Money Monday: Five Ways To Keep College From Becoming A Wealth Trap

BY: - 16 Sep '13 | Money

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Thousands of students are headed back to college. But for many, college will become nothing more than a huge wealth trap. The statistics don’t lie. According to the Associated Press, more than half of America’s recent college graduates are either unemployed or working in a job that doesn’t require a bachelor’s degree.

At the same time, Class of 2013 grads averaged $35,200 in total debt, while the aggregate U.S. student loan debt has surpassed the $1 trillion mark. So how does a student make college pay off? Here are five tips to turn four years of work into a solid investment.

Choose the right major.

Spending $35,000 a year on tuition to earn a degree that will earn you only $18,000 a year just doesn’t make sense. But college students do it all the time. Unfortunately, a degree in creative writing just doesn’t pay the bills. According to Salary.com, degrees with the worst return on college investment include sociology, fine arts, education, religious studies, hospitality, nutrition, psychology, and communications. Conversely, degrees in engineering, computer science, and medicine can make college pay off handsomely.

Fine arts are fine, but take the time to get more out of college.

OK, not everyone wants to become a doctor, engineer, or tech geek. And careers like social work, although low paying, can become emotionally fulfilling while giving back to society at the same time. So what do you do if you love teaching, are a fan of art history, or love psychology?

Learn a marketable skill while pursuing your fine arts degree. Such skills can become a great source of second income, or provide temporary employment while pursuing your dream career. And college is the perfect environment to learn these highly sought after skills. Become proficient in financial planning, creating mobile aps, programming HTML5, or working with adobe photoshop or video editing software.

The old adage goes, “it’s not how much you earn, its how much you keep.” College is a great place to learn about personal finance and investing which can return huge rewards after graduation. Take a personal finance class or join an investment club. Learning how to manage and grow your money will help you do more with less.

Finally, universities have increasingly added entrepreneur classes to their course selections. Teachers, classmates, and entrepreneur student groups can provide you with valuable lessons in the art of entrepreneurship. So you want to be a teacher, who says you can’t be a great teacher, while starting you own tutoring firm on the side?

Get to work, be out in four.

This one is pretty self-explanatory. The longer you’re in school the more debt you’re going to pile up. Plain and simple. Yet, according to the Department of Education, fewer than 40% of students who enter college finish within four years. Get in, get out and you’ll save a nice chunk of change.

Start building your network early.

Networking is the name of the game. More often than not, landing that plum job can come down to not just what you know, but who you know. Realize the importance of building your network from day one. Involvement in non-social student organizations and in department activities are frequently missed opportunities to build long-lasting connections. Remember, network today because landing a job could depend on it tomorrow.

Snag that internship.

According to a survey by the Chronicle of Higher Education, internships are the most important thing that employers look for when evaluating a recent college graduate. Frequently, this “on the job” experience matters more than a student’s major or grade-point average. In fact, a solid internship can often turn into a firm job offer after graduation.

So how does one obtain one of these high power internships that paves the way to a lucrative or fulfilling career? Lauren Berger, author of All Work, No Pay, suggests that students start applying early and that they take full advantage of their school’s career center.

In addition, landing a great internship involves the same techniques as landing a great job. The more practice you have at applying for internships, the better prepared you’ll be when it comes to applying for jobs after graduation.

BMWK, what advice do you have for making sure that college becomes a wealth creator instead of a wealth destroyer?

About the author

Alonzo Peters wrote 298 articles on this blog.

Alonzo Peters is founder of MochaMoney.com, a personal finance website dedicated to helping Black America achieve financial independence.

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3 Keys to Ensuring Financial Success as a Couple

BY: - 17 Sep '13 | Marriage

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My household was not exempt from experiencing the heartache the Great Recession brought millions of American families. When my husband was laid off from his job in 2009, we had no idea what was in store for us over what has turned into a four year journey.

As we have embraced our life as a one-income family, I have found that teamwork, communication, and honesty are the three themes that best helped us avoid some of the pitfalls many couples encounter when it comes to money management.

Here are some real life examples, based upon my experience on how to talk to your spouse about money and thrive financially as a couple.

1. Teamwork – “My-Money, Your-Money” Mentality Has to Go

Teamwork. You have to adopt a team mentality in all facets of marriage, and even more so in your finances. No team can win a game if only one player is doing all of the work. After the layoff, I never adopted a “my-money, your-money” mentality because I was the only one working. My husband is my life partner, and his role in my life exceeds the limits of a paycheck.

We operate in a spirit of togetherness by sitting down and going over our finances together each month. It only takes a few minutes for us to discuss what bills have been paid, what others are due soon, and what other expenses might be coming up. It keeps up both accountable and in the loop about what’s happening with our money.

2. Communication – Talk about Everything

Communication. You have to be able to talk to your spouse about everything surrounding your finances. Is there a big purchase you need to make, like a new appliance or home repair? Talk about it together before a decision is made.

For example, I take a trip to Dallas every year to visit my sister. Before I would even think of purchasing my ticket (even though I travel at the same time annually), I talk to my husband about what the numbers are looking like, so I make sure the trip is within our reach. If it isn’t, we take steps to plan for it – even if it takes a little longer, so that when I travel, I can do so in confidence that our finances aren’t greatly affected.

3. Honesty – Truly is the Best Policy

Honesty.  No good can come from lying to your spouse about money or hiding things from them. Honesty truly is the best policy. I earn extra cash each month as a freelance writer and most of my payments go to PayPal. It could be very easy for me to keep that account a secret from him, but that simply is not something I desire to do. Building trust in your marriage encourages a sense of security. When we feel secure, intimacy increases. So why would I let a few dollars potentially keep me from feeling closer to my husband?

By putting the themes of teamwork, communication, and honesty into the financial aspect of your marriage, you are taking great steps to ensure your success as a couple. Do what you can today to work together to control your money and not let it control you!

Tell us, BMWK family, how do you and your spouse handle money?

About the author

Amber Wright wrote 39 articles on this blog.

Amber is a Communication Coach and Consultant that wants to help you learn how to say it right – from the boardroom to the bedroom! Visit her website, www.talktoamber.com, to find fun and insightful information on how to improve your communication skills and overall quality of life.

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