DebtFREE-Revolution

I finally got things squared away with registering for fall classes.  Good thing … the semester officially starts tomorrow!  I start on Monday at the indecent hour of 0800 (8 AM for civilians), but that was the only time biochemistry is offered this fall.

I had my tuition money saved up and tucked away, but it still hurts authorizing a $2021 payment.  Especially after all the headache, pain, and phone calls needed to simply accomplish registration!  Apparently I hit some kind of odd glitch, even though the registrars office refuses to call it that.  I ended up talking to the chemistry department chair to get an override to get me into a class that I was already qualified for.  His called the registration software system “a challenge at times.”  I informed him he was much much more diplomatic than we students are.

I never thought I would miss the days of physically going to campus to register for classes using pieces of paper and standing in line …. but at least then we could talk to real people when problems popped up!

Yeee-OUCH!  I just got back from paying son’s private school tuition, and I honestly cannot remember writing a check that large before in my life.  No joke, I just wrote a check for $5900.  Wow.

I have not only been expecting this, but have planned for it all summer long.  Next week I will probably be authorizing an online payment for my own tuition, so August is the dreaded “tuition month” for us.  I’m expecting my tuition to run $2300-2500, and that will seem easy after this one.

The good news is son’s tuition is for the entire school year, and frees up almost $500 per month since last year I didn’t have enough saved to do the one payment and instead dragged it out over the year.

This year, being debt-free-but-the-mortgage gave us the opportunity to do this all at once.  I thought I would feel good walking in and just writing the check, but now that it’s done all I can think is “Holy cow!  That’s a lot of money!”

Five thousand nine hundred and no/100s dollars.  Wow.  It actually feels weird “moving up” in the world like this.  Maybe it will feel better in a few hours.

Then again, a few years ago writing any four-figure check seemed huge.  Now I can write out $1xxx checks without really blinking an eye (as opposed to nearly having a hairy cat fit in January of 2007 when writing the $1140 check to fix the heat).  Checks for $2xxx (like MY tuition) still make me blink, but don’t quite provoke the “ouch” response like this one did.

Five thousand nine hundred and no/100 dollars.  It’s there.  It will clear.  It will be rebuilt before the first frost.  Wow.  I love not having consumer debt anymore.

No fancy theme for this week’s Carnival of Debt Reduction, as I just spent almost an hour on campus doing the academic advising thing so I can finally register for classes.  Yeah, a little late in the summer, but I had to figure out how to switch my major and my academic advisor and the college’s website does NOT make that an easy task.  It was so much easier to do when you had to go talk to a real person and fill out a paper form! 

Next step: registering for classes on “drop day” then paying the bill right afterwards.  “Drop day” is when the registrar drops everyone who hasn’t already paid their tuition bill from all their classes.  I’ve used “drop day” to get the classes I want at the times I want for five semesters running now, and it’s how I will get into two “full” classes for this fall.  The key is having ALL of the tuition money on hand before drop day, because at midnight each night the registrar drops anyone who isn’t paid in full or has a payment plan in place already.

Speaking of payment plans, let’s get this carnival started!  Here are my picks of the 18 posts that made the cut this week:

• Brainy from Pants in a Can writes about “Red Zone Finances” which is a football analogy for his level of motivation in eliminating his debts.  I like football, I LOVE killing off debt, so this one is a home run (to mix sports metaphors)
• Frederic Premji from I Need Motivation writes “How I Paid $25,000 in Debt Within 18 Months“  Nothing like a kick (donkey) success story to really help folks get fired up!
• Phil For Humanity has an idea that is not only near-and-dear to my heart, but one I wholeheartedly endorse: STOP USING YOUR CREDIT CARDS!  Seriously, give this one a good read.

Those three are my favorites, but the rest are definitely worth reading here:

• Hanna from College Finance 101 writes about Budgeting (part 3)
• RC from Think Your Way to Wealth wrote about Creating an Aggressive Credit Card Debt Elimination Plan
• Broke Grad Student is Paying off student loans by making money online
• Our Four Pence Worth discusses Resisting the urge to splurge
• Heather guest posts at the Happy Rock and lists 5 creative ways to reduce your debt
• The Money Answer Guy talks about why Store credit cards are a ripoff
• Discover Debt Freedom has 5 Simple solutions to save $500
• Silicon Valley Blogger asks “Your free credit score: Is there such a thing?“
• Debt Free warns about Mortgage Consolidation Loans: what to watch out for
• Gather Little By Little warns “Somebody is Watching You” in everything you do … even finances!
• Bible Money Matters goes straight to the horse’s mouth with Dave Ramsey explains why the Debt Snowball works (note: I used this method myself)
• J. Money from Budgets are Sexy recounts the smartest money advice I ever got (love the quote)
• Ryan from Debt Reduction Formula asks “Is bad news better than good news?” when it comes to pf blogging and comments
• Living Almost Large provides some commentary on the new credit card laws and a link for your input to the Fed
• Coupon Artist says “All this debt is complicating my life!”

And there we have yet another quality week for the Carnival of Debt Reduction!  Thanks to all the submitters for all the good reads.  Now it’s time for the reading and commenting to begin! :)  Meanwhile, I’ll be prowling the online class schedule and plotting out which class I want to take at what time for the fall semester.

The tests have been taken, the projects are all turned in, and the only thing left for this spring semester is to wait for the grades to be posted!  Thanks to everyone for their “good luck” wishes, it apparently worked with the organic chemistry final test: the professor posted the grades last night and by some strange miracle I got an 81 on it!  This professor combines the lecture and lab grades, so I still have to wait to get my final grade, but my prospects of passing  have improved greatly.  As for my other class this semester, forensic chemistry, I am hoping for an A but will be pleased with a B.

Now that the semester is over, it means I can actually read books for fun and personal enrichment, instead of frantically trying to absorb information to regurgitate for a test!  I’ll finally get a chance to read the book I won from Millionaire Money Habits called The Rules of Money, which he highly recommends. 

I may also read the promo copy of Does Your Bag Have Holes, which the author sent to me to review, although after listening to the audio CD  included with the book I am not so sure I am this book’s target audience.  This book is aimed at Christians (which I am not) and actually makes Dave Ramsey’s books sounds secular.  I think I’ll fire up the audio again this afternoon and provide a short review soon.

Also I will now have time to tackle that project I mentioned yesterday: compiling a “stagflation survival guide for money.”  I intend to do some personal interviews of those who are a decade older than I am and who lived through the 70s period of stagflation as an adult with or without money!  Any of y’all readers who lived through that time and wish to share experiences and tips, please email me (imdebtfree at debtfree-revolution dot com) and I will include it.

I’ve been wanting to write an ebook over the summer, and honestly was having problems deciding on a topic for it since I write about several different things here on the blog.  I figured I would throw it open to suggestions: what should I write about?

• Getting out of debt?
• Aggressive budgeting how-to?
• Pizza delivery?
• Attending college as a 35 year old mom?  Without student loans?
• My ode to coffee and how this blog wouldn’t exist without it?
• or should I make the stagflation survivial guide that ebook?

Chime in!  I know y’all have opinions and I do enjoy reading them.

It’s finals week at most colleges around the country, and parents of graduating high school seniors are facing a huge question: How to pay for college tuition, fees, and books for next fall?  Well, CNN/Money tried to tackle that question this morning, and boy did they get things wrong!

The article starts off highlighting a couple who have an 18yo and 20yo in college … at Georgetown and Tufts!  It then goes on  to mention financial aid … payment plans with the university … childrens’ college savings plans … student loans … PLUS loans (parents take out) … then HELOCs and raiding retirement savings like IRAs!  The very last paragraph in the article really set me off:

The Mathenys were happy to borrow from their home, but they don’t see anything wrong with kids graduating with some debt too. Says Patrick: “Hopefully the loans will give the kids a lesson they wouldn’t learn in a classroom: financial responsibility.”

No, NO NOOOOO!!!!!  By all the gods known to mankind, why don’t these parents simply sell their children into slavery?!?  It would be quicker, and the end result is certainly the same!  What ever happened to parents caring enough for their children to try to help them achieve a better life than the one they are living??

With this kind of debt-slavery garbage floating around as “good advice” it is no wonder people are wondering if student loans will be the next financial meltdown.  We have been setting up an entire generation for failure with this kind of advice.   Some pundits have gone so far as to nickname Generation Y “Generation Debt.”  In fact, I think we are setting up the class system for the next couple of generations into those with crushing student loan debt and those who have the financial freedom that little to no debt brings.  I’ll give y’all one guess where my son will end up!

So as an alternative to this bad advice, I offer my “graduate debt free” plan (for the record, I have NO STUDENT LOANS AT ALL!)

• Go to a community college for the core curriculum.  This is especially good for students who haven’t decided on a major yet!  Community colleges are significantly less expensive than four year universities, and the credits will transfer just fine.
• Go to college part-time while working a part-time job.  It may take a little longer, but with student loan pay periods getting as long as mortgages, you will gradauate debt free and be able to keep your money much sooner.  As the part-time job, I personally recommend delivering pizza
• Stick to classes within your declared major and/or minor.  I am not opposed to learning for education sake, but with tuition rising as fast as it is you might want to wait until after you land a good job for the “personal enrichment” classes.  I don’t have a choice, as the GI Bill only pays for classes in my major or minor.
• Save up over the summer and during the semesters to pay your tuition bill in full.  Those payments plans my college offers really aren’t very good terms, and they already bleed you dry with strange fees (”debt service fee” was the one that annoyed me this semester).  For my college, the business office charges almost $100 for the privilege of breaking your payments into 50-25-25% so the registrar doesn’t drop you if you can’t pay in full.
• If you do need to take student loans, take only what you absolutely need!  Don’t spend the next fifteen years or more paying on something dumb, like a car that will be long gone by the time it is finally paid for (I’m not kidding, some students use their student loans to “trick out” their cars).  Student loans should be used for tuition and books only.
• For the students who have no idea what they want to be and no way to pay for college, consider military service.  I’ll be the first to admit the military isn’t for everyone, but if you think your child can hack it and has a desire to serve the GI Bill plus the recruitment incentives (Army College Fund in my case) will help out tremendously.  Patrick from CashMoneyLife went the Air Force route and considers it one of his best moves.

These simple steps are not the be-all and end-all of how to graduate from college without student loan debt, but they are certainly a good start and also what I have done (except the loan part).

Your turn, folks: what kind of advice would YOU give for parents wondering how to pay for college without debt?

Last week I posted about kids and credit cards and asked Who is to blame?  This was in response to a comment left on my post about a reader’s 12 year old daughter getting credit card offers where I was taken to task for blaming the banks and credit card companies for my (our) mistakes.  That’s what I love about blogging with open comments: y’all can make me think and rethink things.  (Just remember the comment policy is still in effect.)

The other beautiful part of blogging is other bloggers can join in, and some have:

• CleverDude wrote a massive post on how he thinks it is first the parents’ responsibility to educate their children, then once the child has reached adulthood it then becomes strictly personal responsibility.
• LJ from Mommy Gets Paid thinks the credit card companies know exactly what they are doing when they raise the college kids’ limits to ridiculous levels.  They did it to her, and her parents helped her out.  (Mine didn’t.)
• Ryan from Millionaire Money Habits says college kids are just too impulsive and truly need a plan before they ever step foot on campus.  While I may not completely agree with his plan, it’s still better than no plan at all.
• CindyS from Oh My Aching Debts supports personal finance classes in the schools, since her parents didn’t teach her about money.  Judging from the economic news nowadays, I’d say a lot of adults in America didn’t get financial education from their parents.

Perhaps the best response to the question I posed can’t be linked to.  Lara92 from MyTMMO board says there is enough “blame” to go around and touch all parties involved.

1. It starts at home.  Parents should include things like budgeting, paying bills, and managing reasonable levels of credit on the list of “must teach” to their children.  I don’t think any parents simply hands a teenager the keys to the family car and says, “Go figure it out on your own,” so why do we do this with money?
2. Once a person is an adult, they have the responsibility to keep learning and discovering better ways (or the tried-and-true ways) of how to manage their personal finances.  No one will look after YOU better than YOU.
3. The banks and credit card companies are not blameless here.  They intentionally target college kids, and some have engaged in kiddie branding tactics.  They intentionally write their terms for credit cards in legal double-speak, so badly that Professor Elizabeth Warren of Harvard Law School said (in the excellent Frontline special about credit cards, part 3) a graduate level contract law class of hers could not agree on what a credit card companies “disclosure” actually said.  They often use dirty tricks to hit you with fees and can change the terms at any time.
4. Schools should teach at least a basic personal finance class.  We teach kids everything else in school, why is this neglected?  Perhaps the most comprehensive suggestion I came across recently was proposed by a college student in a guest post at Blueprint for Financial Prosperity.  I’m not sure that plan will fly, but even just a budgeting and how to deal with credit class would go a long way for future generations.

This post probably doesn’t clear much up for anyone LOL  It doesn’t for me.  This is a massive problem, especially here in America right now.  We have at least three generations of adults who seem to have problems managing their personal finances!  (That’s a generalization, I know there are quite a few individuals who can.)

With so many different factors involved in identifying the cause of the problem, how are we going to figure out and agree on a solution?

Sometimes I get comments on posts that make me stop and do some serious thinking.  If I think long and hard enough, I end up writing a whole ‘nother post on the subject.  Once again, I find myself in this situation, with a statement from first-time commenter klippies on my post about credit card offers for minors:

I read a lot of pf blogs and are always amazed that people blame the banks and the credit card companies for everything. (…) Do not always blame someone else for your bad choices. Nobody is forcing a student or anyone else to apply for credit cards or to use them without being able to pay the balance. Use common sense when dealing with money.

This has made me stop and think: Who is to blame when the combination of college kids and credit cards turns out badly?  Or the combination of military kids and loans turns out ugly and in the first sergeant’s office?  Those two groups are highly targeted by credit card and loan companies to the point it is nauseating. 

• Is it the kids’ (young adults, barely over 18 years old) fault for being naive and uneducated in the ways of handling money and credit? 
• Is it the credit card companies’ and loan places’ fault for taking full advantage of this naivete? 
• Is it the kids’ parents’ fault for not teaching what they might or might NOT know about handling money?
• Is it the schools’ fault for not including sound financial principles in the curriculum?
• Is it the government’s fault for not regulating this?
• Is the blame somewhere in the middle of all these?  With everyone having a share in the fault?
• Is it no one’s fault because (excrement) happens?

This is a really touchy subject, because any time fingers are pointed, someone gets defensive as a knee-jerk reaction.  I know I got a bit defensive when I first read klippies’ final sentence:

Maybe common sense kicked in late for you, but at least you fixed your behaviour (the banks did not change theirs).

Yes, common sense waited until I was almost 34 years old to slap me upside the head.  I knew I didn’t like credit cards, and knew I shouldn’t use them … but I also didn’t know how and what to do to rid myself of them.  I didn’t know any other way other than what I saw on the television and in the ads and what my parents and friends did.

I don’t think I have a straight answer to this.  Maybe I need to think on the subject a bit more.  I am certainly interested in hearing YOUR opinion on this subject!  Who is to blame when kids and credit cards (or loans) turns out to be a very bad situation?

Monday, in response to my post on how credit cards were my biggest money mistake when I was a college freshman, reader blackneto sent me this email:

My 12 year old daughter received an offer for a credit card targeted at HS Seniors from 1st Financial Bank. (emphasis mine. -Ana)

I have a feeling she got it because  she’s been in several programs through the local Community College and they probably sold their enrollments to whomever sends these offers out. Or she entered a contest or drawing at one of the events she’s been to and the list was sold from there.

This is a scary situation!  I have very little doubt colleges are now selling their enrollments to credit card companies.  After all, they let them on campus throughout the school year for money, so selling the enrollment information is the natural progression (anyone have a link for this?).

It’s also extremely likely it came from a contest or giveaway.  Credit card companies are more than profitable enough to hold giveaways worth more than a free pizza, t-shirt, or hat (although that is usually all it takes to rope in the college freshmen).  It could very well be that the giveaway was sponsored by a credit card issuer, and the fine print might have said that you agree to receive solitations.  It wasn’t that long ago my son was 12 years old; I know they don’t read the fine print.

In my email response to blackneto, I suggested two things to help safeguard his daughter against identity theft:

• going to optoutprescreen.com and stopping any future credit cards offers.  I have done this myself for hubby and I.
• If available in his state, putting a freeze on his daughter’s credit report until she reaches the age of 18.  There is absolutely no reason for a 12 year old to have any credit activity, so freezing her credit report is a good step to prevent identity theft for minors.

So with the safety issues taken care of, let’s step back for just one second.  Credit card companies have been targetting college students like nothing else for over a decade … but now they are going after high schoolers?  Are they going to start showing up on our kids’ doorsteps the morning they turn 18 next?  Tapping on their windows as the sun rises, with a huge smile saying: “Good morning!  You are now officially an adult so fill out this credit card application!”

My son starts high school in the fall.  I am beginning to worry that all my admonitions against getting into credit card debt may fall on deaf ears.  There is an unbelievable amount of “peer pressure” out there that says you are somehow magically an adult once you get a little piece of plastic with a magnetic strip … and the debt that comes with it.  Most of this pressure comes from the credit card companies’ marketing departments themselves.  I am glad we just don’t watch much television, with its brainwashing barrages in 30 or 60 second doses during every commercial break (which seem much closer together than when I was younger).

Hey, I’m a mom; I’m allowed to worry needlessly.  Blackneto is also a parent and is allowed to worry about this situation.  If you are a parent, YOU should be worried about credit card companies trying to snare our young people into serious debt!  The idea that college campuses are willing (and bought) accomplices should be a huge warning flag: WE as parents need to counter-brainwash our kids to “JUST SAY NO!” to credit cards.

Colleges across the nation don’t look out for our kids.  They have already sold out, and the credit card companies can easily afford the proverbial “thirty pieces of silver” in each and every college town.  Now it sounds like they are targetting our high schoolers.

Anyone else’s minor children receiving credit card offers in the mail?