7 Things High School Grads Must Do This Summer to Prepare for Life

Congratulations on graduation. Ready for life?

 

Congratulations on graduating from high school! Whoo hoo!

Since you’re graduating, you either 18 years old or about to 18 years old very soon. That means that you are, or will be, legally an adult. It’s time to think about starting your financial empire. Below, you’ll find 7 financial things high school graduates must do this summer:

Check Your Credit Report
It’s imperative that each graduate get a print out of their credit report from each of the “Big 3” credit reporting agencies. The government has passed a law that makes our credit reports available once a year for free from www.AnnualCreditReport.com. This is the only site that will provide a copy of your credit report at no cost to you, from each of the “Big 3”, once a year. You will not get your credit scores though; scores are computed through separate companies.

Tip: Nothing in life is free. Any company offering you a free credit report and/or score is more than likely trying to sell you a monthly credit monitoring service. Read the fine print.

 

Figure Out How Much College Will Cost
Whatever college you choose, it’s important that you understand how much the total cost of your degree will be. Consider the costs of tuition, books, dorm fees, and any other monies you’ll have to pay. Take a look at estimates fees per semester and then multiple that by eight semesters, perhaps ten semesters if your school is impacted. Once you see the costs in terms of tens of thousands of dollars it might make you a little more motivated to be responsible with your money. Apply for as many scholarships and grants as possible because you don’t have to pay those back. When you take out loans not only will you have to pay the money back, you’ll have to pay it back with interest.

Tip: Look for opportunities to make small financial changes that make a big difference. Buying used textbooks can save you hundreds over four years.

 

Consider the Return on Investment
You are going to make some decisions in the next year or two that will be the foundation for your life. Don’t make decisions based on your emotions or what your friends are doing; look at the return on investment. If you are spending money on something, it’s because you are expecting to get some kind of benefit. If you choose to attend an Ivy League university you expect to command top salary at a major fortune 500 company. If you choose to attend a community college it’s because you want to save a few dollars on your foundation classes. Did you know that you can attend a community college, transfer as a junior to a university and no one will know? You’ll cut your college expenses by half and end up with the classes you need. You must consider the return on investment with any purchase and paying for college is a big one.

Tip: If you’re undecided about a purchase, sleep on it. Never make a decision in a hurry.

 

Save 30%. Buy now.

Create a Spending Plan
Writing things down is good. I’m sure you have a general idea of how much money you’re expecting from jobs, financial aid, etc., but unless you have a written plan to spend it the money will pass through your account and you’ll have no idea what happened to it. Have you ever taken $20 out of the ATM and the next day you have no idea how you spent it? Research studies have proved that writing down your goals makes it easier to achieve them. When I want coaching clients to focus on spending, I ask them to write down the financial goal on a Post-It Note and stick it onto their debit card or credit card. The same thing works with writing a spending plan. Knowing how much money you want to spend in each category will help you stay on track.

Tip: making the plan before you actually have the money is the key to putting the spending plan into action.

 

Move Your Money
Visit www.aSmarterChoice.org to find a credit union in your area. Credit unions are financial institutions that offer the same products and services as traditional banks, but they are not-for-profit. The only purpose of credit unions is to serve the community; each credit union member loans money to the other members so loan interest rates are usually lower than a bank. Pretty soon you’ll want to purchase a car and in the not-too-distant future, a home. Credit unions tend to be smaller, offer more personalized service, and offer better rates on loans so having a relationship is a good thing. Moving your checking and savings account to a credit union could potentially save you thousands of dollars over your lifetime.

Tip: Search for a financial institution that is a good fit for you, don’t just choose whatever your parents have.

 

Start an Emergency Fund
Ever heard of Murphy’s Law? It states, “Anything that can go wrong, will go wrong”. It’s up to you to make sure that you have at least $500 in an Emergency Fund at your credit union or bank because there will always be something that you need money for unexpectedly. Having at least $500 in an account that you can have access to when times are rough might be the difference between having to borrow from a family member or take out a cash advance loan or being able to borrow from your stash and go on about life without being a hindrance to anyone. Start by opening a money market account at your credit union or bank and then add $20 a week to the account until you have at least $500.

Tip: Don’t touch it unless it really is an emergency.

 

Open a Retirement Account
Did you know that investing $5 a day will make you a millionaire by retirement? You read that correctly, investing just $5 a day in an average performing mutual fund account that returns 9% a year (industry average is 10%) will put $1.3 million in your pocket. The first step is to find a mutual fund company that will let you open a no-load Individual Retirement Account (IRA) with no money as long as you contribute at least $50 a month. Put your money in an account that’s not too risky and not too safe. You have a long time horizon so don’t be scared to invest more in stocks, but you have to be able to sleep at night. A fee-only advisor can help you determine how comfortable with risk you are and suggest some mutual funds to you. The process is as easy as filling out a one page application and sending in your credit union or bank checking account information. The second step is to commit to adding at least $50 a month to the account. The third step is to watch your account become fatter every month.

Tip: Set up the account so that the money is added to the retirement account automatically every month from your checking account. Add at least $150 per month to reach that million with no sweat.

 

 

In case you’d like to find out more financial information, you can order 10 Things College Students Need to Know About Money from Amazon or directly from the author through PayPal. Happy summer!

 

 

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My Work is So Important Because Teachers Think It Isn’t

“Many of the teachers that were surveyed didn’t think that financial education was an important concept,” said Brian Cullinan, the market managing partner for the auditing firm Pricewaterhouse Cooper in Southern California, which sponsored the survey.

I just read this quote from Despite new law, California lags in personal finance education and it turned my stomach. The reason I work so hard to reach people and teach them about personal finance is because most of them weren’t educated in that field in high school, undergrad or grad school. Apparently, they weren’t educated in it because teachers don’t think that it’s important. According to the article, fewer than 10% of teachers teach personal finance in California.

When you’re calling about speaking to a group of students, often the teacher will ignore your call or not prioritize your event. Now, I know why. This makes it even more important to educate your children about personal finance outside of school. Take ’em to a workshop. Register ’em for a webinar. Buy ’em a book. Talk with them about your successes and challenges. Do SOMETHING to make sure they don’t have to learn the hard way like most of us did.

Buy the Book

Save 30% when you pre-order the 2nd edition of 10 Things College Students Need to Know About Money directly from Shay.

” I LOVE this book! It is dense with information, yet easy to digest. This is the book that I wish I had when I was a senior in high school”  – Amazon.com review for 1st edition

” … the title is misleading. 10 Things College Students Need to Know is not only for students. ANYONE can benefit from the information presented in this easy to read and understand format. I learned a lot of information that will benefit me as I work with my finances.”  – Amazon.com review for 1st edition

“I have given this book as presents over and over again and will continue to do so. Not to mention it’s not boring, for she has quite the personality which makes the book fun and interesting. You don’t have this book? You’re missing out! ”  – Amazon.com review for 1st edition

Order your copy of 10 Things College Students Need to Know About Money for $10 today!

You can also purchase the book for full price at Amazon.com.

Pretending to be Financially Secure

I just read Unemployed, 55, and Faking Normal. The article is about women that are now unemployed or underemployed. These are women that are educated. These are women that are used to living comfortably. Now, they are looking at homeless people and wondering how similar their stories might be. The first bit that really jumped out to me was:

The gender wage disparity gap costs women $431,360 over the course of their lives, according to the Center for American Progress.

That is a LOT of money. We know that women earn less (last count was $0.73 on the dollar) than men and live longer than men (women will die at 81 while men will die at 76, according to the Center for Disease Control) so women are caught in a double whammy.

The prospect is even worse if you are a woman of color: Today, three in 10 single black women over 65 and early 4 in 10 older single Hispanic women live in poverty, a rate more than twice that of white women, according to the Women’s Institute for a Secure Retirement (WISER).

What can we do to change this?

#1 Educate girls and women about personal finance concepts like compound interest, dollar cost averaging, net worth, etc.

#2 Start girls saving (in credit unions) and investing (in individual stocks or mutual funds) early.

#3 Encourage girls and women to grow a skill set that will bring in enough money for them to live on and grown their investments.

#4 Provide information to help girls and women invest in retirement accounts as soon as they have earned income (first job).

Social security won’t cover all your costs in retirement and having a job in your 20s or 30s doesn’t mean you won’t be unemployed in your 50s or 60s. Taking the time to invest in yourself might be the difference between surviving and thriving. Start now.

 

 

 

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Pre-Order 10 Things $10 + FREE Webinar

 

DEADLINE: June 7th

 

Whoo hoo!

I am so excited about the second edition of 10 Things College Students Need to Know About Money that I’m doing something I’ve never done before: offering a pre-order. The book will be available on Amazon.com for $15 (you’re saving 30%) so order now to take advantage of this fantastic deal.

Graduation is around the corner for most high school students and I want to make sure that the books you order make it out in time to give as gifts. To that end, if you pre-order your copies of 10 Things College Students Need to Know About Money on June 7th or before, you can buy each book for $10 and you’ll be invited to a special Thank You Webinar! I’ll solicit questions through an email survey after you purchase and then make the webinar about the topics you want to cover.

If you order before May 27th, your books will ship Saturday, May 28th. Don’t worry, you’ll have your copy in time to participate in the virtual book launch.

Don’t forget to share this post! We want everyone to know about this great resource.

Wanted: Single Women to Invest

Financial Advisor Magazine just came in the mail. This month there is an article about attracting more single women as clients. There are two great quotes that I wanted to share with you:

“Women are better investors than men” – Wibberly, CIC Wealth

“80% of men will die married but 80% of women will die single” – Penta BBH, Center for Women & Wealth

If those two quotes aren’t enough to get to start investing, I don’t know what else to do. Those quotes tell us that women are AWESOME at investing and that heterosexual women are going to have a substantial amount of time not married (at least our 20s and ten, fifteen, perhaps 20 years after our partners die). What are you waiting for?

Start investing now. If your job offers you a 401k or 403b (tax benefits and usually matching) start contributing now. Call HR. Now. If you’re worried about how much money is going to start coming out of your check, start by contributing just 1% and increase your contribution percentage a bit every year.

If your job doesn’t offer you a retirement plan, open an Individual Retirement Account (IRA) as soon as possible. Depending on whether you choose traditional or Roth there are tax benefits now or tax benefits later. You won’t get the matching but you will get to take advantage of compound interest.

Not sure where to begin? Find a fee-only advisor and get hopping! If you’re 30 years old and can contribute $415 per month you can build a million dollar nest egg by the time you retire at 67 years old. Can’t contribute that much? No worries. Something is better than nothing. If your nest egg ends up smaller than you’d like, you can partner your investments with your Social Security payments and go live in one of these 8 beautiful countries.

Either way, it’s time to get hopping.

 

The 5 Documents Every Family Needs

I am NOT an attorney or a CPA. Please, please, please consult an attorney licensed in your state to get everything done legally. What I’m sharing here are things that I learned after my grandmother died.

 

Death.

No one likes to think about it but it’s going to happen. The questions is: Will your family know what to do when it happens to you? If you have assets (checking accounts, retirement accounts, a car, etc.) you need to figure out what you want to happen to those things after you’re gone. What if you don’t die? What if you are injured and/or become incapacitated? If you’re not sure, this is the list for you! Time to get it done and most of it can be done for free with a little bit of time. So, without further ado ….. here’s a list of family documents that every parent needs to have:

A will. Simply put, a will is a document that tells people what you want to happen to your things (bank accounts, investments, home, jewelry, car, etc.) after  you die. There are companies that will provide them to you for free. Some states will accept handwritten wills (aka holographic wills). Having a will does not mean that your estate will avoid probate.

A living trust. A living trust is a trust that is in effect while you are alive and can manage it. You get to put things that you want to avoid probate into the trust and manage those things while you’re alive. While you’re alive, you get to choose who will manager the trust after you’re dead. Once you die, whomever you said gets to manage it takes over. Probate is generally not needed.

A healthcare directive. This document tells people what you’d like to happen in the event of a terrible health event. For example, would you want to have extraordinary life-saving measures taken? How long should they let  you be in a coma before your family decides to pull the plug? These aren’t fun decisions but they are necessary. You can download your state’s form and register it for free in most states.

A healthcare power of attorney. This document tells the hospital, or whomever, who you want making medical decisions for you. Consider who will do what you want versus who will do what they think is best. Who will have a clear head and be willing to go to bat for you. This multi-state form from the American Bar Association should do the trick.

A durable power of attorney. This is a document that gives someone the power to make legal decisions for you. You want to have a document that becomes valid once an event occurs (accidents, death, etc.), not a document that is always valid. You don’t want someone to sell your house and clean out your bank accounts. Hopefully, the person that you put in this role wouldn’t do that anyway but one can never be too sure. Get a “springing” durable power of attorney just in case. Here is a bit about powers of attorney.

 

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OneUnited Bank – A Black Owned Financial Institution

I am so glad that I found out about OneUnited Bank. According to the OneUnited website:

The Bank began almost 50 years ago with the opening of Unity Bank & Trust in Boston, Massachusetts. OneUnited Bank was established by combining Black-owned banks across the country – Founders National Bank of Commerce in Los Angeles, Family Savings Bank in Los Angeles, Peoples National Bank of Commerce in Miami and Boston Bank of Commerce (the predecessor to OneUnited Bank) – with the same mission, to create the fastest growing and premier bank in America serving urban communities.

They provide checking accounts, second chance checking accounts, savings accounts and secured credit cards. I love credit unions but since this is a bank that focuses on the Black community, I’ll make an exception and share about it.

Another Reason to Open a Roth IRA: Paying for College

I was reading the business section of the LA Times when I came across this nugget:

Because you make Roth IRA contributions with after-tax dollars, you can withdraw them at any time without taxes or penalties, just like 529 plans.

I knew that. I’ve done that, but it never occurred to me to contribute with the intention of using that money for college costs. Do you know what that nugget means? It means that:

• Instead of opening two accounts and having to schedule two contributions, you can open one.
• You can take out the money you put in, not the interest that you’ve earned, to pay for college costs after letting it grow for years and years.
• If you don’t end up using it for college expenses you can let it continue to grow until retirement.
• If you do want to use the money for college costs, the money in your Roth IRA with not count against your child for financial aid like a 529 plan would.

That is revolutionary. You can contribute, let the money grow, it won’t count against your kid when you apply for financial aid (FAFSA, scholarships, loans, etc.), and you can leave it there to continue to grow until you need it for retirement. The absolute best part? You can leave the funds left in the account after you die to your spouse OR any beneficiary that you designate and that money can continue to grow.

There seems to be no downside to opening a Roth IRA.

 

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Google Bans Payday Loans

This means everything and nothing: search engine Google has decided to ban payday loan advertising.

Facebook doesn’t show ads for payday loans and starting July 13th neither will Google, but results will still show up in searches. According to the Washington Post:

“Consumers will still be able to find payday lenders from a Google search. But the ads that appear on the top and right-hand side of a search results page will not show marketing from the payday lending industry … “

The hope is that predatory payday loan companies (read Payday Loans are the Devil in Money Matters: The Get It Done in 1 Minute Workbook) will have access to fewer willing clients. I’ll be interested to see how all this will play out.

Virtual Book Launch June 8th

As you all know, I am ecstatic about the printing of the 2nd edition of 10 Things College Students Need to Know about Money! I’m so excited that for the first time ever I’m hosting a virtual book launch on Facebook. What is a virtual book launch you ask? Good question.  *wink*

A virtual book launch is an opportunity for you to ask me about the book, win some cool gifts and score an AMAZING discount on the book. I’m so excited.

Sign up to receive my emails and get another gift.

Subscribe to our mailing list

See you Wednesday, June 8th between 6:30pm and 8:30pm Pacific Standard Time.

Rihanna Gives $5,000 to $50,000 to College Students

Wow!

Singer Rihanna’s Clara Lionel Foundation that will provide 50 scholarships to students from Barbados, Brazil, Cuba, Grenada, Guyana, Haiti and Jamaica that have been accepted into a 4 year college program in the United States, saying:

“I don’t think it’s fair that children carry the burden of financial limitations at such a young age,” Rihanna stated. “To be able to give the gift of an education is actually an honor. Higher education will help provide perspective, opportunities and learning to a group of kids who really deserve it. I am thrilled to be able to do this.”

Applicants will need:

1. A current, complete transcript of grades. Grade reports are not accepted. Unofficial transcripts must display student name, school name, grades and credit hours for each course and term in which each course was taken.
2. A completed Applicant Appraisal Form (click to view and print the form).
3. A copy of the acceptance letter from the accredited four-year college or university you will be attending in the United States.

Deadline is June 10th

Apply here

 

 

$2,000 Scholarship to Travel

After spending most of March in southeast Asia, I’ve traveled to 18 countries on five continents. Nothing has changed my life as much as getting out into the world and seeing that there are tons of ways to do things and the way I learned certainly isn’t the only, and is possibly not the best, way to do things. If you’ve been wanting to travel, this may be the best way to get started – with someone else’s money! Lol

I saw this on the Growing Up Bilingual Facebook page:

Explore the World travel scholarships: HI USA is awarding 4 $2,000 Explore the World scholarships this year to individuals who are 18-30, permanent U.S. legal residents, live or go to school in one of the 14 participating U.S. cities, and who plan to incorporate education and/or service into their international travels. Application deadline is May 15, 2016.

Apply here: https://www.hiusa.org/programs/travel-scholarships

Go for it!

 

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Not Enough Money for Retirement? 8 Countries to Live In

We talk a lot about investing for retirement, not investing enough for retirement, and how to get the most out of your retirement dollar. What we normally don’t talk about it what to do when you just don’t have enough money.

Investopedia has a great list of eight countries you can live in when you only have $200,000 invested and your Social Security check of about $1,300 per month to count on. My favorites are:

Thailand – I’ve been there (only Bangkok) and it’s a cool place where you can live a pretty American life, if you choose to. I rented a one bedroom apartment with air conditioning in a condo building. There was a night market a few blocks away with things to buy and food to eat (they had a Mexican taco truck. Yum!) in a mall with a grocery store and a McDonalds and a coffee shop. The only strange thing is the ode to the King is played twice per day on tv  in train stations, and before movies. Just be quiet and stand and you’ll be fine.

Ecuador – I have never been but I hear a LOT of good things about it. Ecuador has topped many great-places-to-retire lists.

Costa Rica – Again, never visited but I hear that it’s a great place to live if you want an eco-friendly spot. They also say that it’s beautiful. I can’t wait to visit …. one day.

Spain – My first international trip was to Spain (I wanted to see the Al-Hambra) so I know a bit about it and feel that I could live a comfortable life there. I traveled from Madrid to Malaga, Seville and Cordoba. One could live a decent life there, as long as you like pork. They eat a lot of pork in Spain. Lol Push back against being colonized by Muslims for 400 years? Lol Anyhoo, living there could work.

Check out the whole list over at Investopedia.

Graduating? A few financial tips.

Shay Olivarria, financial education speaker and the author of 10 Things College Students Need to Know About Money 2nd edition, was included in the an article geared towards sharing a few tips for students that graduating this year. Nine women were included. Shay’s tips:

“Keep your credit scores high by taking a look at your credit reports for free at AnnualCreditReport.com (the only place you can get them for free). [Also] learn about the five parts of a credit score and leverage your scores to save money (and deposit fees on utilities) on car loans and home loans in the upcoming years.”

“You created a plan to graduate from college and you worked that plan to bring graduation to fruition. You can do the exact same thing with personal finances. Make a plan and execute that plan. Welcome to adulthood.”

Read the rest of the advice by visiting Student Loan Hero.

 

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com.