Payday Loans

April 2007 Monthly Archive


Is it worth it to go into debt for an education?

In my opinion? Totally.

Of course, that’s easy for me to say. So far, I do not have any student loans. My first year at the state university was provided for by federal financial aid and state grants, the second year, out of my own pocket. The times I’ve been at the local community college was out of my own pocket, as the cost was a very manageable $26 per unit (increased a bit but still dirt cheap compare to what some of my friends pay).

When I was riding on the Amtrak last month, I met a nice couple in their 60-70s; I invited myself to dinner with them (heh) and had a nice chat in their spacious cabin after dinner. As we cruise pass the Salton Sea, we talked at length about finances and some of the financial challenges young people face these days. One of the subject? The rising cost of higher education.

“The cost of college is a bit ridiculous these days,” said the friendly train mate, “when my wife and I went to school — and mind you, this was way before you were even born — we both finished out paying less than a few thousand!”

My train mate was entirely correct. The cost of higher education has more than almost tripled since the mid 1980s — from about $3,800 in 1986 for public institutions to $9,800 in 2005. Private institution? $9,600 in 1986 to about $26,000 in 2005. The inflation rate of tuition is at about twice of general inflation. According to FinAid.org, this means that a baby born today will pay more than three times the current tuition rate as they enroll in college.

These days, college students are graduating with a hefty student loan, and at times, accompanied by a hefty credit card debt. Saving for your child’s education, and managing your budget while in college has never been more important.

At these mounting cost and the prospect of even more expenses for the future generation, I still believe that it is entirely appropriate to go into debt for your education. The extremely important and crucial part? Facing the cost of higher education realistically — that is, understand fully how much you’re taking on financially (in terms of loans), and how much you can afford (in terms of paying it back via future job income etc.).

Most of my close friends are graduating with mind boggling amounts in student loan. My best friend of will be finishing her B.S. in Nursing at the cool tune of about $58,000 in student loans (and she was only at this school for 2.5 years). My other good friend will be finishing dentistry school with a student loan of about $160,000. My cousin just finished pharmacy school with a student loan of about $90,000.

What is the obvious thing in common among these people, besides the fact that they’re all more successful than me? They have job outlooks that will pay for their education. Their education debt, although expensive, is practical when you consider the income level they’ll generate (and as I type this, they have all become even better friends in my mind. teehee).

How will the scenarios play out if these friends of mine pursue a career in a field that may not pay as well? They will most likely be in financial hardship as they finish college or graduate school. I point these out not because I like to short change anyone’s academic pursuit. You don’t need to justify the cost of higher education with a high paying job; however, you do need to go into debt with your eyes wide open.

College is not cheap. The financial cost and debt (if any) that you’ll incur is no joke. It is still entirely affordable if you plan for it, but if you’re not careful with your choices, you may pay for it financially. Too many people choose certain institutions without considering the financial cost and a means to repay the cost. If you pursuit higher education and it’ll put you into debt, you will need to have a plan in getting out of that debt. This also applies towards those who are furthering their education to earn a better income — consider this, will getting that graduate degree really increase your earning potential?

Again, this isn’t about the decision you make concerning your educational pursuit. It’s okay if you want to study sociology at an expensive private university — you can never place a concrete return on investment towards the cost of higher education — just be fully aware of the potential income level you may earn, and the means & steps you can take to pay back your debt. If you head into debt without a clear idea of its consequences and tackle on more than you can handle, you may be jeporadizing your financial future.

Many of us have a large student loan hovering over our head. Some of us may still be paying them off, and these debt are most likely a constant source of stress. But let me ask you this question, if you have a large student loan, do you regert purusing higher education? You may regret incuring more debt than you can handle, but I believe most people will value their education and the experiences they have received as they pursue their degrees.

Higher education is entirely worthwhile. In a perfect world, everyone would be able to pursue the study of their choice without the worries of the financial cost. The reality though is that higher education is expensive and it will become even more expensive. The minute you realize the tremendous cost involved, the better you will be able to prepare and plan for the cost.

Related Resources:



Here’s an enjoyable read from Money Musings, “Expensive Products That Were Crap.”

My favorite?

3. Anything I ever bought with the word SONY on it.



I mentioned Crazy Aunt Purl on my site before; in fact, just about a year ago under the series Monetizing the Internet (yes, I’m aware that the series contains only one post).

Since 2005, her blog’s feed has been in my reader and I have continued to occasionally read her various whimsical post — I have at times even contemplated stalking asking her to have an In-n-Out burger with me!

So when I read on my feedreader that she has a book out, I was not at all surprised. On the contrary, I though to myself: finally I can read about an online stranger’s cats, knitting, and self-rebuttal at alcoholism in the comfort of my own bathroom!

Kudos to Laurie’s “Crazy Aunt Purls Drunk, Divorced, and Covered in Cat Hair.” It can be found for $10.85 on Amazon, and it is currently ranked at an impressive #70 in the top seller list. Seeing as how she has more than enough buyers, I shall wait for my free copy in the mail from my bestest-friend-fellow-blogger — or till the local library has them in stock.

Cap: Hi! I would like to put a hold on “Crazy Aunt Purls Drunk, Divorced, and Covered in Cat Hair: The True Life Misadventures of a 30-Something Who Learned to Knit After Her Split”

Librarian: I’m sorry we don’t seem to have that book on order, who is the author?

Cap: Uh, Crazy Aunt Purl? This lady on the interweb?



from Wikipedia

Yes.

If you live in the United States and you’re female, according to the 2005 Census statistics (graphed above), you’re most likely getting paid less.

What are the factors? Discrimination or choices in life?

The answer is apparently because of discrimination, according to a recent CNN article which reported on the research results from the American Association of University Women Educational Foundation.

The foundation is aimed at promoting education and equity for women and girls, so the report may be biased. Still, results from research like these are always an eye opener.

One year out of college, women working full time earn 80 percent of what men earn, according to the study… Ten years later, women earn 69 percent as much as men earn.

Specifically, the percentages that are attributed to gender is 5 percent one year after graduation and 12 percent 10 years after graduation (thanks to samerwriter for pointing this out).

The widening gap accounts for factors in number of hours worked and changes in life situation (such as parenthood). In short, as the research reported, if a woman and man make the same choice, they will not receive the same pay.

As most of you know, I am of the male gender — pending any future life choices (just kidding I’ll stay male, thank you very much). In my life situation, I don’t see the pay gap reported from researches like above. Of course, I’m certainly not ignorant enough to discount reports such as these just because they don’t apply to my surroundings. (Especially since most of the females in my life are starting work in high-demand fields such as pharmacy and nursing).

This blog has a good number of female readers, and although its entirely unscientific to simply ask, I’ll ask away anyway: Do you get pay less because you’re female and do you believe its discrimination or choices in life?

Related Links:



For those that don’t know (and that’s probably most of you), the Mint’s blog is giving away free personal finance books — if your financial fubar stories gets selected for our Tuesday Train Wreck series (best comment also gets a free book too).

A free book for sharing my most embarrassing financial mishap to the rest of the world?

I am so in. (Stories are posted anonymously).

So which personal finance book will you get?

You’ll get to choose from a list, but the problem is I’m compiling that list and so far I only got two off the top of my head:

  1. The Millionaire Next Door
  2. The Richest Man in Babylon
  3. Your Money or Your Life (thanks Dave)
  4. All Your Worth (thanks Bmore)
  5. duh…

If you have any suggestions for a good personal finance book, throw them my way please.



Everytime I post an update on the Carnival of Personal Finance, I am amazed at the progress it has made through the years. To think that when I first read about it from Flexo’s email, I thought it wouldn’t last over a month!

This week’s Carnival of Personal Finance is hosted at All Financial Matters.

Today’s pick is from the creator of the carnival: “Should High Schools Require Money Management Classes?” from Consumerism Commentary. This is a great topic that I’ve been meaning to talk about too. Check it out and join in on the discussion.



Ever have those stupid moments where you consciously make a decision to do a certain thing so you can avoid a certain outcome — only to have that outcome happen anyway, and usually in an increased amount?

I decided to fight that speeding ticket back in October, and so far it’s costing more money and time compare to if I had just paid the ticket and went with traffic school. Oy vey.



We care so much about your privacy, we'll tell you about it in fine prints!

You know how it goes.

You rush home at 12:45 PM from your lunch break; not because you’re a savvy frugal person that bags their own lunch, but more so because you ate too many donuts this morning and you really have to use the restroom (for whatever reason, a tidy and clean washroom is always the last priority at your office building).

You pull into the garage, hop out of your car, unzip your pants, flung the keys onto the sofa and dash toward the downstairs restroom (because let’s face it, you won’t make it upstairs safely) — all of a sudden, a call on your home phone.

“Oh crap, is work calling?” you thought to yourself, “is lunch already over?”

A split second decision, you grab the phone and continue on towards the restroom.

“Hi, this is James from Region X Bank, Baker, Missouri Branch,” says the scripted voice, “Please don’t hang up on me as this is my—”

*click*

No time to be angry. This is going to be one of those replay finish. You kick the door down, turned around and sat right down — only to fall right into the toilet and touch the toilet water (yummy). Your insensitive significant other has forgot to put the toilet seat down.

Oh, the rage.

And who’s fault is this? Of course, the ill-timed telemarketer from Region X Bank (and maybe your upcoming ex-husband). Had they not called you, you would not have been distracted and you might have noticed that the toilet seat was left up.

So how does a savvy consumer keep what’s left of their consumer privacy? How do you reduce unsolicited telemarketing calls, junk mails, and general annoyance from people with products you just don’t care about?

Head Straight to the Offending Source

Most reputable (or nation-wide) financial institutions will have a clear privacy policy. When you apply for their service (such as a credit card or bank account), you will always receive the privacy policy set forth by the specific company. When these privacy policy have been changed or updated, by law, you will also receive an updated version of the same copy.

Most people don’t read these little privacy fold outs (as pictured above). What most people don’t realize is, many of these leaflets contain information on how to avoid direct marketing from the specific company and how the company shares your information.

You will generally have a few options:

  1. Yes/No: Sharing of your information and direct marketing within said company
  2. Yes/No: Sharing of your information and indirect marketing with other companies
  3. Remove name from telemarketing and/or mailing list.

Here are some privacy policy information from national banks, with steps you can take to choose your preferences:

Bank of America:

  • Privacy Policy Site – You can read the policy here and set your preferences online.
  • Call 1-888-341-5000 (recommend using the site instead)
  • Some marketing programs are already in progress, so even if you opt-out, it may take up to 12 weeks for the opt-out to be fully effective. When you opt-out of direct marketing programs via postal mail or telephone, your opt-out will last for five years.

Citibank:

  • Privacy Policy Site – Only option is a mail in form, available in PDF.
  • You have four choices. Limit personal information to non-affiliates. Limit personal information to affiliates. Remove name from mailing lists. Remove name from telemarketing lists.

Chase:

  • Privacy Policy Site – You can read the policy here and set your preferences online.
  • Call 1-888-868-8618, or for the hearing impaired assistance, dial 7-1-1, then 1-888-868-8618 and wait for operator assistance.
  • Old fashion snail mail: P.O. Box 260185, Baton Rouge, LA 70826-0185
  • Chase has two simple choice: Yes/No to sharing information with others; Yes/No to sharing information within family of companies.

American Express:

  • Privacy Policy Site – One of the better ones. You can also set your preferences online.
  • Call 1-800-297-8378 or mail to: P.O. Box 299836 Ft. Lauderdale, FL 33329-9836
  • Four choices, much like others. Yes/No to other companies or affiliates. Yes/No to mail offers or phone offers.

Opt-Out of Everything Because You’re Sick of It

Specific companies not spicy enough for you? Opt-out (or for the different ones, opt-in) to all credit card and insurance offers! You can visit the official consumer credit reporting industry website to either opt-in or opt-out. Your choices are fairly simple, opt-in to all the goodies (and have enough paper to shred for a lifetime), opt-out for five years, or for the more extreme — opt-out permanently! When you opt-out permanently, you’re required to print and mail an opt-out form.

Utilize Some National Resources, kthx

Visit the National Do Not Call Registry and sign up the telephone numbers to avoid telemarketers. Most telemarketers should not call the submitted number once it has been on the registry for 31 days, but you may still receive some calls — and calls from businesses where you are already a customer.

  • National Do Not Call Registry – Fear the enforcement of the FCC & FTC (heh).
  • Call 1-888-382-1222 to register via phone.
  • You can also file a complain if a telemarketer cease to make calls even after you’ve been registered for over 31 days.
  • The more concise, specific, and complete a complaint, the more chance you’ll have for it to be acted on. Avoid long, pointless story such as the introduction to this post.

California and Vermont Residents, Rejoice!

Because our state legislatures (or consumer advocacy lobby groups) actually cares about us, California and Vermont residents have more privacy protection within the state laws compare to other states (although Vermont residents have a bit more protection).

If you’re a resident at either California or Vermont, you will usually have an automatic opt-out choice to sharing of your information with non-affiliated companies (basically, other companies you might not be doing business with). For Vermont residents, you will also be automatically opt-out of the sharing of information within the specific company’s affiliates.

You should note however that both of these automatic privacy choices don’t include the choice of removal from telemarketing list or mailing list, so if you want to opt-out of those too, you should still contact the specific company and specify those choices.

Related Links & Resources:

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