degree in art therapy?! I went to a ridiculously overpriced private college, and learned my lesson the hard way. Although the school might be cool, it’s not really worth taking on MASSIVE student loans. Instead of getting $5,500/yr tuition at the University of Washington (a rather reputable school), I went to a private college that no one has ever heard of with tuition upwards of $25,000/yr. With the help of scholarships, and the parents, I managed to “only” rack up $28,000 in student loans, compared to the $120,000 loans many of my fellow classmates had. HERE ME NOW ALL PROSPECTIVE COLLEGE STUDENTS: Harvard is nice, but so is your local state school. I promise the college you get your degree from, will not be as important as you think. Bigger student loans, don’t mean a bigger income…sorry.

I could keep on going, but I think I’ve proved my point. In a culture where size matters (that’s what she said), I take a stand and say “F YOU culture.” I’ll take my modest home, slightly used car, average job, and enjoy life just fine.

How the heck as society been so clever and tricked us all in to desiring “more”? What are some other areas you can think of where bigger is definitely NOT better?

p.s .the answers to yesterdays “two truths and a lie” are both A. Good job to those who guessed right, you earn the creepy stalker award.

I’m willing to bet…

…very few of you PDITF readers work in the financial sector. I sure as heck don’t! People often think that I must have some type of financial credentials (business degree, work in financial sector, etc) to write about money. In reality, all of my “financial wisdom” (or lack thereof) comes from observation and personal finance books/blogs.

Wanna know a little secret? I began college an accounting major, and after taking my first economics course, realized I would be absolutely miserable being a business man (no offense to you business minded folks). If you’ve been following me for a while, you know my degree is in Psychology, which last time I checked, was not at all related to finances in any way, shape, or form.

Not only does my degree have NOTHING to do with finances, but my work is also far from it. People often ask if I have any desire to become a financial adviser. Wanna know the truth? Hell to the No. There is a difference between a hobby and a career. I’m a Special Agent by day, blogger by night 🙂

Yes, I do enjoy learning about personal finances. Heck, I even enjoy sharing with other people (you included) my opinions on how financial success can best be achieved. But let me be clear… I have ABSOLUTELY no desire to earn an income by managing people’s money for them.

I’m a huge advocate of personal responsibility. I like to encourage people, and remind them that they can manage their money on their own, often without third party help. In fact, I like to pretend my lack of financial education or career, motivates people like you to get your money issues worked out. I’m hoping you can relate to my story and become equally motivated!

So I took a gamble and bet the majority of you have no “expertise” in a financially related field. Am I wrong? What is your degree in and what field do you work in? Why do you come to my site and read my stuff knowing I have no credentials? Is it for my crazy drawings, or do you actually learn something every now and again?

My 401K is gonna be pissed!

Screen shot 2009-12-10 at Dec 10, 2009, 11.38.09 PMI made a pretty impulsive move yesterday. I decided to reduce my 401K contributions from 8% of my gross salary to 5%. *Gasp* Yes, that does mean I am going to have less in my retirement accounts, but don’t worry, I have a ninja-riffic plan in the works. If you read my post on Monday, you know I’m flirting with the idea of living outside of my spreadsheet. As a result, my net worth come retirement may be a little lower, but I think my overall quality of life will improve.

There were a few things that lead to my decision to decrease my contributions.

1) I was contributing 8% to my 401K and fully funding my Roth IRA each year. At my current income ($50K) that works out to 18% of my gross income being invested in retirement accounts. If you keep up with PF blogs, news stories, and TV shows, you’ll notice almost all ‘experts’ recommend a 20-something individual save between 10%-15% of his gross income for retirement. I was contributing 3% more than the average recommendation. Obviously, the more you contribute, the richer you will likely be. But I don’t really care if I have $3MM or $4MM in my account come retirement, as long as I have enough to live a comfortable lifestyle I’ll be a happy ninja. Oh, and the government only matches 5% anyways.

2) I essentially just gave myself a 3% raise. I have contributed 8% to my 401K since my first day of work (at the ripe age of 22). I’ve totally learned to manage my money being 8% poorer than I could be. I now will be taking home about $1,200 more per year (after taxes). That’s $1,200 I can use to save for a house, take a vacation, buy a moped, or rent out an entire movie theater for a private viewing of Twilight III. Sure, most of those expenses are not necessary, but don’t forget, I’ll still be socking away 15% for my gray hair days ahead.

3) The third, and probably most important, reason I decided to reduce my retirement contribution by 3% is this: I had no plans for the short term. Sure saving 18% for retirement is great, but guess what? That doesn’t make me rich until I’m 60 years old. What if I want to have a good chunk of change accessible in my 40’s? What if I want to retire early, but don’t want to be penalized for withdrawing from my retirement accounts? Well my friends, this is where the ‘short-term’ investing game comes in to play. I have to start exploring other means to grow my money. I have been so focused on retirement, I completely forgot to establish a game plan for my 30’s, 40’s, and 50’s.

Sure, I am taking away 3% from my retirement accounts each year, but that doesn’t mean I’m going to waste it. Instead I will transfer that money in to an investment vehicle of my choosing (stocks, bonds, etc). I need to start growing money for a 5, 10, and 20 year time horizon so I can do things like pay cash for the next vehicle I purchase, move up in house as my family size grows, pay for my kids college, and basically enjoy pre-retirement life.

As long as I contribute 15% of my gross income towards retirement, I have no need need (or reason) to contribute more. I’ve realized for me, anything above that 15% mark can be better served in short term mutual funds, real estate, cash, and bonds.

If you aren’t sure what percentage of your income you should be setting towards retirement, ask yourself this question. Would you rather have access to $6MM at age 60, or access to $1MM at age 45 and $3MM by age 60. I use to think I wanted $10MM all at retirement, but I now think I’d be just fine with $3MM in retirement if it meant I had $1MM available to me much sooner.

I have a couple questions for you all, how much do you contribute to retirement (if any), how much would you ideally like to contribute to retirement (if you are currently meeting that goal), and would you rather have $6MM at age 60, or $1MM at 45 and $3MM at age 60? What strategies have you established for pre-retirement goals? What short term investment vehicles do you recommend? Do you think I’m crazy? Any helpful hints, tips, and criticism is greatly appreciated 🙂

“Good debt” is for dumb people

Screen shot 2009-11-18 at Nov 18, 2009, 7.45.23 PM

I was facebook chatting yesterday with one of my loyal readers. She was discussing her car loan, when I mentioned my student loan. She said “At least your student loan is ‘good debt’.” She put good debt in quotes because she knows (and I know) there ain’t no such thing as good debt (did you know ain’t IS a word?).

Typically student loans and mortgages are considered good debt. Why? The thought is, with student loans you obtain a degree, and with a degree you get a higher paying job. For mortgage, you take on a loan, buy a house, and sell the house for a profit. Nice idea right?

Have you read my blog’s title? Is it Punch Bad Debt In The Face? I don’t think so suckers. There is no such thing as good debt. Debt is debt…period. A degree doesn’t guarantee higher income, no more than your home guarantees increasing in value. So don’t fall for the trap and think you should keep Sallie Mae around for the 20 year visit she is planning to take.

It’s time to change the classification of debt. There is bad debt (which we all know as credit cards, payday loans, etc) and not-as-sucky-but-still-pretty-crappy debt (student loans, mortgage). Whoever decided to call some debt “good” was a genius. Heck, I wonder how much money that label has made the banks. Probably at least ten dollars 🙂

Don’t get me wrong. I’m not opposed to utilizing debt to get an education or buy a home. In fact, I’m 99.9% sure I will take out a mortgage. But don’t trick yourself in to thinking that your mortgage is good. It should still be seen as a money hungry beast that won’t go away until you MAKE IT go away. Were you like me and once thought  “good debt” existed? If I could go back in time, I probably would have gone to a public college, saved a ton of money, and graduated debt free. Oh to be young, naive, and easily influenced.

p.s. Anyone that thinks student loans are “good debt” is more than welcome to have mine 🙂