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?

I’ve been seriously thinking about changing my major lately.  Yes, part of the reason is the horrible things physics (a C last fall) and organic chemistry (also a C last fall, looks like I am headed for another C this spring) have done to my GPA.  Two years ago I was on the deans’ list for my GPA of 3.75.  It fell to 3.2 with the fall semester.  Ouch!

Physics I just didn’t understand.  I spent the last half of that class wondering Why is this required for me? and Who thinks of these things anyway??  Organic chemistry is very interesting, and I do understand it, but it is a true case of information overload.  There is just so much new stuff in each chapter, and the professor makes some really tough tests.  Considering almost a third of the class either dropped or flunked the fall semester, I am really not doing too badly.  It’s just hard to see my GPA dwindle like this.

So I am thinking of switching from pre-pharmacy to medical technology (med tech).  This would cut out the drama of how to pay for pharmacy school, which is $27k for tuition alone in the fall of this next school year.  Add in books and fees and parking and gas for the hour commute each way, and it could get really ugly really fast, and due to first year attrition rates the scholarships don’t start until the second of four years.

My brain is a little frazzled by this point in the school year, so if my numbers look off feel free to correct me.  I’m trying to do a cost-analysis between the two programs here.

Pharmacy school: approximately $30,000 per year, up to $35,000 at the end of the four years.  Let’s call it $125,000 in cost with hubby’s income only able to cover about $5,000 to $8,000 per year.  My G.I. Bill will be running out before I hit pharmacy school, so I would be looking at $80,000 to $105,000 in student loans.  Average starting salary after you pass the board (and you must pass the board to get a job): approximately $100,000 per year in the Nashville metro area, a little lower here.  Pharmacists are paid by the hour, and my mom says right now starting wage is about $42 per hour.  I wouldn’t be in the workforce for six more years, give or take a semester, so that pushes my entry into the working world to 2013 or 2014.

Med tech: I could get this one done in about three or four semesters (two years max if I don’t do summer classes) at the most, and it would be local.  I could cash flow college the whole time, and might have only one semester at the most without my GI Bill money.  I could be working in 2010, and average starting salary of a med tech is $32,000 to $40,000.

Finally, there is the non-money issues of hubby’s deployments and son’s school and activities.  There is no doubt hubby will get deployed at some point soon.  Indeed, we have been rather lucky so far in that respect.  Son starts high school in the fall, but has two years before he can get a restricted drivers license.

Short-term thinking says it would be so much better to switch my major and get my happy hide into the workforce where I can sock 15% of that salary into a retirement account and get it busy compounding and get my mortgage paid off quickly.  But there is also the little vain thought in the back of my head that says a six figure income would be nice, and I might be able to make up for all the time and expense of the extra schooling.

Numbers nerds, here’s your chance to shine.  How far out is the break-even point between these two options?  To my caffiene-deprived mind it looks like at least 8 years, even if I put the pedal to the metal on those students loans as soon as I get out of pharmacy school.  At age 35 I am not getting any younger, and I really need to get serious about some form of retirement savings.

Yeah, I stopped and looked at the calendar today.  Which means I realized I will be hit for fall tuition probably next month.  The college is quick to grab our money and slow to process money in our favor, like Pell grants.  They usually credit the Pell grant money two days before “drop day” which is when they drop classes for students who haven’t paid yet.  I guess it keeps us on our toes or something.

I haven’t decided yet if I want to take another summer course or not.  It’s tempting as I make my slow progress towards a chemistry degree.  I’m also toying with the idea of switching majors.  I am just not seeing much opportunity to pay for pharmacy school since no one offers scholarships for the first year (my mom says first year attrition is pretty high).  The idea of going back into debt, even for a high-paying pharmacy degree, turns my stomach.

I’m starting to seriously look at at a med tech degree.  That’s lab work basically LOL and lab is fun … when I don’t blow things up, that is.  I really thought microbiology lab was neat last year, even though my ADD grad student teacher made it hard to get a passing grade.  And the other big plus is I would be able to get into the workforce quicker with a decent wage of approximately $30-40k a year.  It would double our household income.

But I digress (too much coffee and hubby made another pot of it).  I just got done moving $1000 over to my savings account in my credit union to sandbag for whatever nasty tuition hike surprises the college might have in store for the fall semester.  I would have much preferred to sock that money into the money market account where we are building up the fully funded emergency fund, but the college makes it inconvenient to pay by paper check. 

The college wants everyone to pay by “credit card.”  My debit/check card works just as good, but still I just don’t understand the rationale behind this since Visa and Master Card charge some kind of merchant fee for processing.  What ever happened to trying to save students a little money?  Even if it is just to get that money back in tuition or the bookstore?

Oh, speaking of Pell grants … I still have to wade through that nightmare known as the FAFSA form.  As if taxes aren’t painful enough!  Oh well, I do like getting the Pell grant.  And even with the accompanying headache it is a good return on my time.

I had chemistry lab today, and managed to have my experiment (which was distilling quite nicely so far) suddenly go into a mild explosion which left me cleaning stinky dark green slime off the sides of the fume hood.  Sitting here at home still trying to get the stench out of my memory, I couldn’t help but think how much my finances used to be like my ill-fated chemistry experiment.

I used to cruise through life thinking everything would be just fine, happily ignoring any and all warning signs if they were present, until BOOM!  Some financial situation would blow up in my face…and it usually stank just as bad as my chemistry slime.  (Did I mention it was really rank under the fume hood and my arms aren’t long enough to clean it from outside the hood?)

Tuition?  Car repairs?  The water heater breaking?  The roof leaking?  I didn’t plan for those things before!  What was an emergency fund?  I had never heard of it before a little over a year ago, much less the phrase “sinking fund” which is used for planned and expected expenses.  Retirement?  I didn’t think I would live that long!

One would have thought after cleaning up two stinking divorces along with the things mentioned above…maybe I should have gotten a clue.  But just like I had no idea my distillation was about to “bump” as the professor called it, previously I had no idea things would go bad and cost me thousands over the years.  I lived crisis-by-crisis and enjoyed the times in between the crises without any forethought for the next situation.

Oh, people DID try to warn me.  The professor today warned us about “bumping” and listed the warning signs.  But sometimes things will blow up without any warning.  My experiment didn’t change colors, didn’t give a small warning “bump,” the distillation drip didn’t change speed…it was going along beautifully then BOOM! I had that stinky smelly dark green slime everywhere, including in my product…so I had to do it over.  Just like I have been “doing over” my finances for a little over a year now. 

The second time I distilled my experiment, it went perfectly…except I had lost quite a bit of my product down the drain and on the walls.  This time as I redo my finances, it is going great…except I have lost 17 years of saving for retirement.  I can’t get either back, but I can write up the product loss in my lab notebook…and I write about my financial loss here.

And for the handful of fellow chemistry geeks reading this: it’s the conversion of cyclohexanol to cyclohexene in organic chemistry using concentrated sulfuric acid and 85% phosphoric acid.  Good thing for fume hoods and goggles!  Yes I had plenty of boiling stones, and had already turned down the rheostat.  It still bumped big time, about 3 minutes before the gal two hoods down had the same problem.