Photo courtesy of powerbooktrance

The following guest post is from Mike Young, Founder and CEO of The S.E.C.U.R.E. ^TM student program.  You can learn more about Mike, and the The S.E.C.U.R.E.^TM student program at his website.

The media today is focused on the $700 Billion bailout on Wall Street and the credit crunch.  However, what has become very clear in the eyes of many is that the real problem is with the foundation of our educational system.

Remember all of the neat stuff you learned in high school about credit and money?  If you are like me, you don’t, because there was no education on how credit and money actually worked.  The average kid today will see over 360,000 advertisements before the age of 18 while receiving less than 10 hours of formal education on financial literacy.

CNBC reported that the real problem with the adult population today, is they were never taught this stuff in school.  This leads us to an entire generation of consumers with a -2% savings rate.  The average American has less than $3800 in savings and an average credit card balance of $9,200!

Marketing and advertising has been working full steam ahead since the 1950’s and it’s about time that our educational system begins to make sweeping changes to help high school kids develop positive habits with credit and money before they leave home.

It’s time for our society to begin making an impact on the next generation, teaching them lessons we’ve learned the hard way.  It’s time to make a difference and consume less while saving more.  We can turn this ship around, but it’s going to take a group effort at the community level and begin getting involved now.

Frugal Dad’s Thoughts:  I couldn’t agree more with Mike’s message, and his organization’s mission.  As a society, we do a poor job at preparing our youth to take the next step to become fiscally responsible citizens.  Think about it–we spend countless hours of instruction preparing students for fitness through health classes, gym and physical education.  We spend many more hours teaching students proper grammar, in both English and foreign languages.  Rather than teaching them how to take tests, or prepare for college, perhaps we should focus our efforts on preparing students for life.  Some basic courses in personal finance including lessons such as how to balance a checkbook, how to manage credit, how taxes work, etc. would go a long way towards creating a better prepared group of high school graduates.

photo by hyku

*This photo is nearly identical to the view from my freshman dorm room

My college matriculation is best summed up by the famous line from Robert Frost’s The Road Not Traveled, “I took the one less traveled by, and that has made all the difference.”  I guess you could say I got a well-rounded education, because I bounced around three different schools and several majors before finally finishing up the process online. My only regret from the whole experience was that I didn’t pursue the online degree opportunity earlier.

Pre-Medicine Requires Too Much Chemistry

For as long as I could remember I wanted to be a doctor.  It seemed natural, and I had a genuine desire to want to help people.  So, I enrolled my freshman year declaring pre-medicine as my intended path of study and away I went.  Two years into the program, and six chemistry courses later, it all became rather overwhelming.  I had officially reached burnout with several years of school, medical school, and residency to go.  Being the practical personal I am, I realized I wasn’t going to stay motivated all the way through, and accepted the change of heart.

After a short stint as a physical therapy major, and after seeking out an athletic training internship, I decided my heart just wasn’t in medicine anymore.  Good thing I recognized this when I did–just imagine the money I could have wasted pursuing something my heart was no longer in.  A death in the family brought me back home about half way through my third year.  I decided to go to work, and eventually married my college sweetheart, and less than two years later we had our first child.

School, Family, and a Full Time Job

The birth of my daughter inspired me to get back in school and finish my education.  I recognized my career opportunities and earnings potential were somewhat limited by the fact that I had not finished my undergraduate degree.  I enrolled at a nearby college, and thanks to a change in majors, transferring from the quarter system to the semester system, and going to school in different states, I practically had to start over.  And so I began a long, painful process of attending school at night from 6:00pm-10:00pm, Monday through Thursday, while working full time 8:00am-5:00pm and missing my newborn daughter and my wife terribly.  It was an exhausting time.

I kept up the pace for a couple years before a job relocation took me away from that local university, just a couple semesters shy of graduation.  A friend recommended I check out an online program offered by another local school.  He knew I was sick of being a “traditional,” in-class student because it kept me away from my family.  At the time online degree programs were relatively new on the scene, and I was a little skeptical.  I decided to look into it and I am sure glad I did.

The Benefits of an Online Education

There are many reason to finish your degree online.  For a husband and father of two working full-time I needed something with maximum flexibility.  Online education provided the ability to work around my job and family schedules while pursuing the exact same degree as those poor souls stuck in a classroom until 10:00pm.  The online degree program also forced me to upgrade technology, and stay on top of new web-based applications (something that later helped in my career).

Is an Online Degree Right For You?

Continuing your education online requires a greater degree of discipline than attending school in a traditional setting.  All interaction with professors and classmates will be done virtually, usually via online chats, forums and email exchanges.  One of the main complaints about online degree programs is that you miss that social interaction sometimes required to fully grasp a new concept.  Professors will not be able to spoon-feed you information for exams.  When I attended a university full time professors made a point of emphasizing which areas of the text were most important, and often repeated contents of their lecture (a signal to write it down, because it would likely be on the test).  In an online environment you are often told to read pages 145-227 and expect any material contained to appear on the midterm.  It was up to you to figure out what was most important, and what would most likely appear on the exams.  It was an adjustment, but a good lesson in ignoring fluff and focusing in on what was most important.

Compare Top Online School Programs At AllOnlineSchools.com Today

I’d be interested to hear some of your experiences with an online degree.  Please feel free to share your story in the comments section below.

A perfect storm may be brewing in the financial world, and this time it is not the fault of sub-prime mortgage lenders. Student loans are getting out of hand in this country, not because they are a bad product, but because of the amounts some students are willing to borrow to fund their education.  Stories abound of students graduating with thousands of dollars owed on student loans. These loan payments sometimes represent as much as a new graduate’s housing costs (and many can’t afford housing because of the loan payments). The rising costs of tuition, a proclivity for borrowing, and changes in federal loan lending legislation are setting up a late-summer crisis for 2008-2009 college students.

Lenders and colleges are getting creative, and government legislation is not helping. An unintended consequence of the College Cost Reduction and Access Act is that federal subsidies are drying up for private lenders that make federal loans to college students. Many colleges are ending their alliances with these types of lenders, and instead pointing students to borrow directly from the federal government through their respective colleges. This will practically shut out private lenders, and we have already seen what taking away privatized options has done to other government programs (think Social Security, for example).

Of course, none of this matters to those who choose an alternative to student loans. Fortunately, there are several other options to borrowing money to attend school. However, similar to other areas of financial life it has become the norm for high school graduates to assume thousands of dollars (and sometimes hundreds of thousands of dollars) for the privilege of obtaining a college degree. I took on some small student loans myself early in my college career, but thankfully I took a different approach when I returned to school and worked full time to pay my way. Here are some alternatives to financing your college education:

• Work. Work is a sure-fire money making scheme. College educators tend to frown on student employment citing poor class attendance and lack of participation in other extra-curricular activities which add to the college experience. Baloney. I don’t have a problem with someone working to pay their way through school. In fact, I encourage it. Graduates who have worked their way through school enter the job market with experience already listed on their resumes. They also tend to take school more seriously when they are footing the bill. Employers like to hire candidates who have worked their way through school because it speaks to the potential employee’s dedication, perseverance and all-around work-ethic.
• Tuition Reimbursement Programs. Many companies now offer tuition reimbursement programs where employees are reimbursed for some or all of their tuition for pursuing degrees related to their careers. Some of these programs reimburse employees based on grades earned (100% for an “A,” 90% for a “B,” and so on) which provides an extra incentive to perform well in school.
• Military Service. A commitment to military service comes with the perk of paid tuition upon completion of required duty. The G.I. Bill pays for military service personnel to attend classes that lead to a college degree, and even some vocational courses that lead to a degree or certificate. This is an excellent way for aspiring physicians to attend medical school. The government will typically cover the costs of your medial training in exchange for a promise to serve as a doctor in one of the Armed Services. During times of war, this can be a risky proposition, but maybe not as risky as financing $120,000 to attend medical school!

Bottom line? Stay away from student loans if at all possible. Consider alternative sources of funding, such as the ones mentioned above. If you do not have the money to attend college right out of high school, work for six months to a year and save up for tuition. As part of this strategy, look for employers that offer tuition reimbursement. UPS reimburses part time employees for tuition expenses beginning the day they are hired through their Earn and Learn Program. Not a bad deal for slinging boxes a few hours in the evenings.

Looking for finance options? For a great loan quote visit Rebuild.org.

Image Credit: meyshanworld

I caught a segment on the CBS nightly news the other day that told of a growing trend across the country whereby kids, and their parents, are being paid for meeting educational milestones. So called “Learn and Earn” programs now exist in eleven states and are currently funded with a combination of public and private funds.

In New York, Mayor Bloomberg even pitched in his own money to fund Opportunity NYC, New York’s version of the “Learn and Earn” program which compensates the cities “poorest kids” for passing required regents exams. They also pay parents $25 for attending parent-teacher conferences, and $200 for taking kids to annual physicals. Two Georgia school systems have also recently gotten in on the pay for participation trend, offering to pay kids $8 an hour to attend after-school tutoring.

Maybe I’m just old-fashioned, but I believe kids ought to have some innate desire to want to learn, and should not have to motivated by the promise of cash. Parents should foster this desire by encouraging lifelong learning, both inside and outside a traditional classroom setting. When did it become the responsibility of taxpayers and private donors to motivate students and their parents to educate themselves? What this really sounds like is a complex welfare system which operates under the guise of an educational reward program.

If you really want to pay low-income students and their families, why not create incentives around good, old-fashioned work, and leave educational goals out of it. By converting current volunteer activities to paid, part time work, parents could be compensated for time spent improving school grounds, working at after-school activities, or assisting teachers with much-needed oversight during the administration of standardized tests, etc. Students could be paid for tutoring younger children (but not for receiving tutoring), assisting with sports programs (team managers), and performing after-school jobs such as painting, grass cutting, etc. Perhaps then kids would take more pride in their schools and parents would be more visible on school grounds, leading to less disciplinary issues.

When I was in school the only motivation we needed to be successful was the threat of failure, summer school or after-school detention. Today’s kids aren’t as concerned with punitive threats, but teaching them to expect cash rewards for doing minimal work will create an entitlement mindset that will stay with them their entire lives. This mindset will lead to a generation of underachievers, content with doing just enough to get by and receive their government rewards. That’s not what American capitalism was built on. Kids should be encouraged to learn, to excel, and to develop and chase their own dreams.

For most of my life I’ve been a bit of a dreamer with an entrepreneurial streak here and there. Those two attributes seemingly go together quite well, but unfortunately in my case they turned me into a great “starter,” and a lousy “finisher.” I was great at starting up business ideas, weight loss goals, educational goals, etc., but I rarely had the perseverance to see it all the way through.

That changed in the winter of 2000 when my daughter was born. Becoming a father made me reflect on the things I wanted for her life, and made me realize the things I would need to change about my own life to get her, and the rest of my family, to our goals. For instance, a couple years earlier I had given up on my personal dream to obtain a college degree. I attended college right of high school and selected pre-medicine as my intended major. I always wanted to be a doctor, but never really reflected on whether or not that was my true passion. After completing nearly two years of school I got burned out. A death in my family, and a love interest took me home and I began to work with the dream of finishing school quickly fading.

My daughter’s birth inspired me to return to the classroom in the summer of 2000, changing majors to computer information systems in the business school. For the next five years I toiled away attending night classes after working full time during the day. I only saw my wife and daughter on weekends and during a quick lunch and dinner at home. It was a grueling schedule, one that tested my relationship with my wife. Without her support I never could have done it. Along the way I learned a lot about myself. I learned what it took to see a dream through to the finish line. Since finishing up that degree I’ve applied these steps to other areas of my life with success.

• Write down your goal. Dreaming up goals in your head is great, but putting them down in writing creates sort of a contract with yourself. I wrote down my New Year’s Resolution around Y2K as “I will return to the classroom this year and successfully complete two semesters of school towards a business degree.”

• Plan out the steps required to reach your goal. I remember about half way through my degree I felt like giving up. I visited a counselor and asked for an updated list of all the courses I would need to finish my course of study. I hung that list up over my desk and struck them off one by one each semester. This served as sort of a visual road map for where I was headed, and what stood in the way from me accomplishing my goal.

• Reflect on what you have already accomplished. It’s easy to get discouraged when chasing a dream. I’ve found that the longer it takes to accomplish something the easier it is to become demoralized. That’s because the goal line seems so far away and we forget how far we have come. Take time to recognize your efforts. If you have $30,000 worth of debt to pay off and are barely half way there it can seem overwhelming. Instead of looking ahead to the remaining $16,000 left to pay, recognize that you have eliminated $14,000 of debt from your life. You have most likely improved your debt-income ratio, your FICO score, and your personal net worth.

• Never completely lose sight of your dream. Imagine you are a private investigator tailing someone for a client. At times it might be necessary to drop back a little and put some distance between you and a target, but you never completely lose sight of them. This is the approach I take towards following my dreams. Sometimes you have to slow down when life gets in the way. Take a semester off from school. Take a couple “mental health” days away from your job. If you feel yourself burning out it’s usually a good time to take a small break, but never a permanent one. Great finishers never completely lose sight of their dreams.