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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Once upon a time, in the long ago year of 2010, I tried to share some thoughts on how to improve the U.S. educational system.  I made a reasonable start, sharing some ways to make the funding of our school system more rational, but unfortunately, time got away from me, and I wasn’t able to finish the series as I had planned.

But, not being one to let a good idea slip away, I’ve come back to the concept of improving the educational process.  As I’ve spent most of my (admittedly, still rather young) life in school of some sort and would like to become an educator at some point in the future, it is a passion of mine.  So, with that explanation of why this personal finance blog is dabbling in educational issues out of the way, let’s get right into the meat of the article…

Improving the Academic Schedule

One issue worth looking at closer in order to improve the academic schedule.  The current arrangement for when we have our students learning leaves much to be desired, both in terms of the day to day schedule, and the overall yearly schedule.  A few tweaks to the schedule could make a world of difference, tweaks like…

1. End Summer Vacation: I realize by even writing these words, I’ve probably made enemies of everyone under 18 in the country, but hear me out.  Here’s the problem with summer vacation: the same things that make it so appealing to kids (a long period of time when they don’t have to study, aren’t tested, and generally don’t have to use their brains) makes it destructive to the educational process.  To help students, particularly those from disadvantaged backgrounds, we should end the practice of having a long break in middle of the year and replace it with smaller breaks throughout the year.  A break for a week (or less) every month or so would be much less destructive to the student’s educational process than losing three months every year.  And speaking of the how much time students spend out of the classroom…

2. Have Children Attend More Days of School: If I didn’t make enemies of the children of this nation with that last suggestion, this one aught to do the trick.  Again, there is a method behind the madness: most of the school systems around the world have longer school years than the U.S.  With 180 days of attendance, students in the U.S. spend less than half the year in the classroom.  With that sort of schedule, it’s no wonder we have trouble sharing all the information we want the students to learn.  Most school systems in the world have their students learning for more days throughout the year, and the students don’t seem to suffering terribly so as a result.

3. Delay the Start of the School Day: Alright, now it’s time for me to improve my reputation with the students before they form a lynch mob.  Let’s be honest, the schedule we follow for our schools is a bit unusual, getting up quite early (frequently starting at 8 a.m. or even earlier) and then leaving before in the middle of the afternoon.  By bumping back the start of the school day just an hour or so, it’s possible to get much better attendance and generally improve the school experience.  Start the school day later and students, particularly teenagers, will arrive more refreshed and ready to learn.  Speaking of changing the school day itself…

4. Lengthening the School Day: We’re back to reasons that U.S. school students will want my head.  Having more time will enable teachers to share more information and make the lessons more meaningful.  Now, we don’t want to make the days too long, of course; there’s only so much material that students can absorb in a day, and trying to share more information won’t do more than overwhelm them and cause problems as they learn.  But an extra hour, used to extend the time that teachers can use to share their lesson plans, could potentially make a world of difference.

It’s amazing what a few changes in a schedule can do.  How would you shift the school schedule to improve the educational process?

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With Father’s Day so recently past, I’ve been thinking a lot about my own (future) children.  (Although, every Father’s Day that passes is one Father’s Day closer to when I will be receiving ties and home-made cards from my own offspring.)  I look forward to having kids, and having the opportunity to share things with them.

I have shared before in this very blog some of the things I wish to teach my children about money, as they get old enough to gain an understanding of the concept.  But money is far from the only, or even the most important, thing I hope to teach my children.  So, if you’ll indulge me a bit, here are a few things that I hope I’ve properly taught to my children by the time they leave the nest (which will hopefully be closer to when they are 18 than 28, but that’s a different story):

1. How to Be Self-Reliant: There seems to be very little done in school by way of preparing students for living on their own.  I realize that such skills are perhaps viewed as something best taught by parents at home, but surely there is some room for schools to do something.  Let’s start by rethinking home economics and shop class; while there is little use for most of us in being able to sew a pillowcase from scratch or build a bird house, there’s plenty of need to know how to, say, cook simple yet nutritious meals or successfully task apartment or home repair.  You wouldn’t even have to completely remake the courses, as a few shifts in priority here and there should do the trick.  Regardless of what my children learn in school, though, I fully intend to make sure that they go off to college knowing where to find great financial management tools and take care of themselves in ways that make them financially frugal and wealth minded individuals.

Of course, there is much to be said about making sure my children get at least a basic education before I worry too much about teaching them subjects outside the classroom...

2. How to Get Along With People They Dislike: It might seem a bit counter-intuitive; why bother to spend time with people you don’t like, after all?  But let’s be reasonable: there’s lots of people we have to deal with, sometimes on a daily basis, that we don’t really like, if not outright hate.  Being able to work with such people without losing your cool, complaining about them behind their back, or simply being mean is a dying skill, one I hope to encourage in my children, if only to add a tiny bit more civility to the world.

3. How to Avoid Scams: This is a tricky one, as scams change and evolve all the time.  Twenty years ago, who could have predicted the proliferation of 419 scams and similar online thievery?  I don’t want to even hazard a guess as to the methods scammers will be using twenty years from now when my children are preparing to go to college.  Still, there are some constants I can pass along to my little ones.  Scammers will play on your emotions.  They will offer you something for nothing.  They will try to get you to do their dirty work, recruiting other people or engaging in illegal activities to benefit themselves.  In short, if sounds too good to be true, it most likely is, and is likely a scam, to boot.

4. How to Manage Their Money: This shouldn’t come as a shock to anyone; obviously, I care enough about money and money management to be have written over 500 posts on the subject, so it’s obviously something I want my children to know about.  A complete list of everything I want to expose them to would fill up a book (or at least several weeks of blog posts), but the basics are pretty simple: how to save money, how to spend money wisely, how to invest, and how to plan for the future.  If they can master those skills, they’ll be in much better shape than most of their fellow classmates come college time (to say nothing of their debt-ridden former classmates come graduation).

5. How to Pursue Entrepreneurial Aspirations: I’ve discussed ways to help encourage entrepreneur children before, but as you might guess, it’s something I would definitely like to pass on to my children.  There’s plenty of ways to go about doing so, from limiting their allowance and encouraging them to find a way to make up the different to offering all the help (financially and through advice) that I can when and if they want to start a business of their own.  Now, I don’t want to force them into being entrepreneurs if they don’t have that desire; someone forced down any particular path in life is likely to rebel, whether that path is entrepreneurship or becoming a doctor.  Instead, I want to encourage them to…

6. Follow Their Dreams (But Still Make a Good Living): It’s a rare parent who doesn’t want their child to do something that will make them happy in life and not to settle for a dull, unfulfilled life of drudgery.  That said, it’s an even rarer parent who wants to watch their child go down a path as, say, a professional musician, only to wind up in their mid-thirties, broke, with no children, useful skills, or hope for the future.  My goal, then, is to help my children to reach the middle ground: gaining the skills needed to hold a decent, at least semi-interesting job, while still having the time and creativity needed to pursue other interests on the side.  Given the expansion of technology and the decreasing prices of just about every creative tool imaginable, it’s not hard (or unusual) to picture secretaries who write novels (hopefully not during work hours), teachers who publish their own blogs on subjects they are passionate about (hopefully, the same subjects they are teaching), or yes, doctors who rock out on the weekend.  With a little creativity (something I also hope to cultivate), my children shouldn’t have a problem fulfilling their dreams while they keep their pockets full.

What do you hope to teach your children by the time they grow up?  Do you think the lessons you need to pass on are much different than the ones taught to you?  Any parents out there who would care to share some thoughts with this would-be parent on how best to teach some of these things to children?

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It’s finals week for me (which, combined with having to give a major presentation last week, might help to explain why I’ve been all but absent from the online world recently).  I imagine that more than few students are finding themselves in similar situations right now, so I’m going to take a brief break from both the personal finance writing and finishing my remaining final projects in order to pass along some advice to students getting ready for their finals:

You might remember that at the end of last year, I provided some advice on how to prepare for your finals.  There, I told you what to do throughout the semester and how to prepare in the week before the final.  If you have both the time to carry out all those suggestions as well as the willingness to do all that studying suggested, then good for you!  You should be in great shape for your finals (and similar tests throughout the semester).

But what if you don’t have a whole semester to prepare?  What if, due to personal issues or other obligations (including other finals that come up earlier during finals week, perhaps a more important class with a final the day before), you don’t have that much time to study?  What if, in fact, you only have one day in order to refresh the information in your mind and generally prepare for your final?  Well, here are some suggestions on how to cram as much information in your mind at the last minute:

Last Minute Studying Tips

1. Don’t Panic: One of my favorite suggestions for almost any high-stress situation, and definitely one you will need to keep in mind while you are studying.  Panicking will not help your situation at all, and will only make it harder to study (which, as you’ll recall, is what you need to be doing right now).  Instead, relax, breath deeply, and focus on the task at hand.

2. Plan Out Your Studying: It’s tempting to dive right in and start studying, but particularly when you are so pressed for time, you can’t afford to go in unprepared.  Although it might feel like a waste of time to spend 15 minutes plotting out your studying, it will be more worth it if it helps you stay on track and spread out your studying.  While you’re thinking about your plan, also remember…

3. Prioritize Your Studies: With only one day to prepare, you’re not going to be able to (re-)learn everything that was covered throughout the semester.  Instead, you need to figure out where to focus your effort.  Try to get a broad idea of the material that was covered throughout the semester, and then focus in on more specific issues, according to what your instructor is likely to test you on.  (For one example, my Biochem professor has an interest in the problems our bodies have (metabolic diseases and similar issues), so I always make sure to take a closer look at the ways biochemistry can go wrong.)  You’re not going to have time to memorize everything, so use past tests and comments from past students (if available) to determine what is likely to be covered, and study accordingly.

4. DON’T Try to Pull An All-Nighter: It’s tempting when you are short on time before an exam to try to do without sleep; after all, that’s six-eight hours you will spend unconscious that could be devoted to getting ready for the test.  But trying to do so, particularly if you aren’t used to all-nighters, will likely do more harm than good, by leaving you tired and inattentive when the test comes around.  Unless you’ve pulled all-nighters before (and know you can make it through the test period before your body simply shuts down), don’t think you can do it know.

5. Don’t Ignore Other Tests or Assignments: I know, I know, the last thing you want to think about as you try to cram that last bit of information into your brain before test time is other things you need to study or finish.  But not doing so can lead to a vicious cycle; you finish one thing, possibly take a (well-deserved) break, and then realize that you only have a day (or less) to prepare for the next test.  If you can mix in some studying for your future tests (or work on future goals) in with your cramming, you can hopefully avoid finding yourself with limited time to study in the future.  It’ll be tough, I know, but I’m sure you’ll be up for the task!

Did I miss any good last-minute study tips?  Are there ways to study at the last minute that others have found particularly useful?

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It’s practically as American as Apple pie, Mom, and Baseball at this point: go to college, do well, graduate, and get a good job using your degree.  There’s a good chance that your family used this sort of reckoning to convince you to go to college, out of concern for your future and the hope for your success.  If you’re a parent or otherwise have young people who look up to you, perhaps you’ve even encouraged them to go to college yourself.  It’s just common-sense, after all, that more education will help you in the future, right?

Perhaps not.  After all, with more and more people who have college degrees, getting a Bachelor’s degree is no longer a means to set yourself apart from other potential employees.  When you add in the debt that you will likely have to take on in order to achieve a higher degree, it’s starting to seem as if getting a college degree might not be worth it, after all.

Where every college student hopes to be someday

That seems to be the conclusion of more and more people.  Peter Thiel, for one, seems to maintain that college (at least, at the highest levels of academia) is starting to get ‘bubbly’.  He’s far from the only one, of course; even that bastion of learning NPR has raised the question of whether college is truly worthwhile.  So, are college costs worth it?

Why We Go to College

If we are going to determine whether college is worth the expense, we need to think about why exactly we go to college, anyway.  Yes, yes, we go there to learn (and for a surprisingly large portion of us, we go to party), but there is a larger goal at the end of it.  So, why do people go to college?  Here are a few possibilities:

-To Achieve Professional Certification: If you go to college for pre-med (like my youngest sister Lauren; keep up the good work, Lauren), pre-law, pre-pharmacy, or really, almost any major with a pre- attached, you have a pretty defined purpose built right in.  You’re taking courses in order to get into med school, law school, etc, where you will graduate with the skills to jump right into the work force.

-To Gain Professional Skills: Even if you don’t go for a specialized degree, there’s plenty of skills that you can learn in college that can prepare you for the real world.  Particularly in STEM fields (Science, Technology, Engineering, and Mathematics, dontcha know), there’s usually equipment that you don’t have access to in high school or in your nonprofessional job.  In my own experience in biochemistry, there’s numerous techniques that I was able to experience in college that I wouldn’t have been able to try without my education providing the opportunity.

-To Prove Your Ability to Learn and Study: Now, not everyone chooses a major that leads directly to a career path or provides useful skills.  Even if you get a degree in Medieval French Literature or something similar, your degree says something to would-be employers.  Regardless of the specific major, the time, effort, and skills required to get a degree show an employer that you are able to study and expand your abilities under pressure, and should be able to do the same if they hire you to work for them.

But, is College Worth It?

There are numerous reasons to go to college, as we’re just seen, but that’s not really an answer to our question.  Here’s my gut feeling on the subject: college has become all but a necessity for most types of employment.  With few exceptions, getting a job in the modern economy basically requires a Bachelor’s degree, at a minimum.  (And increasingly, getting a Master’s or PhD. is becoming practically a necessity if you hope to stand out from the crowd or get work above the entry level.)  Unless you are planning to open a business of your own (in which case, getting a few accounting, finance, and other business courses under your belt wouldn’t be a bad idea), you’ll likely need a college degree to get the job of your dreams.

All of that said, just because you (all but definitely) need a degree doesn’t mean you have to pay out the nose in order to get one.  Here are a few tips to help you get a degree without breaking the bank or taking on a back breaking load of debt:

-Start in Community College: There’s a bad habit many people have of assuming that college has to mean four years in a private school, paying high tuition the whole time.  Spending a year or two in community college before transferring to another school can help you take care of those pesky general education courses that you’ll need to complete to graduate, while paying much, much less than you would at a private or even a state college.  (Just be sure to check and double-check with school you intend to transfer to in order to ensure that your credits will transfer; this method could backfire if you have to retake most of your classes to get credit for them.)  On the subject of state colleges…

-Consider Going to Your State School: Most State colleges are a boon to college students.  Not only are they generally cheaper than private schools to begin with, but they also are known to give residents who attend a hefty discount on top of it.  As you search for a good school to attend, you should definitely be sure to include your state school at the top of the list.

-Combine Work and School to Save: You will probably have the opportunity to do some work for your school at one point or another, particularly if you are academically successful.  From RAs to TAs, tutors to peer counselors, there are sure to be plenty of opportunities to work for the university you are attending.  Definitely try to take advantage of them, at least if you can do so and still maintain a good grade point average; besides having the opportunity to earn some more money (and in some cases, even get lodging or other expenses paid for you), these sorts of activities can look pretty good on a resume when it comes time to apply for a job.

I could probably go on; there has been quite a bit written on saving money while attending college, but this should be a good start.  In conclusion, let me just say that with college still a near necessity, finding ways to get a college education without breaking the bank should be a priority.  Fortunately, a little bit of effort shows plenty of ways to do just that.

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One of my biggest pet peeves is the inadequacy of the US educational system.  Unfortunately, we seem to be stuck training young people for an Industrial Age society well into the Information Age.  (Unless we’re in a new age by now; it’s been a while since I’ve learned about the ages of man.)

There are any number of ways to improve the US educational system, some of which I’ve already discussed.  But today, I’d like to take some time and suggest a few course additions that could help the United States to do better in preparing its students for the professional world they face today.  Let’s start back where the whole thing got started:

Elementary School

While elementary school is pretty good at teaching reading, ‘riting, and ‘rithmetic (at least for the most part; I know that books have been written about where the school system or some portion thereof has failed even basic education processes), there’s quite a bit more that people need to succeed in a modern society.  And that type of education should begin in the earliest years of elementary school, with courses like:

-A Foreign Language: Another area where I wish that my education was more substantial (and want to improve my knowledge now that I’m a graduate student myself) is being able to communicate with foreign language speakers.  My school didn’t even offer foreign languages until Junior high school, which puts the US at a disadvantage to many countries that start this education when the students first enter school.  As for the choice of language, Spanish seems like a pretty obvious one, given the demographic trends we face, but depending on the demographic traits of the region where the school is located, French, German, Italian, or Portuguese could make options, as well.

-Basic Computer Skills: I might actually be too late on this one; perhaps every 3rd grader is more proficient at using computers by now than I am.  But a course on typing, using spreadsheets, and other computer usage skills would help to ensure that everyone is on the same page and has the essential skills of the information age.

-Skepticism: Alright, this one might just be my personal hope, but I’d love to see more effort put into teaching students how to ‘Trust, but Verify’, as Reagan put it.  Teaching students how to evaluate research, consider evidence, and determine the motivations behind statements that are made by public figures would definitely be a good thing.  Admittedly, there is something to be said about not crushing childlike dreams, so perhaps this course will have to wait until…

Middle School

Ah, middle school (or junior high, in at least a few more places); not quite old enough to start a part time job, too old to spend all day playing around.  I don’t know about you, but that sounds like the perfect time to add a few new courses to the curriculum!  A few that could be good include:

-A Second Foreign Language: Yup, that’s right, I’d like to see a world where students have to be tri-lingual to graduate from high school.  While the first round of foreign language education should, I imagine, focus on European languages that are at least somewhat similar to English, given the increasingly global economy and rising importance of non-European countries, language offerings like Mandarin, Hindi, and Arabic would seem more helpful to students’ future prospects.  (Goodness knows, I’d almost be willing to go back to middle school for the chance to learn some of those.  Almost.)

-Personal Finance Basics: Another one of my pet causes, one I’ve written about here and on the Yakezie website, is trying to spread the importance of personal finance education.  Admittedly, the trick is trying to find a curriculum that a majority of parents would approve of, given how much variation there is in the approaches to money management.  As a result, this might be another one we have to move to the next highest school level, in this case…

High School

Ah, the culmination of your years of education (at least up to this point; there’s still a long, long way you could go).  Now, at this point, things start to get more complex; you start dividing up the people in vocational technical and pre-college groups, as well as allowing students more choice in the courses they take.  So, these are more suggestions on courses to add to the curriculum, including:

-Business and Entrepreneurial Basics: Another of the complaints laden on the school system (there are more than a few) is that it is designed to funnel people into the positions as workers, whether white-collar or blue-collar.  There isn’t much (formal) education provided to those who want to be business owners rather than working for others.  If we hope to encourage the future business leaders of the country, providing more information they find useful would be a great start.

-Public Speaking and Expression: One area where people seem to especially struggle is public speaking, and other methods of expressing themselves in front of other people.  Combine that with the nature tendency of many high school age students to be (overly) concerned about what other people think of them, and you have a group that needs public speaking help more than any other.  (A side note: one thing I learned as a public speaking club member in college is that when you are speaking in public, the ones who want to listen to you and hear what you have to say will support you as you talk; the ones that don’t care, simply won’t listen or react.)

There you have it, seven courses (well, six, if you count the foreign languages as a single course suggestion) that would make the US educational system more useful to those getting an education (and more helpful to the country in general).

What courses would you like to see added to an elementary, middle school, or high school curriculum?  What courses do you wish YOU had when you were younger?

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Someday, I hope to have children (although, not someday soon).  It’s one of the things that Sondra and I have discussed; we both want one or two children once we have finished our respective educations, gotten married, and have the resources to devote to raising them in a warm, loving environment.

Given this desire, and my own personal interest in money and other personal finance related matters, it’s only logical that I’ve given some thought to how I intend to teach those little whippersnappers about money and what you should (and shouldn’t) do with it) once they are old enough to understand the concept.

Teaching them to keep the family coin bowl organized will be step one.

Here are some of the lessons I hope to impart on my kids about money management (and life) once I have the opportunity:

Spending

Probably the first area where my kids will be exposed to money is when I spend it.  They won’t watch while I earn it (although, they will probably have an idea of ‘Daddy goes to work to make money’, as most young children do) and it will be a little while before I can explain properly the importance of investing, they will be watching when we go out to buy groceries or visit the mall to buy gifts, and will see Daddy pull out a handful of bills or swipe his credit card before we leave the store.

The most important lesson I’ll try to pass on when they are first getting old enough to learn about money is that, when Daddy (or Mommy, for that matter) gives the cashier money or swipes his credit card, that money is going from Daddy to the store, and Daddy can’t spend it anymore.  Given that Daddy, like everyone, doesn’t have an infinite amount of money, he has to decide what to spend it on; if he buys expensive food, he’ll have less money available to spend on toys, and similar trade offs.  When they are younger, the biggest lesson on spending is that you can’t have everything you want; you need to make choices and compromises about where your money goes.

As they get older, I’ll try to open up more on all the places where the money goes.  I’ll try, as much as is possible, to share the cost of the household expenses and what sort of income I have coming in, explaining why I use particular services for heat or electricity or water.  I’ll also try to emphasize the importance of putting some money aside, in savings accounts, retirement plans, and 529 plans (or similar education plans) to help them with tuition when they get old enough to go off to college.

Earning

I’ll admit, I’m a bit torn about whether to give my kids an allowance.  On one hand, I didn’t get an allowance as a kid, and I seem to grown up with a pretty decent understanding of money.  On the other hand, my mother (and my father, to a lesser extent) tended to buy me things out of her own pocket whenever I asked, which I’m certain didn’t help to form a link between getting something and earning the money to buy it in my mind.  As a result, I’m leaning toward providing an allowance.

What I do NOT want to do is link that allowance to performing chores.  To my mind, that creates the expectation that you should get paid to do things around the house to earn money, rather than because as a member of the household, you should contribute to making the house look nice and livable.  It’s a fine line to walk, I realize; if the children know that they will get money regardless of what they do to help the household, they might simply opt to slack off and play rather than cleaning their rooms or helping with dishes.

What I might do is try to split the differences: paying them for ‘extra’ chores, like helping with dishes, shoveling snow, or raking leaves, IF they’ve done all their ‘required’ chores, like keeping their room(s) clean.  Then, they’d learn that there are some things you simply have to do, but going above and beyond them can lead to rewards.  (I should probably consult with a parenting book or two before I commit to anything, though, to get a better idea of how children usually react to such plans; the last thing I want is for my attempts to reinforce the wrong lessons.)

As they get older, there will be changes, of course; first, as they grow, I’ll expand what falls under the rubric of ‘required’; while an eight year old might be suitably challenged by simply keeping her room clean, as she reaches ten, twelve, or her teen years (*shudders*), the level of tasks I’ll expect from her as par for the course will increase (and of course, when she has a car of her own, she’ll be expected to care for it on her own).  The list of ‘extra’ chores will also expand, as they become physically able to handle more complex and challenging tasks; I wouldn’t trust an eight year old to mow the lawn, but a twelve year old is a different story.

When they get old enough, I’ll encourage them to get a part-time job, both so they have a better idea of what the working world is like (especially if you don’t have the education/training to get a higher level position) and so they earn some money on their own.  I’ll also do my best to explain the concept of passive and alternative forms of income, and encourage them to do something like start a blog or create another website as an additional form of income.  (Now, of course, I’ll also need to teach them how to be safe and secure online, but that’s a whole new barrel of monkeys.)

Saving and Investing

One thing I definitely want to emphasize is the importance of putting a portion of your money aside, creating a fund for future spending as well as trying to grow your money so you don’t have to work for every penny you spend.  When they are younger, this might just consist of teaching my children to put part of their allowance or any other money they get (from birthday cards, Christmas gifts, etc.) into a savings account at the bank, so that they aren’t tempted to spend it and can earn a little interest.

As they age, I’ll start to introduce the concept of investing, explaining how they can earn more money than at a bank, and how important it is to invest if they hope to retire (or meet other big goals throughout their lives).  When they first start out, I’ll probably pick investments for them and have them trust that Daddy wants what’s best for them, but when they get older, I’ll encourage them to find their own investment opportunities so they learn how to research.  (I’ll check over said investments before they put any money into them, at least until they are older enough to know what sort of scams exist in the world of investing.)

To further encourage them, I will probably add some of my own money to their investment pot.  Not only can help encourage them to invest enough to get a company match on their retirement funds when they reach that point of their lives, but I can help boost the size of their investment pot to help them get a head start for longer term goals like school and retirement.

Giving Back

Perhaps the most important thing I can teach my children is how to give back to the less fortunate.  When they’re young, I’ll probably try to emphasize times when I give physical money to charity, by putting cash in the bowl at church or slipping a few bucks into a Salvation Army bucket in December.  Those are perfect teachable moments, and should be ideal for explaining why Daddy is giving money to this strange man.

As my kids get older, I’ll share more about other ways to contribute to charity, explaining how I make donations online and how I decide deserves to receive money.  I’ll encourage them to find charities to support and to donate to them a portion of their income.  I’ll emphasize the importance of finding a good, worthwhile, legitimate charity, and trying to keep those donations coming.  As with saving and investing, I’ll do my best to chip in some of my own money to help increase the impact that their donations will have (and help out the charity, as well).

Wow, I didn’t think I’d write quite so much; but money is a big topic, and trying to create an 18 year plan (or so) for sharing what I know with my children would be hard to condense into a 1000 word column.  This is a pretty good start to getting my thoughts on the subject organized, though.

Readers, what do you want to teach your kids (if you have any/desire to have any, that is) about money?

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(Today, we have another good guest by an Olivia Coleman.  It’s on how to pay for college, an issue that I’m sure many high school seniors are starting to think about right now.  (If not the seniors themselves, I’m sure their parents are considering the issue.)  Here you have  a few suggestions to help bridge that gap between what you need and what you have available.  Good luck to all incoming college students; trust me, it’s tough, but rewarding.)

How to Pay for College: Using Other People’s (and Your Own) Money to Your Best Advantage

Paying for college is difficult for everyone. There are some important things to keep in mind, though, that will help you make the most logical use of available funds as you go through the process of choosing a school and funding your education.

1. Get the Best Financial Aid Possible

Check into the quality of a school’s financial aid program before applying. A good financial aid program indicates that that institution cares about enrolling as many good students as possible and easing the burden of education costs for students from all walks of life. It should include both need and merit based scholarships. These schools offer great programs. A concrete indication of what a particular school’s financial aid department will do for you is the package they present you with upon acceptance. Use this to compare the best deals for you.

2. Always Search for New Scholarships and Grants

Even the best financial aid programs don’t seek out every obscure scholarship or grant that may apply to you. You have to do that on your own. And you definitely should. There are millions of scholarships out there, and many go un-awarded every year. With enough determination, everyone can find a scholarship specific to them. This site is a great scholarship database. You create a profile and it provides you with matching scholarships. Make sure to re-apply the following year if you don’t get a scholarship the first time. Also, keep track of application dates. Many scholarship organizations require students to apply every school year, even if the scholarship is for 4 years. Look into the requirements for all your scholarships and make sure you stay on top of it. This is free money and completely worth the time and effort.

3. Apply Your Loan Returns Wisely

Most scholarships are based on the projected tuition and cost of living for each semester. Sometimes not all of the funds awarded to you in the beginning of the semester actually end up being applied to your tuition charges. When this happens, students are often mailed a refund check for the difference. It’s awesome to get a huge check in your student mailbox, but remember that this isn’t actually your money. You will have to pay it back. If you’re not in dire need of the cash, it seems logical to use the refund to directly pay off more of your loan. However, once the financial aid department has an indication that you are were awarded too much in loans, it may be more difficult to get as much aid next year. Talk to one of your school’s financial aid advisors, and they should have some insight into school policy.

Another option to consider is paying down more pressing debt, such as credit card or car payments. The interest on student loans is low and institutions are lenient and helpful when it comes to payment methods. It could actually be more financially advantageous to pay down a loan on something like a credit card, which is not structured with your best interests at heart. No matter how you decide to use the money, returns are usually pretty sizeable, so you may as well use it to your best financial advantage.

4. Get a Job

If your schedule allows, a part-time job can be beneficial in a number of ways during school.  Work experience is the first thing employers look for on a resume. So, if you are able to find a job or paid internship relevant to your interests, it’s actually a great future investment, financially speaking. A small side income can also offset some of the cost of living as a student. You will not have to use as much of your parents’ money, burn out your credit card, or use your financial aid toward pizza costs. Combining financial aid with a part-time job will allow you to have a couple different sources of income and less debt after graduation.

By-line:
This guest post is contributed by Olivia Coleman, who writes on the topics of online colleges and universities.  She welcomes your comments at her email Id: olivia.coleman33 @gmail.com.

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As you may know (from reading Tuesday’s post), I’ve recently taken the GRE.  I did rather well, at least on the portions that were instantly graded (the Quantitative (Math) and Verbal sections; there are two Analytical Writing segments that need to be graded yet).  I received a 610 in the Verbal Section and a whopping 750 in the Quantitative section; since the GRE, like the SAT, is on a 200-800 scale, both scores are better than average, and the 750 is near the top.  Needless to say (although I’m about to say it anyway), I’m pretty happy with my score.

While I’m on the subject of good news, here’s another positive development: my fiancee Sondra had a gallery opening last night to display some of her wood working, and it went over very well.  Granted, the gallery was at her school, and she had to share it with the other people in her wood working class, and a good number of the people at the gallery opening were more interested in the food than the wood working, but still, it was nice to pieces she had worked so hard to complete on display as part of a gallery.

So, as I’m in a very happy mood and also filled with GRE related knowledge, I thought I would take a moment to share some of the tips and lessons I’ve learned about how to do well on standardized tests, like the GRE, the SAT, PCAT, assorted AP tests, etc.  This is hardly a be all, end all list to getting a perfect score, but should hopefully help you to boost up your score at least a bit if you ever find yourself forced to take one or more of these tests in the future.  Let’s begin:

1) Know the format of the test: One of the biggest advantages of standardized tests is that they are well, standardized.  This makes them easier for test makers to grade; feed them into a computer or hand the answer key to a grad student and before you know it, the grading is done.  It also means that you, the test taker, can familiarize yourself with the format of the test and the questions, so that the actual test seems similar to what you’ve already done.  You won’t know the questions ahead of time, but at least you’ll know what they should look like.

2) Use the Process of Elimination: Another advantage of the standardized test format to test takers is that most of the questions are multiple choice; the answer is listed right there on the test, you just have to determine which one is correct.  Even if you can’t come up with the right answer immediately, take a moment to eliminate ones you can obviously identify as wrong, and pick one of the remaining answers.  If you can eliminate three of the five choices on most GRE questions, for example, you can more than double your change of guessing correctly (from 1 in 5 to 1 in 2).

3) Pace yourself…: It’s easy on a timed standardized test to try to rush through the questions, moving as fast as you can to get everything answered.  Don’t.  You’ll do much better (and leave the test much less stressed) if you try to pace yourself, taking the time you have available to give yourself the time to think about the questions.   (This is especially true at the beginning of computer adaptive tests like the GRE; the early questions affect your final score more than the last ones, and the difficulty of the final questions depends on how you did on previous questions.)

4)…But don’t go too slow: If you’re a perfectionist (as I tend to be on tests), you might spend more time than you have available trying to answer a single question.  It can be hard, but sometimes the wisest course of action is just to take a guess, especially if you can easily eliminate a few of the answers to boost your odds.  You’ll score higher by finishing all the questions than by spending five minutes to get one right and either not answering or making completely random guesses on the last five questions.

5) Use the preparation material available to you: ETS, the company that does most of the standardized tests in the US (including all the ones I have listed above) has a pretty snazzy website that includes prep material, practice tests, and other resources to help you, the test taker, prepare for your exam, all provided for free.  In addition, there are any number of for profit test centers that put out guide books, practice tests, flash cards, and a wealth of other material to help you prepare.  (I’ve had good luck with the material from Princeton Review, but there are other groups as well.)  The more you practice, the better prepared you’ll be when the actually test comes around.

6) Relax: One of the most important, but hardest things to do when it comes to standardized tests.  Just take a deep breath, exhale, and remember that even if you don’t do as well as you’d like (knock on wood), you can retake the test at a later date.  It’s not the end of the world.

That’s enough advice to get you through most standardized tests; if you’re taking a test like this in the future, please drop a comment to let me know.  If there are any tips or tricks that I’ve missed that have worked especially well for you on these types of tests, please share them with me and my readers so we can learn from your experience.

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I like many things about economics, including the tendency to explain complicated issues through the use of metaphors and other stories.  One of my favorite economic stories is the ‘Tragedy of the Commons’.  For those of you who haven’t taken Economics 101 (or decided it would be a better use of your time to sleep through the class), here’s the nutshell version:

Imagine a small town, where one of the primary activities is raising sheep for wool.  In order to feed the sheep, the owners take them to a field in the center of town filled with grass.  For a while, everything goes well: the land more than supplies the sheep with grass, and everyone can graze their flocks as much as they would like without cost.

However, soon the individual farmers realize that they can increase their sheep herd to increase their profits while limiting their costs (as they don’t pay to feed the sheep).  A few families start to increase the size of their flocks, causing their income to rise and increasing the strain on the field to provide for all the sheep.  Their neighbors notice this, and start to increase their sheep populations as well, which inspires the first farmers to further raise the size of their flocks.  Before long, all the farmers are attempting to feed as many sheep as possible, the land starts to be overgrazed, and eventually, the field is unable to support grass or other plant life at all.  Without a ready source of arable land, nobody is able to feed their sheep at all, and the town soon suffers economically as a result of the over grazing.

The result is what is known as the Tragedy of the Commons; the benefits of increasing the number of sheep you grazed are privatized, while the costs to the town, the declining quality of the field, were public.  Each individual family was directly compensated for increasing the size of their flocks, while the costs of such increases were borne by the village as a whole.  As a result, even though each of the families may have known that increasing the number of sheep grazing on the field would lead to a loss of the field, there was still enough incentive for them to do so, and hope that their neighbors wouldn’t follow their lead.

In the real world, one of the most prevalent examples of a common good is the environment.  The air, wild animals, and natural settings we all enjoy aren’t directly owned by anyone, but are still considered valuable.  Unfortunately, because they aren’t owned by anyone, there isn’t any incentive to avoid overusing them; if a company can make more profit by pouring soot into the air or overfishing, the logical move for them is to do so.  There are a few possible solutions to the problem of common goods, most of which involve changing the incentives for the individuals who would otherwise overuse the resources:

1. It might be possible to get all the interested parties to cooperate, and act for the good of the group rather than the individual.  In our story of the shepherds and the field, if all the neighbors would agree to limit the number of sheep they kept, the tragedy could have been averted.  The problem is, a single neighbor who did not agree and increased the number of sheep he held could spoil the whole plan; with one of their neighbors benefiting from a larger flock, the rest of the group would likely increase their flocks in turn, thus causing tragedy again.  Similarly, attempting to get all the parties who fish in a river or add pollutants to the air to voluntarily cut back are frequently doomed to failure, if for no other reason than the difficulty in getting unanimous agreement (and then enforcing it).
2. Another solution is privatization; by converting a common good into a privately held one, the financial rationale will change, as well.  In our story, if each farmer had owned a portion of the field, they would have the incentive to keep it healthy and well cared for; the short term advantage of having more sheep would be off set by the long term disadvantage of having to buy extra food or pay to graze their flock on a neighbor’s section of field.  While this tack has possibilities, there are also limitations: it’s only really effective for resources that are fixed in place, like land or trees.  If you allow a company to pollute the air above its factory as much as it wants, you’ll soon find the air in the town downwind has gotten incredibly polluted.
3. In cases where private solutions are likely to fail, we can turn to government involvement.  If the town government charged a fee on each sheep that was grazed in the field, the economic logic would be changed, and there would be fewer farmers taking on huge flocks of sheep.  Similarly, a tax on pollution, such as a carbon tax (or a cap and trade program, for that matter), would make it less profitable to engage in activities that produce a great deal of carbon dioxide.  The downside, of course, is that governments cost money, and lead to less efficient outcomes than a purely capitalist system.

All three solutions have their place, and a combination of the three used properly can help to resolve the problem of the Tragedy of the Commons.  A good environmentalist, and a good economist, will realize the possible solutions, and attempt to use a combination of the three in order to protect the environment; convincing people and businesses to voluntarily restrict their emissions, allowing private businesses to regulate the wildlife on their own property, and having the government intervene when needed makes a pretty solid environmental policy.

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One thing I’ve been considering doing is going back to school, especially now that my temporary position is coming to an end.  I’ve been told for much of my life about the benefits of higher education, and the biggest advantage to doing so is pretty simple: I could increase my earning potential dramatically.  According to the data compiled by the US Census Beaurau, by going back to school and earning an advanced degree, I could increase my average annual earnings throughout my adult life from an average of $43,000 to $55,000, a more than a 25% bump in salary.

The question then becomes, why not go back to school?  Because it might not help, and could actually hurt, my financial future; as noted by authors like Penelope Trunk of the Brazen Careerist, post bachelor education leaves much to be desired.  It is expensive, time consuming, is frequently looked at as an escape hatch from real life, and did I mention the expense?  The problem is that I will greatly increase my student debt (and likely at a higher interest rate than my current 2.875%) and will greatly decrease my earnings while I am taking classes.

Which option is preferred could become simply a matter of crunching the numbers, running various scenarios to see which conditions yield the greatest return for my time and money.  But I’m not going to do that.  While I do like crunching numbers, my professional life to this point has taught me nothing if not that the future is unpredictable.  When I made the decision as an undergraduate to switch out of the pharmacy track program and into the biochemistry major, I was expecting to hold a full-time, permanent job by now.  Alas, a string of bad luck, for myself and the broader economy made sure that was not the case.  So, instead, I’m going to put aside the issue of money, and simply focus on asking the following questions:

1) What do I want to do? I sometimes feel like I’m still a kid, juggling so many possibilities for my future in my head: researcher, pharmacist, technician, and yes, perhaps even a full-time blogger, if the Fates smile upon me.  Before I can decide how to reach my destination, I must first decide in which direction it lies; this will require some deep soul searching and thinking about my life, likes, and dislikes.

2) Do I need school to get there? One idea I stumbled upon while gathering resources for this entry was a post by Marty Nemko, suggesting that getting training in the real world (by offering to take unpaid internships, for example) could be just as helpful in getting a job as obtaining a college degree.  Depending on what I decide to pursue, an advanced degree might be necessary (if I want to become a pharmacist) or simply optional (as a researcher, for example).  Once I know where I want to go, I’ll need to carefully consider all the ways to get there, and see which are the most plausible to me.

3) Do the opportunities exist? A final issue I’ll need to confront: no matter how much I prepare or how ready I feel, I might not be able to enact my ideal plan.  Jobs dry up, pharmacy schools have limits on admissions, and blogging is a blog eat blog world (it’s a bad pun; so sue me), all of which could derail my plans and force me to go with Plan B, or Plan C, or…well, you get the point.  As a result, I’ll need to do plenty of research, prepare for all possibilities, and have a few back up plans ready to go, just in case.

I honestly don’t know if this time next year I will working another full-time job, preparing to go back to school, or running a hugely successful blogging empire (although, that last one sounds pretty nice).  But, I will keep up my efforts and always make sure to have something in the works to better myself.

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Sometimes, I wish that I had a broader high school education.  I appreciate everything that I’ve learned, but I’ve noticed holes in my education that a more complete curriculum might have filled.  There are some steps being made to ensure that all students in the US get a complete education, such as the No Child Left Behind law, but even that is rather limited in scope, covering only math and English.

It’s a good start, and math and English are definitely skills that everyone needs.  But I can think of plenty of skills that students should have before they graduate:

1) Personal Finance – Pretty obvious for a PF blog, but let’s be honest: the average level of knowledge about money management in the USA is crummy, and the lack of any financial information being presented in the schools doesn’t help.  I don’t expect every high school graduate to be qualified as a CFO, but being able to balance a check book, evaluate investments, and create a basic asset allocation are the sort of things that everyone needs to do, but most people can’t.  That should change.

2) Basic Organic and Bio-Chemistry – I’ll admit, I’m biased on this one; being a biochemist myself, I think that people should know more about my professional area.  But I do have some logical to back up my opinion: we are all biological entities.  If you ever take any drugs, being able to read through the chemical structure and have some understanding of the effects of the medication will make it that much easier to make informed decisions about your health.

3) Civics – Let’s be honest, most Americans are far too uninformed about how our system of government works.  While most high schools offer civics or social studies, it often gets pushed off to the side, not emphasized in any way.  (And in the case of my high school, taught by the football coach, who very clearly would rather be coaching.)  Adding a civics section to the required graduation tests would help to make sure more people have an understanding of the US government.

4) Foreign Languages – Most Americans can only speak English (and sometimes just barely at that).  But with the ever-increasing pace of globalization, a good way for us to stay competitive is to expand the number of students who graduate being able to understand at least one foreign language.  (Possibly more than one, but let’s take this a step at a time).

While we’re considering foreign languages, we should also look into expanding the selection of languages available for study in our high schools.  A short list of languages that could be tested:

- Spanish (Given that most of the Western Hemisphere speaks Spanish, this one is practically a no-brainer)

-German, French, Italian (The Big Three European languages after Spanish, these would make fine additions to the testing material)

-Russian (The Cold War may be over, but they are still a major world power.)

-Japanese (A major trading partner, plus bonus points for the otaku love!  Sorry, little bit of geek humor.  (Bonus points to anyone who gets the reference.))

-Mandarin, Hindi and Portuguese (The official languages of China, India and Brazil, respectively, these languages are helpful for understanding some of the biggest emerging market countries.)

-Arabic (The main language of many Middle Eastern countries, it could be very helpful given the current geopolitical environment.)

These are just some of the suggestions I would make to have our schools test useful, real-world skills.  How do you think we should test our graduating seniors?

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Yesterday, I wrote about all the things my mother taught me about money. She laid a good foundation for my financial success up to now, and her support and encouragement will no doubt serve me well in the future. The more I learn about financial issues, though, the more I wish I had received a broader exposure to money and investing while I was growing up. I sometimes feel like I’m trying to catch up to other people my age when it comes to financial knowledge and money management skills. (Although, as I’ve been hanging out on PF blogs a great deal lately, I might have a somewhat skewed view as to just how much the average twenty-six year old knows about good money traits.)

There are several points I particularly regret not learning sooner in my short life:

1) Invest early, invest often – When I started to look into managing my money more actively last year, one of the avenues I considered was investing. My mother, though, expressed numerous concerns with my plans. If I had been encouraged to start investing earlier, I could have a greater investment currently in place (although, given the latest market movements, perhaps it was good that I didn’t have more ‘skin in the game’).

When I have kids of my own, I’m going to do what I can in order to spark an interest about money and investing in them. One specific plan I have is to match their Roth IRA contributions while they’re in high school (and possibly college), in a sort of make shift 401(k). This will pass along several important lessons: start saving for retirement as soon as possible, using tax-advantaged accounts allows your money to grow, and when someone offers you free money, you should take it.

2) Network, Network, Network – One of my biggest problems finding a new job has been the lack of a network to utilize as I search. It’s tough to find something when you can barely get your foot in the door. I’m hoping my luck will change soon, but at the moment, I wish I had built up a network of contacts before I left school.

I’m working to build up my network now, including planning to go to a few conventions and putting myself out in front of placement agents. I am trying to make friends and contacts in my field (and for that matter, in the world of PF bloggers). It’s slow going, especially as I’m normally a shy, withdrawn person, but it’s important that I have more contacts, in case I find myself in this situation again.

3) Take advantage of the Internet – Alright, this one is hardly my mother’s fault; the web wasn’t even invented until 1993, when I was already eleven years old. The idea of setting up a blog, putting up a few ads, and using that as a source of revenue is new enough that I’m not too surprised I’m only now getting started with it.

By the time I have kids, though, the internet revolution will have been in effect for more than a generation; while I won’t claim to know what the future of computers will hold, I do know that my kids will need to understand them. I’m going to do my best to spur them to get online and figure out ways of making money, from blogging to producing static websites and other online ‘side hacks’. Chances are, they’ll be even more proficient at using the computer than me, so perhaps they’ll end up showing old Dad a few new ways to make money online.

This is hardly a complete list of what I hope to pass onto my kids (and what I regret I didn’t learn about sooner), but it’s a decent start, and should inspire me to help my children grow and learn.

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I give my mother a great deal of credit; she raised me and my two sisters essentially by herself, all the while working full time. She never let us feel deprived, alone or unloved. I’m proud of all her accomplishments and everything she has done.

Some of the most important lessons she taught me involved money. Between her actions in her personal life and what she explicitly told me, I learned a great deal about how to get a handle on my finances and keep my life in balance.

1) Control your spending – One of the first lessons I learned from my mother, I picked up simply by watching her in her daily life. She did spend money, but not on extravagances. She would buy food, resisting temptations of candy and sweets. She took us to the library, encouraging us to borrow books rather than buy them. She enrolled us in low cost after school activities, such as Scout programs, allowing us to socialize, learn, and grow.

All of these experiences that I observed helped to establish the idea of frugality in me. I still tend to keep my spending low, without even making much effort. Many of the tips I encounter about saving money, such as packing your lunches and resisting daily treats (like a Starbucks coffee) come naturally to me, all because of my mother’s influence.

2) Save up for what you desire – When I was sixteen, I wanted to get a car. (Well, actually, my mom wanted me to get the car more than I did, so I could take my sisters to school and our other activities, but I still wanted it, as well.) Rather than simply buying me a car, my mother encouraged me to get a job, earn and save the money, and buy the car on my own. Thus began my employment at McDonald’s, lasting long past when I actually bought my first car (a 1988 Aries, if I remember correctly; a pretty solid car, especially since I only paid $1000 for it).

From this, I learned that if you are going to make a big, expensive purchase, the best way to do so is NOT to charge it and slowly pay it off while accumulating interest; but rather, to work, spend less than you earn, save the difference, and eventually purchase the item outright. It has been a valuable, meaningful lesson for me, and I am glad I learned it without having to get overwhelmed by debt (as so many other people seem to have done, sadly).

3) Study hard and get good grades – My mother always stressed education. She encouraged us to work hard in our classes and take some of the harder courses. She pushed my sisters and I into the gifted program at our school and motivated us to stand out academically as much as possible.

This might not seem related to my finances, but it’s had at least two important monetary impacts on me. First, my good grades and high SAT scores allowed me to start college without having to pay for my tuition, and by keeping my grades high allowed me to continue in the same fashion. I still had room and board expenses, but the savings enabled me to graduate with a relatively small amount of student loan debt, avoiding one of the major pitfalls of the recently graduated college student.

Secondly, that push to learn and study has stayed with me up to this date. As a result, I tend to be cautious, carefully, certain to learn as much as I can about something before jumping in. It is a good approach for many things in life, particularly when it comes to money and investing.

Almost all of my good money management traits are a direct result of my mother’s influence.

This is not to say that my mother taught me everything I now know about money; in fact, there are some areas where I wish she had done more. I will cover those tomorrow.

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