Financing a college education: Fact and Fiction

Written by Emily on July 12, 2007 – 10:00 am -

If you have children, saving for their college education is probably among your financial goals. Today, the average tuition at a private college is over $22,000. Refinance the house? Dip into retirement? Not according to Anne Marie Chaker at the Wall Street Journal Online. Her article Seven Myths About College Finances debunks several assumptions people are likely to make if they don’t look deeper into college financial aid.

Myth 1: Financial aid means grants and scholarships. Truth: Financial aid includes scholarships and grants (don’t have to be paid back) as well as federal loans. Loans can be subsidized and unsubsidized, but either way there is a cap on the interest rate–saving big bucks over the long term. Some jobs after college offer loan-forgiveness programs.

Myth 2: My assets (home and retirement savings) will prevent me from getting a need-based loan. Truth: The home you live in and retirement plans are not included when determining how much aid you can get under federal rules. Private colleges may use a separate formula, but do not include retirement savings.

Myth3: I should go with the lender preferred by my college financial aid office. Truth: Shop around and read the “fine print.” What looks like a good deal upfront might include an origination fee, or heavy penalties for missing a payment.

Myth 4: I’m doomed if I have two kids in college at the same time. Truth: You are likely to qualify for more aid.

Myth 5: The federal aid process follows a strict formula and my situation will never be given special consideration. Truth: College aid officers have the authority to make adjustments on a case by case basis. Documentaiton will be required.

Myth 6: Our child is likely to receive many private scholarships. Truth: Nearly all financial aid officers agree that parents overestimate the amount of scholarship and grant money children will receive.

Myth 7: The 529 college savings plan is bound to be the best for me. Truth: Shop around–be sure to look at fees.

If you are researching college financial aid, be sure to check out this post by Anna Leider.

After reading these articles, my biggest question is: Have parents always footed the bill for college? It never occurred to me to ask my roommates how they were financing their education; I only know that at least half of them worked. My parents paid my first year of room and board, but after that I was on my own. Just the idea that they would have used their retirement or refinanced their home to pay for my education seems crazy to me.

Has a college education become an entitlement? Even at the expense of the parent’s financial future? We live in a land of opportunity, and some believe that our country stays strong because life isn’t handed to us on a plate. We believe in hard work, and the self-made man. By giving our children everything, do we rob them of the chance to struggle, work hard, and fulfill their potential?

Posted in Debt, Finances, Saving | 6 Comments »

Buy ties (neckties) at a discount

Written by Sam on January 25, 2007 – 4:00 am -

buy tiesOk, this post is a little random. But I recently learned about a new site that does one thing and does it well: sell ties. The site,, offers free shipping and ties as low as $9 (if you order 5 ties). I actually ordered tie #21 (I wanted a little Trump vibe) and was very happy with the quality. Looking back, I should have ordered 3 ties for $11 each since I’ve been wearing the same ties for years.

I loved the simplicity of the wearcacti site. It reminds me of Google’s bare-bones simple interface. You can buy 1, 3, or 5 ties at an increasing discount. The selection is small at this point but I talked with an owner and he indicated they will be expanding their selection soon. If you’re in need of a tie update, check it out.

On an even more random note, here are a few sites that explain how to tie a neck tie:
Paul Fredrick

Posted in Saving, Spending | Comments Off on Buy ties (neckties) at a discount

8 ways to prepare to become a millionaire

Written by Sam on January 16, 2007 – 9:13 pm -

8 ways to prepare to become a millionaireToday I went to lunch with a very wealthy person. I don’t know exactly how wealthy , but based on his frequent trips to Maui, the fact that he earns a free plane ticket every month through his frequent flier points, and the fact that the other day he decided to go out and buy a truck just because he’s never had one before, there’s good reason to believe he’s close to a seven-digit earner. As I talked with him, it raised a lot of questions in my mind about how managing my finances will change as my wealth grows. If I were a millionaire would I still need to budget? Would I still want to track all my spending? Would I still need to negotiate with my wife about finances? It seems logical that with an income over $1,000,000 a year you wouldn’t need to plan as vigorously. But in the end thats a lie. Millionaires that manage their money irresponsibly can quickly lose it all and fall from grace (MC Hammer comes to mind).

Financial management principles are the same for millionaires and low-income-earners alike. Certainly the numbers your dealing with will change, but the basic principles and processes are still the same. In fact, by following sound financial management principles and optimizing your frame of mind, you can accelerate the process of building wealth and know how to keep it when you arrive. Here are 7 ideas that will help you think about and manage money like a millionaire, regardless of your income.

Read more »

Posted in Budgeting, Couples, Finances, Money, Personal Finance, Relationships, Saving, Spending | 24 Comments »

How to estimate FSA expenses: Cafeteria Plans can save you a lot of dough

Written by Sam on December 20, 2006 – 2:01 am -

cafeteria plan (FSA)Cafeteria plans can save you a lot of money and yet are one of the most under-utilized benefits that many employers offer. One of the reasons they’re neglected is because it can seem so overwhelming to determine how much money to set aside for medical expenses. Having just gone through the process ourselves, we wanted to share a brief overview of how Cafeteria Plans (FSA) work and how to optimize your participation.

My wife graciously volunteered to write this post and it’s her first post on GFD so be sure to give her extra praise and adoration!

It’s that time of year again. Rushing around, making last-minute decisions. I’m not talking about Christmas shopping. It’s the annual employee benefits festival—you come home with all sorts of insurance papers, medical, dental, life, and (my favorite) accidental death and dismemberment. It’s not enough that you still have Christmas shopping to do before you get ready for holiday traveling—you are supposed to find the time to make important financial decisions as well.

To help you on your way with minimal loss of holiday cheer, my husband has asked me to write a helpful guide to cafeteria savings plans. Even with the risk of making my debut on his site as “the cafeteria lady,” I have agreed. Read more »

Posted in Budgeting, Finances, Personal Finance, Saving, Taxes, Tools | 6 Comments »

Find the deal of all deals

Written by Sam on December 18, 2006 – 11:11 pm -

I’ve been quietly updating my list of RSS Shopping Websites and I thought this new site was worth mentioning specifically. aggregates results from many of the major “deals” sites (most of which are on my list). I’m into convenience and efficiency so is right up my alley. As I played with it, I was very satisfied with the thoroughness of the results. Some aggregation sites tend to be buggy but I haven’t run into any problems yet. When I searched for 17″ LCD monitor I just bought (that’s right, I finally got one) it properly showed the great $99 Best Buy deal I took advantage of (there aren’t even any rebates).

Unfortunately you can’t subscribe to specific search terms. But there is a main RSS feed and you can search on the site for specific items. Check it out!

Posted in Lists, Saving, Spending, Tools | Comments Off on Find the deal of all deals

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