Help with a 30k College Bill

Q: We are facing a challenge in regard to financing our son’s education. We are being asked to contribute $30,000 a year for a private college education. Is this really a wise move? We have a daughter who will be in college in two years. Help!A: A good education is virtually essential to success in today’s competitive, global economy. That said, there are plenty of ways to get a good education, and bankrupting yourselves on a too expensive college shouldn’t be one of them.

 

If you can’t manage this bill without sacrificing your own retirement plans or your daughter’s education, then you need to think about some options.

If your son has his heart set on this college, then he should be willing to take on at least part of the cost by incurring student loans. (He should be careful, though, to make sure that his total student loan debt doesn’t exceed the salary he expects to make in his first year out of school.)

Another option, obviously, is for him to attend a less expensive school for at least a couple of years, if not the duration of his education.

The fact that you’re asking this question just months before your son starts college indicates that you haven’t done enough thinking and planning, but it’s not too late.

Head to the bookstore or library and grab a copy of a college financing guide and explore your options. You might also use FinAid.org’s expected family contribution calculator, available at http://www.finaid.org , to estimate how much you’ll have to kick in once your daughter starts school.

Good luck.

How can safe deposit box horror stories be avoided?

Dear Liz: You’ve written a couple of times about how safe deposit boxes don’t necessarily keep your valuables safe. We wanted to tell you our story.

We recently went to put some papers into one of the two boxes we maintain at a bank where we’ve been customers for more than 20 years. We were given the box and I almost fainted when I discovered it was empty.

Apparently it had been drilled in error. After a week of searching, bank employees found part of our box contents tied up in a plastic bag. But property was missing that was historic, personal and irreplaceable. We had papers in there with our names on them, but apparently no effort was made to contact us.

It is a horrifying situation that a bank can be so casual and apparently unconcerned with property that most people assume will be secure. This should be made public more often.

Answer: As you’ve read here before, banks are required by law to make an effort to contact box owners before a safe deposit container is drilled and emptied, but sometimes those efforts are pretty cursory. (The fact that you were longtime customers and that your names were on papers in the box shows just how cursory.)

Some readers say they’ve tried to prevent situations like yours by putting their full contact information on a sheet of paper atop the contents of their boxes. In any case, you also should check on your box a couple of times a year and ask your bank during those visits whether you’re up to date on your box rental fees.

Many times, after a merger, banks begin to charge customers who used to have free box rental. Longtime customers may assume the charges don’t apply to them, because they’ve had free rental for so long, and fail to pay the bill. The bank could then decide the box has been abandoned and drill it open.

How to Stick to a Budget

Q: How do you stay on a budget? I have tried several times, and it never works. I’ll buy something on impulse or to take advantage of a sale, or friends will call and ask us to go out for dinner. My friends complain that I’m tight, but if I were so tight, I would have a lot more money in the bank. We are in our 40s, and I feel we are not where we should be at this stage in our lives. Plus, I am always thinking about money. How can I get a budget started and stick to it so we can finally see some savings?

A: Wouldn’t you like to stop thinking about money? Or at least when you do think about it, to feel calm and in control, confident that you have enough, that you’re making progress toward your goals and that you can handle any setbacks likely to come your way?

Managing your money well gives you the power to achieve what you really want in life while dialing back the anxiety that plagues people who live paycheck to paycheck.

Budgets tend to fail when people view them as an awful exercise in deprivation, instead of as a tool to help them stop wasting money on things they don’t really want so that they can get the things they do. Once you view your spending plan in this light, it’s easier to skip those sales and invitations.

You might want some inspirational reading. “Your Money or Your Life” by Joe Dominguez and Vicki Robin would be an excellent beginning. You might find David Bach’s “Start Late, Finish Rich” helpful as well. (Savings tip: Check these out at your local library or buy them used online.)

Let go of ideas about where you “should be” at this stage. You are where you are. Regrets about not having more, or being able to spend more, can lead you to chuck the whole idea of a budget.

You also may find it helpful to seek out a support group of people who are trying to get their finances under control. You might join an online forum, or the Simple Living Network at http://www.simpleliving.net can direct you to study groups in various cities that use “Your Money or Your Life” as their basic text.

You can do this. Good luck!

My Husband Needs to Make More Money

Q: Thank you for writing about the fact that sometimes a person’s financial troubles are due to underearning. I am a stay-at-home mom with three children and my husband does not make enough money. As a result, we aren’t saving anything for retirement and college and in fact we’re going deeper into debt every month. He does not understand how much kids or for that matter life costs where we live. His solution is that if I want more money, I should go back to work, but that was not our deal. How do I get him to realize that he needs to generate more income?

A: Hold your horses.

You may be right that your lives would be easier if your husband made more money, but that does not relieve you of the responsibility of living within your means. The fact that you’re not saving and piling up debt shows very clearly that you’re not taking that responsibility seriously.

You have choices about how much to spend, and if you’ll look around in your community you’re likely to find families surviving on a lot less than your family makes now. You may have to make sacrifices, get creative and stop keeping up with the Joneses, but you can do it.

If you aren’t willing to make that effort, then your going back to work may be the only solution. It doesn’t matter what “deal” you made back when you decided to stay at home; that was then, this is now. The agreements couples make about money often have to change over time as circumstances change. If you demand a lifestyle for your family that exceeds your present means, then you need to help finance that.

Either way, you may find that your taking responsible action has a positive effect on your husband’s earning ability.

Right now, he may feel like every dollar he earns goes into a black hole; why should he work harder or look for a new job if the extra money he makes will disappear into that maw? If you switch gears and become an effective money manager, he may come to believe the extra effort is worthwhile.

In any case, you need to stop rowing against your husband and start rowing with him. Lay off the poor guy, and take care of your end of things.

Should you check your safe deposit box?

Dear Liz: Please remind your readers to regularly check on their safe deposit boxes, particularly after a bank merger. Our bank was recently taken over by a larger one, and I could not believe what happened. Even though I have an active checking account and am a “preferred” customer, the bank claimed that my box had been closed and no one could find my signature card (which I had signed within the last year to access the box).

Rather than contact me, the bank was about to turn the contents over to the state. I was treated poorly and was forced to identify contents of my box in front of bank employees.

I did not think bank employees were ever supposed to be allowed to view contents of boxes, and I am extremely distressed and horrified by the entire experience. But if I hadn’t checked, I could have lost precious family heirlooms. If you have any suggestions as to how to make banks more accountable for these types of errors, please do let me know.

Answer: Banks are supposed to try to contact customers before turning a safe deposit box’s contents over to the state unclaimed property department, but as you’ve discovered those efforts sometimes fall quite short.

You can make a formal complaint to whatever state or federal agency regulates your bank. You can call the bank and ask, or visit the Federal Financial Institutions Examination Council’s website at http://www.ffiec.gov and click on “National Information Center” to access a searchable database. You also can contact your lawmakers and push for legislation that would hold banks more accountable for this kind of error.