Monthly Archives: September 2016

Tips to Find a Tuition Free College Education

Tuition-free colleges? Is that insane or even possible? A quality college education doesn’t have to be insanely expensive. Parents and students should not be bankrupting themselves now or jeopardizing their futures by going into an insane amount of debt.

With some planning and a diligent college search, you can find at least 20 tuition-free colleges that may rescue your family from years of paying back student loans. And while scholarships are fine, we’re not talking about that. We’re talking 100% tuition-free, leave your checkbook at home colleges. (For more, see: A Roth IRA or 529 Plan for a Grandchild’s College?)

Rising Costs of Higher Education
Since 1978, the cost of college has risen by more than 1,225% compared to inflation as measured by the Consumer Price Index (CPI), which has “only” risen by 279%, according to www.strategiesforcollege.com. While the cost of a college education has risen four times as fast as inflation, it has even outpaced the other exorbitant family expense: health care. At least we’ve been seeing medical expense inflation slow. Not so with college tuition, yet.

There may be a lot of reasons for college costs to rise so much. Campuses have certainly added lots of new buildings and taken on debt to upgrade facilities. Concrete block dorms have been replaced by sleek apartment suites. Simple gymnasiums have been upgraded to facilities that rival many Olympic training centers. Simple student lounges with a few couches have been given a total makeover to include bistros, baristas and bowling alleys. But one of the biggest expenses on many campuses has been the number of non-teaching faculty, managers and support personnel.

College costs continue to skyrocket at more than 4% each year, higher than general inflation. It’s a depressing thought that a family with a toddler may be looking at spending far more to educate one child than the cost of their first house. And for some families with three toddlers (me included), this can be more than a depressing thought.

How can families try to cope with this expense? If you’re open minded and plan ahead, you can find one of these many tuition-free colleges may fit the bill without the high price tag.

Free: The New Price of a College Degree in America
How does free sound to you? It sounds pretty darn good to me. If you were free from the financial worries of trying to pay for college, then you could fund your retirement, pay down other debt, and – if you’re a graduating college student – you’d be in a better position to launch into your own life and take a seat at the adult table.

And even though neither Bernie Sanders nor Hillary Clinton will be occupying the White House, there are still ways to make the dream of free college come true for some. You have some options to join the trend toward online education using Massive Open Online Courses or MOOCs. Using technology, these programs are revolutionizing distance education in initiatives such as Ed-X. For a more complete list of courses and programs, you can visit www.mooc-list.com.

Traditionally, students have had options of getting free college tuition by getting accepted to a military service academy or joining the military or National Guard. More recently, there have been options for individuals working in non-profits or in education or as a first responder to get student loan debt relief.

Some private schools have implemented a “no loans” policy which means that they provide grants instead of loans to fill any gap between a family’s Expected Family Contribution (EFC) and the advertised cost of school. While not free, this does significantly reduce the cost to a family. One such option includes Davidson College, a highly selective independent liberal arts college with just 1,900 students north of Charlotte, North Carolina.

But what I’m talking about here are schools that offer a quality education for free – absolutely nothing. These outliers can be very selective and in return, some require that a student work on a ranch or help build container ships.

Some schools offer tuition-free college educations or other financial assistance to families that have incomes below certain targets. And there are several Ivy League colleges that have implemented programs to remove economic barriers. At Harvard University, if your family’s adjusted gross income (AGI) is at or below $65,000 per year, parents will pay nothing. For more information, check out Harvard’s Financial Aid Initiative.

Tuition-Free Colleges
Here is a partial list of schools that offer this unique opportunity.

Alice Lloyd College: A Christian-centered liberal arts college with just 600 students highly ranked by U.S. News & World Report, requires students to work on campus or in the community in exchange for free tuition.
Antioch College: A private liberal arts college in Ohio, has a required co-op program for all students. The tuition-free package is worth at least $121,000.
Barclay College: Located in Kansas, offers a Bible-centered education on a campus of about 250 students and nearly a 50% acceptance rate for applicants.
Berea College: Located in Kentucky, is a private liberal arts college with about 1,500 undergraduate students and requires all students to work at least 10 hours per week in campus-approved jobs.
College of the Ozarks: A private, Christian liberal arts school in Missouri with about 1,500 students ranked 10 by U.S. News & World Report for Midwest colleges that also require students to work on campus.
Curtis Institute of Music: Located in Philadelphia, is focused on music performance and boasts a highly selective application process.
Deep Springs College: Offers an alternate education program for a two-year degree that prepares students for successful transfer to schools like Harvard University, Princeton University and Yale University.
Macaulay Honors College at City University of New York (CUNY): A liberal arts college that requires community service in exchange for free tuition.
Webb Institute: Located in New York, known for its engineering programs devoted to ship-building and design.
Williamson College of the Trades: Formerly the Williamson Free School of Mechanical Trades, is the only men’s only trade school in the U.S. that provides 100% full scholarships to cover all textbooks, tuition and room and board.
Free Tuition Colleges Based on Family Income
There are also a number of colleges which offer free tuition for families that have limited income or assets. These include selective schools such as:

Cornell University
Duke University
Harvard University
Massachusetts Institute of Technology
Princeton University
Stanford University
Texas A&M University
University of North Carolina at Chapel Hill
Vanderbilt University
Yale University

Almost all the colleges on these two lists are highly selective. Each has a different learning environment that may not be suited for all students. This is why it’s important your college search process should go beyond a college visit. Parents and students really need to consider the question of paying for college and add an assessment that helps match up a student’s abilities, motivations and learning style with the right school. A more motivated student who is in the right learning environment will be less inclined to drop out, change majors or transfer, which will save you and your student a ton of money in the end if that tuition doesn’t turn out to be free.

Some Tips That Will Help Your Finances in 2017

Here are five different ways you can increase your savings this year.

1. Max Out Your Retirement Plans
In 2017 you can defer up to $18,000 of your salary into an employer-sponsored retirement plan such as a 401(k), 403(b), or 457 plan. If you are age 50 or older, the IRS has a special catch-up provision which allows you to contribute an additional $6,000 for a total contribution limit of $24,000. If your employer doesn’t offer a retirement plan, you may still be eligible to contribute to a traditional or Roth IRA. The IRA contributions limits for 2017 are $5,500 or $6,500 for those age 50 or older. If you didn’t maximize your IRA last year, there is still time. The Internal Revenue Code has a special provision permitting you to make a 2016 contribution up until April 17 of 2017.

2. Know How Much You Are Spending
Most people have no idea what they are actually spending. While some bold participants may blurt out a response when asked, in my experience what people say they are spending and what they are actually spending are two very different numbers. A good back-of-the-envelope approach to calculate your spending is to look at your final paycheck for 2016. Take your year-to-date gross pay and subtract any taxes paid as well as any employee benefits such as medical, dental, and retirement contributions. This in effect is your take home pay. From there, subtract any additions you made to long-term savings accounts throughout the year and you have calculated your annual spending.

Most people are surprised by how much they are spending. Now that you know how much you’re spending, keep any eye on major outflows and set up an automatic transfer to your savings account to ensure some money is put away before hitting your pocket.

3. Review Your Investment Portfolio
When it comes to determining an appropriate asset allocation, most people take the set-it-and-forget-it approach, meaning they randomly picked some stock and/or bond mutual funds when they enrolled in their employer retirement plan and they have not looked at it since. For many of us this could be five, 10, or even 20-plus years. Now is the time to review your most recent portfolio statement to see if your current allocation is still appropriate for your age. Traditionally younger investors can be more aggressive and allocate a higher percentage of their portfolio towards equities. On the other hand, seasoned investors who are approaching retirement may want to reduce risk by diversifying into more bond funds and fewer stocks. If your current asset allocation is appropriate for your age, be sure to rebalance your accounts annually to make sure your portfolio stays properly aligned.

4. Take Responsibility
The glamorization and/or demonization of politics and economics by the media can be hard to ignore because they are on the face of every TV station, newspaper, and social media site. Nonetheless, it’s essential to remember that for the most part, these situations are out of your control. But that doesn’t mean you should sit idly by and hope for the best. To use a weather analogy, while you don’t have control over when the next snow storm will hit, you do have the ability to buy snow tires for your car, a new shovel, and salt for your driveway. By personally managing the internal factors in your life such as how much you save, your consumer loan balance, and the size of the home you purchase, you are taking responsibility for the aspects in your life that allow you to control your own financial destiny rather than taking a back seat to external factors over which you are powerless.

5. Invest in Yourself
Many people don’t realize that the greatest financial asset they have is themselves—their ability to earn a living. Investing in post-secondary education, technical training programs, and advanced degrees go a long way toward building a complete resume. Combine these skills with quality work experience and you’ll have positioned yourself for a financially rewarding career.

Tips to Improve Your Financial Health in 2017

Your financial well-being is equally important to the traditional “new body, new you” goals that are rampant after the holiday season. Whether you’ve overindulged in food or spent a bit more than intended for gift giving, it’s natural—and healthy—to seek suggestions on how to scale back on the excess. Perhaps you’re headed for retirement and desire to focus on increased savings for the post-work years. Or home buying is slated as your prime objective.

By now the onslaught of New Year’s resolution posts has died down, and all prominent voices in the financial industry have levied their “financial fitness for the new year” advice. Rather than sifting through an endless stream of data on the matter, I’ve curated the top tips for improving your financial health in 2017. The following is applicable for all generations: Boomer, Generation X, Millennial and everyone in between.

Pay Off Credit Cards or Consumer Debt
It’s true that debt can be leveraged to help when you’re in a financial bind—car troubles, sudden health related emergencies and so forth. However, the interest rates are an additional expenditure that slows the process of stashing cash in other, more lucrative places.

Rather than paying the interest rates, that money can be transformed into a financial work partner by placing the amount in savings or, if you’re inclined, an investment portfolio. Certainly, maintaining a healthy credit rating is part of the money management system. Yet, if you’re the type who can’t pass up a sale and whip out your credit card to pay for more stuff, then credit card consolidation is a resolution for you to seriously consider. Pay yourself, not the credit card companies.

Maintaining a Budget Is Crucial
All items on this list lead back to budgeting. It’s easy to become enraptured in the constant stream of subscription entertainment or online instant gratification purchasing. Five-dollar cups of coffee or weekly dinners at your favorite restaurant can be included—though removing them for a month, or three, isn’t exactly deprivation. At the very least, monitor your spending for a week to determine where your money is going. Then begin to scale back on small things within each budgeting category.

Save, Save, Save
Though saving and budgeting are intertwined, this category warrants its own emphasis. While you set up your budget and scale back on the nonessentials in each budget category, make sure that you include a target amount to save per month. Your target savings amount is what you’d need for three to six months of expenses in the event your income stream is disrupted. Yes, it’s that simple. The challenging part will be curbing former spending habits. However, with diligence and focus, you can retrain your brain to stay on course with your intention. Remember intention flows to where our attention goes.

Investment Engagement
As with everything on this list, choosing an investment instrument is a highly personal endeavor. There are plenty to choose from. Every investment opportunity is balanced against a certain amount of calculated risk and given the variety of financial products available, there’s a sector for every risk level. A significant initial financial outlay is not always required to put your money to work for you. Indeed, instead of spending money on your credit card debt or restaurant dining, that money can be what Kevin O’Leary refers to as a soldier you send into battle every day to bring you back your fortune. Even if all you do right now is transfer $50 per month into a savings account, which is a small initial investment step (and you’re investing in yourself, ultimately), then you’re cultivating a habit that can provide far greater security long-term security than that daily $5 latte.