Category Archives: Advice

Things We Have No Control Over

Sometimes you have to deal with things that you have no control over. This has been more than clear this week to anyone living in the Carolinas. And it really hit home for me yesterday.

Anyone who has visited me in my office this semester had a chance to see the wrist brace that I’ve been wearing all summer.  And yesterday I finally had surgery to repair that injury.  The surgery went well and now I’m recovering at home for a couple of days. And while I’ve dealt with the aftermath of anesthesia before, this was my first experience with a nerve blocker.  The up side of the nerve block was that I had no pain for 20 hours after my surgery.  The down side was that my left arm was completely numb for that same time.  I had no control whatsoever over its movement.  It was actually fascinating to me.  My left arm was just dead weight (which was MUCH heavier than I would have expected!).  I wore a sling to support it and just had to live without my left arm for the day.  (Teeth and feet become very useful tools when you only have one arm).  I just had to find ways to work around the thing I had no control over.

Sometimes you’ll face financial challenges that you can’t control.  The unexpected auto repair.  The annual tuition increase. The rising price of gasoline.  A medical situation.  The cost of the bar exam.  Air travel for a family emergency.  Financial stress can come in any number of forms that you can’t control.  But what you can control is how you prepare for and react to these things.  A budget.  An emergency fund in savings.  Insurance.  These are all preventative measures to deal with the things you can’t control.  Loans. Credit cards. Side jobs. Selling things you don’t need.  These are all reactive measures you can take to relieve your financial stress.

We will all face things that we have no control over.  But we all have control of how we prepare for and react to these things.

A Moneywise Twofer–Protect Yourself

Sometimes it’s just way too hard to choose only one topic for my weekly writing adventure.  This week there are two things that both seem to need urgent attention, so the Moneywise Tip is going to be a twofer.

First up, September 4 is the last day for students to purchase the Penn State Student Health Insurance Policy (SHIP) for fall semester.  And while you are young and healthy it’s easy to think you can get away with not having insurance.  But you really shouldn’t.  One broken bone.  One bad case of the flu.  One inflamed appendix.  Any one of these can happen at any time, and without health insurance it can easily set you on the path to a lifetime of medical debt. You can read more about that here.  But know that the choice to skip insurance is a game of Russian roulette you really shouldn’t play.

And for the second topic of the day, a student came to me last week to discuss something that scared both of us.  She came in to say, “I came to give you the information you called me about this morning.”  She went on to tell me that she had received a phone call from me asking for her birthdate and Social Security number for a student job she was applying for.  One big problem:  I hadn’t called her.  The caller had used my name, but I didn’t place the call.  It was a scammer. The reality is, anyone with access to the internet would be able to figure out that she is a student at Penn State Law, and I am the Financial Aid Director at Penn State Law.  I’m actually kind of stunned that someone would do this level of research to try to run a phone phishing scam.  But it happened.  So how do you protect yourself against this kind of thing?  My rule of thumb is that I never give out personal information on a phone call that I did not initiate.  No date of birth.  No Social Security numbers.  No credit card numbers.  If I didn’t place the call, no one is getting that kind of info out of me over the phone. Period.  And thankfully, this student was smart and didn’t share that info on the phone, even though she thought it was me on the other end of the phone.  WHEW!  (Just so you know—I would never ask for that kind of info on the phone.  I would always ask for you to bring physical documentation of these things.) Scammers are still everywhere, so make sure to protect yourself!

Time and Money

Time and money are a lot alike. They are both limited resources.  Everybody seems to need more of both.  You often find yourself swapping one for the other.  And both need to be budgeted with care.

The beginning of a new academic year is a great time to look at how you are budgeting both your time and your money.  It’s kind of a “clean slate” time of year.  You have a brand new schedule of classes that you need to plan your study schedule and other responsibilities around.  You may have just received a large refund of student aid funds that you’ll be using to cover your living expenses for the next several months.

It’s easy at a time like this to feel wealthy.  You have a lot of money in your bank account.  You have months before exams.  And that’s when it’s easy to make a lot of poor decisions.  If you make poor decisions and squander your time, you’ll find yourself trying to play catch-up at the end of the semester instead of heading into exams less frantically and more prepared.  If you make poor decisions and squander your money, you’ll find yourself struggling to pay December rent and wondering how to spruce up your daily ramen noodles at the end of the semester.

The best way to avoid these challenges is to spend your limited resources wisely.  Both your money and your time.  This is best achieved with a plan.

By now you are likely familiar with the assorted tools used to plan your time.  An electronic calendar in your phone.  Or perhaps an old fashioned paper calendar.  Maybe even a Pinterest-worthy bullet journal.  Gather your syllabi from your classes.  Mark in important deadlines.  Plan where you need to be in your outlining process by what dates.  With it all spelled out there for you it is much easier to avoid the last minute rush.

Money always seems to be more challenging.  It feels like “budget” really ought to be a four letter word, the way it makes people cringe to think about it.  But there are a lot of tools available to help you deal with it.  Your first step really should be to make sure that your student aid refund is in a savings account.  Then decide how often you are going to “pay yourself” from that savings account by moving money from savings to checking (I like monthly, but many prefer weekly or bi-weekly).  Divide the money by that many transfers, and that’s how much you have for each budget period.  But then comes the hard part.  You still have to decide how much goes to each expense.  Some things decide themselves for you—you don’t really have any way to control the amount of your monthly rent once your lease is signed.  But groceries, clothing, and fun money are a lot easier to adjust.  You may want to try an online budgeting program such as You Need a Budget or Every Dollar.  Or you may prefer to just create a spreadsheet using Excel in Office 365 or a Google Sheet.

How you go about your plan is as malleable as the “recreation” line item in your budget.  But the important thing is that you do it.  If you are failing to plan, you might as well be planning to fail.  Just do it.

Do Something, Even If It’s Wrong

Sometimes when I’m driving, the road rage words that jump from my mouth, aimed at the car in front of me, will be, “Do something, even if it’s wrong!” (Full credit for this gem goes to my husband’s grandfather, who spouted an abundance of what we call “Wilbertisms.”)  But there’s a lot of wisdom in this particular phrase that goes way beyond the driver who can’t figure out what he or she wants to do.

This is still the season of New Year’s resolutions.  I made a couple of them this year.  One is to make healthier food choices and to run more, with the goal of running a half-marathon in the fall (which I’ll now be held accountable for, since it’s out there in the blogosphere).  The other is to create and live by a budget in an effort to pay down some debt I’ve been lugging around with me.

Right now you are likely thinking in wonder about the money lady who doesn’t have a budget and has a bunch of debt.  I know….I know.  It’s one thing to understand the principle.  It’s quite a different challenge to put it into practice.  I know that the secret to weight loss is to burn more calories than you consume.  But I like cheese! And chocolate! And pizza! And I know the secret to budgeting is to spend less than you earn.  But I like restaurants! And music festivals!

So here we are at the start of a new year.  And I’m going to do something.  Even if it’s wrong.  Because doing nothing will not change anything.  If I do something, it may lead to a positive change in my life.  Or it may be wrong and lead to a learning experience.  But either way, doing something is better than doing nothing.

My “healthier choices” plan includes using my fitness tracker’s app to monitor my food intake and calorie burn.  My half-marathon dream is right now in week 3 of Couch to 5K.  And I’m currently in my free 34-day trial of You Need a Budget, as well as reading the accompanying book by the guy who created it.  I’m not sure how this will go (though I’m sure I’ll keep you posted as I progress).  But I know that I’m doing something.  And doing something (even if it’s wrong) is better than doing nothing.

Is this for real? It might not be!

This afternoon I received a text message from my sister.  We use the same credit union for our banking and she and her husband had just received the same text, supposedly from this credit union, notifying her of an “alert” on her account.  My sister is smart.  She was suspicious of this text.  She sent me a text message to see if I had received anything similar.  I had not.  Then I checked my account online to see if there were any alerts there.  Still nothing.  So then my sister called the credit union directly….not at the number that came in the text, but instead on a number she found on the credit union’s web site.  My sister’s suspicions were confirmed.  This was a phishing scam.

Crooks have gotten pretty clever with their attempts at identity theft.  Phishing scams are everywhere.  It could be a text from “your bank.”  Or an email from “your student loan servicer.”  A phone call from “Microsoft.”  A phone call from “the IRS.”  It’s everywhere.  Protect yourself.  Be suspicious.  Never just click on the link in the text or email.  Find a genuine phone number for follow up.  Never give out your personal information on a phone call that you didn’t make.  Never let someone who called you have remote access to your computer.  Be smart.  Be suspicious.  Don’t be scammed.

Big Events Require Big Preparation

The bigger the event, the more preparation it requires.  We saw that in action this weekend as the big snowstorm brought havoc to the northeast.  For days we were warned that it was coming.  Be prepared.  Stay home.  I have to say I was a little disappointed that State College got only a few inches.  But I was prepared for snow of Carlislian proportions.  Snowblower and shovels at the ready.  Fresh bag of salt in the garage.  Super snow brush in the back of my Subaru.  And a several days long supply of food in my kitchen.  I wasn’t trapped in my house, but if I had been trapped, I’m sure I would have been fine for many days.  A big storm demands big preparation.

The same holds true with money.  The larger the event, the more you have to put into preparing for it.  When you buy a tube of toothpaste, you just have to make sure you have a couple of bucks and go to the store.  When you buy a car, however, you have to make sure you have sufficient down payment and financing (which may require reviewing your credit history).  You have to make a major decision about what kind of car you are going to buy.  You have to research where your best deal will be and haggle on price.  It’s a lot more complicated than the tube of toothpaste.  And buying a house involves even more research and preparation (not to mention the formidable task of moving into it!).

The bigger the event, the more preparation it requires.  So if you have a major financial event (or a big paper…or a big trial…or a big snowstorm) coming up, make sure you leave yourself sufficient time and energy to deal with it.  Maybe it won’t be so bad (like this weekend’s State College snow), but it’s better to be prepared for the worst.

Saving in Your 20s

I recently learned about a viral blog post entitled, “If You Have Savings in Your 20s, You’re Doing Something Wrong,” written by millennial writer Lauren Martin.  To Ms. Martin, I have only this to say:  HORSE MANURE!!!

Ms. Martin says that the need to save money was ingrained in her by her parents (who I believe are wise people), but that she now disagrees with that philosophy.  I am going to go step by step through Ms. Martin’s theories on saving in your 20s and explain why she is incorrect.

“Refusing to give yourself the luxury of enjoying your money negates the whole point of making it.”  Not entirely incorrect.  But Ms. Martin is saying to forego retirement savings in your 20s in favor of more fully experiencing life.   And while experiencing life while you are young enough to enjoy it is absolutely important, doing it at the expense of building a retirement nest egg during the early years is just foolish.  The earlier you start socking money away in a retirement fund, the more time it has to grow and multiply.  Early savers are more likely to be able to retire younger, and less likely to have to work during retirement to be able to meet their expenses.  At the very least, folks in their 20s should be investing enough money into their retirement as it takes to earn an employer match (for those who are not self-employed).  Not earning that match is equivalent to throwing away free money.  And if there is not enough money left over after that investment for an occasional night out, then Ms. Martin has likely made some bad decisions about how much she has chosen to spend on some basics, like housing, clothing, and food.

“When you’re saving for yourself, you’re refusing to bet on yourself.”  Ms. Martin purports that saving while you’re young is tantamount to predicting that you won’t earn enough money to play “catch-up” later on, thus predicting your own future failure.  But why would anyone want to have to play “catch-up” when they have the opportunity to be in a comfortable position from the beginning?  Anyone who has ever watched their favorite sports team trying to come back from behind knows that this is the more stressful situation.  Why choose the more stressful option?

“When you have something to bank on, you have nothing to reach for.”  Ms. Martin seems to think that success comes from need, and that folks with a financial cushion have nothing to strive for.  Having a financial cushion actually just makes that strive a bit easier.  She could strive toward owning a home, having a family, or traveling the world.  All things that are much easier to do if you are financially secure.

Ms. Martin asks, “What memorable experience does money in the bank give you?”  None. But it also helps you avoid such memorable experiences as “that time I couldn’t pay my rent and got evicted,” “that time I had a medical emergency and took on $20,000 in debt,” or “that time I had to work until I was 75 years old because I didn’t start saving for retirement until my kids finished college.”

“When you die, you can’t take your money with you.”  True.  But most people look at their savings as a bell curve.  You save for retirement and watch the savings balance grow throughout the working years.  But then you retire and start living on those savings, and watch that same balance decline.  No…you can’t take it with you.  But it sure is nice to have it there if you’re planning to live PAST your 20s.

treat-yoself

“When you deprive yourself, you don’t learn how to TREAT YO SELF.”  And if you never deprive yourself, you will have no appreciation of what is actually a treat, and it will eventually take greater and greater treats to stimulate your sense of luxury.

“When you’re 40, you’re not going to look back on your 20s and be grateful for the few thousand you saved. You’re going to be full of regret.”  Ms. Martin, as someone who knows what it is like to be 40 (and older), all I can say is that you are wrong.  When I look at my retirement savings statements for the accounts from my early years…my 20s…I am VERY grateful for the little bit of money that I saved then…and I’m amazed by the size it has grown to.

I remember my 20s being lean years in my early career.  And I’m grateful that my parents, like Ms. Martin’s, instilled in me the need to save money even at that time.  I don’t feel like life has passed me by or that I have not treated myself.  I feel wise.  And I hope that Ms. Martin wises up before it is too late for her to realize just how wrong she has been.

One Bite at a Time

You’ve probably heard the old adage, “How do you eat an elephant?  One bite at a time.”  It’s a great way to look at a giant goal and realize that you have to break it down into much smaller chunks.

Many of you followed my progress last semester as I went from Couch to 5K.  Once I finished that program I set a goal for myself to run at least one 5K race per month for the rest of the year.  And I’ve been doing that (with the exception of August due to scheduling challenges), with my most recent race being this past Sunday.  And Sunday’s race was a game changer for me.  It’s the first 5K race that I’ve run the whole way through.  No walking breaks.  Just slow and steady jogging from start to finish.  That’s been a goal for me all summer.  I feel like I just finished a chunk of my elephant.  And now I can move forward to the next goal of increasing my distance so I can move on to a 10K next year.  (And yes…my elephant is a 26.2 mile marathon.  Someday.)

Many financial goals seem monumental at first.  Repaying student loans.  Repaying a car loan.  Paying off a credit card debt.  Saving up enough money for a down payment on a house.  Saving for retirement.  These are all really big goals.  Elephant size.  So it makes sense to break them down into smaller chunks.  Set your sights on an intermediate goal, such as “I will pay off $1,000 of my credit card debt this year.”  It’s not the whole elephant.  But it’s a significant chunk.  And when you achieve that intermediate goal, you feel good about yourself and want to work harder toward the next intermediate goal.

One bite at a time.  Slow and steady.  It’s the only way to get there.

Surprise! It’s a financial emergency!

Sometimes life can catch you off-guard with a big financial surprise.  For me it was an unexpected major (read: expensive) repair in order to make my aging Subaru pass inspection. (For those of you new to Pennsylvania, the Commonwealth requires a pretty extensive annual inspection on automobiles.)  For many law students it was a technological breakdown in the computer communications between Penn State and the Education Department that delayed the disbursement of Federal Graduate PLUS Loans, which in turn delayed living expense refunds.

Being caught off-guard without enough money is never a pleasant experience.  You may find yourself making calls to delay bill due dates.  You could face overdraft charges.  You may have to take on credit card debt.  You could have to borrow from family.  You might need to dine on ramen more frequently than is appetizing.

emergency_fund 2

The ideal solution, of course, is to have an emergency fund.  A savings account that you can tap into in situations where you unexpectedly come up short.  If you don’t have an emergency fund…now is the time to start one.  It’ll start small and grow larger over time.  And eventually, what would have been a financial emergency in the past is just an inconvenience that takes money from your emergency fund.  Ideally, your emergency fund should be large enough to fund three to six months of your living expenses.  But the world isn’t ideal, so if you could set aside a minimum of $1,000, that’s at least a decent cushion.

But what do you do until you have your fund established?  That’s when you have to leverage your own financial flexibility.  Maybe that involves family who can help.  Maybe it involves credit cards.  Maybe you have to sell something.  Maybe you just have to fend off your creditors for a short time (don’t ignore them…ask for extensions!).  Only you know where your own financial flexibility lies.  The important thing is that when the unexpected happens, you know what resources you have available to help you handle the situation.

And hopefully we’ll never have to deal with another Grad PLUS Loan disbursement delay!

How to Give to Charity Without any Money

I wish that I could give more to charity.  While I make donations to various causes from time to time, I always seem to wish I had more to give.  And sometimes it seems like there just isn’t any extra money to give. So how does someone without financial resources give back?  Volunteering!

For every charitable organization that exists, there is at least one way to volunteer your time.  It could be something small, like when I provided a bit of entertainment with my guitar at this year’s PILF auction.  Or it could be a much larger commitment, like a regularly scheduled shift working at the local food bank.  Or anything in between.  Yesterday I ran a three mile race that benefited Special Olympics.  And I noticed that everywhere I looked I saw someone in a yellow “volunteer” shirt.  And the event, with 4,000 runners, simply wouldn’t have worked had the volunteers not been there.  They gave a little bit of time on one day, and made a huge difference.  Every major event or ongoing cause needs volunteer assistance.  Opportunities abound, and provide a very rewarding experience.

Wish you could give more to charity.  Try giving your time.  Volunteer.  It makes a difference.