The Amateur Financier

It’s one of the unquestioned facts of modern life: if you want to be successful in life, you need higher education. There’s certainly plenty of truth to this; a college degree, whether a Bachelor’s degree, Master’s degree, or even a Ph.D., can greatly increase your potential earnings over the course of a lifetime. It’s also becoming largely required that you have at least a bachelor’s degree before you get most entry-level positions.

All of this would not be a problem if getting a college degree was a cheap, short, and easy path. If one could gain all the experience that was needed in six months for a few hundred dollars, there wouldn’t be a need for student loans, on-campus housing, or elaborate tests. Alas, that’s not the case; instead, getting a college education, at any level, is a major undertaking, both educationally and financially. Just how big a financial issue it is is perhaps best illustrated in this infographic from Top Colleges Online (complete with entertaining zombie apocalypse theme!)

From: Top Colleges Online

Alright, so it will take thousands of dollars in loans (or perhaps our own money, if we are lucky enough to have access to those levels of funds when we first start our educational career) to achieve our educational goals. It’s the reason that so many Americans (myself included) end up with thousands, tens of thousands, or even hundreds of thousands of dollars in debt when their educational process is complete. It’s…not a great system, when all is said and done.

So, how do you keep your student loans from being tens or even hundreds of thousands of dollars while you get your needed education? Well, I’ve covered some of these issues before, but a short review could be in order; try to start somewhere like a community college, take advantage of tuition offers and scholarships to the best of your ability, and when you do graduate, try to pay down your debt as soon as possible.

Unfortunately, the cost of a college education is unlikely to decrease any time soon. But if you plan properly, you should be able to keep your expenses to a minimum.

To High School Students Looking to Go onto College:

Congratulations! You are about to take a big step towards becoming an adult, one that will enable you to expand your mind, add to your list of useable skills, and prove that you are able to put yourself to work in this world of ours. It’ll be tough at times; in spite of what you might have gathered from movies like Animal House, college is not one big party that ends with everyone leading a great life off-screen that is referenced in brief comments at the end of the film. No, amazingly enough, most colleges actually expect you to work if you hope to graduate, let alone get good enough grades to impress future employers or graduate schools.

Yup, expect to spend more time studying, and less time Toga Partying

But your work isn’t simply going to start in college; if you hope to get into a decent school, you’ll need to begin well before you graduate high school, doing all kinds of tasks to ensure that you are able to get into college (as well as getting the financial aid you need to making going to college work for you). So, in the hopes that it can help you get through your college application process, here are some steps you need to take in order to successfully make it into college:

1. Apply, and Apply Early: How early do you need to apply, you ask? Well, if you are reading this shortly after I publish it in February 2012, you’re probably too late to apply for the 2012-2013 school year. Most colleges have their deadlines for regular admission application in January, with early decision applications due in November. If you’re a senior, you’re a bit late for either one. (Although, you still should look into your schools of interest; some have later application dates, or rolling applications that could allow you to get in for next spring.) On the subject of deadlines…

2. Apply for Financial Aid as Soon as Possible: You have a bit more time on this goal, for the most part; the federal deadline for having your Free Application for Federal Student Aid (FAFSA) completed isn’t until midnight, June 30th. That said, there are different deadlines for each state, including some that are quite close (Connecticut’s deadline is February 15th, for example). You want to make sure that you have your forms submitted by that time; unless your parents saved quite a bit for your college admission, you’re probably going to need student loans or other financial aid to make it through eight semesters of study.  While you’re at it, familiarize yourself with the rules related to your student loans, including the conditions when you can take advantage of student loan deferment and the student loan interest deduction.

3. Decide Where You Want to Go to School: This might be more for the juniors or younger high school students than the seniors, per se; by this point in the year, most of you seniors have probably formed some strong opinions about where you want to go, and as mentioned above, have hopefully applied already, probably to multiple schools. Still, it’s worth considering which school you’d most want to attend. It might seem like the most prestigious private school should be at the top of the list, but prestige often comes with a high price tag. It can be much easier on your (or your parents’) wallet if you start at a public university (particularly within your own state) or even a community college for the first few years of your college career, before possibly moving on to a private school. Particularly if you haven’t settled on a major yet, and are just taking general courses, it can save you tens of thousands of dollars to start in a lower priced school. (Just be sure that the school you want to end at will accept transfer credits from the school you start at; the cost advantages are lost if you have to spend several semesters retaking classes you’ve already finished.)

4. Finish Your High School Career Strong: Once the applications are sent out and the wait for replies begins, it’s tempting to stop focusing on your high school studies; after all, you’re basically a college student now, so why bother with high school courses? But this ‘senioritis‘ can have negative effects on your ability to get into a good college; universities consider your senior year course load while evaluating your admissions, and can rescind admission offers if they notice a drop in grades your last year. Make sure that the courses you take remain challenging, and be sure to do well in them; until you’re actually attending college classes, don’t give your future school reason to doubt your commitment to academics. One way to do that is:

5. Consider Taking AP Exams: You might, if you are a diligent student (and your school offers them) already be taking one or more Advanced Placement classes. If so, good; make sure that you study hard, that you register for the tests by the deadline (possibly through your school; check with your AP teachers to find out the details on how they handle things), and that you cover the test fee in time. If you’re not already taking an AP course or two, you should be sure look into AP courses and tests; for a relatively small fee, taking an AP test (and doing well enough, of course) can potentially allow you to skip that course in college, cutting down the amount you need to pay in college to get all the coursework you need finished and the time you need to expel during your college career. It’s definitely an approach worth taking. (Just double-check with your future college to be sure that they will accept AP exams as replacements for coursework; otherwise, the course, and test, will just be a means of preparing for the course in college.)

Alright, that should be enough to keep you well occupied your senior year of high school (and if you are particularly diligent, or your parents particularly enthusiastic about getting you into a good school, possibly your junior year, as well.) Good Luck, and have a great education!

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!