your future

Big Debt on Campus – Make it Worth It

Its back to school time and so many college students have scrimped and saved to go to college — including taking out some student loans. I knew that college loans was up — but holy smokes — up “310% more than a decade ago.” All I can say is WOW.

I’m an HR person — my degrees are in Biology (I was pre-med — long story, I’ll have to tell you about it another time) and I completed another degree in English and I went back to grad school for a degree in business. My advice — choose your major wisely, work you arse off, get good grades, intern, network. Have fun and know that you don’t have to figure it out — but know that in your 20s (early career) you are laying the foundation for the rest of your life.. err, your working career at least — no pressure right?You can make changes and adjust, but get the foundation right.

The explosion of college tuition and student debt is leaving more grads with big bills and doubts about their futures. Some back-to-school stats:

1. College costs a lot more than it used to.

The good news: College grads earn 84% more than high school grads.

The bad: Getting that sheepskin is getting a lot more expensive.

via Charts: How Big Debt on Campus Is Threatening Higher Ed | Mother Jones.

I love learning, I love the class room setting — just make sure you’re getting the best bang for your buck — I’m not saying pick money over passion — I’m saying be strategic and think about short term goals and long term gains.

Making the HR connection, yours

On The Minds of Your Employees: Rising Education Costs and Student Loans

I don’t have kids yet and I feel like I’m already behind in saving for their college education.  If its on my mind — I KNOW its on the mind of my employees and colleagues with kids. I was a scholarship kid and going to college would have been difficult for me without it.  I finished undergrad debt free — but can’t say the same for my graduate studies.  I mentor high school kids and I know that the process has changed. Not only is it more competitive to get into school, but its hard to find the money to fund it (hard but not impossible).  Scholarships are harder to come by and the financial aide process continues to evolve with complexities each year.

Okay – so I haven’t told you anything that you don’t know yet. But this is something that you DO need to pay attention to. On July 25, 2013, the US Senate Senate approved a student loan deal:

The bipartisan proposal would link interest rates on federal student loans to the financial markets, providing lower interest rates right away but higher ones later if the economy improves as expected.

Undergraduates this fall would borrow at a 3.9 percent interest rate. Graduate students would have access to loans at 5.4 percent, and parents would borrow at 6.4 percent. The rates would be locked in for that year’s loan, but each year’s loan could be more expensive than the last. Rates would rise as the economy picks up and it becomes more expensive for the government to borrow money.

via Senate Approves Student Loan Deal : NPR.

Rates as high as 6.4% for parents who could undoubtedly get larger loans than their students who could borrow at 3.9%.

If you were saving for a child’s education you might have to sock away a bit more.

There are TONS of strategies for funding a child’s education – I hope that we can explore some of them on this blog — but your big call to action is to look at your plan. If you don’t have a plan, you need to get one (yes I’m even talking to those of you like me who would like kids, but don’t have them yet). But don’t go it alone — involve your student. You pick the age, but I will say that at a very young age I understood the connection between my academics and my opportunities to go to college. I don’t exaggerate when I tell you that I was thinking about this at 7 (which totally explains why two words that never describe me are “laid back” – I’ve always been a little “intense”). Maybe its not 7 for you and your family but, IMHO, 17 is probably too late.

Don’t forget to consider your retirement plan and emergency funds in the mix. You’ve got to take care of yourself too. I’m not a financial planner, just calling out some of the big pieces that you want to consider and evaluate.

Don’t freak — take a breath, get some information,  and get a plan.

Making the HR Connection, yours,

Millions of Americans Have Inadequate Means to Retire. Get the Retirement Facts.

Despite the Dow hitting all-time highs, millions of Americans still have a dismal outlook when it comes to their own ability to retire.

Consider these five statistics:

46% of Americans have less than $10,000 saved for retirement. (Employment Benefit Research Institute)

40% of baby boomers now plan to work until they die. (AARP)

36% of Americans say they don’t contribute anything at all to their savings. [CNBC]

87% of adults say they are not confident about having money for a comfortable retirement. (Lifehappens.org)

Expected retirement age is up to 67 from age 63. (Zero Hedge)

via Millions of Americans Have Inadequate Means to Retire. Get the Retirement Facts..

Older Workers Are About to Surpass Younger Workers for the 1st Time – Matthew O’Brien – The Atlantic

This is how a baby boom ends. Not with a bust, but with a lot of old workers.

For the first time ever, workers over-55 are set to make up a bigger share of the workforce than workers between 25 and 34 years old. The chart below (via Conor Sen) shows the share of younger workers (blue) versus older workers (red) since 1950.

via Older Workers Are About to Surpass Younger Workers for the 1st Time – Matthew O'Brien – The Atlantic.

Millions of Americans Have Inadequate Means to Retire. Get the Retirement Facts.

Despite the Dow hitting all-time highs, millions of Americans still have a dismal outlook when it comes to their own ability to retire.

Consider these five statistics:

46% of Americans have less than $10,000 saved for retirement. (Employment Benefit Research Institute)

40% of baby boomers now plan to work until they die. (AARP)

36% of Americans say they don’t contribute anything at all to their savings. [CNBC]

87% of adults say they are not confident about having money for a comfortable retirement. (Lifehappens.org)

Expected retirement age is up to 67 from age 63. (Zero Hedge)

So why, in the great prosperous country of America, are so many faced with doomed retirement dreams?

Those who took the surveys pointed to the rising cost of living and day-to-day expenses as the reason they are worried about or unable to save enough for retirement. And many also noted that rising healthcare and long-term care costs will have a major impact on their ability to afford a comfortable retirement.

Adding insult to injury is the fact that the once mighty dollar no longer goes as far as it once did, as a result of the loose monetary policies from the Federal Reserve.

“The biggest retirement mistake people make is they stick their money in a bank,” comments Aaron DeHoog, the financial publisher of Newsmax. “The reality is, inflation will destroy 50% of your savings every 22 years if you let it sit there. You have to put your money to work, safely.”

The problem is that current yields on safe investments, like CDs, bonds, and money markets, pay 85% less than what they did just six years ago.

via Millions of Americans Have Inadequate Means to Retire. Get the Retirement Facts..

How I Did It: Real Women, Real Retirement Savings LearnVest

What does retirement mean to you  — are you ready for it? Are you even thinking about it? Do women need to play for retirement differently than a man?

I don’t know the answers — I’m just asking the questions 🙂

How I Did It: Real Women, Real Retirement Savings LearnVest.