The Amateur Financier

More and more, the method that crooks, criminals, and other ne’er-do-wells use in order to get their hands on your money is not robbing you in person, but rather, by getting your personal information and commiting identity theft.  While the number of victims decreased last year, there’s still more than a small chance that you (or someone you care for) could be affected, with 8.1 million US residents who were victims of identity theft in 2010 alone.

Of course, there’s nothing that says you MUST be a victim; in fact, there’s more than a few steps you can take to ensure that you avoid identity theft altogether, saving yourself lots of time and aggravation (if not a sizable chunk of money). So, what sort of things can you do to keep your personal information personal, and your identity safe from theft? Well, for starters:

You too will be able to protect your identity

1. Watch What You Share: With social networks like Facebook and Google+ becoming ever increasingly popular, would-be identity thieves have more ways than ever to obtain information about you that can be used to gain access to your accounts. To cite but one example, Facebook enables women to include their maiden names as part of their user profile; with many accounts using ‘Mother’s Maiden Name’ as a security question, it’s not much of a stretch to see how a hacker could use that info to gain access to other accounts. Be careful about what information you share, and the people with whom you share it. Also, on a similar note:

2. Don’t Use Real Information for Your Security Questions: For most places you need a password (which is most of them, it seems), you will need to provide further information to allow you to get back online if you forget your password. Most of them offer questions like ‘What was your first pet?’ and ‘What’s Your Father’s Middle Name?’; the problem is, when you use real answers to such questions, you run the risk that others will figure it out (particularly when, say, your father’s middle name is the same as yours.) Instead, use answers that you can remember, but which aren’t actually the real, say, name of your first pet. It might take a little while to figure out good answers, but should be possible to figure something out.

3. Watch the Mail You Receive and Send: In spite of all the worry about the use of the internet to steal identities, a large amount of identity theft occurs the old-fashioned way: would-be thieves getting a hold of your personal information via the mail. It could be getting a hold of mail heading towards you, or intercepting outgoing mail. How can you prevent this? Well, among other means, you can make sure that your outgoing bills are mailed from the post office (so criminals don’t take it from your mailbox), use the Internet to pay your bills when possible, and make sure that your address is up to date with all your creditors.

4. Only Give Personal Information When You Instigate the Interaction: There are many times when you will be asked to give personal information to some individual or organization. DON’T DO IT! Or at least, don’t do it unless you are the one who initiates the encounter. It’s one thing to give credit card information as you check out of Amazon; it’s a much different situation to give personal information to someone sending you an email that CLAIMS they are from Amazon. This goes for all forms of contact, from email and telephone calls to offers you receive in the mail. If you do respond to something, make sure you verify with the organization that they are the source of the contact information.

5. Watch Those Credit Scores: If something does happen to your identity, one of the first places it will be reflected is in your credit scores. You’ve probably heard about these, the scores maintained by three organizations that attempt to determine how likely you are to pay back your loans. If something happens, if someone uses your identity to take on more credit, it’ll be reflected here. If you want to really be safe, you can also contact the credit bureaus and ‘freeze’ your credit, to prevent new credit from being open in your name. (Using LifeLock will not typically be enough; luckily, there’s plenty that you can do without needing their services.)

If you follow these tips, you should be able to prevent your identity from being stolen, and prevent yourself from having to pay for it, either with money or the time and effort to fight an identity thief.

As occurs every so often, it is time for finals yet again.  While one of the advantages of being a graduate student is that I don’t have to take as many classes as I did while I was an undergrad, there are still multiple finals I will need to do this week before I can call the semester complete.  (And before any of you undergraduates start calling foul on me for not having as many classes as you, bear in mind that I also have research, grading papers, and teaching undergraduates to do, on top of studying for my finals.)

As is often the case when finals time (or other busy periods in my educational life) rolls around, I’m not in the most ‘personal finance’ sort of mood.  Instead, I’ll take this opportunity to share some hints about how to do well in the realm of academia.  I have shared tips on doing well on your finals in the past, but it never hurts to hear good advice more than once.  This post is also going to focus more on how to study for more than one test at a time, as most of us do not have the luxury of only studying for one test at a time, particularly when finals roll around.  Some advice to do well on ALL of your finals includes:

1. Get as Early a Start Studying as Possible: I realize that this advice is probably a bit late for you to truly take advantage of it; it would probably be better to hear this sometime closer to the start of the semester rather than near the end. But it’s not impossible to benefit from studying, even if you have days (or even hours) rather than weeks before your test. I have shared some tips on how to prepare for a test at the last minute, and the advice given there still holds. But there’s an old Chinese proverb: ‘The best time to plant a tree is 20 years ago. The second best time to plant a tree is today.’ Similarly, while the best time to start studying for your finals is as soon as you have materials to study from, starting as soon as you can comes in second best.

This is most likely a 20 year ago tree

2. Prioritize Your Study Subjects…: Particularly at finals time, you don’t have the luxury of focusing all your attention on a single subject. But there are almost certainly going to be some areas that require more attention than others. Perhaps there’s an area you’ve done poorly on in past tests (and need a better final grade to pull up your overall grade), or a subject that you have trouble on more than others. It might be a simple issue of what subjects have cumulative tests and which do not. Regardless of how you make the decision, you should be able to come up with a ranking of which subjects to focus the most attention. That said…

3. …But Don’t Neglect to Study for Everything: So, you know you need to study more for chemistry than, say, English. That does NOT mean you should skip studying for English entirely. Besides the fact that it is the rare course where you can completely neglect the final and still get a decent grade overall, there’s the fact that studying for multiple tests can actually help you with each one. By spacing out your studying, you can prevent fatigue with the material and give your brain a chance to reinforce what you’ve learned. There are limits to how much you can spread things out, but by not trying to cram six hours of studying into a single six hour period, you can help retain the information (and your sanity) better.

4. Remember to Take a Break Every So Often: In the same vein, you’re not going to be able to study at your most efficient if you study for hours straight with any pauses to allow your brain to rest and recover. This shouldn’t be taken as an excuse to pause for an hour between each hour of studying, of course; there’s a difference between a ‘break’ and slacking off, although I understand how easy it can be for the former to turn into the latter. But some brief exercise, a light snack, or reading for pleasure (if your eyes can handle even more reading, of course) can help your brain to rest, in order to be ready to come back to studying stronger and more prepared than ever.

5. Try to Study With Friends: I know that there are lots of different approaches to studying, and some will work well for you, while others won’t; given that, it’s possible that you do your best studying while part of a large group, while with one or two classmates, or even by yourself. That said, there are advantages to working with your friends while you study. You can get help in areas you have trouble, help teach them when you understand things (thus reinforcing the concepts in your own head), and get new ways of thinking about the material that would not have occurred to you. There’s also something to be said for the advantages of associating studying with people and activities you enjoy, rather than viewing it as a task to be gotten through as swiftly as possible.

Here’s hoping this advice helps all of you who have finals in the next few days. Good luck, and here’s hoping you do well!

It’s one of those truisms of modern life: if you’re going to be a great success, you need education beyond high school.  Alas, the days when you could graduate from high school (if you even got to that point), enter the workforce and earn a sizable income, enough to provide for yourself and your family, are long since past.  (As are the days when the US was the center of industry and manufacturing, with Europe still reeling from World War II; but this article isn’t about the changing geopolitical realities of our world.)

No, it’s widely agreed that success in the modern world requires an advanced degree, be it a bachelor’s degree, a master’s degree (as I’m currently trying to earn, myself) or a doctorate.  For most of us, that means taking out student loans.  As a service to students of all stripes, here are some of the answers to many of the questions you might have about the student loan process (as well as that inevitable fate of PAYING BACK the student loans).

Q: How Do I Get a Student Loan?

A: Well, in general, there are two sources for student loans in the US: the federal government and private lenders.  The federal government will typically back private lenders to administer the federal government loans.  In order to apply for any federal student loans, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA).  When submitted to your school, that will allow you to find out what types of student loans you can obtain, the amounts of money you can borrow, and the interest rates you will pay when it’s time to pay the loan back.

Q: What Can Student Loans be Used For (and Not Used For)?

A: It can be tricky to figure out the student loan limits.  On one hand, student loan funds are only supposed to be used for education related expenses.  On the other hand, your student loan contract might enable you to use the student loan money (the amount beyond what is needed to cover your tuition) to cover education-related expenses as diverse as your rent and transportation costs.  You should stick with using your student loan to cover school related costs (no fancy vacations), but check with your student loan provider to learn exactly what limits there are on your loan.

Q: When Do I Have to Pay My Student Loans Back?

A: Typically, your student loan will have a grace period upon your graduation, a six month period where you don’t have to pay back your loan.  (Allowing you time to get a job.)  You’ll then have to pay back your student loans according to one of several different schedules, from standard (over the course of ten years) to extended (over an up to twenty-five year period).   You can also choose graduated schedules that enable you start paying smaller amounts and increase the payments over time, or income-contingent plans linked to how much you earn.

Q: In What Situations Do I Not Have to Pay Back My Student Loans?

A: Good news: there are several situations where you can get all or part of your student loans eliminated.  Bad news: most of those situations are not the sort of thing you’d want to happen to you.  Death is a big one, as is total and permanent disability.  You can also get a partial discharge for military service or full-time teaching.  There are some things that don’t eliminate your student loan obligations, bankruptcy being a major one.  In any event, your best course of action is doing what you can to pay off the debt properly.

Q: What Alternatives Are There to Student Loans?

A: You don’t necessarily have to get a student loan in order to pay for college.  There are other options, including federal grants and scholarships offered through your school, both of which can cover a substantial portion of your college costs, and have the advantage of not needing to be paid back.  You can also pay the costs yourself.  It’ll be rough, but there are ways you can earn the money and still focus on your studies, from being a Resident Assistant (and possibly getting free lodging) to being a Teacher’s Assistant (and helping shape young(er) minds as a bonus).

A little bit of time and effort is all you need in order to gain a nice education and not be in terrible debt for the rest of your life.  Good luck on the education process.

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Once again, I’ve decided to take a little detour from the normal personal finance road and discuss an issue close to my heart, education. I’ve already discussed how to change the scheduling for our schools to help encourage learning and generally improve our school system, now it’s time to discuss the most important people to making our schools a success: the teachers.

Teachers are on the front line of the educational system; improving the school system requires that we re-examine the current position of teachers in school, and in society.  We can make all the changes to the curriculum we want, but if we don’t consider the people who share the information and actually teach the children, there won’t be much change overall.

Let's be honest, teachers are the basic of the whole education system

Don’t worry, teachers, I’m not trying to make your jobs harder (goodness knows, I’ve worked in various teaching positions often enough to have plenty of respect for teachers and the sort of things they need to do a daily basis); but let’s face it, there’s plenty about teaching that could be improved.  There are ways we can take a new approach to the role of teachers in our schools, by giving them:

1. More Money – Let’s not beat around the bush: if we want to attract the best and brightest to teaching positions, we need to pay them salaries that can compete with other highly educated positions.  (It’s one reason that when I started to cover ways of improving our schools, my first topic to address was changing how we fund our schools.)  If most people have the choice of making $100,000 a year with a business degree or $50,000 a year with a teaching degree, it looks like an easy choice to go for the business degree (or any other higher income job degree).  Now, I don’t think it’ll be possible to make teaching into a multi-million dollar a year profession (although, if you want to see the best and brightest people fight nearly to the death over teaching positions, that is one way to do it), but a higher income will help to attract the best people (and reward those who stick with the profession and improve their skills).

2. More Punishment (of the (Bad) Students; Less for the Teachers) - One of the more bemoaned facts of modern American education is how rowdy kids and pushy parents have managed to take over the classroom.  Fears of being disciplined or potentially fired for striking, or even scolding, a child are not unheard of, and who could function with such possible threats hanging over their head?  I’m not saying we should bring back corporal punishment (although, I’ve met more  than a few children who would benefit from a good paddlin’), but having punishments that would actually cause the children to have some regrets and perhaps avoid naughty behavior in the first place would be wonderful.  At the very least, increasing the teachers’ power to remove the students from the classroom (and in the case of particularly disruptive students, from the school entirely) would definitely make it easier for the diligent students to learn.

3. More Control: I understand that there is information that needs to be taught to the students, but there should be some flexibility in how that information is passed from teacher to student.  There are plenty of techniques that a skillful teacher might use to pass along information to their students, and giving those teachers a freer reign to try new things will likely give us entirely new perspectives on the most effective teaching methods at various levels.  Now, of course, we can’t just let teachers run wild, but if a teacher has an idea that might work, why not give them a chance to try it?  All that needs to happen after that is some testing to verify that the needed information has been passed along, which means…

4. More Testing: Yes, yes, I know that one of the biggest complaints leveled against programs like ‘No Child Left Behind‘ is that all the testing leads to the teachers ‘teaching to the test’ (that, and that taking away funding from schools that don’t meet the standards is a backwards way to try to improve them).  And I don’t doubt that it’s true.  Here’s the thing, though: there SHOULD be some standards that students are able to meet to progress in school.  Don’t get me wrong, there needs to be more flexibility and understanding in how the tests are administered; for reasons that range from psychological issues to their family life, not every student is going to be successful, and having that as the standard, while admirable, is just not realistic.  But if a class (or a series of classes with the same teacher) as a whole is producing significantly lower results on a regular basis compared to their peers, it makes sense that the teacher is a likely cause, should be treated accordingly, and face some sort of discipline.  For the teaching profession at large, though, there needs to be:

5. More Respect: This is perhaps the most important thing, and the only one that can’t really be legislated.  Unfortunately, in American society, teachers tend to be looked down upon; from folk wisdom that denigrates the teaching profession (such as the old chestnut ‘Those who can’t do, teach’) to frequent portrayals in the media as foolish, ineffective, perverted, or some combination of all three, there’s an abundance of negative press about teachers.  (Being made the bad guys in many states’ debates about unions didn’t help matters, either.)  If we want the best, brightest, and most effective teachers joining the profession (or sticking with it, for all those teachers who are already among the best, brightest, and most effective professionals on the planet), we need to do everything we can to improve how teachers are viewed.

There you have it, a few thoughts on how to improve the school system.  How do you think we can improve the situation for teachers?  Any teachers out there who’d care to share their suggestions?

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