Okay, technically, it's not ME that has been framed. It's my new house!

Now that the walls are up, it's starting to feel more real each day. My contractor says I can expect to be finished sometime in September, almost a month earlier than planned. That means I need to get moving on selling my existing home — good thing I watch a lot of "Designed to Sell"  on HGTV .

Although I'm optimistic that I won't have too much trouble selling my current place (fortunately, the real estate market is still pretty healthy here in the Midwest), I've started to panic about funds. That's because in my Online Banking profile, I can see all the money that I'm on the hook for: my existing mortgage, my home equity loan (which I used to buy the land), and my construction loan. Let's just say that the debt outweighs my deposits by quite a bit, not a comfortable place for me.

Gulp. I keep reminding myself that real estate is an investment.

I've also been keeping an eye on mortgage interest rates, since I will need to secure my permanent financing fairly soon. Unfortunately, they have not been going in the direction I'd like them to! I'm trying to be optimistic about this, too. Worse comes to worst, I may end up with a higher rate initially and will plan to refinance down the road.

If you're not yet in a position to build your own new home, or if you think I'm just plain nuts to be doing so, you can get some practice by building a virtual one in Stagecoach Island. They've even got their own HGTV-esque show!

Posted by Staci at 10:00 AM |  Contact Staci |  Permalink  |  Comments (2)
Found in Budgeting, Debt, Financial education, Home Ownership, Home equity loans, Interest rates, Money management, Mortgage, Preparing, Wells Fargo Bank

Living in California , we've been lucky to start out summer early with sunny weather and backyard barbecues .

With the 70-degree weather this past weekend, I managed to attend not one, not two, but three BBQs — one of which was a backyard pool party! It was so much fun, but also somewhat dangerous because small children love the water.

Both of my girls take swim lessons — mainly for safety so they learn how to float on their back. Those lessons came in handy on the weekend. Long story short, my two-year-old couldn't wait for daddy and left the safety of the pool step to try a few laps on her own!

Needless to say, she didn't get very far. After a few strokes she did the right thing and rolled on her back, but I scooped her out immediately. I was slightly freaked of course, but happy that she was able to float rather than sink!

As I came into work today, I thought about my daughter's incident, and how it's actually a pretty good analogy for managing credit. Let me explain…

Building and maintaining good credit has never been more important, or more challenging. It is important for everyone to learn how to "swim" by understanding how to manage the debt you take on, especially in these tougher economic times.

Just as my daughters take lessons to learn how to be safe while swimming, we all can take lessons to become smarter about credit . If you're looking for some ways to help you stay above water, here are some good tips on building and maintaining good credit.

What other resources have helped you stay afloat?

Posted by Dinna at 10:00 AM |  Contact Dinna |  Permalink  |  Comments (0)
Found in Credit, Debt, Financial education, Looking back, Money management, Preparing, Wells Fargo Bank

Sometimes there is no better feeling than arriving home after a long day at work. Just entering my house, I often breathe a bit easier.

On my arrival home last week (after greeting Bill and supplying her dinner, of course), I grabbed the mail and plopped down on my couch to sort the "keep" (mail I need/want) from the "shred" (junk mail o' plenty).

Included in the pile was my bill from Nebraska Furniture Mart  — that's where I purchased my living room furniture and later a kitchen table, both of which were financed at 0% interest for a set number of months. As I opened the envelope and read through the detailed statement, I realized: I'm sitting on something that I own.

What's a better feeling than the first step into your home after a long day at work? Paying something off. Removing a debt. Owning a large item outright. It's an awesome feeling. This furniture is completely mine — no more $100 a month from my budget!

Which brings me to another great thing about paying off one debt: more money to throw at other debt. Snowblower, anyone? (BTW, that's also at 0% interest!)

So what could possibly feel better than paying something off? I'm happy to say I know the answer to that, too! Buying something you've saved for. No financing needed.

I'll talk about my big purchase in another post soon...stay tuned!

Posted by Barbara at 08:57 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in Debt, Financial education, Money management, Paying, Saving, Wells Fargo Bank

As I get further into the home building process, I'm confronted with a lot of "might as well" temptations. You know — I might as well add extra square footage here, I might as well install more lighting there, I might as well finish the basement now instead of waiting a few years.

Before I know it, I've might as welled myself right over my budget.

College presents you with a lot of "might as well" temptations, too — ones that you might be paying off for a long, long time, if you're not careful. Here are a few examples:

Might as well (MAW): I don't need all of these student loans, but they've been offered to me, so I might as well take them.

Why you should resist (WYSR): If you don't need the money to pay for school right this minute, don't take the loan. You're going to have to pay it back, with interest. In most cases, the interest starts accruing as soon as the loan is disbursed. Why pay interest on money you don't need yet?

MAW: I've got leftover financial aid money — I might as well use it to buy an Xbox .

WYSR: If you have leftover financial aid money — and really, you shouldn't, if you look at the previous WYSR — throw it at next semester's tuition, or use it to pay for living expenses. An Xbox does not count as a living expense. Besides, shouldn't you be studying? If you really need to play Halo  or Guitar Hero  (and sometimes you do — it is good stress relief), just head over to your friends' place and take advantage of their poor financial decision making.

MAW: Even though I'm financing my college education with loans, I might as well skip my Economics class. It's boring, and I'm tired!

WYSR: Think about what your classes cost per credit hour, figuring in books and other materials. Then think about the interest rate on your student loans. There's some sort of mathy economics formula for figuring out exactly what skipping class costs, but you don't know what it is because you skipped Economics! Bottom line: time is money. Get your money's worth by getting out of bed and going to class.

Feel motivated to fight off the "might as wells" now? I sure do. I'm off to resist the temptation of granite countertops.

Posted by Staci at 12:40 PM |  Contact Staci |  Permalink  |  Comments (2)
Found in Budgeting, College, Debt, Financial aid, Financial education, Money management, Paying, Preparing, Student loans, Wells Fargo Bank

March went out like a lion  in South Dakota. We had quite the winter storm system pass through the area this week. That thick layer of frosting now covering the emerging green grass inspired me to talk to you about snow, well, actually snowflakes.

Snowflaking is a concept that personal finance blogger paidtwice  discusses on her blog I've Paid For This Twice Already... .  She offers a basic introduction to the idea of snowflaking here. 

Basically, it's taking any extra money you scrounge up and throwing it at your debt — even if it's only an extra dollar or two. Earlier in March, I offered similar advice to one of our readers through comments. It's a practice I follow myself. Each month, a little extra ($44) goes toward my mortgage balance.

Recently, paidtwice offered a great illustration  of how throwing a little extra toward your debt balances can pay off. So, to bring my advice full circle, I decided to calculate just how much power that $44 each month has.

According to the calculator she links to, here is the estimated payoff:

If I paid the minimum amount, I would take 190 months to pay off my mortgage and I would pay $63,743.00 in interest.

But by adding that $44 every month my payoff time is reduced to 179 months. Not only do I take a year off of my repayment, I also save over $4,000 in interest! Those are pretty big results for a little extra each month.

So, while real snowflakes are hindering spring and all of its new beginnings, financial snowflakes can be a great catalyst to help us reach our financial new beginnings faster.

Posted by Barbara at 10:00 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in Debt, Financial education, Money management, Paying, Wells Fargo Bank

In January, I wrote about some colleges reducing tuition costs for families below certain income levels. I thought it was an interesting topic, and it seemed like a rather novel idea at the time, but it didn't generate any discussion.

Two months later, several more universities have followed suit — and not just big, prestigious ones like Stanford  and Brown , but smaller colleges and state schools, too. The Project on Student Debt actually keeps a running list  of schools that are either limiting or eliminating student loans from their financial aid award packages.

Sure, it might put me out of a job if student loans are eliminated altogether, but if these colleges can use their endowments to help low- to middle-income families afford education and avoid debt, I'm all for it. I was fortunate enough to not need to borrow money for college — I can only wish the same for students today.

However, I wonder if prospective college students (and their parents) are paying much attention to these financial aid policy changes — and if they're impacting where students apply for admission. Time will tell...

Posted by Staci at 12:30 PM |  Contact Staci |  Permalink  |  Comments (0)
Found in College, College selection, Debt, Paying, Tuition, Wells Fargo Bank

I was talking with a co-worker the other day who was telling me all about his vacation plans this year...how he had planned everything at the end of 2007 and had made all of his flight and hotel arrangements already.

It got me thinking: What do I want to do this year? And is there any place I could visit this spring?

Then it hit me: "Yes, there is!" As I was driving in to work, a commercial came on the radio. The voice had that familiar, friendly accent and hyped up places like Bondi Beach  and the Sydney Opera House . "Now is the perfect time to visit Australia!" the voice said, encouraging me to get info about Qantas flights .

I visited Australia  while in grad school. I really had no money, but a friend of mine worked for an airline and got me a "buddy pass" that allowed me to fly for a steal. Once there, I was also able to stay with my friend's relatives. Unfortunately, because we were flying standby, our trip was short, and I've always vowed to return.

Nowadays, I use frequent flyer miles  to go on vacation. But nothing is ever "free," and I still have to consider the cost of airport taxes & fees, hotel, meals, ground transportation, sightseeing, and of course, local shopping!

So, even though I really want to go, I have to ask myself: Can I afford to go? I could charge everything — I usually use my credit card anyway when I travel because it's safer than cash, adds additional insurance, the exchange rate is usually better, and I get rewards points for every purchase. But can I (or would I) pay it all back when I return?

What would you do? What are some of your vacation planning considerations?

Posted by Dinna at 10:00 AM |  Contact Dinna |  Permalink  |  Comments (0)
Found in Budgeting, Credit cards, Debt, Exchange rates, Looking back, Paying, Vacation, Wells Fargo Bank

I'm older today. Well, you are, too. But I have to jump numbers today. Last year I did some evaluating when I turned 23. And I figured I'd do so again to see where a year older and (supposedly) wiser has gotten me.

To the naked eye, it may seem that I'm even farther from crossing "organize my finances" off my to-do list.

While the year has taken a toll on my finances — from major purchases to unexpected medical bills — I'd like to think the organization piece is there. I might not be in the green, but I am aware of where my money is being spent and how to use my income wisely.

I have to admit that 24 is one of my scary ages. The label "early 20s" is now off limits and full-fledged adulthood is required — at least that's how it works in my mind. So, it feels good to have my financial adulthood on the right track.

I've slowly come to accept my entrance into financial adulthood — however, I keep wondering when it's going to feel real. There are times when I'm sitting down working on my budget, or clipping coupons, or sorting through insurance statements, or transferring money to pay my mortgage when I sit back and think: Am I seriously doing this?

According to an older Money Magazine article , I have the mentality of a financial grown-up.

So why don't I feel like one?

Even a salaried job, mortgage, and 401k don't help me adjust my senses. Some days it seems like I'm dreaming and will wake up to find myself a teenager whose only financial responsibility is making enough tips as a waitress to stay remotely fashionable.

So what will it take? Joint finances with a spouse? Financial responsibility for dependent children? Will the way I feel ever reflect my financial maturity?

What helped you feel financially mature? Taking on student loans...or perhaps repaying them? Your first big paycheck?

Or maybe you feel the same way I do. You tell me: At what point do you really feel financially grown-up? Or do you ever?

Posted by Barbara at 10:00 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in Budgeting, Debt, Financial education, Money management, Paying, Post-college, Wells Fargo Bank

Right now, student loan consolidation may be on the minds of many student loan borrowers. If you graduated in May, your loans are probably coming out of their grace period right about now. Some of you may already have made your first payment.

I received an email question recently about consolidation—specifically, if borrowers would be better off waiting to consolidate their loans—and I wanted to share my response with all the Student LoanDown readers. The short answer is: It depends.

If you’re just entering repayment on your student loans, it’s likely some of the loans are variable-rate federal loans. The rate of these loans is adjusted annually each July 1  based on the 91-day T-bill rate. If you’re a borrower with these loans, it’s possible your rate may go down in July.

Remember, the rate on a consolidation loan is based on the weighted average of your current interest rates rounded up to the nearest one-eighth of a percent. Lower interest rates on variable loans could mean a lower consolidation loan interest rate.

So, should you wait?

There are a number of reasons you may decide to consolidate your loans, and many variables play into whether consolidation is the right choice. It depends on what you’re hoping to accomplish by consolidating:

• If you’re looking to reduce your monthly payment by consolidating, chances are your monthly payments might be more than you can handle. If that’s the case, you would likely benefit more from an immediate ease on your monthly cash flow. Otherwise you’d still have to make those higher payments each month until the July rate change.
• If you want to lock in your rate by consolidating—which is more of a factor for those with a large amount of variable rate loans—it could be beneficial to wait until July. Right now variable interest rate Federal Stafford Loans are at 7.22% during repayment. It is possible that next July variable interest rate loans might be lower, but there is no guarantee. There’s always the chance that the rate might not decrease.

For some borrowers, consolidation may not be the right option at all:

• Depending on your interest rate and loan balance, it might not make sense to consolidate. For example, if you have a large amount of debt at one interest rate and a smaller portion of debt at a higher rate, it might not be the best choice to combine those debts. You could be paying a higher interest rate in the long run on a portion of the balance that originally had a lower rate.
• Another option to consider in lieu of consolidation is an extended repayment plan. This option is generally available if you have more than $30,000 in student debt through the Federal Family Education Loan Program (FFELP) . With extended repayment, your monthly payment would decrease without having to take out a new loan.

So that’s the skinny on waiting to consolidate. Any questions?

Posted by Barbara at 10:02 AM |  Contact Barbara |  Permalink  |  Comments (8)
Found in College, Consolidation, Debt, Federal loans, Paying, Post-college, Student loans, Wells Fargo Bank

Over the Thanksgiving weekend, I ate a lot of pie and watched a lot of TV. In fact, I'm now down to 47% capacity on my DVR (anytime I get below 50% is a big accomplishment for me). I got caught up on most of my favorite shows, including the fantastic How I Met Your Mother . But the series' "Dowisetrepla"  episode — though hilarious — left me worried about some of my beloved television characters.

Here's why: Lily (played by the terrific Alyson Hannigan ) is over her head in credit card debt and refuses to tell her new husband Marshall. Together the two of them make a terrible decision to purchase an overpriced apartment down wind of the sewage treatment plant. With Lily's financial baggage, they qualify for a mortgage — but at 18% interest, gasp — and decide to buy!

C'mon, Lily! You were Willow on Buffy the Vampire Slayer , for heaven's sake! You're stronger than that! I expect more from you!

Sorry about that. Sometimes I have a tough time separating television from reality.

See, in television, a series of poor financial decisions like Lily and Marshall's are funny. In reality, not so much. So take note: If you're married and have a lot of credit card debt, tell your spouse. If you're considering buying an expensive piece of real estate near a sewage treatment plant, think again. And if someone offers you an 18% interest mortgage, run.

But if someone offers you pie and time in front of the DVR, by all means, settle in and enjoy.

Posted by Staci at 10:00 AM |  Contact Staci |  Permalink  |  Comments (2)
Found in Budgeting, Credit cards, Debt, Financial education, Food, Money management, Newlyweds, Paying, Wells Fargo Bank

Calling all parents of high school seniors!

It's now time to take on a not-so-fun parental duty. It's time to have "the talk" with your senior: that uncomfortable discussion about college costs and their future ability to repay their student loans.

In almost every article I read these days about student debt, there are a few anecdotes about students who spent thousands upon thousands of dollars on college, only to find upon graduation that their salary is completely out of whack with their debt load.

I'm always left wondering if the student either: 1) had no idea of the earning potential in his/her chosen career; 2) knew the earning potential but just didn't realize how that would translate in a practical sense; 3) just chose not to think about finances at all until it was time to pay.

It's easy to understand why 18 year-olds would have a tough time understanding how their salary translates in the real world. That's where parents need to step in during the college-selection process and give the following short, but pointed speech:

I know you're very interested in attending "Really Expensive College," but we're going to have to consider what kind of financial aid package they offer you. Because you plan to study XYZ, you'll probably start out at a salary of around $25,000. Once we see your financial aid package, we'll have to figure out how much money you'll need to borrow, and what your monthly payments will be once you graduate. If it's going to be too much to handle on your salary — and I can help you figure that out — you're going to have to consider "Less Expensive College ."

Of course, the discussion may not be that simple — especially if your child is very attached to the idea of attending an expensive school and following a career path that doesn't justify the price tag. But hang in there, parents, and keep them focused on financial reality. They'll thank you one day.

Parents: are you talking with your kids about college costs?

Posted by Caroline at 09:33 AM |  Contact Caroline |  Permalink  |  Comments (1)
Found in College selection, Debt, Financial aid, Financial education, Jobs, Money management, Parents, Paying, Post-college, Preparing, Student loans, Tuition, Wells Fargo Bank

Eventually Charlie's* transcripts were released and he obtained his degree — summa cum laude  and Phi Beta Kappa  — from the University of Minnesota. I told you he was smart! But with the degree and all its honors came a wide range of emotions, including severe financial fear.

Once the debt had been paid, how did you feel?

Honestly? I felt like telling the messed up and unsympathetic bureaucracy of that school to take a flying leap.

But, most importantly, I finally felt free and unfettered. I felt like nothing else, no matter how bad, would ever get me down. I felt grateful to my family and my friends for being constant sources of emotional support during the dark years of debt. Most of all, I am grateful to my father, who worked up to four jobs at one time to keep our family financially afloat and to make headway in the debt owed.

I will say this, and perhaps it is not entirely appropriate, but money is an emotional issue for me, and this is an emotional response to the issue. I said I am grateful to my father for all he did for me and for my family during some very dark years financially. But because my dad worked so much and was so burdened with the stress and constant worry about this debt, he became seriously ill. In the end, he was diagnosed with cancer and passed away when he was only 61 years old. For me, this debt will always be linked to the emotions of my father's untimely death.

What advice would you have for others who may be in a similar situation?

Start talking about money BEFORE you even THINK of applying to school. And honestly talk about what your family can afford and what sort of debt you can support. Students should do a lot of research, speak with the financial aid offices, and apply for every loan and grant available. And remember that there would be NO schools if it were not for the student. Remind the colleges of this and do not allow yourself to be brushed off by the bureaucracies.

How has this experience changed how you approach finances?

As I have said, money is linked to emotions for me. It is not the simple clear-cut idea of dollars and cents. It's linked to my father's death and to my own struggles to support myself and finance my continuing education. I find myself very cautious when it comes to finances and loathe to repeat the experiences of the past. However, I am much less emotional and terrified of money and debt than I once was.

How did the situation end up impacting your credit?

Miraculously, the debt owed did not reflect negatively on my credit. When I began requesting my credit reports  from the three major credit agencies, I combed through them diligently to see if there was anything that would be a black mark against me.

That huge sum of money owed, just sitting there and dragging me down, that's what truly affected me mentally and emotionally. The anxiety and stress of trying to come up with a plan on how to pay the debt was arduous, but, eventually, a payment plan was agreed upon with the school and the whole amount was paid off last year.

Even though your credit didn't take a negative hit, what made you decide to work on improving it?

My partner and I have a goal of purchasing a house within the next year or two. As such, we wanted to make sure there were no skeletons in our financial closets and that we had everything in order before we began the process of applying for a mortgage. Knowledge IS power and it's important to understand that money SHOULD work for YOU, not the other way around.

I review my credit reports every six months to check for any discrepancies and to see how my credit rating is improving, pay my bills ahead of time, and pay well over the minimum amount due. I've instituted an aggressive savings plan, including the purchase of CDs.

How are you feeling about your financial situation these days?

I make a lot of jokes about Suze Orman  and how I hate the fact that I cannot be as capricious as I would like in my spending habits because of her financial guidelines.

But I do have her "tough love" tactics for financial health to thank for being in a much better place than I have ever been. I do not feel as weighed down and helpless as I once did. I feel very positive and confident that my goals for continued improved credit and the purchase of a home are well within my reach.

I'll have you know that I'm very proud of my dear friend Charlie. Throughout this whole financial ordeal (and there were some seriously trying times), he never let it get the best of him. When his debt was paid last year, we celebrated — celebrated his dignity, his tenacity, and ultimately, his freedom!

If Charlie's story has given you something to think about, I hope you'll share your thoughts.

Oh, and in case I didn't make it clear before, I'm thrilled about the prospect of getting his canned goods and embroidered dishtowels for Christmas!

* Names have been changed to protect the financially challenged.

Posted by Staci at 11:23 AM |  Contact Staci |  Permalink  |  Comments (0)
Found in Budgeting, College selection, Debt, Federal loans, Financial aid, Financial education, Looking back, Money management, Parents, Student loans, Tuition, Wells Fargo Bank

After Charlie* embarked on his Ivy League adventure, he thrived. But unbeknownst to him, money was a problem.

Charlie, did you know that you had outstanding tuition bills?

For the year and a half I was at school, I had no idea there were any problems with paying for my tuition. If my parents received any sort of statements or letters, I was never privy to them.

I do not blame my folks for keeping this information from me. I think their first instincts were to protect me and to try to figure out on their own how they were going to come up with this huge sum of money to see their firstborn through his college education. And, the way I was raised, this is what parents do. They find a way, any way, to make their kid’s dreams come true, no matter what the sacrifices or hardships. And we were not raised to discuss the “sordid topic of coin.” So this crisis (and believe me, it was a crisis) just simmered and boiled over. And my entire family and I suffered for it.

How did you find out that you had to leave school?

I was home for the Christmas break. I had packed up all of my bags and even had some boxes addressed to my campus address that I needed to be mailed. I remember walking into our kitchen and telling my parents we had to go to the post office that day so the stuff would be at school when I arrived. They didn’t respond; they just sat there, very quiet. And I knew. I knew something was terribly wrong.

Mom and Dad broke the horrible news to me that I would not be going back to college and that Mom and I would be leaving the next day to collect all of my belongings. Of course, I was thunderstruck, devastated, shocked. I did not know how any of this could have happened. HOW could my carefully planned life have gone so terribly wrong? I remember a lot of tears. I was in a stupor for the entire drive and spoke very little to my mother.

When I got to school, I had to tell all my friends, as well as all of the freshmen I counseled (I was a Resident Counselor for my sophomore year) that I had to leave and I did not know if I would ever be coming back. I had less than 12 hours to pack up my entire college experience, stuff it into a tiny car and leave it all behind me. Once I got back home is when the anger and the fury at the school and what they had done to me and to my family begin to really take hold.

Because of the unpaid tuition bill, it took several years before your school would release your transcripts — meaning that you couldn’t continue your education elsewhere. How did that situation change your education plans?

I had no choice but to immediately go to work. With no college degree, I did not have a lot of options, but I did find a job at a local book retailer. I worked for several years in my home state and then transferred jobs to a neighboring state. Like any twentysomething , I needed to find my independence.

I always planned to go back to college. It was simply a question of when. And the WHEN was determined by the release of transcripts from the school. My education plans never changed — they were only postponed.

When all was said and done, how much did you owe?

We owed over $30,000, which included late fees and fines.

How long did it take to pay off the balance?

15 years.

Tomorrow, the final chapter: lessons learned (and emotional baggage packed).

* Names have been changed to protect the financially challenged.

Posted by Staci at 11:35 AM |  Contact Staci |  Permalink  |  Comments (2)
Found in Budgeting, College selection, Debt, Federal loans, Financial aid, Financial education, Looking back, Money management, Parents, Paying, Student loans, Tuition, Wells Fargo Bank

It's October, which means that high school seniors all around the country have begun their college searches in earnest. They're taking entrance exams, filling out applications, visiting campuses, and setting their hearts on particular schools.

But are they thinking about how they're going to pay for it?

Are you?

A few posts ago I introduced my best friend Charlie* and his financial challenges. This week, I'm going to tell you how he got there (and hopefully, how you can avoid some of the pitfalls he experienced).

It all started in our senior year of high school, right around this time of year. Charlie was (and still is) my brilliant friend, and I always knew he was destined for something great. So it was no surprise to me that he was admitted to some very prestigious colleges.

Charlie, how did you find yourself in the Ivy League? 

Like many other prospective college students, the summer before my senior year in high school my family and I took a tour of the colleges and universities in which I had an interest. We took the incredibly long drive from South Dakota to the East Coast to look at seven campuses, both state and Ivy League schools. Of course, the academics and the prestige of attending an Ivy League school were very enticing.

In the end, I got into all the schools except for one. The spring of my senior year, I was invited to visit two of them for a weekend, to get a better feel for campus life, meet other students, etc. (I clearly recall receiving letters from both schools, telling me what an asset I would be to the student body, how impressed they were with my academics and extra-curricular activities, how I was very unique and had a lot of potential. Well, for an 18-year-old kid from a square Midwestern state, that's wonderful praise.)

I had a tough choice, but I knew that my father in particular would be over the moon if I decided to attend an Ivy League school. I remember walking into one of the large halls off the campus green and approaching my dad, saying, "How would you feel about having a child with an Ivy League degree?" The man literally leaped up and down, clapped his hands, and gave a whoop. He was so, so very proud. And that was very, very important to me.

Why was it important for you to attend this type of school?

Honestly? Because it had cache. Because it had status. Because I wanted to be one of the very few from my graduating high school class to attend an Ivy League school.

Most importantly, though, because I had EARNED it. I had worked so, so hard for four years to get excellent grades and to participate in a myriad of extra-curricular activities. My entire focus and direction while in high school was to be an academic all-star so that an Ivy League school would be able to look at my application and think, "Wow! We cannot pass this kid up! Let him in!"

Was the cost of education an issue for you? Your parents?

The topic of money was never, ever brought into the equation in my final decision. My parents never discussed it with me, and, as an 18-year old I assumed what most children do: that Mom and Dad would provide. How was I to think differently? We lived in a beautiful house with a pool in an affluent upper-middle class suburb. Why wouldn't I be able to attend whatever school I wanted, no matter what the cost?

I will also say that I do not recall the high school counselor with whom I spoke about colleges providing me with information about financial aid. Also, when I visited the campus and attended various programs to learn more about the school, I do not remember getting a lot of information about how to pay for college.

After I did get in and my family came to visit me in the fall of 1989 for Parents' Weekend, my folks did meet with financial aid. I think it was at that point, unfortunately, too late in the game, that they realized that an Ivy League education would be very dear and they just did not have the funds to see me through four years.

Of course, at that time, all federal loans and grants had been meted out for the year, so there really was nothing left for me. And, because my parents made a decent living, they did not see me as a hardship case. My parents were turned away without any help or any solid and feasible suggestions for paying for my education. In fact, I later learned the loan officer told my parents, "If we had known your son would need such significant financial aid, we never would have admitted him."

Next up: What happened to Charlie when the money ran out.

* Names have been changed to protect the financially challenged.

Posted by Staci at 10:00 AM |  Contact Staci |  Permalink  |  Comments (0)
Found in Budgeting, College selection, Debt, Federal loans, Financial aid, Financial education, Looking back, Money management, Parents, Preparing, Student loans, Tuition, Wells Fargo Bank

My best friend Charlie*, who lives in Minneapolis, was recently home for a visit. When he's in town, it's dangerous for both of our pocketbooks. We love to hit the local antique and secondhand stores, drink grande nonfat no-whip mochas, and get kicked out of Barnes & Noble for giggling too loudly. Seriously, we've been asked to leave. Twice.

On this particular Saturday, Charlie and I were in line at Culver's , our favorite Midwestern fast food joint.

"Listen," he said, pulling out his faux Dior wallet, purchased several years ago on Canal Street . "I can't spend a lot on this trip. Suze Orman  has me on financial lockdown. I'm trying to buy a house. Everyone is getting homemade canned goods and embroidered dishtowels for Christmas."

Charlie has struggled with his finances for as long as I've known him – 22 years. After learning not-so-healthy spending habits from his family, he went on to make several unwise financial decisions – some that occurred as early as high school – that impacted his ability to earn a college degree, his credit score , and now, his options for purchasing a home with his partner.

In the coming weeks I'm going to tell you the story of how Charlie became "Young, Fabulous & Broke"  – and how he's working to turn his situation around. Stay tuned.

* Names have been changed to protect the financially challenged.

Posted by Staci at 09:40 AM |  Contact Staci |  Permalink  |  Comments (2)
Found in Budgeting, Debt, Financial education, Looking back, Money management, Preparing, Remember, Wells Fargo Bank

A while back I told a reader that I’d faced my own Stafford Loan conundrum in college. If you’ve been reading the Student LoanDown for a while, you know I didn’t take on any student loan debt to attend college, thanks to a full-ride scholarship.

But after a summer internship in Fargo, N.D., I thought about accepting a Federal Stafford Loan. Living on my own for a summer — making a small but adequate salary — I incurred some credit card debt to covering some necessities like groceries and other living expenses.

Because of my credit card’s high interest rate (about 17%), I wanted to throw all of the money I was going to make working that upcoming semester toward my debt. But that’d have me cutting it close on living expenses, since that’s what the money usually covered.

So when my college’s financial aid award letter arrived a little more than halfway through the summer, I took a second look at the funds I was offered. Alongside my two scholarships was an Unsubsidized Federal Stafford Loan — for somewhere around $2,000.

Even though I had scholarships coming my way, my dad had me fill out the FAFSA (Free Application for Federal Student Aid) every year just in case my situation changed. And with all the benefits of federal loans, it was a smart plan.

But when I looked at that loan on my award letter, I didn’t know if I should take it. In my mind, because I had my tuition covered and a little left over to live on, it seemed wrong to take the money.

I opted not to take the loan. Instead, I faced a financially tight year, and ended up with more debt after having to use my credit card in a pinch — well, several pinches. Definitely not the smartest decision, considering the Stafford Loan rate would have been 4.70% while I was in school and during a six-month grace period after graduating!

For those of you wondering what you can use Federal Stafford Loan money to pay for, here are the details from the Promissory Note. You can use a Federal Stafford Loan to pay for:

• Tuition
• Room
• Board
• Institutional fees
• Books
• Supplies
• Equipment
• Dependent child care
• Transportation
• Commuting expenses
• Rental or purchase of a personal computer
• Origination fee and federal default fee
• Other documented, authorized costs

So, bottom line: if the school awards it to you based on cost of attendance, expected family contribution, other financial aid, etc., and you use it for an authorized expense, you’re good to go.

Wish I’d looked into this two years ago! :)

Posted by Barbara at 10:42 AM |  Contact Barbara |  Permalink  |  Comments (0)
Found in Budgeting, Credit cards, Debt, Federal loans, Financial aid, Grants, Money management, Paying, Student loans, Wells Fargo Bank

Some of the comments we've been receiving as of late—and I haven't been able to publish them all because they don't meet our Comment Guidelines—indicate that the Student LoanDown blog hasn't been spending enough time discussing student loans.

I'm not going to argue with that—we have diversified our content a bit this summer, adding new bloggers and broadening our topics. But here's what I would argue: that we're here to talk with you about financing college and managing debt, and that includes much more than just student loans.

These days, what I hear from so many young people is that their student loans feel like Monopoly®  money—abstract, unreal amounts with no consequences attached. That they're not even sure how much they owe. That they have no idea how they'll pay it back. Wait, you mean I have to pay it back?

Earlier this week I read an article quoting a 22-year-old college grad who said something along the lines of "we're too young to understand that we're going to owe this much" and that "it doesn't feel real until later."

I don't want to be judgmental here, but it's this kind of attitude that frustrates me. You're not too young to grasp the concepts of borrowing—you're just not doing it.

That's why we discuss the broader topics of debt and credit and wants and needs and budgeting and saving on a "student loan blog." We share our personal experiences for the same reason. If we can get any of these financial concepts to resonate with you in any way, we will have built a better educated, more responsible community of past, present and future student loan borrowers.

Because, my friends, it's not Monopoly money—it's as real as it's ever going to be. So do not pass Go, do not collect an unnecessary $200 at 6.80% interest, and, above all, do not claim ignorance. You're old enough to know.

Posted by Staci at 10:39 AM |  Contact Staci |  Permalink  |  Comments (10)
Found in Back to school, Banking, Budgeting, Credit cards, Debt, Federal loans, Financial education, Lenders, Money management, Online banking, Paying, Post-college, Preparing, Private loans, Student loans, Wells Fargo Bank

It's August, which means that it's tuition time for the many of us heading back to school.

*GULP*

Over the next few weeks, the loans I am borrowing will be disbursed to my university to pay off the tuition and fees I owe as I continue my education. Once I have settled my bill with the school, the remaining funds will be deposited into my bank account in a ceremony I affectionately refer to as "Student Loan Payday."

Let's face it, getting a degree is expensive, and many of us need to borrow money just to cover our cost of living. Here in the San Francisco Bay Area , that burden is especially high. I am eagerly awaiting the additional money in the bank so I know I'll be able cover all of my expenses for the next few months!

The kicker about "Student Loan Payday" is that it only comes about once a semester, which means you have to figure out how to make those funds last. Creating a budget—and sticking to it—is crucial to making that happen!

What tips do you have to help stretch your student loan dollars?

Posted by Kathy at 09:39 AM |  Contact Kathy |  Permalink  |  Comments (3)
Found in Back to school, Banking, Budgeting, Consolidation, Debt, Federal loans, Financial aid, Financial education, Money management, Online banking, Paying, Preparing, Private loans, Student loans, Wells Fargo Bank

At the risk of sounding like a total nerd, I've never had an issue with debt and have always had good credit. Somehow, Mom and Dad got the message through to live within my means and pay off debts quickly.

Maybe it was because I saw my parents living simply, budgeting their money, balancing their checkbook, and not buying many of the big-ticket luxuries that their friends were indulging in. I can remember hearing my father say to my mother, "When you see me driving around a Mercedes , I won't be worrying about making payments." I guess I took that to heart and didn't want to worry about making payments, either.

I was the older of two kids from immigrant parents and grew up in a middle-class neighborhood. My dad was in the Navy , and my mom worked in the banking industry. My parents bought their first home when I was about 10 years old, and my mom managed the household finances.

When I was old enough, Mom gave me money management “training wheels” by putting me on her credit card account. But she didn't just hand the card to me without instructions—she taught me the basics like credit limits, balances, minimum payments, and payment due dates. And, while I didn't completely understand its value at the time, she emphasized how proud she was of her good credit rating . She said that I should try to build my own good credit by paying back my debts and always paying on time.

Now that I work in the credit card industry, I recognize the value of these lessons. And, from talking to friends, I've learned how uncommon it is for parents to give their kids the basic financial guidance I was lucky enough to get. By the time I got a credit card in my own name, I understood that each purchase I made was actually a little loan that needed to be paid back—so I really thought long and hard before using it.

Thanks to my folks, when I ventured out on my own I did so with a good credit history. This signaled to lenders that I was a good risk to buy a car or to rent an apartment. I was surprised to learn that even employers were interested in my credit rating. And, when it came time to buy a house of my own, I was able to qualify for a mortgage with a lower interest rate, which saved me a considerable amount of money.

What money management lessons—good or bad—have you learned? And who have been your teachers?

Editor's note: Please welcome Dinna as the newest member of the Student LoanDown blog team!

Posted by Dinna at 09:02 AM |  Contact Dinna |  Permalink  |  Comments (0)
Found in Banking, Budgeting, Cars, Credit cards, Debt, Financial education, Lenders, Looking back, Money management, Parents, Paying, Post-college, Preparing, Remember, Student loans, Wells Fargo Bank

I had a pretty amusing—but all too common—experience at the mall last weekend.

While shopping at a nationwide retailer (whose identity I will not disclose, but it could really be any of them), I found a shirt that had that elusive combination: 1) It looked really cute on me, 2) It would be appropriate to wear for both school  and work, and 3) It was on sale! This shirt that normally retails for $58 was marked down to $29.99. I was still grinning about my good fortune as I brought it up to the register.

As the saleswoman behind the counter scanned my treasure, she asked me, "Would you like to save 10% today by opening up a [Store Name] credit card?" I stifled a laugh and politely declined .

On top of the fact that this special discount would only save me $2.99, I thought about the possible damage it could do to my credit score. A credit score is a number used by a variety of people and institutions (banks, landlords, utility companies, etc.) to determine the likelihood that you will make payments as promised. It's a complicated equation that is constantly being updated and that your actions directly influence. To learn more, check out www.whatsmyscore.org .

So what does my situation at the mall have to do with my credit score? Every time you apply for or open up a new credit card account, an inquiry is made into your credit history. Too many inquiries or too many credit card accounts could lower your credit score—which could mean getting charged higher interest rates or even being turned down for credit in the future. I hardly thought the $3 I could save today would be worth the damage to my credit score and possible extra interest I could be charged in the future.

It's tough to resist this temptation, especially when your purchases are bigger and that discount begins to seem more appealing. Just be sure to factor in all the costs before you decide to fill out that application.

Do you have experience opening up (or resisting) retail credit cards? If so, share your story here!

Posted by Kathy at 09:15 AM |  Contact Kathy |  Permalink  |  Comments (0)
Found in Credit cards, Debt, Financial education, Money management, Paying, Preparing, Student loans, Wells Fargo Bank