Tuesday, April 7, 2009

Seven Ways To Fund College Without A College Savings Fund

The stories are endless. Joe and Sally saved their entire lives for their kid’s college education, but the recent market downturn has cut their college savings fund in half. Often times this report is followed up by a tearful high school senior explaining their dream of attending an Ivy League school has been crushed.

I’m a father of two kids, and I know how it feels to want to give your kids everything. But I honestly think parents are unnecessarily beating themselves up over these college fund balances. Parents and college-bound kids are going to have to make some tough choices between now and next fall, and the toughest of those choices will be dealing with the financial reality that a large portion of their college funds are gone.

These days most families turn to student loans, particularly those who lost half the value of college savings in a matter of months. Their story is a cautionary tale for those invested in risky investments too close to a financial goal, but since they all recognize that now there is no sense beating them over the head with portfolio allocation instructions. No, we are where we are, and we have to figure out where to go from here. Because I generally dislike student loans, the following tips will intentionally leave Sallie Mae out of the mix.

Seven Ways To Fund College Without A College Fund

1. Reconsider your choice of school. I sound like the guy who doesn’t read his own articles. I made the mistake of getting hung up on an out-of-state school because my best friend was going there, and I liked the football team, and it was my favorite college town. Big mistake. While I do have the ultimate souvenir from those days away at college (my wife), I also came home after 2 1/2 years with a pile of student loans and credit card debt. After enrolling in a local university it was obvious the quality of education was just as good, and the tuition was considerably less. Lesson learned.

2. Ask for help from friends and family. One of the more interesting concepts I have seen lately to formalize this process is a type of social investing market lead by Freshman Fund. Students and parents tie the child’s Freshman Fund account to existing 529 college savings plans, and then share the student’s profile with family and friends. Contributions are collected and deposited directly into the 529 plan behind the scenes (no need to share account numbers, etc. with extended family).

3. Apply for every scholarship under the sun. I mean that quite literally. If I were a high school junior facing rising tuition costs and a small balance in my college savings fund I would make it my part time job to apply for as many scholarships as possible. I would enter writing competitions, join various associations, and basically spend every free moment researching scholarship opportunities. Even if you applied for 1,000 scholarships and 990 of them turned you down, there is a chance those remaining 10 could finance a year of school (or at least offset some of the costs of that first year).

4. Get a part time job. This one is a little controversial because some argue that part time work detracts from the college experience, or leads to lower grades. I started working my freshman year to cover books and miscellaneous expenses, and later worked even more hours to pay for an apartment and utilities. Admittedly, it was a drain, but I appreciated things far more than if my mom paid for everything. I think it helps kids to have at least a little financial skin in the game.

5. Work full time for tuition reimbursement. Many companies offer tuition reimbursement plans to their employees. Start by researching companies in the field you are ultimately interested in studying. Most company websites offer a list of perks included in their benefits package, and if you have questions about tuition reimbursement eligibility contact the company’s human resources office (or recruiter) usually listed on the job search page.

6. Live at home and stay local, or commute a short distance. Room and board can add significant costs to already inflated tuition costs. If you are short on cash you might be able to pull off tuition-only and stay and stay on the “Mom and Dad” meal plan. As a compromise, at least consider living at home your first year or two and then look for a reasonable off-campus option for the final years at school.

7. Take a year off to save up the cash. Again, not a popular option for most high school seniors eager to get started on college life. But families need to be realistic; if the money isn’t there it just isn’t there. And with many people being laid off, or at least fearing they may be laid off, most parents are reluctant to try to cash flow tuition at an expensive school. It might make sense to take a year off, work full time while living and home, and save every single dime you earn towards the next year’s tuition. I wish I had chosen this route - in fact, I ultimately did. I went to school right away for a couple years, returned home and worked for a couple years, and then wound up working my way through my remaining time at school.

Again, I want to stress to those parents and students out there who might be reading this that it is not healthy to play the blame game. Many parents are mad at themselves for not rolling funds into cash last year, and many students are equally mad at parents for losing so much of their college fund. Being mad at yourself, or resentful towards your parents accomplishes nothing. Now is the time to pull together as a family and work to find a solution that works best for everyone involved.

High school seniors, resist the temptation to take out huge student loans. I know the money is there, and you don’t have to pay it back for a few years, but you will have to pay it back. When you graduate college you will be filled with the excitement of getting started in your career, and finding your first home. Don’t spoil it by tying a noose around your neck and hanging four years of student loans from it. Those loans will limit your options, and are often the gateway to other forms of debt such as credit cards and car loans. Make the sacrifices now so you don’t have to make them later. I promise, ten years from now you won’t regret it.

Post from: Frugal Dad

Monday, April 6, 2009

Funny Story...

About 2 years ago (shortly after joining Deloitte) I entered and won tickets to a Nationals Baseball game. They got lost in the internal mail on their way to me. Deloitte gave me new tix, but the original ones never showed up. I received a letter through our internal mail on Friday. It was the tickets from 2 years ago...

Wednesday, April 1, 2009

Been a while -

It's been a while since i have posted anything of substance. I originally started blogging so that I would have a venue to get the thoughts out of my head and down on paper (electronic anyways). I tend to think way to much into things and get lost in my own thoughts a lot.

I have begun training for this years MS Bike Ride. I plan on riding 60 miles this year. Last year i rode the 30 miles and still had plenty of legs left when i finished. I think the benefit that i had last year were some of my training rides i went on were way tougher than the actual ride. Trails End Cycling is where i purchased my road bike from. They host weekly training rides that start from the shop and go for either 35 or 75 miles. They have a no drop policy which makes the rides nice since no one is left behind. The 35 mile ride is the one i went on and it kicked my butt. It did, however, set my level of training. Needless to say it was overkill, and I finished in the top 5 of the 30 milers. This year since I have signed up for the 60 mile route, I am feeling the pressure to kick up the training a bit more. My first training ride out of the gate this year was a 30 mile route on the WO&D trail. We started at Trails End (since that's where it sits) and rode out to Goose Creek (Near Ashburn, VA). This point is right at 15 miles from the shop, so it made a convenient turn around point. Total training ride took me 2.5 hours to complete with an average speed of 12.5 mph and a top speed of 23mph. It is safe to say that 30 miles was probably a bit too aggressive for my first ride out, but on the plus side - I finished it. I felt like garbage towards the end of the ride and all that evening. I thought that i pushed my self too hard and that was my body's way of telling me to F' off (heh). Another day went by and I was feeling worse. I decided to make a trip to the doctors office (something I rarely do). Turns out that I had Strep Throat. That would explain why i felt the way i did. I have been on a self directed break till I feel a little better - best not take too long though.

Denver or Bust ? We have been looking at a Denver move for a couple years now. We don't have much of a support system in the area that we live in now and the abundance of possibilities that would be available in the Denver / Boulder area just seems to good to pass up. The schools are newer and seem better funded than the ones we have here. The communities all have rec centers and the extra-curricular options leave the kids with more decisions than they could want. My mother and brother - in - law live in the area. My sister and her kids live in the area as well. The have all shown interest in spending time with us and being part of our kids lives. My wife went to H.S. in that area and still has friends that never left and still keeps in touch with. It would be nice for her to have a support group to help her out as well. finding a job 1500+ miles away has proven to be a challenge. I had a couple nibbles so we started to talk to Realtors to see what our house is worth and how long it would take to sell. My wife did the majority of the talking with the Realtors. It turns out that our area has been hit by the economic recession / depression pretty hard and we have lost close to 100k in equity. The upside is that we are still in the black. The down side is that it still isn't enough for us to sell and come out with the money that i wanted to have. My desires is to sell the house and use the equity to clear all of the household debt, have 75k for a down payment, and have 20k for a "decorating" / move-in budget. I just don't know how to do it if those things can't be accomplished. I am willing to bend a lot on the decorating budget, but the other items feel like show stoppers. It is incredibly frustrating and has left a bitter taste in my mouth. I am uncertain on what the best option for this is.

The Infirmary - There has been a funk floating through our house. Everyone in our house has been sick in some fashion over the last month or so. It has made life hard on everyone. I will be really happy (and so would my wife) when we are all finally able to shake whatever it is.

Thrill of the Hunt - The job market in the area has been okay. My job has been solid over the last 2+ years that i have been with this employer. The crappy part of my day comes with the 70 mile commute that i make ever morning and evening going to and from work (140 miles / day). I floated my resume around and had quite a few offers. There have been only two that I have taken seriously. The first was a position doing the same kind of work, but for a manager I had worked for previously. He and I get along great, and it would be nice to work with him again. The second I have fretted about a long ago as this morning. It is a job with a small firm that has won a DoD contract with the Coast Guard. This position would put me 14 miles from home (each way). Wow that would make for a great commute. After a lot of deep soul searching, I have decided to pass on the opportunity. My current employer has really treated me right and has a ton of incentives to stay.

Indoor soccer has ended. This was the first time that i have coached solo. I am usually helping another coach. Indoor soccer was my idea to keep Elizabeth moving over the winter so she wouldn't have such a big hurdle when we started back up with Spring soccer. Indoor soccer was enjoyable, but i am really happy it is done. The way the county had the league set up made it less than desirable to coach for. I don't think i will do that league again.

There are a ton of other topics i want to get off of my mind, but i just don't have the time right now...

Up Next...
Katelynn & School
Elizabeths Birthday Party
House Chores