- Well, this week's edition of Ask Rachel
will be all on college:
college tuition, saving for college, college questions.
So you guys can submit any questions you have,
not just about college,
but anything in regards to money
to any of my social accounts.
So it could be Facebook, Instagram, Twitter,
YouTube, doesn't matter.
Post questions
because my team and I, we are looking for those
because I want to be able to answer some of your questions
here on the show.
Alright, Kinsey asks,
"What should a high school student be doing
to save for a car or be more prepared for college?"
Well, the key here is to avoid debt completely, Kinsey.
The earlier you can get this mindset,
the better off you're going to be.
So a car, you can save up,
you can talk to your parents.
Sometimes parents will do things like maybe match
how much you've saved or maybe you buying a car
is all up to you.
It doesn't matter, either way.
It is possible, you can do it.
So put money aside, work, save up for that car.
Now, college,
totally different story, totally different ball game there.
So number one, again, talk to your parents.
Say, "Hey, listen, I just need to know as I'm planning
for college, you know, what you guys are thinking about?"
Because to be honest, some high schoolers,
they get to the point of graduation in May,
their senior year,
and their parents were like,
"Oh, by the way, X, Y and Z."
Either you have to pay for college or we have a college
account for you that you may not have known about.
So if those conversations are not happening,
the earlier you can have them with your parents,
the better off you're going to be.
So do not feel entitled that they have to pay
for your school.
Some parents feel guilt or the shame
that they don't have money to pay for their kid's college.
I don't want parents to feel that.
And I don't want students to feel like that's the only
way they can go to school debt-free
is just from their parents,
because that is not true.
So talking to your parents, number one.
Number two, choosing a school that you can afford.
This is really important because the moment you step
over a state line or go to a private college,
the tuition almost doubles, sometimes triples in some cases.
So go to a school you can afford,
even if it's a community college for the first year or two,
I promise do what you can to stay in the lines
of your budget, say okay,
here's an affordable school, and then apply
for scholarships and grants.
This is free money.
So go apply for as many as possible,
get as much money as you can.
And then, lastly, know if you have to work,
it's going to be okay.
You're going to survive in college if you have to work.
So this could be getting a part-time job.
It could even be working for your college or university,
maybe working on campus somewhere.
Because they can help with tuition reimbursement sometimes,
depending on the program or the situation.
So look around and get creative that if you have to work
to see how much of that money can be applied
to college specifically.
So those are some things you can do.
Again, it's probably a lot that I just gave you,
but working through this as early as possible,
even your freshmen, sophomore year.
Start by having those conversations with your parents
and know where you're at,
because it is still possible today.
Even though people think it's crazy, it is true.
You can still go to college without student loans.
Lauren asks, "Where in the Baby Steps would you recommend
starting to attend or save for graduate school?"
Yeah, graduate school's great.
I mean, if you can continue on your education,
and especially if you are in a field
where you need that continued education,
then graduate school might be your next step.
I will say it may not have to be your next step.
Some people do go to graduate school
right after getting a four year education
because it's like, well just kinda the next thing you do,
I'm gonna go get a master's in business,
or I'm going to go get a master in X, Y and Z.
And sometimes you don't need that master's degree
to go and win in the real world.
Like go take a few years, see what you can do.
But if you're in a field that yeah,
you specifically need a master's degree, then you do know,
okay, eventually I'm going to have to get
this to advance specifically in your career.
And that's great.
So what I would do there
is, I would do it in Baby Step 3b.
So usually this is where you save for a down payment
of a house, but I would even do this to say,
okay, yeah, if you need to save up some money
for graduate school, you can.
So this means you are completely debt-free,
with a fully funded emergency fund
of three to six months of expenses,
and then you can start saving on the side.
Now, Baby Step 4 is saving 15% of your income
into retirement.
So I don't want that to not be used.
I don't want you not funding retirement
for a long period of time.
So if you can save up for grad school pretty quick,
kind of get some money under you.
Knowing that you'll probably be working
through grad school and actually cash flowing that,
I want you to start funding retirement as soon as possible.
So I don't want that graduate degree
to go on for like eight years and you don't fund retirement.
So you might get to a point where you say, you know what,
I'm out of debt.
I have my fully funded emergency fund.
I'm going to spend the next, you know, six, eight months
and save a big pile of money for graduate school
and then continue to cashflow it,
so that way I can start funding retirement,
that would be a great plan.
Or you could say, you know what?
I don't really need graduate school until probably
the next three or four years.
I'm going to go ahead and start funding retirement,
but on the side as well, I'll be saving for graduate school.
So either one of those choices is great by me,
but always cash flowing it.
That is what is so, so important again.
Because I get these stories, you guys,
where people end up six figures in student loan debt
or because they went and got their, you know,
they went to graduate school
and they didn't really even need to
to advance in their career.
And they have so much debt.
Like the return on investment didn't make sense.
I heard gosh, from this assistant principal,
and she had $330,000 in student loan debt.
She's an assistant principal, making $63,000 a year.
Yeah, not a great return on investments.
So I'm not mad at assistant principals, if anything,
I'm very grateful.
My daughter has an amazing one at her school.
So I'm very thankful for people in education
and all different fields around,
but you need to really, really think through
and be smart about how you're doing this, because again,
student loans are so freaking normal
that people don't even think. They just see, okay,
that's how much tuition is.
I'll just sign away and just worry about that later.
And then that later comes and it's like, what did I just do?
So the more you can think through it,
the better off you're going to be.
All right, the last question is from Uzmina,
and she asks, "My daughter has a full scholarship,"
Yay!
"and still will have $52,000 in debt just by being in a dorm
for two semesters and a few other mandatory fees.
How do I get out of this?
She will have two other semesters to go
and could incur another $50,000 in the future."
$52,000 in debt just for being in the dorm for two semesters
and a few mandatory fees?
Okay, I think something's probably not accurate.
If it is accurate, run.
Tell your daughter to run away from this school.
It costs $52,000 just to be in the dorm?
That can't be right, y'all.
Unless you're on the club level of the Ritz,
maybe it costs that much.
There is no way a dorm should cost that much money, no.
You don't live on campus if that's the case.
Go rent an apartment with like five other girls
and just call it a day.
And if you're forced to do this,
this is not a smart decision to pay $52,000
to be in a dorm and have other fees.
So at this point, I don't care
that she has a full-ride scholarship
because she still is going to incur all this debt.
And it's interesting the way she worded the question.
She said, "My daughter has a full scholarship
and still will have $52,000 in debt."
She doesn't have to, like, even the way it's phrased.
It's like, oh yeah, this is what she's going to do,
so it's going to happen.
She doesn't have to do that.
So this is what's difficult, though.
I know for parents because it's like, I get it.
You don't want to be this controlling tyrant,
but you also, parents, have a responsibility to walk
your kids through smart decisions, making a smart decision.
Now my opinion still would be the same
if this $52,000 was tuition.
I still would say, no, don't go,
go to another school.
But the fact that it's $52,000 for just the dorm
and a few mandatory fees, like that's not smart.
It's not smart to pay that kind of money
just to live in a dorm.
So no, I wouldn't do it at all.
Like run for the hills.
No thank you.
So again, walking and talking with your daughter
through this process is going to be extremely,
extremely important.
And if she's dependent upon your name going on this loan,
you could say, I'm not doing it.
Because it's not gonna be good for her.
When you walk out with a $100,000 in student loans,
again, not even for tuition,
just for living in a dorm,
talk about the rate of return, the rate on investment,
like we were just talking about in the last question.
This makes no sense.
Absolutely no sense.
And so I would not do it at all.
So I would say, sorry, I think I'm good.
I mean, again, I keep going back to these numbers,
maybe you're, I mean, not saying you are confused,
but look into it and figure out what this is,
because this means it'd be a $100,000 for two years.
Guys, there's places that you can buy a house
for like $150,000 or even $100,000.
That that should not be correct.
And if it is, I would not go to that school.
So that's my answer for you, because man,
having these tough situations, they're asking an 18-year-old
to make decisions about their life,
that like I even read from some scientists or something,
like the frontal parts of your brain aren't even developed
until you're like 25.
And I'm like, these kids are making decisions
that are gonna affect them for like decades to come.
So being smart and taking those brains,
because she's obviously extremely smart
because she got a full-ride scholarship
go to an in-state public university.
She'll get a full ride, no problem,
but it doesn't cost as much to live in a dorm.
So make smart decisions,
help your kids see them, because again,
you are giving them such a gift
by talking about the subject of college.
You guys, I'm telling you.
And if you want to check out Anthony ONeal,
he has a scholarship tool on his site,
anthonyoneal.com.
You want to check that out.
So if you know someone that's going to college,
or you are in college, then make sure to check that out.
Because again, those scholarships and grants, free money.
And if you guys, again, ask any question you want
on any of my social channel platforms,
and we will be looking at those and answering your questions
on the segments like this of Ask Rachel.
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