The Family CEO

Weekend Reading: Checking In Edition

2013-06-14T16:50:30Z

I realize things have been a little slow around here of late. I blame the lazy days of summer.

Still, I wanted to check in and update you on a few things.

On a whim, I decided to take Operation Houseplant outside. This basket had been filled with dusty, fake flowers and greenery that I just couldn’t handle hanging on the front door. So I ripped out the fake stuff and put some real in instead.

I’ve seen tutorials on this somewhere that involve lining the basket with a trash bag, etc., but since I found an arrangement at the hardware store, already planted in an oblong plastic pot, I just used that.

I switched out some of the flowers to create a red, white and blue arrangement since we have a flag and bunting up for the summer. I plopped the whole pot into the basket and it comes out easily for watering.

Being the world’s laziest gardener, I have no idea how long I can keep this alive, especially once the real heat of summer hits, but I’m enjoying it for now.

Summer Reading

(Note: This section contains my Amazon referral links. See my disclosure policy for more details.)

With one child in London and another in town, but rarely home, I’ve been fighting off some of my summer boredom with reading.

I pre-ordered some new summer releases from Amazon: Mary Kay Andrews’ Ladies Night and Elin Hilderbrand’s Beautiful Day. I’m seriously considering adding Jen Lancaster’s The Tao of Martha to the list. It sounds hilarious.

I also had the chance to work a four-hour stint at my library’s summer used book sale last week. I spent my time “merchandising” the romance and mystery areas, which have to be the most fun places to be. Those readers are serious! They even come prepared with long lists of titles that they’re looking for.

It was strictly volunteer, but I got some “book bucks” for my effort and promptly spent them on these titles.

The first one I read was The Drop, by Michael Connelly. It’s the first book of his that I’ve read and I liked it. It’s one of a series featuring his detective character, Harry Bosch, who solves not one mystery, but two, during this book.

Speaking of reading, here’s some stuff from around the web that recently caught my eye:

You Are a Terrible Investor and You Should Stop That @ The Daily Beast. Simple investing advice in the form of tough love.

Worst End of School Year Mom Ever @ JenHatmaker.com. Laugh out loud post that you will totally relate to.

Five Ways to Use Vinegar in Your Garden @ Bridging the Gap. Some new ideas and some good reminders.

And I want to thank Charlotte at Teens Got Cents for inviting me to do an interview there. Teens Got Cents was started by Charlotte and her daughter, Eva. They now have some contributing writers too. It’s a new personal finance blog from a younger point of view, which is pretty rare in the blogging world. It would make great reading for you or your kids.

What are you up to this summer? Gardening? Reading? Traveling?

What Does Study Abroad Cost? One Family’s Expenses and Some Money Saving Resources

2013-06-03T18:57:20Z

London-bound at the Kansas City airport.

She’s off!

Our daughter, Lindsey, left last Sunday to spend 8 weeks studying and interning in London. I am so thrilled that she is having this experience.

We’ve spent the last six months or so learning all about studying abroad. There’s so much to consider: Where? How long? And how much? As in money.

Because some have let me know that they found my What does college cost? posts helpful, and because those posts and the How much does prom cost? post have generated a lot of comments, I decided to break out the calculator and add this What does study abroad cost? post to the mix.

What does it cost to study abroad?

Let me cut to the chase: study abroad is expensive. It’s easily 2-3 times what my husband and I imagined it would be.

Having said that, there is a lot of variety in study abroad programs. Things like which country you’re visiting, how long you’re staying, and whether you plan to do any side traveling will all affect the cost of the program.

KU’s Office of Study Abroad offers programs in dozens of countries — from Argentina to Vietnam — and in lengths ranging from Spring Break and Winter Break to a full academic year.

Like I said…a lot of variety.

In Lindsey’s case, she chose a summer program that includes some study for college credit, and also a 20-hour per week internship in her field.

Channeling Mary Poppins in front of Buckingham Palace.

Here is what our office of Study Abroad told us we could expect for expenses for her program:

Tuition: $1600
Program Fee*: $6750
Airfare: $1150
Passport: $135
Visa**: $420
Housing Deposit: $150
Meals: $1100
Onsite Transportation: $420
Personal Expenses: $1000

Total: $12,725

* The program fee includes housing and internship placement costs.
** Required because she’s interning and not just studying.

Our actual expenses so far have been pretty close:

Tuition and Fees: $850*
Program Fee: $6750
Airfare: $993
Passport: $0**
Visa: $489
Housing Deposit: $150

Total to date: $9232

*After $500 scholarship
** She already had one from a previous trip.

Their first bargain: a burger and beer for 7 pounds.

Obviously, the meals, onsite transportation and personal expenses have yet to be determined and those will be the most variable costs. Although Lindsey did report that they found a pub nearby on their first day that serves a burger and beer combo for seven pounds.

Part of personal expenses will include any sightseeing, day trips, and side trips to other cities. We’re encouraging her to take advantage of those opportunities while she’s there, so I’m anticipating personal expenses to come in at more than $1000.

Money-saving resources for study abroad

Despite the high costs of study abroad, there are some ways to save money. Here are a few we’ve taken advantage of and all the credit goes to Lindsey for doing the legwork on these.

Scholarships – We’re learning that scholarship opportunities don’t stop with your freshman year. Lindsey has one, main renewable scholarship that pays for over half of her tuition, but she has become a rock star at seeking out and applying for additional scholarships, including ones for study abroad.

She won two study abroad scholarships totaling $1500: one from her university’s honors program and one from the study abroad office. The first came in the form of a check, so it will offset the cost of food and personal expenses while she’s there. The second was applied to her tuition.

STA Travel – Another resource Lindsey was made aware of was STA Travel, which specializes in travel for young people, like students. She was able to save on her airfare by going through STA Travel. She booked the airfare, so I don’t know the exact savings, but it was around $150-$250.

International Student ID Card – Obtaining one of these was on Lindsey’s to-do list for the week before she left. The ISIC comes with a number of benefits, including discounts with retailers and discounted airfare, train tickets and rail passes. You are eligible to get one if you’re over 12 and a degree-seeking student at an accredited school.

How to pay for a study abroad trip

Despite our initial sticker shock, this is something we all wanted Lindsey to be able to do. And we wanted to do it with cash. So we put together an “all of the above” strategy for paying for it, much like we’re doing for other college costs.

Here’s what it looks like:

Tower Bridge photo op.

Some of the expenses (airfare, Visa, housing deposit) were due during the spring, so we cash flowed those items as they came up.
We used savings from our two college accounts to pay the big bills (tuition and program fee), which came due right before she left.
Lindsey saved as much money as possible from her campus job during the school year.
She received a very generous gift from her grandparents that she will use to do some special things, like see Les Miserables on the London stage and take some side trips.
Lindsey researched, applied for, and won scholarships totaling $1500.

Other considerations

The fact that Lindsey chose to go abroad in the summer means that she’s foregoing the income she would have earned by working full-time during that time. That was something to consider, although it’s possible that she might have been working an unpaid internship even had she stayed home.

On the plus side, it really helps that Lindsey attends such an affordable school to begin with. This experience would not have been possible, at least without debt, if she were at a more expensive school.

So that’s our experience so far. Did you study abroad in college? Is it something you would like for your kids to do? Do these costs surprise you?

Weekend Reading: Memorial Day Edition

2013-05-24T17:15:03Z

West Point Cadets, Fall 2010

A man’s country is not a certain area of land, of mountains, rivers, and woods, but it is a principle and patriotism is loyalty to that principle. - George William Curtis

Those of us in the U.S. will be observing Memorial Day this weekend. Here are some posts I’ve run across lately that are perfect reading for the long weekend ahead.

The title says it all. Kristia at Family Balance Sheet has put together some great recipes – complete with pictures — for Memorial Day Weekend and all summer long.

Love hanging flower baskets but not the cost? So does Sharon at Life After Empty Nest and she shows us exactly how to put them together for a fraction of the pre-assembled cost.

Anne at Modern Mrs. Darcy reads an incredible number of books each year. And she puts her top picks into this much anticipated, 26 page Summer Reading Guide, that is free when you sign up for her newsletter.

And here are some Family CEO posts you might have missed from summers past:

How does a post about towels as souvenirs result in 25 comments? Apparently we all take our vacation souvenirs seriously!

Did you know that it’s easy — and affordable — to give someone a flag that has been flown over the U.S. Capitol?

I loved my potted herb garden from last year and plan to repeat it again this summer.

What are you up to this weekend? Is cooking, gardening, or reading in your plans?

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What Does College Cost? One Family’s First Three Years of Expenses and How We’re Paying Cash for College.

2013-05-23T14:13:28Z

We’ve set a goal to pay cash for our daughter’s college education, and because I’m such a big numbers nerd, I’ve been keeping track of our costs down to the very last dollar.

Since her junior year is now in the books, it’s time for a update.

The Exact Breakdown

Tuition/Room & Board/Books: $10,143

Tuition = $3059*
Room = $2950
Board (Meal Plan) = $3800
Books = $334

*After scholarships

Fees: $1328

Required Campus Fees = $888
Technology Fees = $290
Sports Combo Pass = $150

Sorority: $2465

Dues & House Maintenance: $1032
Moms/Dads Weekends, Flowers, Musical Production = $1433

Total: $13,936

What’s Not Included:

Spending money – Lindsey is responsible for her own spending money so I don’t have costs for things like eating out, snacks, toiletries, school supplies, clothing, laundry, gas, etc.

KU Dyche Hall Flickr photo courtesy of ensign_beedrill

Junior year came in $765 higher than sophomore year. Room costs were $400 lower, books were lower by almost $300, and sorority expenses were $1400 higher, so that accounted for most of the difference.

Here’s our running total for the first three years of college:

Freshman year: $17,435
Sophomore year: $13,171
Junior year: $13,936
Total: $44,542

You can see the breakdown for freshman year here and sophomore year here.

Being a KU Orientation Assistant is a great summer job. Photo courtesy of Lindsey Mayfield

How Our Family is Paying Cash for College

We set an ambitious goal of paying for college without debt, despite the fact that we had very little saved for college going in. Here are the things that have helped us do that so far:

We chose The University of Kansas, an in-state school with affordable costs. KU also offers a four year tuition compact so that tuition costs are locked in for four years.

Lindsey earned academic scholarships, which brought the cost of tuition down even more.

Lindsey has worked during both the summers and the school year so that she can pay for incidentals. She’s also very frugal and a good steward of both her money and ours, which we appreciate.

A couple of years before Lindsey started college, I started setting aside my earnings from freelance writing/blogging into a account earmarked for her college expenses. Even though the amounts I receive are often small, faithfully saving each one and getting a slight head start has paid for a chunk of her college costs. The remainder we pay for out of our monthly cash flow.

So that’s a real-life look at one family’s first three years of college expenses. Anything surprise you? Are you saving or paying for college right now?

Note: Lindsey and I blogged for two years on the U.S. News & World Report education site. Our blog was about college from both a parent and student points of view. You can read our archived blog posts at Twice the College Advice.

This post is part of Penny Pinching Party, Works for Me Wednesday, and Fabulously Frugal Thursday.

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Books with Memorable Settings: Savannah, Nantucket and Ireland

2013-05-21T15:06:17Z

I’m drawn to books with a strong sense of place. The kinds of books where the setting plays a major role, almost like a character.

So it’s not surprising that three of my favorite authors write books that fall into this category.

Mary Kay Andrews

I first discovered Mary Kay Andrews when I was getting ready to take a trip to Savannah, Georgia. I was looking for books set in Savannah to read while I was traveling and I discovered Savannah Blues. I’ve been reading Mary Kay Andrews novels ever since.

Mary Kay is former journalist turned Atlanta-based author. Mary Kay Andrews is a pen name; her real name is Kathy Trocheck and she writes under that name as well (a series of books about Callahan Garrity, an ex Atlanta cop turned housecleaner). The novels she writes as Mary Kay Andrews are light, fun, and have strong, sassy female main characters.

The books are set in the south, in places like North Carolina’s Outer Banks (Summer Rental), Savannah (Savannah Blues and Savannah Breeze), and small Georgia towns (The Fixer Upper and Hissy Fit).

Her newest book, Ladies Night, is being released on June 4 and the main character is a lifestyle blogger. I can’t wait to get my hands on it, for obvious reasons.

Elin Hilderbrand

Elin Hilderbrand is a writer who lives on the island of Nantucket and sets her novels there as well.

I remember that the first Elin Hilderbrand book I picked up was on a Friday afternoon, in a Walmart, on the way to Lake of the Ozarks. But I couldn’t tell you which of her books it was, because I loved it so much I read a bunch of others in quick succession.

I chose her book, The Island, as my book club pick last year and every one of our members loved it, almost without exception. And Nantucket is on my list of places to travel to, entirely because of Elin’s books.

Her next book, A Beautiful Day, comes out on June 25, and I’ve got it pre-ordered from Amazon. I’ll have to finish Ladies Night quickly so I can read this one right away too.

Maeve Binchey

Years and years ago, Tom and I rented a little Irish movie called Circle of Friends. It was charming, as you’d expect a little Irish movie to be, and full of great characters. It may have been the first movie I ever saw with Colin Firth.

I discovered that the movie was based on a book by Maeve Binchey, so I sought that book out and read it. It was the first of many, many Maeve Binchey novels to come for me.

Maeve was an Irish writer whose books were all set there. She died last year, and I just finished her last book, A Week in Winter, which almost read like a series of short stories, although all around a single location: a refurbished inn in the west of Ireland.

I’ve loved every Maeve Binchey book I’ve ever read because her characters and settings are so richly drawn. I know if I’m ever in the mood for something sweet and charming with memorable characters that I will find it in a Maeve Binchey book.

Have you read any of these authors? Do you have a favorite book set in a memorable place?

Note: This post contains my Amazon referral links. If you purchase anything from these links I will earn a small commission at no additional cost to you.

This post is part of One Project at a Time.

Credit Cards for College Students and Young Adults

2013-05-16T13:11:50Z

In a little less than two weeks we’ll be putting our daughter on a plan to London, where she will be studying and working a journalism internship for eight weeks.

It’s such an amazing opportunity for her, but one full of lots of details and new things to learn about. One of the many things on our to-do list was to get her a credit card, so she would have more than just her checking debit card as a form of payment overseas.

The timing is good, as she’s 21 years old and heading into her senior year of college. Soon she’ll be applying for jobs, getting her own insurance, and possibly renting an apartment or buying her first car. Having a good credit history can help will all of those things.

As we were educating ourselves on credit cards for students and young adults, I decided to reach out to two of the most knowledgeable women I know of on the topic, Gerri Detweiler and Beverly Harzog.

So who are these women?

Gerri is the Director of Consumer Education for Credit.com. She has authored or co-authored five books about debt and credit, regularly speaks on those topics, and is the host of TalkCreditRadio.com. You can real Gerri’s full bio on her site, GerriDetweiler.com.

Beverly is a credit card expert, consumer advocate, and former CPA. You may have seen her in her appearances on Fox News, ABC News Now, or CNN Newsource. Her advice has also appeared in a number of print publications and on popular financial websites. Beverly’s full bio can be found on her website, BeverlyHarzog.com.

I asked them each the following questions.

Q. Should students/young adults have a credit card?

Gerri: Yes. A credit card is a great way to establish a credit history and it’s also the safest way to shop online, pay for recurring payments, etc. One of the factors in your credit score is the age of your accounts; so the sooner you start the sooner you can establish a “seasoned” credit history. That doesn’t mean you need to go overboard though. One card is enough.

Beverly: I do think it’s important that young people establish a good credit history. If they graduate from college with a good credit history, they’ll have a smoother transition to ‘real’ life. For instance, it can be difficult to rent an apartment without good credit. People with good credit also pay less for car loans and health insurance. So while you don’t want to encourage a college student to use their credit card for a shopping spree at the mall, you do want to promote a healthy respect for credit and how it can benefit them.

Q. What is a good age or life stage to get a first credit card?

Gerri: Because of the Credit CARD Act it’s harder than it used to be to get a card before they are 21. If you are between the ages of 18 and 21 you’ll either need to show you have the ability to repay the debt or get a cosigner. I am not a big fan of cosigning – even when it’s between a parent and a child. If anything does wrong on either end it will affect both signer’s credit histories. And it’s nearly impossible to remove a cosigner from an account without closing the account.

Beverly: Honestly, it depends on the child. This is one of those times when I think you shouldn’t pay too much attention to the experts. As the parent, you’re the expert on your child. Only you can decide when your kid is ready for the responsibility. Some kids are ready for a credit card when they leave for college. Others aren’t ready until their senior year of college.

Having said that, I do recommend some “plastic training” while they’re in high school. Get your child a checking account and a debit card. I took this approach with both of my kids when they were 16. It gets them used to the idea that they are, indeed, actually spending money when they hand over that card. This is an important connection to make before they get to credit cards. Oh, and don’t “opt in” for over-draft protection. This way, if your child tries to overspend, the debit card gets rejected.

Some folks like to use prepaid cards for this, but in my opinion, a debit card is the better choice. It’s good for your child to begin having a traditional relationship with a bank. Plus, a debit card is usually cheaper.

Q. What should they look for in a credit card?

Gerri: Hanging onto your first card can be beneficial for your credit history. For that reason, choose a card carefully. I suggest one with no annual fee since every penny counts when you are starting out. You may want to choose a card with rewards, but I wouldn’t get too focused on that in the beginning since you want to use your card sparingly until you are sure you can handle it responsibly.

I also don’t see a reason to load up on retail credit cards as a student. They’re tempting – especially with that initial discount they offer when you open an account, but it’s easy to feel like you’re not spending real money and buy things you wouldn’t purchase if you only had cash.

Beverly: I think it’s fine if they want rewards, but at this point, it’s important to focus on using the card responsibly with the goal of building a very good credit history. The interest rates are going to be a little high, in most cases, simply because young adults are considered a credit risk until they prove otherwise. So it’s essential that your child understand what compound interest is and how quickly it adds up. One thing I like about Discover and Capital One is that they have educational centers on their websites to help young adults manage credit responsibly.

At the end of the day, though, kids learn from their parents. So parents need to take time to really educate their kids about credit. I can’t stress this enough. Go over all the fine print with your child and make sure they understand when the payment is due, what can happen to their credit if they make a late payment, and so on. Once your child has the card, explain how to use a free money management tool, such as Mint.com, to track expenses and set up payment reminders.

Q. Are there any credit cards you would specifically recommend for this group?

Gerri: Yes you can see some cards we like here: http://www.credit.com/credit-cards/student/

CitiForward and Discover are good cards for starting out.

Beverly: There are several student cards on the market that are pretty good. The Discover it for Students Card has rewards, which is nice. But it also forgives the first late payment. We all hope our kids won’t make mistakes, but trust me, they will! So it’s nice to have a cushion. This card also offers a zero percent introductory APR for the first six months. Again, a little bit of a safety net if your child needs time to get used to making payments.

I also like Capital One’s Journey Student Rewards Credit Card. This card gives students 1 percent cash back on all purchases. But what I really like is that it gives students a 25 percent bonus on the cash back they earn each month if they pay their bill on time. I like the positive reinforcement with this card.

For a young adult who doesn’t qualify for a student card, I recommend getting a secured credit card that reports to all three major credit bureaus. There are several good ones on the market right now. With a secured card, the young person puts a deposit, say $300, in an account. The card issuer uses the deposit as collateral. The young adult then gets a credit card with a credit limit that matches the deposit (some cards will allow a limit slightly higher than the deposit). This is a fairly safe way to build credit. I like to think of this as a credit card with training wheels.

Thanks so much to Gerri and Beverly for sharing their expertise.

Do you have experience with getting a first credit card, either for yourself or your child? Let’s talk about it in the comments.

Blog Rewind: Spring, Finally!

2013-05-07T18:24:53Z

I think it’s finally safe to say that Spring has arrived in Kansas City.

I hope I’m not jinxing things, since we did have snow in May this year, but I think we’re now in the clear.

We even had a mother bird build a nest in the wreath in our front door. She laid three tiny, perfect eggs. They all hatched, but sadly, one of the baby birds didn’t survive. We’re keeping a close eye on the other two.

And those tulip bulbs I bought last year with all good intentions?

Lazy gardener that I am, I didn’t get them planted in the fall and they sat in my garage all winter. I decided to plant them this Spring with no idea if they would bloom or not. Happily, they did. I’m loving the color!

I’m reminded every year at this time what a great investment perennials are.

I also recreated the Mother’s Day photo display from last year.

I love, love, love seeing these pictures every day and it’s so simple to do.

The first year of finding pictures and matching them to frames takes the longest. After that you can just keep all the pictures in a folder for next year. And if helps if you snap a quick picture so you can see which pictures you put in which frames and how they were arranged.

It’s easy to switch it all out for Father’s Day too.

Here are some other posts from Springs past that you may be interested in:

Switching from Artificial to Real Houseplants

Free Family Finance Courses by Email

The Money Hiding in Your House: Textbooks

I hope you’re enjoying Spring where you are too.

Budget Hacks for the Home Office and Small Businesses

2013-05-21T18:20:05Z

The following is a guest post from Andrea Woroch. You can read more about Andrea in her bio at the end of the post.

As someone who works from a home office, I am happy to have her suggestions.

Another note: this post contains referral links. Please see my disclosure policy for more details.

According to the Bureau of Labor Statistics, 24 percent of employed Americans worked from home some or all of the time in 2010. Such tools as cloud storage, video conferencing and online collaboration have made telecommuting more convenient than ever.

While working from home has its perks, it also has its share of expenses. Whether you run your own business or are employed from home by another firm, consider these tips for saving on home office costs.Dedicate Space for Business

Working from home can result in great tax deductions as long as you know the rules. For instance, if your home office doubles as a guest room for weekend visitors, you can’t deduct the space for business. For more insight into what you can claim for your home office, refer to this helpful tip sheet from the IRS.

Reduce Energy Use

Many people leave their computers, printers and scanners running all day and night. These electronics are known as energy vampires because they suck power even when not in use. In fact, Consumer Reports indicates that you can shave 10 percent off your electric bill by powering down this equipment at night. Use a power strip to make this task easier.

Eliminate the Monthly Phone Bill

If you’re still paying gobs of money for your pricey landline, switch it out for an Internet phone service like Ooma. You pay $150 for an adapter and monthly taxes and fees thereafter based on your location (less than $5 per month in most cases). Otherwise nationwide calling is free, and the basic home service includes voicemail, caller ID and call-waiting. You should also consider Skype for free video conferencing and instant messaging.

Buy Remanufactured Ink

Replacing ink cartridges isn’t just bad for your wallet, it’s bad for our planet. Buy remanufactured ink to save money and compare prices on InkjetWilly.com to ensure you’re getting the best deal. Better yet, do what you can to keep things digital and reduce paper clutter, like saving important files to PDF or storing your work “in the cloud” via Google Drive.

Join Reward Programs

Office supply stores like Staples and Office Depot offer free reward programs that provide you with coupons and special offers. You earn points with each purchase you make so getting discounts is fairly easy to accomplish. To get the most bang for your buck, pick one store to do most of your shopping so you can earn those points faster. Julie’s note: This is an excellent suggestion. And you can add to your savings by going through Mr. Rebates to make your purchases. For instance, Mr. Rebates offers 2% cash back at Office Depot and Staples and 1% cash back at Office Max. These stores also offer free shipping on minimum purchase orders, ranging from $20 – $50, depending on the store. All this equals convenience + savings.)

Shop Consignment Stores

When furnishing your home office, buying used desks, shelving units and filing cabinets will save you a bundle of money. Craigslist, thrift shops and antique stores are great places to office essentials for a great deal. Remember, a fresh coat of paint or even new knobs can make an old piece of furniture look new again. You may even take your chance of looking on Freecycle.org where many local residents are unloading their goods for free to fellow community members.

Check Designer Discount Stores

I recently picked up a vintage desktop file organizer from Marshalls that looks identical to the one I wanted from Pottery Barn. And get this, I paid half of what the name-brand store was charging! Stores like Marshalls, TJMaxx, Homegoods and Ross are great places to find file organizers, pin boards, chalk or white erase boards, shelves, frames and other office supplies at 50 to 75-percent less.

Buy Paper in Bulk

Buying in large quantities typically saves you money on a per-unit basis. Paper is one of those items you don’t want to run out of before a big presentation or when your child’s book report is due. In addition to checking prices at your local office supply store, check warehouse club stores for deals or shop Amazon and other online retailers.

Get Free Software

Protect your computer with AVG free anti-virus software and add the free PDF maker from CutePDF to your computer. I also stock up on promotional notepads and pens offered by hotels. These materials in handy for jotting down quick notes and best of all, they don’t cost a thing!

Andrea Woroch is a nationally-recognized consumer and money-saving expert who shares smart spending tips and personal finance advice to help transform everyday consumers into savvy shoppers. As a sought after media source, Andrea frequently contributes to news stories on various consumer topics and has been featured on Good Morning America, NBC Today, Dr. OZ, CNN, New York Times, Kiplinger Personal Finance, Better Homes & Garden and many more.

Andrea is also a dedicated smart money blogger with stories published on popular lifestyle and personal finance sites like AOL Daily Finance and CNN Schools of Thought, plus writes for the New York Daily News Dollar Stretcher as well. Follow her on Twitter or Facebook.com/AndreaWoroch for daily money tips.

This post is part of Fabulously Frugal Thursday.

How Much Does Prom Cost? One Family’s Expenses

2013-05-02T19:20:37Z

This week CNN Money ran an article with the headline Teens (and their parents) spending hundreds on prom. In it were these figures:

The average family expects to spend $1139 on prom this year (up 40% from 2011)
The Northeast average is the highest at $1528
The Midwest average is the lowest at $722
Teens pay 41% of the costs themselves

All of these numbers came from one Visa survey of 1000 teens, so I’m not sure how much weight we should give them.

Still, they caught my eye because our family is living through the prom years and those figures seem high.

Really high.

And our family is not even especially frugal when it comes to prom.

We don’t buy suits at Goodwill or make dresses out of duct tape (although you can win a $5000 scholarship by doing that). We do the pretty standard “buy a new dress/rent a tux, order the flowers, and pay for dinner at a nice restaurant” thing.

My son and his friends even rented a limo/party bus this year.

And yet I still didn’t feel like we spent anything close to the numbers in the CNN Money article. So I decided to check with my son and pull together some of my own info to see what our actual numbers were.

Here’s what we spent:

Tickets: $50.00
Tux rental: $106.59
Corsage: $38.12
Limo rental: $60.00
Dinner: $80.00
For a total of $334.71

Now, I realize that he’s a boy and tux rentals don’t cost nearly what a new formal dress does. But as luck would have it I also have a girl who went to two proms not that long ago, so I pulled those numbers too.

Junior Prom:
Dress: $171.76
Boutonniere: $10.80

Senior Prom:
Dress: $193.59
Alterations: $48.82
Boutonniere: $10.80

I’m certain there were some hairstyling and manicure/pedicure costs in there that I haven’t accounted for, but notice that – in our area anyway – the boy pays for tickets, dinner, and the limo if they rent one, so that offsets some of the girl’s costs. Also, boutonnieres for boys are much less expensive than girls’ corsages.

So I’m left kind of scratching my head about how the average family is spending over $1100.

What am I missing? A much more expensive dress? A more extravagant dinner?

What are your thoughts on and experiences with prom expenses?

This post is part of Fabulously Frugal Thursday.

3 Big Problems with Your Retirement Savings and What You Can Do About Them

2013-04-25T19:16:18Z

How are your nest eggs doing?

Did you watch “The Retirement Gamble” on Frontline Tuesday night? (If not, and if you’re interested, it’s available to watch online.)

This wasn’t one of my favorite Frontline programs, but it did raise some interesting and important points.

After watching it, I dug further back into the Frontline episodes and found one from 2006 – “Can You Afford to Retire?” – that I also watched online.

While I found “Can You Afford to Retire?” the better of the two episodes (and surprisingly still relevant despite all that has taken place economically since 2006), together the two programs paint a troubling picture of how prepared American workers are for retirement.

Specifically, there are at least three big issues with retirement planning in the US today:

1. The cost and decision-making have shifted from employers to employees.

Over the last generation, the country has moved away from pension plans, whose cost and decision-making was the responsibility of the employer, to IRAs and 401(k) plans, where the cost and decision-making are with the worker.

Among the things American workers now have to sort out:

• What plans are available to them?
• Which to participate in?
• How much to contribute?
• Where to invest the money?

It’s confusing and overwhelming for many (most?) and we’re not doing such a hot job with the decisions we’re making.

2. High fees can cost us a big part of our retirement.

“The Retirement Gamble” spent a lot of time on this point. 401(k) and mutual fund fees can make a surprisingly big difference in how much money you have at retirement.

A fee of 2%, which sounds kind of low, actually isn’t low at all.

Over the course of a lifetime of retirement investing, that kind of fee can make a difference of hundreds of thousands of dollars in an investor’s retirement. That, in turn, can translate into having to work more years.

Many employees aren’t aware of the kind of impact that fees can have (I certainly wasn’t).

3. We’re not saving enough for retirement.

The “Can You Afford to Retire?” program made these points:

• 25% – 30% of employees eligible for a 401(k) program don’t participate (and many don’t even have one available to them)
• Less than 10% contribute the maximum allowed

Also, leakage (or using 401(k) savings for things other than retirement) can leave us with a shortfall at retirement.

The Good News

Despite all this scariness and general negativity, there is some good news for you and me.

Namely, that all of the things I listed above are within our control.

We can educate ourselves on the options, look for low fee investments, and start finding ways to contribute more.

There are other things that will affect our retirement, like:

• Social Security: Will it still be there for us so we won’t have to be completely dependent on our own savings?
• The stock market: will our retirement investments continue to grow?
• Inflation: Will it stay in check, so our retirement dollars will actually buy something?

Who knows? These things are out of our control, but we can certainly focus on what is within it.

First Steps to More Control

My husband watched the first program with me and we’ve found ourselves talking about retirement over the couple of days since.

We’ve been doing things like:

• Pulling reports and paperwork on our investments.
• Requesting paperwork from my husband’s company.
• Pulling our Social Security statements.
• Talking about when and how we want to retire.

It’s actually been empowering and even kind of fun.

Finally, a couple of other things I found interesting in watching the two Frontline programs:

The 401(k) plan was originally designed to be a tax loophole and, even when it became more widely used, was only supposed to supplement other kinds of retirement plans.
Many employees want investment decisions made for them and that might be a trend we see more of in the future.

Did you watch “The Retirement Gamble?” What are your thoughts on saving and investing for retirement? Let’s talk about it in the comments.

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