Posted in Building Wealth, College & Student Loans, Debt Free, Financial Freedom, Winning with Your Money, You and Your Money

Every Mother’s Dream

Or this mother at least!

My daughter is currently attending the University of New Haven.  She graduated high school in May of 2016 and began her college journey that September.  I try not to over talk about her or her decisions; however, when it comes to college, I believe we all can learn from her journey.  So if you will indulge me, I would like to share a few things she has done that I believe everyone should do when it comes to life after high school.

1.  Research your passion – We all dream of something as a little person – we want to be a teacher, firefighter, garbage man – so many options for a young mind.  However, when we turn 16, it starts to get real.  We reach that part of our lives where we not only need to dream, but we need to take action.  Let me be clear about something – college isn’t for everyone.  If you choose to not go to college, you are no less important than anyone else.  The important thing is to find your passion – that thing that you will enjoy doing day in and day out.  And understand – this may change along the way.  You are only 16 and have many years ahead of you, but you have to start somewhere.

My daughter’s high school required that every student do one day of job shadowing in order to graduate.  However, my daughter had a few careers she was considering and so she did three job shadowing days.  In doing so, she eliminated two career choices right away and ascertained that she wanted to go into the criminal justice field.  You may find, by the way, that your passion doesn’t require a college education.  Don’t spend the money on college if it is not needed.  Use college as a place to get the required education, if needed, for your field.  Many careers require only a high school diploma or trade school experience.  Know what you need and go about getting that – college or no college.

2.  The best for the least – In today’s job market, where you get your education isn’t as important as the experience you receive in the process.  There are a few schools that are still held in high esteem, but most employers are looking for what you know, not where you learned it.  This is why in most cases, the least expensive way to pay for college is by attending a community college for 2 years and then transferring to a four-year college if needed.  Just like when you are shopping, you want to get the best education possible for the least amount of money.  This requires a plan of action.

After researching many schools, my daughter really wanted to attend the University of New Haven.  They are one of the top criminal justice schools and have organizations such as banks, the FBI, and more recruiting directly from them.  However, UNH is a private institution.  This has its pros and cons – it cost a lot, but has great potential for large school scholarships.  My daughter had always tried to maintain a high GPA in high school because she knew it could benefit her financially when college time rolled around.  And it did just that.  She was able to get a scholarship directly with the school for half of her tuition.  She then applied for other scholarships and received them, ended up in the honors program after her first year, which afforded her more scholarships and ended up paying less to go to private college than she would have going to an in state university.  She also took AP exams which gave her credit for classes she needed, took summer classes at the community college online, and is now graduating a year early, saving her over $26,000.

Again, I don’t say this to brag.  I share this because she is an awesome example of how to get the best for the least.  She had a dream and she went after it with everything she had.  She even surprised me and I raised her.  She did things I never would have done when I was in college.  She is proof that it is not about just signing up for a college, getting student loans and hoping it works out.

3.  The words we all want to hear – We helped her pay for most of her college, but in the end she took out small loans for her part that she already has a plan to be paid back within a year of graduation.  That was for the first two years – however, this year, she moved off campus which saved a bunch of money.  In June, we received the tuition bill for the fall semester.  We paid our part as always.  And then she told me she wanted to cash flow her senior year.  2 weeks ago she paid $4,000 in cash and is working to pay cash for her last semester.  No more student loans!

Of course, that is music to my ears given my profession – teaching people to pay cash for everything.  But what made me even more proud as a mom was what she said – “Mom, it was hard to let go of the cash, but it felt so good.”  She was able to feel the pain of having a loan, even though it is small, and the freedom of paying cash.  Guess what – she won’t borrow money anymore.

As a parent, we have to find a balance between doing everything for our kids and holding their hand as they learn this thing called adulthood.  It was hard for me when she took out the loans, but I knew she would learn what I had learned.  Luckily, she had 3 less zeros on her’s.  And before one dollar is due, she has a plan to pay them off as quickly as possible – she is not just wishing or hoping, she is putting action behind it.

Thank you for allowing me to share my daughter’s journey with you.  I am very proud of her as I know you are of yours.  Teach them, let them learn, and always keep the conversation going.

Check out “The Adulting Survival Kit: The Ultimate Personal Finance Toolkit” in Debbi’s store.  It is what every young adult needs to start this journey called life.  Shop Now

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Posted in College & Student Loans, You and Your Money

Back to School

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Well, here we are again.  One week from today, my daughter will be heading back to college for her junior year.  Where does the time go?  But I digress.

This time of year can be a major budget breaker if we are not careful.  Last year, I spent a lot of money getting her everything she needed for her dorm thinking this was a one time thing.  But every year they change dorms so of course there is always that “need” for new stuff.  And if your children are in K-12, don’t think you are off the hook.  Every year the schools provide a new supply list based on their grade.

The one big lesson that I have learned, however, is that just because the school or even your student says they “need” it doesn’t mean you have to buy it.  Below are a few tips for saving money when the “Back to School” season starts:

  • Take an inventory – Whether it is clothes, school supplies or dorm items, make sure you take an inventory of what you already have.  Just because it is a new school year doesn’t mean everything has to be new.  Did you know that it is possible to start the new school year without one single new outfit?  Or one new notebook?  I’m not saying don’t buy anything – I’m just saying be realistic about what they need and what they want.  Don’t break the budget buying items that they already have and are in perfectly good shape.
  • Stick to the budget – I love a good sale!  Who doesn’t?  And the sales at this time of year can be amazing.  But it is only good if you need the item that is on sale and if you have the money budgeted to buy the item.  Be careful not to get swept up in all the sweet deals.
  • DIY – This is mostly for the college readers, but can apply to anyone.  Instead of spending hundreds of dollars decorating your dorm room, use stuff that you already have from home to make it feel more comfortable.  Also, make stuff to decorate with.  Get a cool frame from a yard sale, thrift store or even the dollar store and put your favorite picture in it.  Decorating doesn’t have to cost a lot of money and you will feel at home if you have touches of it with you.

It is so easy to get swept up in the chaos that is back to school shopping.  And it is easy to spend way to much if you don’t go in with a plan.  Using the steps above, you will be well on your way to making this the best year ever without breaking the bank.

I hope everyone has an awesome year – whether you are starting school for the first time, moving on to the next grade or heading to or back to college.  These years are precious and need to be treasured, not for what you bought but for the experiences you will have.  Sending you prayers, love and encouragement!  Go kick some butt!  ~Debbi

Posted in Car Buying, College & Student Loans, Debt Free, Financial Freedom, You and Your Money

To Buy or To Lease – That is the Question

Car

 

This weekend I was having an intense conversation with my 19 year old daughter about all of the options for buying a car.  In her mind the only option is paying cash for a used car and at her age that is the best option.  No one in college or even a young adult starting a family should have a new car with an average car payment of $350.  One of the many things that I have realized over my 15 year career is that there are 2 important steps in making all financial decisions:  always do the math and do what will work for you personally and not anyone else.

Having said that keep in mind that debt doesn’t work for anyone.  Never buy anything that you do not have the money for.  This is why the only option, in my book, for a millennial is paying cash for a used car.  But as we get older, many of us build up our savings accounts and we end up having the money to comfortably drive a new car.  So how do we decide what to do between the two options that are available for getting a new car.  The Bible is an awesome book of instructions that God has given us, but no where in the Bible does it tell us to buy a car over leasing or vice versa.  However, it does tell us to be good stewards and great managers of what God has given us which is where the math comes in.

The math when it comes to buying vs. leasing has to be looked at long term.  For example, if you are planning on owning a car for 10 years, you need to total in the amount you pay for the car in addition to repair bills that will be paid over the course of that time.  About 3 years ago, my husband and I were in need of a different vehicle.  We had the financial ability to get a new car and so we began the numbers game.  The van we had that needed to be replaced had 420,000 miles on it and we had owned it for 9 years.  We paid $20,000 for it and had put in at least $5-6K in repairs including a new engine.  That means that over the time of owning the car, it had cost us $240 a month to have that vehicle.  So we decided to look at both of our options and decide if we wanted to buy or lease our new vehicle.

I want to be up front before I go any further.  Leasing is not for everyone and you should never lease just for the low payments.  It can be very attractive especially to people who live in a monthly payment, paycheck to paycheck world.  And just like deciding whether to rent or to buy a home, you need to do what is going to work for you in a positive way.  Leasing is not what it was 20 years ago and there are advantages to leasing, but you must do your research and be honest with yourself about your needs.

Here are a few things to consider when making the decision between buying and leasing:

  • When you buy a car, you own it but cars are not investments and they are only an asset to the extent of what they are worth minus what you owe.  Don’t pay more for a car just because you will “own” it.  Research the car you are looking at and know how well they hold their value.  For example, a Honda will be worth more 10 years from now than a Kia will.
  • When you lease a car, you have no maintenance and this can be a big deal to many people especially as we get older.  An average lease is for 36 months and that is the minimum warranty on most vehicles.  And tires and brakes usually last at least 40,000 miles so you would only be responsible for oil changes which many dealerships will throw in.
  • As you probably know, new cars lose value quickly in the first year or two.  Most leases come with GAP insurance included which will cover the difference should your car become totaled from an accident.  This is an additional purchase when buying (if you are financing) and should be included in the math.
  • When you buy a car, you can drive it as many miles as you want.  However, with a lease you are limited in how many miles you can drive per year (average is 12,000/year or 36,000 total).  When your lease ends, if you don’t purchase the vehicle you will be responsible for paying for the miles over at the rate of the lease agreement (usually .20/mile)

I am not one of those money people who says “never buy a new car” or “never lease a car”.  I have done the research and there are advantages to both.  You can have anything but not everything.  This means that in life we have to choose what is important to us and use our financial resources to do those things.  God loves giving us the desires of our hearts, but He will never help us get something that is going to hurt us.  You work hard for your money and God wants you to enjoy life.  A godly life has great balance.  That may mean that if you have a new car you can’t travel as much or have as big of a house as some.  It may mean that you don’t buy “stuff” everyday.  But if having a nice car is important to you, you will be willing to sacrifice in other areas in order to have what adds value to your life.

Let me close with this – new cars are not evil.  They are awesome and frankly can give you peace of mind when traveling the highways and byways.  But they can also cripple you and take you into bankruptcy if you buy them before you have the ability to pay for them.  Debt is not ok – God made that one pretty clear.  This is true for a used car or a new car.  Anytime you are looking at getting a new car, weigh all of your options, know your true financial situation and always do the math.  Do what is going to move you forward, not backwards.

Have a blessed week!  Lots of love!

~Debbi

http://www.debbiking.com