College can wait

In the next month, high school seniors across the country, eager to get a jump on their peers, will be applying for early admission to their choice colleges. Other students won’t be so pressed. That’s because a growing number of U.S. high school graduates are taking a year off before going to college, according to data from the Higher Education Research Institute, which found that an estimated 1.2 percent of first-time college freshmen in the United States deferred admission in 2011, leaving a year’s gap before hitting college campuses.

“While gap years have long been a common practice in England and other countries, they have only recently gained popularity in the United States,” reports Valerie Strauss in The Washington Post’s Answer Sheet blog. Gap years offer an opportunity to travel, explore different interests and gain experience and maturity before beginning college.

Instead of going right off to school, many students choose to spend their gap year in structured programs volunteering abroad or in the United States.

Holly Bull, president of the Center for Interim Programs, tells Victor Luckerson of Time Magazine that she’s seen an increase in schools urging students to take time off.

“I wouldn’t call it mainstream, but there’s way more awareness and support, and colleges are now beginning to endorse it as a really positive thing.”

Bob Clagett, a former director of admissions at Middlebury College, says taking a gap year can help students gain a renewed focus on academics, reports Luckerson.

“Getting a job for a year, even if it’s flipping hamburgers, still can be a productive experience and can help students just do something other than think about what they have to do to get into college,” Clagett told Time.

This week’s Color of Money Question: What do you think of high school graduates taking a year off before going to college? Send your response to colorofmoney@washpost.com and put “College Can Wait” in the subject line.

Ungrateful Boomerang Borders

Advice columnist Amy Dickinson was right on the money when she responded to a reader who feels her daughter isn’t grateful enough for her financial support.

Here are the facts:

-- Mother let grown daughter and her boyfriend come live in her house.

-- The couple has been living with mom for two years.

-- The couple has never invited the mother to join them for a meal when they cook.

-- The couple does not pay rent. They do “pitch in” for utilities.

“I feel sad and angry about this,” wrote the mother. “I have been a generous person with them, and the least I expect is for them to share a meal with me. Am I overreacting? What are your feelings?”

Amy told the mom just what I would have said. Her advice, which a lot more parents with ingrate adult children living in their house should heed: “You will not receive gratitude by demanding it. But you can receive rent. You are not happy with this arrangement, so you should change the terms. Either charge this couple rent (in which case gratitude won’t be a factor), or tell them it’s time to find other housing.”

Money Up In Smoke

Americans waste more than half a trillion dollars each year.

Many people burn money up smoking. Americans waste $44 billion smoking between the cost of the tobacco and the taxes, reports DailyFinance.

Exhibit No. 2.: Gift cards: Between 2005 and 2011, $41 billion in gift cards went unused.

Here are a few other ways that consumers waste money, according to the article:

-- Buying lottery tickets. If you think you’re going to hit the megamillions, think again. In 2010, Americans spent $59 billion in lottery tickets.

-- Parking tickets. The National Motorist Association says drivers spend $7.5 billion to $15 billion in traffic tickets. Oh, and don’t forget the extra cost of getting some of those tickets: higher auto.

-- Giving in to a sweet tooth. Candy may be dandy, but all that sweetness adds up. Consumers spent $29 billion in 2010 for candy, with 60 percent going toward chocolate.

Squirreling Away Your Savings

Recent data by the Federal Reserve found that many Americans are stashing $6.9 trillion into savings accounts even though interest rates are at historic lows.

But squirreling your money into low-interest-paying savings accounts could hurt you in the long run. People who are stashing their cash that way are missing out on the highs of the stock market and a recovering real estate sector, experts say.

For last week’s Color of Money Question, I asked: “Are you afraid of the risk in investing?”

Here are some of your responses:

Derek Freyberg of Menlo Park, Calif., wrote: “I’m putting money in short-term, one-year, CDs to avoid rising interest rates, but the real rate of return is negative. But what’s the alternative? If I go to long-term investments the increase in rates is marginal but the risk is higher.”

“The flight to ‘safety’ just trades a possible visible risk (stock market drop) for a guaranteed invisible one (inflation),” said Laura McAfee of Catonsville, Md. “Two percent to 3 percent inflation doesn’t seem like much. But even those low rates (below the historical average) will cause prices to double or more over a 40-year career. So if you’re relying on a savings account paying 0.01 percent to get you through retirement, better be prepared to save twice as much.”

Bert Tindall of Coppell, Tex., said: “No, we are not afraid to take risks in the stock market. We did not sell when the market dropped a few years ago. Our investments have recovered from the losses and are now ahead of where they were before the financial collapse. As most financial advisers recommend, keep a balanced and diversified portfolio and do not sell when markets decline. Instead, that is the time to buy. Its hard to do but the only way to come out ahead.”

Upcoming Events

--On Saturday, Oct. 13, from 10 a.m. – 12 p.m., I will be speaking at Meadows Baptist Church in Maryland. The free workshop, “Personal Finance: Getting Your Finances Back on Track,” is open to the public. The church is located at 6600 Croom Station Rd., Upper Marlboro, Md., 20772. For more information, call (301) 257-4857.

--On Saturday, Oct. 27, I’ll be speaking in Detroit at Triumph Church. My keynote is part of a day of free financial workshops open to the public. The theme for the event, scheduled from 8 a.m. to noon, is “If Money Is The Key, Why Am I Still Locked Out?”. The church is located at 2670 E. Grand Blvd., Detroit, Mich., 48211. The workshops will include information on budgeting, credit management, retirement, saving and investing. There will also be a special youth track for teens ages 14 to 17. For information and to register, visit the church’s Web site, or call (313) 871-0300 or (313) 874-3724. This is an annual event presented by the Financial Empowerment Ministry of Triumph.

Tia Lewis contributed to this report.

You are welcome to e-mail comments and questions to colorofmoney@washpost.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.

Michelle Singletary writes the nationally syndicated personal finance column, “The Color of Money.”
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