This Week in Your Wallet: March 5, 2013
In today’s newsletter, I’ll be talking a lot about both school and money — starting with the announcement of Jean Chatzky’s Money School. Over the years many people have asked me if I could come to their homes, to help them learn to budget a little better, spend less, save more, get out of debt or plan for the years to come. This is my answer. Money School consists of online courses (starting next week, you’ll be able to sign up at JeanChatzky.com for one or several) that I’ll teach myself, live via webinar. Each class consists of a lecture with Q&A, and should you have questions after the session is over, there will also be office hours. I’ve tried to keep the price reasonable and office hours are included. I hope to see you there! And I hope you’ll spread the word. Even if you’re not ready to join me in class, I’d love it if you’d take a look at the website in the next few weeks. It’s undergoing a bit of a makeover and we’re getting ready to unveil a whole new look.
Now, onto school and money: For the students who didn’t apply to schools with rolling admission or early decision/action policies, we’re officially in the month they finally learn their college fate (and the month their parents learn exactly what they’re looking at in the tuition department). March can be an anxious time, and as the New York Times recently pointed out, there’s one question that can multiply the anxiety tenfold: “Should I even apply for financial aid in the first place?”
There’s a bit of a misconception floating around that if a student applies for financial aid, certain schools will be more likely to overlook that student in favor of one who can foot the whole tuition bill. This thinking, financial aid consultants told the Times, is “overblown” and a “rationalization.” While some schools are trending towards “need-aware” admission policies (instead of “need-blind,” which completely ignores a student’s ability to pay), many schools still have those need-blind policies. What’s more, it’s worth remembering that it’s a student’s resume and performance that ultimately get them into a school — not the size of your wallet. And if you fail to file the FAFASA, you’re only hurting yourself by missing out on federal grants and aid that could ease the burden of tuition.
Also helping to ease the burden of tuition: savings that have accumulated in a 529 account. I know that picking a 529 can be tough — it’s one of the most frequent questions I’ve gotten over the years — which is why I wanted to share this fantastic Wall Street Journal article about the factors to consider when you’re deciding which 529 to use. Among the key takeaways: low fees are “essential,” but it’s also worth looking into the quality of customer service (Are tuition payments made on time? Is there a sales commission?), whether there’s a rewards program and what the tax advantages are like. If you’re in the market for a 529 plan, I highly recommend reading the whole article. You can really learn a lot!
And now, here are the other headlines for the week:
One more note on paying for college…
I know this newsletter has been very college-focused, so I’ll make this quick: The Consumer Financial Protection Bureau is looking into private student loans and ways to make the payment process more affordable for the millions of borrowers who are struggling with the higher interest rates and stricter repayment terms that come with private student loans. To that end, they want to hear from anyone burdened by private student loans and are interested in hearing your thoughts on what should be done. You can see their full list of questions here, and information on submitting your stories and ideas here. They’re accepting submissions until April 8th. If this issue affects you (and parents, they want to hear from you, too), I hope you’ll consider sending them your thoughts!
Sequester Update
The sequester is officially underway. The good news is that the world didn’t end (reports about lines and waits at airports seem to be particularly overdone). The bad news is that, over time, the effects of the sequester will likely get progressively worse. You likely haven’t noticed a difference in your day-to-day life, and the information I gave in last week’s newsletter is still relevant. Still, if you’re looking for an update, this Politico article has a great rundown of what will happen next, breaking down what we should expect to see this week, this month, next month and then May and beyond. As you’ll see, stuff will really hit the fan by April — this is when cuts to the FAA really will create airport nightmares, and when USDA meat inspectors could begin their furloughs (meaning shortages and higher prices for us). To be continued…
Because I refuse to end the newsletter on that sour note…
Here are some great last-minute spring break deals, courtesy of dealnews.com. If you have some extra money and vacation days set aside, now is the perfect time to escape to a little sunshine!
Have a great week!
Jean
