washingtonpost.com
Color of Money Live

Michelle Singletary,Zac Bissonnette
Thursday, December 2, 2010; 12:00 PM

Need advice about how to handle your personal finances? Whether the struggle is saving for retirement, organizing your bank files, or talking about money responsibility with your spouse or loved one, Post personal finance columnist Michelle Singletary offers her advice and answers your questions on Thursday, Dec. 2 at 12 p.m. ET. She will be joined by Zac Bissonnette, author of "Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships or Mooching Off My Parents," the most recent Color of Money Book Club selection.

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Michelle Singletary: Thanks for joining me today. I hope you had a chance to catch my live video chat just a few minutes ago. If not, you can always watch it later. And if you want me to answer your questions live online, send them to colorofmoney@washpost.com.So let's get started.

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The value of education: Mr. Bissonette, I know this isn't exactly what you came here to discuss, but could you address the question of whether our society is spending too much on college? Charles Murray has written that only 15% of high school graduates who start college will eventually graduate and then use their hard skills in their careers. The rest will drop out, or if they do graduate, they'll only use their degree as a kind of certificate of the possession of soft skills like keeping a schedule and being able to write a coherent paragraph. Even though a degree is usually a competitive advantage to its holder, would our country as a whole be better off if we didn't have so many people in college at any time?

Zac Bissonnette: Well I think that if you read a lot of the writing that comes out of academia, you realize that a lot of people with post-graduate degrees can't even write coherent paragraphs! I'm thinking about starting an endowment at my university for "The Preservation and Promotion of the Single-Clause Declarative Sentence".That gripe aside: ;)Only about half of college grads under age 25 have jobs that require a college degree, so it's certainly reasonable to wonder whether we're suffering from an overinvestment in higher education.My greatest concern is that a huge percentage of people are enrolling in college, borrowing a bunch of money, and then not graduating. I worry that our national obsession with degrees has led to too many people "automatically" pursuing college without giving thought to whether they will actually benefit from it.As education expert Marty Nemko has reported,"among college freshmen who graduated in the bottom 40 percent of their high school class, 76 of 100 won't earn a diploma, even if given 8 1/2 years. Yet colleges admit and take the money from hundreds of thousands of such students each year!" http://www.martynemko.com/articles/americas-most-overrated-product-higher-education_id1539I don't know that I have an opinion on this necessarily, but I think that this is an important discussion to be having and that we must not get locked into the politically correct notion of wanting everyone to go to college. Thanks for bringing this up.

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Are Ivy League Schools Worth the extra Money?: Hi, Mr. Bissonnette. I know Michelle disagrees, but I am willing to spend more, and/or have my children borrow more, within reason, if they can get admitted to a true blue chip college. I'm head of recruitment at a Fortune 500 company, and we'll take a C student from Harvard or Wharton over an A student from Podunk any way of the week.

Zac Bissonnette: Hello,Thanks for this perspective. What is interesting about it is that you, as the head of recruiting at a Fortune 500 company, appear to be in the minority. For instance, a WSJ and Payscale Inc. study found that "Under pressure to cut costs and streamline their hiring efforts, recruiting managers find it's more efficient to focus on fewer large schools and forge deeper relationships with them, according to a Wall Street Journal survey of top corporate recruiters whose companies last year hired 43,000 new graduates. Big state schools Pennsylvania State University, Texas A&M University and University of Illinois at Urbana-Champaign were the top three picks among recruiters surveyed." (http://online.wsj.com/article/SB10001424052748704358904575477643369663352.html)The other really important point here is that, as a practical matter, it's rare that people need to borrow significant amounts of money to attend the most elite colleges, which have huge endowments and very generous financial aid packages.People tend to get in the most trouble with debt at sort of second- and third-tier schools like NYU and American University of rexample.So to answer your question: would it be worth borrowing a bunch of money to go to Harvard or Princeton? I don't think so -- and I think the evidence is fairly overwhelming that I'm right about that. But, conveniently, if your kid gets into those schools, he probably won't have to borrow anyway!

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Moving from FT to PT work arrangement: Hi, Michelle. I've read your column for several years and take your sage advice to heart (though not always into practice). Here's my question: I want to move from a full-time position to a part-time position so that I can be at home with my daughter when she gets out of school at 3pm. I can estimate how much I would likely earn at 30 hours a week, and my husband and I are starting to practice living on that amount and saving the rest to see if this is actually doable. Are there any other things you would suggest we do in advance of the change?

Michelle Singletary: I love that you are already practicing what it will be like to make less. That's exactly what I would recommend.

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Child hates in-state schools: Student's major is only available at two universities in-state which student does not like either one. One is extremely large and the other one has a really low graduation rate. (Students must be on the 6/7 year plan). Recommendations are greatly appreciated. Joining the military or ROTC is not on the table. Do out of state colleges ever offer students in-state tuition even if they don't reside in the state? I really appreciate you being a voice for parents and students to hear that graduating with large sums of debt $60,000+ is crazy and life altering. Thank you!!!

Zac Bissonnette: Regarding graduation rates: Graduation rates are overwhelmingly influenced by what statistics people call "selection bias." That is, unmotivated students tend to go to less selective schools and then not graduate and the school has a low graduation rate because of that.Picking a college based on the graduation rate is a lot like trying to lose weight by moving to Colorado, which has, last time I checked, the lowest obesity rate in the country. What matters is not where you live but what you eat and how much you exercise. You can live in Mississippi (the state with the highest obesity rate) but if you eat healthily and workout, you'll be able to stay fit!So that's a general word of caution about getting too caught up in graduation rates.Some states have agreements with other states where you can get in-state of close to in-state tuition if your child's major is not offered at his in-state institution. Here's some information on the program in New England, for example: http://www.umb.edu/admissions/undergraduate/rsp.htmlCheck with your high school guidance counselor or the admissions office at a school you'd like to attend in your region (but not state) to see if this is an option.Please feel free to email me at ZBissonnette@gmail.com with more details and I'll see if I can help.

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401K/Roth IRA: I currently contribute 17% to my 401k. I plan to save more in the new year, but was wondering if I should contribute more to my 401k or contribute regularly to my Roth IRA? I plan to increase the savings amount to 19 or 20%. Thanks!

Michelle Singletary: Depending on your tax situation, this gives you some options of how to and when to withdraw the money.

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Homeownership: Hello -- I just wanted to express my appreciation for all that you've done over the years. My fiancee and I just purchased our first house (well below our means) and still have a few months' worth of emergency savings, healthy retirement funds, and no other debt. It's going to be a very merry Christmas for us thanks in part to your fantastic advice. Thank you very much!

Michelle Singletary: How very sweet. Thank you so much. You just made my day. I know lots of people don't always agree with my advice. It's hard sometimes. I know that. But if I can move people not as far left as I am but somewhere in the middle, they wouldn't be so stressed about money. That's my goal.So thank you for letting me know that I am helping.

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paying for college: My 15 year old sophomore is talking about med school....how should I approach college selection? I know she may change her mind, but she is a high honors student with pretty clear goals.

Zac Bissonnette: Here's the thing to remember if your high school student is thinking about medical school: It's really, really freakin' expensive. Medical school can easily cost upwards of $200k, and the average doctor who borrows graduates with$156,456 in debt, acording to the Association of American Medical Colleges.Given that: students planning to attend medical school (or any kind of graduate program, really) should absolutely do everything possible to avoid borrowing ANYTHING for undergrad. If you borrow $50k for undergrad, you may well find that the amount of debt required to become a doctor would put you over the edge and make it impossible to pursue that dream of being a doctor.That would be tragic and I don't want that to happen to your daughter. For inspiration, check out this piece I did on a girl who started at an Ohio community college and ended up going to Yale Medical School ALL OF IT DEBT-FREE!!!!!! WAHOOO!!!!!!!!!! http://www.walletpop.com/blog/2010/03/07/from-community-college-to-yale-medical-school/If your daughter wants to go to medical school, she should kick butt in all her classes, take challenging classes in college, graduate with a very high GPA, and kick butt on the MCAT. You don't need a prestigious name on your diploma to go to medical school. Having a strong financial foundation is infinitely more important.

Michelle Singletary: I just love Zac!What great advice. And how unconventional since many, many people would tell this parent otherwise -- to borrow, borrow, borrow to get into a good undergrad to get into a good medical school.

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Parents' earnings level: Is it disadvantageous for the child's chance to get a scholarship/grant if the parents' earnings reach a certain level?

Zac Bissonnette: In terms of need-based aid, yes. In terms of merit aid, no.But it's sort of like not earning any money to save money on taxes. The more you earn, the more money you get. Parent earnings are only "taxed" by the FAFSA form at a relatively low rate, so you really should NOT try to minimize your income in order to get money for college.HOWEVER: You should avoid doing things that will artificially increase your net income without actually making you richer. For instance, realizing a $50,000 capital gain on stock you sell would boost your income by $50,000 which would wipe out a ton of financial aid eligibility.But in general, earning more money will only help you pay for college.

Michelle Singletary: I'm so swooning right now!Go Zac, go!Such common sense. It never ceases to amaze me when some parents (not the poster perhaps) complain that if they save for their kid's college expenses because it will hurt them in the financial aid arena. What they fail to realize is much of the aid these days is in the form of loans. Even if the loan is subdized by the federal gov't, it's still debt!Save as much as you can NOW.

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Charitable Giving: Michelle, you're so right that people should try hard to give to others during this holiday season. Anne Arundel Co., where I live, reports that hundreds of families who have requested help may have to do without unless more people step up. I've had a wonderful life, but am now old, disabled and largely housebound. So I use the money I used to spend on travel and entertainment to make charitable donations. I do good and it makes me feel good. Win/win. But I have to say that even I am getting worn down. Last week I received 37 charitable appeals! If I send only $10 to each, that's $370. And when you send a donation, the acknowledgement almost always asks for a further donation. I focus my giving on about 8 organizations that I know do good work, with occasional random others that catch my eye. The sight of starving children, abused animals, homeless families and so many others takes a toll. If you give to one animal rescue site, for example, you receive appeals from dozens of others. I plan to continue to donate, but understand how sometimes people do get overwhelmed.

Sarah Halzack: Michelle's column: Why not add charity shopping to the Black Friday ritual?

Michelle Singletary: I do understand the donor fatigue. I get it often. But you are approaching charity the right way. Give what you can to those charities that matter to you. And you can also set aside some extra funds for needs that may come up unexpectingly such as when Haiti was hit by the earthquake. Otherwise don't feel guilty if you can give to all that ask. They have to ask and you can say no if you are giving wisely.

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Annapolis, MD: Do you keep up with her at all? I'd love to have her style my hair if she is able to land a comparable position.

Sarah Halzack: Michelle's column: Giving ex-offenders the chance to work

Michelle Singletary: For those not sure what's this about please read my columns on Ms. Brown. It's a heartbreaking story.I'll be writing a follow up soon. But she's doing okay. she found a job although it's not nearly as good as the one she had and it does not have any benefits. But still her spirits are good and Kelly is so grateful for all the support from folks like you. She was surprised and so was I that so many people understool her plight. Yes, she made a horrible mistake and she paid for it. Isn't that what we want. People to be punished and then have a chance to redeem themselves? And yet, that often is not the case with ex-offenders.So again, thank you for standing up and being heard on this issue.

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Saving money at college: Mr. Bissonnette,What are the top three things a parent should do to ensure their kids aren't burdened by debt after college?

Zac Bissonnette: 1.) Cut discretionary costs to help your kid pay for college. i.e. DO NOT take out a home equity LOAN or stop saving for retirement. DO drive your car an extra year, skip vacations, and stop eating out. Short-term sacrifices can go a long way toward helping your kid pay for college without putting anyone's long-term financial future on the line.2.) Be a parent, not a wimp. Recognize that most adolescent brains are not developed enough to understand the long-term consequences of something like $50,000 in student loan debt. Do everything in your power to push your kid into attending a college that is affordable. Do not fall into the trap of letting your kid dictate these things. It's just too important.3.) Don't be one of those parents who doesn't want their kid to work during school. I cite a study in Debt-Free U that shows that students who work during college actually graduate with, on average, higher GPAs than students who don't worry. TELL YOUR KID TO GET A JOB!!!!!!!!! ;)

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Value of an Ivy degree: Just a quick story: Several years ago, I had a student who was accepted to Harvard, but came to our much smaller college because we offered her a full ride. This student is now beginning her surgical residency at the Mayo Clinic, and she doesn't have any undergraduate debt to worry about. Ivy schools are nice, but they aren't the only way to achieve Big Success.

Zac Bissonnette: Great story! Thanks for it!

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Type of college: My 16 year old is a competitive swimmer and is interested in physical therapy. Should he swim for college while pursuing this career?

Zac Bissonnette: Sure, why not? :) A lot of employers like to hire athletes. (See Dr. Thomas J. Stanley's book The Millionaire Mind for an interesting discussion of this). it's somewhere between page 50 and 100 in the PB edition, if my memory serves. . .

Michelle Singletary: Great advice.

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College savings plans: What, if any, are the downside of college savings plans?

Zac Bissonnette: There really are none except that you must put your own retirement needs first.Before you start saving for college you need to be 1.) Debt-free except for a fixed-rate mortgage on your house 2.) Contributing at least up to the maximum match on your 401(k), and 3.) have a 6-8 months emergency fund in the bank.

Michelle Singletary: Also just know that with any investment your return depends on the risk you take. Many parents were dismayed to realize the 529 plan they set up loss money during the last several years. It's an investment and they tend to do that.That's why it's important to listen to what I've been saying and what Zac just said. Invest what you can afford to lose. Still invest, but understand what that means. So if the 529 plan doesn't do well you still have savings and little to no debt to help with college. All three of our 529 plans took a big hit during the last two years. But they all are back up now. However, we are still saving in conservative vehicles AND trying to keep our debt to just our home.

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RE: MED SCHOOL: I agree that you don't need a big name undergrad to get into med school - grades and MCATs are much more important. BUT keep in mind that many (most?) pre-med students end up changing their minds. So I would not put all of my eggs in one basket and select an undergrad on the assumption that your child will definitely go to med school. If she changes her mind or doesn't get in to med school, then she's stuck with a lesser, albeit free, undergrad on her resume.

Zac Bissonnette: You are exactly right.This is why i HATE HATE HATE HATE HATE the standard advice that "students should borrow no more than their expected starting salary" that you see trumpeted by so many personal finance writers (although not Michelle Singletary because she is super-smart and gets this stuff).College should be all about building a flexible foundation for the rest of your life -- one that allows you to change your mind and pursue your passions. Making financial decisions that lock you into a single career path at the age of 18 is not a good plan. I've NEVER gotten an email from someone saying "I'm 25 years old and I wish I had a pile of student loans". I've gotten tons saying the opposite.

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Community College and Financial Literacy: Zac, thank you for your book and recommending community colleges. Would you be willing to speak to a community college audience and tell them the value of becoming money management smart?

Zac Bissonnette: Yes! If it's close enough to me and I can fit it in! Big fan of community colleges. Email me at ZBissonnette@gmail.com

Michelle Singletary: I'm available too (hee, hee). Hey a one-two punch from me and Zac will really wake up your students!

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Payday Loans: What suggestions do you have for a person who has to depend on a payday loan every payday to keep them afloat with their monthly finances? It seems like once you start getting them, how do you stop????

Michelle Singletary: Stop.Stop the maddness.Today.Don't get another one of those terrible loans. If that means your phone gets turned off, so be it. If that means no cable fine. If that means you are going to be eating rice and beans or oddles of noodles for awhile, do it. ride unless you get off now.Please, please contact a non-profit debt counseling agency to help you figure out how to budget and get on a good plan to pay off the loans you have.Just think about it. Go to www.debtadvice.org to find an agency near you.

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Kudos to you ZAC!: Thank you very much for writing your book, I'm almost finished with it and hope my wife and kids will read it and come out with the same outlook as I have......Thanks to Michelle for introducing you to me through her column, I look every week to figure out how to pay for college and now that its on my doorstep.....I'm glad I found the two of you!

Zac Bissonnette: And I'm glad I found you!!! XO <3

Michelle Singletary: Ah shucks, me too!Be strong dad. You can do this. I promise you can. I've seen it done. Zac is doing it. And so are many others who have come to their senses and are rejecting the notion that you should borrow "whatever it takes" to send your kid to the college of their choice.

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College finances: This is a piece of advice for parents: PLEASE talk to your kid, honestly and upfrontly, about what you can afford to spend. I wanted to go to a local private college, and my parents told me, as a fourteen-year old h.s. freshman, that if I wanted to go I needed to get at least half in scholarships/awards. I did that, attended the school of my choice, and graduated debt-free! So talk to your students about your financial circumstances well ahead of time, so they know what they have to do.

Zac Bissonnette: Yes, great point.Honesty is important. . . your kids need to know what the deal is. . .

Michelle Singletary: I call this advice "Managing Expectations."Practice it all the time with my kids. Doing it now for Christmas. They want three-pages worth of stuff. I say, look kiddos, got to send you to college. You can have xxx and that's it. Love you but that's it.P.S. Please don't put me in a nursing home for my tough love!

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Ivys and debt: I would just like to echo your comments. I got accepted to an Ivy, but chose to go to a less prestigious, but well respected liberal arts school on a full ride. I worked through college and graduated with minimum debt and was able to get my very expensive graduate degree from a top program without the extra stress of over six figures of undergraduate debt. If you get a graduate degree, few people look or care where you went to undergraduate. As for those who graduated from my graduate program with major undergraduate debt-- they'll be paying off a sizable portion of their (and their spouse's) income to the government for the next 30 years. In addition to being less desirable to marry, it means no vacations, eating out, and a life of unnecessary hardship. No one thought about that when we were 18.

Zac Bissonnette: Yup.This is an important point for everyone to read.The dumbest thing in the world is to borrow a bunch of money to go to an expensive undergrad program and then go to a cheaper graduate program.

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Scholarships: Mr. Bissonnette, thanks for your insights and excellent advice. What are the best resources for researching merit scholarships?

Zac Bissonnette: FastWeb.com is THE resource for that.

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B-C Student - Paying for College Advice: Zac, I am much wiser reading this today. What financial advice do you have for parents of average students who are serious about college? And about how much the student should contribute to the cost?

Zac Bissonnette: There's all kinds of formulas for how much parents should contribute, but what parents really need to remember is this: the airplane rule. "Please make sure your own oxygen mask is secure and fastened before assisting your child". he and his future wife probably do not want you crashing on the couch when you're 70. But DO stop goign on vacation for a couple years, drive your car an extra year, and brown bag your lunch. Then set up a separate savings account where you put the savings from that each week. . . If you start doing that freshman year of high school, you'll probably be surprised at how far the savings will go toward paying for an in-state public college.

Michelle Singletary: that kid is doomed to some average career or life tomorrow (depending on how you define average). I say that to mean just because your child has average grades doesn't mean he or she won't succeed in college. You just have to find the right program. And if you are worried about him or her not finishing, then start them off at community college (a much lower cost way to start off your college life). See how she or he does, then move forward from there.

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Thoughts on college: First, I think too many parents push their children into college when that may or may not be the right path for them. My philosophy is that if you don't know your child is right for college or what type of major they want, then maybe they can take a year off, work for a year and then enroll the next year. Sometimes that year of working will give them a better idea of what they want to do and working at low paying jobs often will give them the incentive to work harder when they do enter school so that they don't limit themselves to unskilled labor jobs. I've also seen kids who take time off decide they want to go into skilled labor jobs and go into trade schools rather than colleges.Regarding trying to get in-state tuition rates for out-of-state schools, it might be worthwhile for your child to move to the state they want to attend school in, work for a year to attain residency and apply the following year. Or they can enroll in a community college in the new state and then apply for the full-time state college the following year. It may sound expensive, but it can actually save you money over the full duration of college especially if your child is paying part of their own expenses. Plus they'll understand the financial commitment a bit better if they are partially supporting themselves during that year.

Zac Bissonnette: Good point about the first part.The moving to another state to gain residency and qualify for in-state tuition really doesn't work the way it did a few years ago.As college costs have soared, many states with sought after public colleges have made it very, very, very, very hard to qualify for residency and in-state tuition. It was a loophole that's basically been closed (at least in the states where you would bother moving there to qualify for in-state tuition).

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Community College Follow-up: Thank you, Michelle and Zac. I'll definitely be in-touch. I applied for a grant at my community college to host a financial literacy conference in April 2011. My proposal was accepted. Both of your responses made me stand up and cheer! Yeah!

Michelle Singletary: Good for you for being proactive on this front. I've spoken to a lot of students and if you give the information in an interesting way they will listen. They will apply it and they will be grateful.

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Moving to part time: For the poster asking about moving to part time, I did that when my son was born almost 2 years ago. I moved to 4 days a week, and my salary was reduced 20%. If it is financially feasible, I highly recommend it - having more time with my son has been invaluable, and it's also great from a logistics standpoint. We do doctor's appointments, grocery shopping, etc. on my day home, and then our weekends are more free for fun family things.

Michelle Singletary: Definitely worth trying to make it happen. I have a schedule that allows me to do this and still work full-time. But that often means staying up late, late at night.The point is many people could work less hours when you factor in the cost of working and the money we waste. Now I understand for many others it's not possible but if you can make it happen it's wonderful for the kids.

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med school...: And they still get in to med school - even though it wasn't their focus in undergraduate school. My cousin just got a degree in physics at a state school - and in his senior year decided he wanted to go to med school. He got into UPenn med school, with lots of scholarships. I don't think he's borrowing anything, actually... Tell your kids to do well wherever they are. That's good advice, and not just for school.

Zac Bissonnette: YUP!!!!!!!!!!

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college: What steps did you take to pay for college without loans?

Zac Bissonnette: I picked a college I could actually afford. IMAGINE THAT! Setting a budget and THEN shopping. How un-American!I also worked a TON during high school (candy store, grocery store, usher at a theater, and I bought stuff at yard sales and sold it on eBay) and saved almost all the money -- high school is THE time to save because you have no expenses really. . . you can save a percentage of your income that you will probably never again be able to for the rest of your life.There's more to it than that but that's the Cliff's Notes version. . .

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Personal Finance Software: Hi Michelle,Thanks for taking my question. I'm 28 with no debt and a very healthy savings account. I have always done my budget using paper and pencil but am thinking of making the switch to software. I would like a stand-alone program that does not use the internet and does not automatically sync up with my bank account (I do not have internet access at home and pretty much pay cash for everything, so Quicken does not seem like a good option). In essence, I just want a convenient place to enter how much I spend each month and keep an eye on my savings and investments. Excel would work, but I wondered if there is a particular program you could recommend. Thank you!

Michelle Singletary: I may be wrong (cuz my husband inputs the data) but you can use Quicken without the Internet or syncing up with your accounts.Anybody have any software ideas for this person?

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so what now?: Do you have any advice for those of us who made the wrong decisions as 18 year olds? I did exactly that "stupidest thing" - borrowed money for a (wonderful, amazing but) expensive liberal arts undergrad, then tried to save on grad school. I did not have a lot of good guidance to say the least. Now I'm staring down debt for the rest of my life in a not terribly well paying career. I feel like the world's biggest sucker (although my undergrad academic experience was fantastic...) I've never had credit card debt, auto debt, or lived beyond my means in any other way but I just feel permanently screwed. Is there any hope out there?

Zac Bissonnette: How much debt do you have?The problem with student loans is that they're like financial herpes. You can't discharge them in bankruptcy and they will be there until you've paid them off -- with every penny of interest and any collections fees that might be applied if you default. . .It is one of the few forms of debt that really and truly can permanently ruin a person's life, and that's why I'm so incredibly obnoxious in my quest to get people to avoid it. . .

Michelle Singletary: Look the last thing I would want to communicate to any of you is that if you borrowed heavily your life is over.It isn't. It just means you will have some tough years ahead. But you can shed this debt before you need a long-term care assistance. (which I hope you watch) in which I highlight people who have paid off an amazing amount of debt without selling their soul. It can be done.So don't kick yourself. You did the best you could with the information that was being pushed on you.

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college: The valedictorian of my graduating class went to a nice midwestern liberal college because that's where he got a free ride, and so I guess that's where his parents 'let' him go. The reality is that the valedictorians of that high school typically go on to Ivy league schools - but I guess they didn't give him enough money and his parents weren't going to pay up. I'm sure he's fine and there's no psychological damage (LOL). I mean, seriously - it's not the be all and end all. Yes, there are many 'prestigious' people who go to the Ivies...but most of the graduates are not doing those jobs, they are 'working in the trenches' like the rest of us, only they probably have more loans to pay back.

Zac Bissonnette: Yep.Loren Pope did a wonderful study of graduates of Princeton I think it was, 30 years of so after they'd graduated. A surprisingly high percentage were unemployed or on welfare.What will determine your success in life is who you are and how hard you work.Dr. Thomas Stanley found that academic aptitude only accounts for about (going based on memory here) 0.25% of financial success.

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Future of College: Do you think colleges will wake up and start making education affordable again? It is crazy what some charge for a 4 year degree.

Zac Bissonnette: You're asking the wrong question:Colleges will wake up and start charging reasonable fees when families demand it.Congress and the private loan industry are making it worse by providing tons of liquidity for families to borrow money. And they're willing to borrow it, so the cycle of rising fees continues. As costs go up, Congress raises the amount of federal loan money available. There is no law that says college costs have to rise 3 times faster than inflation. They rise because people will pay it and the money is made available.Anyone who doesn't think that the availability of borrowed money leads to higher prices should Google "housing bubble".

Michelle Singletary: It's about supply and demand.They demand you pay ( or borrow heavily) and you supply them the kid to do it.

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The Washington area and "state" schools: A good friend of mine lived in Montgomery County when his kids were young. As they started moving toward high school, he moved the family out to Loudoun County. When I asked why he said, "My son is smart enough to get into U VA. I'm smart enough to want to pay in-state tuition." No disrespect to Maryland (I live in Baltimore) but none of the state schools there are on the same level as U VA or William and Mary (which many don't know is also a state school). Worth thinking about.

Zac Bissonnette: Smart guy!

Michelle Singletary: Hey, hey.Don't be dissng Maryland schools.I'm from Baltimore. I went to the University of Maryland and Johns Hopkins -- both in MARYLAND. butts of UVA and William and Mary students.Where's the proof?Look at me now. Big time, big time, wonderful, columnist -- syndicated no less -- for The Washington Post.

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Med Schools: A big thank you to both Zac and Michelle!!!!As an Admissions Officer at a Medical School, you would not believe the number of phone calls I get each week from parents of high school students on how to get into medical school.College should not be treated as a stepping stone to medical school. Rather if the student is doing what he/she likes in a setting that is comfortable, the student is more likely to perform well and that will open many doors in many different arenas (inlcuding medicine if that is really where the student wants to go).

Zac Bissonnette: Yep.As one admissions person told me, "We accept people, not colleges".

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Awesome!: My alma mater (undergraduate) just sent out a survey for recent alums, and indicated in the survey that they were thinking about requiring students to take a quarter-credit personal finance course before graduation. I wrote about seven paragraphs in the free space about what an AWESOME idea I think that is! I am constantly amazed at how little my peers know about budgeting, loan-repayment, and the importances of savings. In fact, with the exception of one or two friends, most of my financially-viable former classmates receive monthly help from mom and dad. I told my girlfriend about this, and she was pretty ho-hum about the idea, so I thought that I would write in to someone I knew would enjoy it.

Zac Bissonnette: Oh the irony of places that are responsible for putting kids 20, 30, or 100k in debt forcing them to take a class about the evils of $1,000 in credit card debt. . .

Michelle Singletary: Amen, Zac!

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re: not going to college: I always tell people that it's okay if my kids don't go to college (and my husband and I each have two degrees, so obviously, education is important to us).People are FLABBERGASTED. Don't know what to say.I tell them that if the kids don't want to go, then it costs too much money to send them. And that living on a min. wage job is an education, too.

Zac Bissonnette: Yep. See my friend James Altucher's brilliant blog post explaining why he won't send his kids to college:http://www.dailyfinance.com/story/investing/seven-reasons-not-to-send-your-kids-to-college/19572537/I don't agree with his conclusion (because his numbers involve sending your kid to a very expensive college -- which just shows what a bad investment a $50k year college is) but it is extremely important food for thought.

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Mortgage Refinance: Michelle, Thanks so much for taking my question. My wife and I have a minor disagreement about whether or not we should look into refinancing our home. My argument is that interest rates have gone so low, we should at least check into it and see if it would be worth the effort. She, however, points out that we're already at 5.25 percent and that the last time we checked into it--a couple of years ago--we found that because of the fees, etc., we wouldn't save much, if any money. We got our loan in 2003 and have excellent credit scores. The question: if we refinance, how much do you think we could lower our interest rates, and do you think it would be worth it? I thank you in advance!

Michelle Singletary: No need to argue. Run the numbers. Then decide.But I'll bet you will owe your wife a very, very nice backrub so she won't say, "I told you so." (smile)P.S. Bankrate.com has some calculators to help in this decision.

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joint accounts: When my husband and I married, we agreed that our accounts should become joint accounts (except for two minor checking accounts for small purchases.) I did my part, adding my husband's name to my retirement accounts, investments, etc. My husband is trying to do the same, but running into trouble because his mother's name is on investments that were set up for him by his grandparents when he was a minor. She doesn't believe I am entitled to these funds. We know legally we could go ahead and take her name off them and add my name on without her permission - but we're trying to avoid a family battle. Can you think of a more reasonable way we can get her to understand why we feel the need to do this?

Michelle Singletary: If you can get her name off and put yours on, then do what you have to do or what you and your husband feels is right and take the heat.Mommie can't dictate what two married grown folks want to do with their money.If you must, get your husband to explain to his mother that you are his wife and he thinks this is best for yoru family. Period. No discussion. He should be respectful but firm.

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Quicken: I used Quicken for years without an Internet connection to maintain volunteer organization books. I know that our treasurer still uses it and we do not enable the syncing options. It's much easier to use than some of the other packages that I've tried and you don't need all the options...just use the ones that work for you.

Michelle Singletary: Thanks. That's what I thought.

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A reminder about subsidy: Michelle mentioned that college loans are subsidized by Uncle Sam. What she meant, and was typing too fast to say, was that only the INTEREST on those loans is subsidized, and ONLY while the student is enrolled full-time. None of the principal, and none of the post-graduation interest, is subsidized. Zero.

Michelle Singletary: Thanks.

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Student loans or house savings?: Mr. Bissonette, my husband and I owe a total of about $55k in student loans. At the same time, we are in a small townhouse and looking to move to a single family home. Our goal is to pay off our student loans as soon as possible, but also save for a down payment on our next house. Here's the problem - with the terrible housing market, we will be lucky to sell our house at the price we bought it, so we're not counting on using the profit from the sale of the home towards our next home. Thus the need to save for a down payment. How should we split this up - is it better to have lower student loan debts, or a more money to put towards the house?

Zac Bissonnette: You should be completely student loan-free before you even think about trying to move up to a more expensive house.

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Public vs. Private: When we evaluated colleges, a big part was the financial aid package. Private schools came within $1,000/year of the public school cost. Told our daughter it was her decision to pay the difference.Our youngest took free tuition for 2 years at comm college, and 2 years at state school because she wanted no debt.

Zac Bissonnette: It's actaully pretty rare that private colleges end up being anywhere near the cost of public colleges.From a piece I did on this very topic (http://www.dailyfinance.com/story/public-colleges-lead-to-much-lower-student-loan-debt/19612483/):According to FinAid.org, 61.2% of grads of four-year public colleges borrow, compared with 70.5% of students who attend private, nonprofit schools. The average public college student borrowed $20,040, while the average private college student borrowed $27,535. That means students who attend private colleges borrow 37% more -- but what's $7,500 between friends? Unfortunately, those debt figures don't tell the whole story of just how much more money parents will have to spend, on average, to send their kids to a private college. Here's why: According to a Sallie Mae Study, parents with children attending four-year private colleges contribute $17,258 per year, compared with $7,838 at four-year public colleges. That's a difference of $9,420. In other words, if you assumed that parents were keeping their own contributions constant at $7,838 per year, and the student was financing the rest with debt, the average student attending a private four-year college would graduate with $65,215 in debt, compared to the $20,040 in debt that would come with attending a public college. There's more: Those public college debt figures include students attending out-of-state public colleges. If you limit those numbers to students attending their in-state public colleges, the average debt load is far lower.

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Ivy vs. Good State Schools: I have seen much information that 5 to 10 years out of college it doesn't matter where your degree came from. It really comes down to your work experience, performance, value-add, etc. to your employer. This was very true for me (I was an English major and have worked as a tech writer for 18 years and have never had trouble finding a great job - even in this economy). Your thoughts?

Zac Bissonnette: Yup.Seee, for instance, this study: http://www.nytimes.com/2000/04/27/business/economic-scene-children-smart-enough-get-into-elite-schools-may-not-need-bother.html

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How do you pick?: What are some good ways to evaluate the less expensive colleges to get the most for your money?

Zac Bissonnette: It starts with recognizing that college is, like most things, mainly a matter of what you put into it. . . . . That really is the best option for most people. . .

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...we'll take a C student from Harvard or Wharton over an A student from Podunk any way of the week.: What a horrible thing to say. Especially in this economy. There are LOTS of bright students that come from 'podunk,' myself included. How about interviewing before judging someone's 'podunk' talent?

Michelle Singletary: Amen!

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Washington, D.C.: To be a little contrarian:I appreciate the topic and agree with much of what your guest is saying (I basically always agree with you!). However, I think the claim that college costs are tied to federal student aid has been thoroughly debunked and to show a second opinion, the NYTimes has a few really interesting pieces on the topic suggesting that this discussion is becoming myth-driven and off-track. The price of college does not even begin to cover the cost of college, for example.http://opinionator.blogs.nytimes.com/2010/11/22/college-costs-the-sequel/

Michelle Singletary: Haven't read the article but I'll pass this along so we can continue this great discussion at a later time.

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Michelle Singletary: Wow, that had to be the fast chat hour ever.Loved having Zac, didn't you?Great questions, comments, tips. I so enjoy this live discussion and the contributions from all of you. Even when we disagree, it's great to talk about money.So Zac's got to run to class. I have to finish my Sunday column.Thank you for joining me today.I hope you subscribe to my eletter (and actually open it when it comes into your e-mail box). I try to keep you up on the latest personal finance issues.I hope you get a chance to view my live video chat. I'm still new at it and finding my groove, so would love any suggestions.Finally, most importantly, I wish you much financial security. That's what the chats and my columns are all about.Take care.And don't forget I'll have a video and text chat next week, the last for the year.

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