For a few years, I got to skip Dave Ramsey's Baby Step 5. Save for our children's college education? That was an easy one…since we didn't have children, that answer was NO!

But now we have two kids (soon to be three), which means our days of delaying that decision are over. And since our oldest child is ten, we've already missed out on a decade of compounding.

Most personal finance experts, including Dave Ramsey and Suze Orman, recommend saving for your children's college education only when your own financial house is in order. If you still have student loans, credit card debt, or anemic retirement savings, it's much better to get yourself out of that hole. Continue reading...

In 2000, I graduated from my first round of post-secondary education and landed a job. My first annual salary was about 13 times more than my entire education had cost me. It wasn't that my job paid so well, but that my education had been so inexpensive.

Now that my husband and I are parents, we have some decisions to make regarding our children's education. We, of course, want to find the best value possible…you know, an inexpensive but good education. With the average student holding over $26,000 in student loans, though, do "inexpensive" and "education" even belong in the same sentence?

I keep hearing that it's a different environment now than it was when I got my first job (and it is). But is it so different that an expensive education at a four-year institution is the only option? Continue reading...

What's the best way to teach kids about money?

That question has haunted folks for decades — maybe centuries. There are dozens of financial literacy programs in the United States right now, but none of them seems to be effective. Why is that?

I've written before about why I think financial literacy education fails. Here's the short version: Most financial literacy fails because it focuses too much on mechanics — how bonds work, the magic of compound interest — and not enough on behavior. While mechanics are key (they're the foundation, after all), they're not the most important aspect of financial success.

By the time you read this, my husband and I should be in the middle of hanging out on a different continent for eight weeks -- with our kids. Allow me to digress for a few sentences before I get to the point of this article.

We started the adoption process two years ago. In October, 2012, we were matched with our children, and the weeks and months since then have been filled with waiting, paperwork updates, and more waiting. Finally, in mid-April (I am writing this 11 days before we're scheduled to leave), we will meet our kids for the first time. I don't know how other new parents feel, but it's surreal to me. We're so excited (and scared)! Okay, back to the article…

What we want for our kids Continue reading...

According to the Federal Reserve, the average amount of student loan debt carried by a student graduating in 2012 reached a staggering $24,301. And that isn't the only scary student loan statistic. Overall, student loan debt in the U.S. has reached a cumulative $902 billion dollars, and loan delinquencies are at an all-time high. This is depressing news for everyone, including those of us who want our children to be able to go to college.

Saving for an unpredictable future

Since my kids are so young, I shudder at the thought of what a college education could cost when they graduate from high school. College tuition has outpaced inflation at an astronomical rate. And worse yet, the job outlook for college graduates isn't all that great. In addition to all of that uncertainty, I've found it difficult to do much planning since there are a gazillion possible outcomes. Will my kids go to community college? An in-state university? Will they pursue an advanced degree? At this point, I cannot possibly answer these questions. Still, I haven't lost hope that I can help them avoid taking on a soul-crushing amount of student loan debt. I certainly can't predict the future, but I can at least try to prepare for it. And while I don't necessarily plan on paying for all of the costs of my kids' college education, I do want to help them as much as I can.

It's a common refrain that today's college graduates are entering into the worst job market and economy since Hoover was around. We're told that an undergraduate degree means less than what a high school diploma once was, yet we're investing more in school than ever before. Post college debt is a major emotional weight on the backs of this newest generation, and colleges encourage debt with ease — don't worry about it; you don't have to pay it off until after you've graduated and have a well-paying job.

We're sold on it and it's a hard sell, not only by schools, but by the banks' ad dollars, as well. Previous generations didn't start life with so much debt, and in the middle of a job-killing recession no less. You probably aren't going to pay off that kind of debt waiting tables. Realize that college debt most likely means postponing life goals such as mortgage, car, marriage, and maybe even children.

Good-to-know facts about college debt
How big of a problem is the cost of college? Consider the following:
Continue reading...

For over a decade, I've spent a week every fall hanging out with fellow money nerds at Fincon, the annual "money and media" conference. FinCon started in 2011 as a small(-ish) gathering for a couple hundred financial bloggers. It's now ten times its original size and draws legit financial journalists from all sorts of platforms. It also attracts some of the biggest names in the world of financial products -- USAA, Ally Bank, Capital Group, etc. -- plus plenty of new companies with cool ideas that may blow up in years to come.

For me, though, FinCon isn't about meeting brands or looking for new ways to make money. Some of that happens, sure, but I spend most of my time catching up with colleagues. Ten years ago, these folks were mostly strangers. Today, they're some of my closest friends.

I've recently hired my second employee, a newly-graduated technical writer who aspires to one day run his own business. He's proactive, punctual, hardworking and very capable. The mentor in me wants to make sure he has a great career ahead of him. So imagine my alarm when I heard him say, “Yeah, I'm thinking about going for an MBA in a few years.” As the holder of not one but two MBAs (it's a long story), I have a somewhat negative view of the degree. An MBA often costs a lot of money and provides very little return. However, as I began to consider how to tell my new employee that his plan was flawed, I also began to reevaluate my view of the MBA.

So, if I'm going to be honest with my employee, I first need to be honest with myself. Was the MBA worth it? Or was it a big waste of money? Was there a flaw to the program itself? Or was I to blame for not taking advantage of what was offered me?

ROI Analysis

I first tried to do this calculation in purely financial terms. Take the cost of an MBA and the average return per year and see if the return on investment (or ROI) makes sense. Unfortunately, both costs and returns vary widely. For example:

A few weeks ago, the proprietor of this establishment (J.D. “The letters in ‘Get Rich Slowly' can be rearranged to spell ‘The Sly Cowgirl'” Roth) asked me to address a reader's question — specifically, how should a parent save for college (perhaps because I once wrote a book on the topic, though it's now outdated). But first, let me say this:

College costs too much, it saddles young people with too much debt, and it forces students to “learn” things they'll soon forget — and it won't matter because it wouldn't help them further their careers anyhow.

As Continue reading...

Lately, I've been more vocal about the importance of looking for ways to boost your income. Cutting costs is awesome — don't stop — but if you really want to supercharge your debt reduction or your saving, you have to look for ways to earn more money.

"That's great," some commenters have said, "but how do we earn more money." That's a fair question, though it's much tougher to answer than, "How do I spend less?" For the most part, we all spend money on the same things. But we all earn money in different ways. We each have different work ethics, abilities, and styles. It's much more difficult to generalize about ways to earn more money.

All the same, it's a topic we've explored many times in the past here at Get Rich Slowly, in articles like: