College bound? Buyer beware!

It's that time of year when Juniors and Seniors in High School are taking their SAT's and contemplating college.  While students are thinking about ivy walls and being away from home, parents are fretting the costs, which can be considerable.

Allow me to share some "20/20" insights from a parent who has gone down the college cost road more than once...(and on my way down again).  There are fewer greater feelings in the world than to be able to send your kid to the college of their own choice; but there are some good reasons why this gift may not be the wisest move.

First, if you are not in a position where you can write a check for all four-five years, then know that you face the possibility of running out of funds before your child can graduate.  If funds fall short, you may find yourself in the horrid position of asking your kid to "come home" and relocate their education.

Second, most students do not contemplate how difficult and different college is from high school, so their expectations are far off from reality.  If your child decides to go away to college, you run the risk of your child succumbing to stresses and failing classes.

Here are some strategies for a more successful outcome...

1. Sit down with your child and prepare a budget.  Its important for them to understand the actual cost of their education--after all, the student loans are in their name and they are ultimately responsible for these monies.  They need to understand the debt they are legally incurring (regardless of your intention to pay off the loan for them).  Also, once your child can appreciate the cost, they can better understand the importance of getting good grades.

2. Going away to college sounds great, but postponing this major step for a year or two may be better.  The first year is spent on prerequisites and general classes that can be taken at a State college for as much as 50% less than that of an out of state college. These classes are also easily transferred to most colleges. Besides the savings, the time will give your child a chance to mature and ease away from the apron strings.

Remember that the only college you list on a resume is the one you graduate from!

Stay tuned for additional advice on how to send your kids to college, while keeping some funds home.

How's Your Credit?

C’mon..sing along...you know the song…

They say a man should always dress for the job he wants
So why am I dressed like a pirate in this restaurant
It's all because some hacker stole my identity
Now I'm in here every evening serving chowder and ice tea
Should'a gone to free credit report dot com
I could'a seen this comin' at me like an atom bomb
They monitor your credit and send you e-mail alerts
So you don't end up selling fish to tourists in t-shirts

Yea, it’s a funny commercial, but it’s also very true.  Your credit score tells a story about you that may or may not be true, but a potential employer is not going to ask you for an explanation.  Your best defense against being portrayed as financially irresponsible is to keep your credit history CLEAN!

STEP ONE:     Get a copy of your credit history direct from the three companies: Equifax, TransUnion and Experian.  Freecreditscore.com is also a good spot (hence the song).

STEP TWO:     READ IT THOROUGHLY!  Make sure that the information is correct, but also learn from the information.  Realize that late payments (regardless if you paid within the grace period) are late;there is no such thing as a “grace period”.  Know that newly opened accounts make you a credit risk, credit used to its max is also a red flag. 

STEP THREE:  TAKE ACTION.   Consider the following:

Cancel those cards you don’t use. For every credit line you have, you are responsible for that amount –EVEN if you DON’T use it.  That’s why multiple cards are a negative.

Use only debit or charge cards (like American Express). There are no interest payments, and because it is automatically deducted from your bank account, or due in full at the end of the month, it'll keep you disciplined in your spending.

Pay on Time. If you have credit cards, pay them online through automatic payments so you are never late.   Also, always pay more than the minimum.  Remember, every credit card balance is a mini-mortgage because it will take you 30 years to pay if you just pay the minimum.

If your credit history needs some TLC, taking these three steps will repair your credit on its own.  Paying someone to repair your credit is unnecessary, at best, and is usually a scam.  Do it yourself by being responsible.  It's like losing weight, the only real way to get results is to eat right and exercise.

Your credit is extremely important and a bad score can cost you thousands of dollars over time.  Protect your future NOW!