According to the Federal Reserve Bank of New York (FRBNY), at the end of the third quarter 2011, there was about $870 billion in outstanding student loan debt. That’s more than credit cards and more than auto loans. In fact, it’s more than any single asset class that is not backed by real estate (so basically, mortgages).  Of that $870 billion, about $85 billion is delinquent.  Close to 10%!

At the peak of the credit crisis, when it seemed all asset classes had no ceiling for late payments, credit card delinquency rates hit 6.7% on aggregate, also according to the Federal Reserve. So a 10% delinquency rate is crazy.

Even crazier, the total pool of outstanding student loan debt includes loans that are currently in deferral. Student loans are different than most consumer loans in that the repayment period does not begin when the loan is originated. Instead, students begin paying their loans back after they graduate. And even then, there is often a six month grace period. While a student is in school, or during the grace period, the loan is said to be in deferral. Since no payments are being made, a delinquency is not possible.

When the FRBNY excluded the loans that were in deferral, it found that a staggering 21% of the remaining outstanding student loan balance is delinquent. Not only that, 27% of all borrowers have at least one delinquent student loan account. That represents 5.4 million borrowers. So once a student graduates, he has a 1 in 4 chance of falling behind on his student loans.

• Closing Credit Cards – This has become less “strange” in recent years, but closing your credit cards can hurt your score. What seems like simple financial housecleaning actually affects a variety of factors that go into your credit score. When you close a card, your credit limit drops, which increases your credit utilization (bad).  If that card is older than most of the other cards you have, the average age of existing accounts will also fall (bad). These are not as bad as an account in collections, but they could mean the difference between a good credit score and a bad one.
• Not Filling Out A Moving Form – When you move, it’s important to report your change of address to the United States Postal Service or you risk missing important mailings like credit card and utility bills. The last thing you want to do is be behind on payments because that will be reported to the credit bureaus. Some credit card companies will report you as soon as you are 30 days late. While you’re at it, be sure to hold your mail when you go away. You don’t want someone stealing your mail and your identity.
• Asking Banker to Check Score – Rather than jump through the hoops of free credit score companies or paying for it yourself, it might seem harmless to ask your bank to look it up.  This will hurt your credit score because it will result in a hard inquiry on your report. When you look up your own score, the credit bureaus treat it as a soft inquiry because you are asking about yourself. When you ask your bank, all the bureau see is a bank requesting your score, as if you had applied for a loan.
• Not Paying Library Fines – Years ago, owing the library a few dollars wasn’t a big deal. Today, with local budgets in a pinch, everyone is trying to find ways to make more money and fund valuable community services. This means that some libraries are sending even the most trivial of debts over to collection agencies. Those agencies tack on their own fees and penalties, report the debt to the bureaus, and that can have a devastating effect on your credit.
• Unpaid Parking or Speeding Tickets – Did you get a parking ticket in another state? What about a speeding ticket or other citation? Since citations are considered debts to the county and governments are not in the business of ignoring debts of any kind, this will almost always be turned over to a collections agency. That agency will tack on penalties and fees, report it to the bureau, and, much like unpaid library fines, this will be extremely painful for your credit score.
• Pay Less Than Owed – Let’s say you already have a past due on your report and you want to get the debt off your back, so you agree to pay for 75 percent of the debt. That actually hurts your score because the balance that’s left for what you don’t pay will be reported as a new charge off on your credit report. You can prevent this when you negotiate with the debt holder, but if you fail to do so, most will report the charge off. The debt will be settled, but the impact on your credit report will persist. It does seem counter intuitive, to be punished after paying, but that’s how it works.
• Cards With No Limit – Some credit cards come with absolutely no listed limit, which at first may seem like a good thing. In reality, those credit card companies aren’t reporting a credit limit to the credit bureaus and so the bureaus assumed it was $0 for their calculations. This would make your credit utilization artificially higher, which hurts your score. If the only credit card you had was one of these limitless credit cards, your credit utilization would be infinite.

According to a new Pew Research Center study, more than 75% of young adults who moved back home during the Great Recession and its aftermath (the boomerang generation) say they’re OK living at home with their folks and are optimistic about their future financial prospects.  One reason young adults might feel less lame about living with their parents is because doubling up – living with friends or relatives – has become such a widespread phenomenon in tough economic times.

According to the study, the share of Americans living in multi-generational family households is the highest it has been since the 1950s, having increased significantly over the past five years. In 2010, almost 22% of young adults lived in a multi-generational household (the vast majority were living with their parents) up from just about 16% in 2000.

A whopping 61% of young adults say they have friends or family that have moved back in with parents over the past few years due to financial difficulties.  But while living at home might mean sharing your finances and personal space with your parents, the arrangement doesn’t mean dependency or permanence, experts say. 

“Young people who are living with parents are building up financial security to help them move in to the housing market,” says Jed Kolko, of real estate website Trulia. “By paying less or no rent, they’re able to save. It puts them in a better position when they decide to either become renters or homeowners.”  That’s good news for the housing market because historically the 25 to 34 age group has been a deep well of housing demand, something that’s been conspicuously absent in the housing market for the past few years.

But even as the job market begins to turn around, it will take some time to get the boomerang generation into their own homes and apartments.  “It takes some time to be confident enough about your own financial security before you would leave home,” Kolko says. Translation? Don’t hold your breath for a move-out date, Mom and Dad.

~ U.S. News & World Report

Why is it important to get a college degree?  Access to college is what distinguishes the middle class from low-income Americans. People with at least some college education stay in the middle class or move up.  Over the next decade, there will be 31 million job openings that will require at least some form of education – 9 million newly created jobs along with 22 million jobs from baby boomers who are retiring. Roughly two-thirds of those jobs will require some form of education or formal training beyond high school.  After the recession of 1981 to 1982, what you took in college largely determined what you’d become in life.

Break it down financially – The salary premium for college grads continues to rise while the number of jobs for those with just a high school diploma is shrinking fast.  We always knew that people with an associate degree earned less than those with a B.A., on average. That is still true. The difference is about $500,000 to $600,000 throughout a career. Over the course of a lifetime, a college degree is worth an extra $1 million in earnings … (over a high school diploma).  It’s even better if you have a professional degree, like accounting. You will make $3.7 million during your career, on average. A doctor will earn $6 million.  But it’s tough to find a job in an area like architecture right now, which is tied to the housing market. The unemployment rate for recent college graduates with degrees in architecture is 13.9 percent.

What’s your advice to students who are trying to pick a major?  If you become a petroleum engineer, you’ll earn $90,000 out of college. If you become social worker, you will make $35,000. The differences are huge. The question is, what are you prepared for and what do you want to do? What are your interests? What are your abilities?  Do your homework before picking a major. When it comes to job prospects and compensation, not all college degrees are created equal.

Are there other keys to financial success?  Professionals like engineers, scientists and even financial types tend to have two careers. First, they have a technical career – they are a chemist, engineer, biologist, bank analyst. But then they have a second career as a manager.  If you work in a job that’s more technical, the odds that you will become a manager are much higher than if you become a schoolteacher. I can tell you, it’s good to be the boss. You make a lot more money when you are in charge.

How does graduate school factor into the earnings mix?  If you study chemistry, engineering or other technical trades, you are crazy if you don’t go to grad school because the jump in income is really huge – it can be as much as $500,000 to $1 million over a career. Arts students also need graduate degrees because it is the only way you can teach or work in a museum.

Right now, the total amount of student loan debt exceeds $1 trillion, which is more than credit card debt. How can you tell if a college degree is worth it if you have to rack up massive loans?  That’s a tricky question. If you go into a profession like nursing and have $200,000 in debt, it’s worth it because you will still make $3 million during your career.  The issue is coming up with the cash. You need to compare the cost and the benefit. Even the expensive colleges cost only a fraction of their ultimate payoff. In fact, one could argue that the only choice more expensive than going to college is not going to college.

So is a liberal arts degree still valuable?  Only 10 percent of degrees now are in the liberal arts. Educators are very concerned that the economic value of a college degree will crowd out Shakespeare. It still makes sense go to an elite four-year liberal arts college and attend a graduate or professional school. And if you go to a place like Harvard, it’s like a big summer camp. You can go there for four years, learn a lot, make great connections, and develop as a human being. But then you will need to go to graduate school to focus and prepare for an occupation.

There are more women in college today than men. So why aren’t women out-earning men?  There is a huge gender bias in all this stuff. The jobs that pay are dominated by males. Even though 40 percent of math majors in college are female, they become schoolteachers. Men that major in math go into technical areas.

How do your peers view your research?  The classics people at Georgetown walk the other way when they see me coming. Their view is that this commercializes learning. They are right.

Maybe colleges do not want to be training foot soldiers for capitalism. But, by and large, whether they like it or not, they are selling jobs to students.

Spending Plan – First, you must decide approximately how much money you and your family are willing to spend on a vacation. This includes plane tickets, hotel stays, attractions within the vacation area, and a food allowance throughout the week.  Once totaling the pricing, if you are overwhelmed at the number, try to cut down on costs, try a cheaper restaurant or hotel or maybe even the red-eye flight. Once you feel comfortable with the price, start deciding how you will come up with this money.

Cuts Will Help – Do you belong to any club or organization that you are no longer involved in that you still pay monthly or weekly dues? What about the gym membership you bought over after the Christmas holidays that you have never even attended? CUT THESE THINGS OUT! There are many services that each household pays for even though they do not use it. Save this money for your dream vacation instead of wasting it on something you will never use.

Pantry Week! – During one week a month, cook only food in your pantry. Many families have their pantries full of food but always return to the grocery store each week. During your pantry week, you will save your family time and money spent at the grocery store.

Eat out less – According to the Natural Restaurant Association, a typical family with kids younger than age 6 spends an average of $239 each month on restaurant meals. This is money that can easily be put aside into your vacation fund if instead of dragging the family out for a meal, try to make a special meal at home. Maybe something that is a little fancier to create the feel of restaurant dining. You can also check your local restaurants for specials including kids eat free on Wednesdays, or buy one get one free burger.

Purchasing Tickets – When purchasing tickets, whether it be plane tickets, hotel rooms, or tickets for attractions, always ask about any specials that they could give you. Many businesses know about the high costs of living so in order to show that they care about their customers, they give out specials. Some are discounts can be used at any time while reservations must be made in advance to receive any specials, so make sure you are always looking for deals!

~ Sara Knopsnyder

• Most Americans lack emergency savings or “rainy day” funds. Only 49% of survey respondents reported that they had set aside funds sufficient to cover expenses for three months in case of sickness, job loss, economic downturn or other emergency.
• The majority of Americans have not done any retirement planning. Only 42% of survey respondents who weren’t retired said they had taken the time to calculate what they would need.
• Well below half of Americans have saved money for college. Only 41% of those who have financially dependent children have set money aside for college education.

There are numerous ways for consumers to make sure they’re on solid financial ground, but these 10 tips, compiled by ACA International and the Better Business Bureau, are especially important:

1. Plan and Budget:  Determine what you can reasonably afford, create a budget and plan, and stick to it.  Keep in mind that purchases on credit will need to be repaid at some point in the future.
2. Track your Spending: Keep tabs on how much you spend to help stay within budget guidelines.
3. Protect your Identity: Be careful about giving personal information including a credit or debit card number over the phone and online. Monitor your accounts and immediately report any suspicious or unauthorized purchases to your bank or credit card company.  Consumers should monitor their credit and are entitled to a free credit report each year at www.annualcreditreport.com.  If you believe your identity has been stolen, contact your local police department.
4. Start Planning for Retirement:  You’re never too young to start.  Decisions about how much to save in order to afford a comfortable retirement require collecting information about several important variables (including Social Security and retirement plan benefits) and doing some, even rudimentary, calculations.
5. Budget for a Child’s Education:  Tuition and fees at four-year public colleges and universities have increased more rapidly than they did during the 1980s or 1990s, rising by an average of nearly 5% each year.  With this trend unlikely to abate, an average American family with children can expect to dedicate a sizable share of their resources to paying college tuition.
6. Avoid “Get Rich Quick” Schemes:  Scams and fraud is exposed every day. The BBB recently partnered with the FINRA Financial Education Foundation to promote smart investing and to help consumers avoid investment scams.
7. Manage Your Debt:  One of the best ways to ensure a brighter financial future is to manage and eliminate costly debt. BBB offers “Managing Credit – Made Simpler,” an online learning tool for consumers and small business owners.
8. Communicate with Creditors: Having trouble making payments on an existing debt? Contact the creditor to discuss alternative payment arrangements. It won’t eliminate your debt but it can make things more manageable. Communication is particularly important if you are behind in payments to a creditor (e.g., credit card, loan, mortgage, medical) to avoid having the debt appear on credit reports.
9. Communicate with the Debt Collector:  If you hear from a debt collector, avoiding a letter or call won’t make the debt disappear. The reason for the contact cannot be resolved without the ability to communicate; whether it’s to pay an owed debt, verify an alleged debt or confirm that the debt collector has reached the wrong person.
10. Consumers have Rights: Consumers deserve to be treated respectfully and have rights under federal and state law.  For more information about consumer rights in debt collection or to ask questions, visit www.askdoctordebt.org.

~ Sara Knopsnyder

• Figure out where you want to be working: Students who live in one place during the school year and somewhere else over the summer should first decide where they will be staying. You cant find a job if you don’t know where to start looking!
• Where to look: students can find summer jobs on their career board, online on websites such as monster.com or even on facebook.com, and through family members or friends.
• Before Walking In: Make sure that you have all of your essentials in order like your resume and cover letter; no one wants to hire a disorganized mess.
• Be Prepared for Rejection: Although you believe you are perfect for the job, not all employers agree. Rejection isn’t a bad thing, listen to their reasoning why you are not suited for the job and try to fix it before your next interview.
• Be Persistent: You must be persistent in two aspects, applying for many jobs and following-up with those jobs. Many employees are busy and are not thinking about your resume. Make sure you follow up with the employer, showing your interest in their company, keeping you on the top of their mind.

~ Sara Knopsnyder

Fortunately, their money was not put to waste. The employees of Saldutti are proud to announce their big winnings, $10, matching up 3 correct numbers within the lottery. “What should we do with all the extra money?” asked Robert Saldutti, after finding out about their great winnings. The lucky winners of the drawing decided to spend their hard earned money on a bagel-breakfast. Congratulations to the staff at Saldutti, LLC!

Smithsonian Magazine writes that Australian physicist Graham Turner says “the world is on track for disaster” and that current evidence coincides with a famous, and in some quarters, infamous, academic report from 1972 entitled, “The Limits to Growth.”  Produced for a group called The Club of Rome, the study’s researchers created a computing model to forecast different scenarios based on the current models of population growth and global resource consumption. The study also took into account different levels of agricultural productivity, birth control and environmental protection efforts. Twelve million copies of the report were produced and distributed in 37 different languages.

Most of the computer scenarios found population and economic growth continuing at a steady rate until about 2030. But without “drastic measures for environmental protection,” the scenarios predict the likelihood of a population and economic crash.  However, the study said “unlimited economic growth” is still possible if world governments enact policies and invest in green technologies that help limit the expansion of our ecological footprint.

Turner says that perhaps the most startling find from the study is that the results of the computer scenarios were nearly identical to those predicted in similar computer scenarios used as the basis for “The Limits to Growth.”  “There is a very clear warning bell being rung here,” Turner said. “We are not on a sustainable trajectory.”  Despite foreshadowing the economic collapse 60 years ahead of time, however, the latest report out of MIT suggests that the Earth is still on its way towards some troubling times.