The Financial Student | Finance for Young People

Ciao!

by Ryan on October 1, 2011

You all can can calm down now. I’m back. I know that must have been scary – not having me around for a month will do that to you! I would apologize, but I’m not really sorry. That sounds horrible, but I’m 4000 miles from home having the time of my life. Writing kind of stopped being a priority for me once I landed in Torino. I’m back now though and I’m gonna work to get my blogger cred back (not that I had any to begin with…). After October 14th, I have 4 day weekends (you’re super jelly right now aren’t you?) so there’s no reason I can’t give you guys at least one post a week.

***********SUPER AWKWARD TRANSITION***********

Living in a foreign country affects your finances in a million different ways. Some good, some bad. Here are the things that have affected me the most:

Using a Different Currency - I spent 19 years of my life using green paper to buy stuff. Now I’m using Monopoly money. . Using notes with different sizes and colors is smart though - especially for the visually impaired. Go Eurozone! The biggest change though is that people actually use 1 euro coins!

Cell Phones Are Prepaid – Few people here have a cell phone bill they pay every month. Everyone is prepaid and that means paying by the minute or per text! BUT, incoming calls are free. That means when people call me, I talk normally while they speed through the conversation, trying with everything they’ve got not to go over the 1:00 mark!

Credit Card Fees – I haven’t paid a single cent in ATM fees. Thanks, Capital One Online Checking! I did accidentally hand over my American Express instead of my Chase British Airways card though one time and paid 3% of the purchase price. Not sure how AMEX is still getting away with their “we’re the card for travelers, we love you, blah blah” bit.

Travel is Cheaper - Not paying for gas = Best thing ever. I’m sure I’m spending the same amount on different stuff now, primarily wine & eating out, but at least I get more enjoyment out of those things. For 18 euro a month, I get unlimited subway and bus rides in the entire city. Can’t beat that!

Overall, I’d say living here is actually cheaper than what I’d pay back home if I didn’t mooch off my parents. No complaints.

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26 Pairs of Crap or 1 That Makes Me Look Fly

by Ryan on August 31, 2011

Earlier in the summer, I bought a pair of sunglasses at Aeropostale. They were clearance, so I paid $2.99. I don’t give myself much credit for being frugal, but a good deal is a good deal.

They broke last week. Shocker. That’s what I get for buying sunglasses that cost less than a Happy Meal. Yes, they were in my pocket when they broke and yes, maybe sitting on them caused the destruction. The world will never know. I wanted to replace them before Operation EuroTrip started. But how much to spend? Another $2.99 pair would be asking for trouble. I’d probably get off the plane holding fragments of plastic.

I went back to Aeropostale to see if they had any left, thinking I may buy another pair that was I don’t know, $10 or $20. They had nothing. I walked through Macy’s and found a pair of Oakley’s that I liked. Of course I did. Price – $110.00. But they were on sale & the cashier girl said I’d also save an extra 25% thanks to their store wide sale going on. I have always wanted a pair of Oakley’s, so the decision to buy them wasn’t exactly hard.

I’ve been wearing them for a week now and I gotta say, I do really like them. Not regretting the purchase, but I still don’t know if I should have bought them. I can afford them – I didn’t take on any debt and I still have something like $2,000 in savings. And Google just sent me my 1st Adsense check. But when I say it like that, it sounds like I’m justifying something I shouldn’t need to.

The point I’m attempting to make is: How do you know when you should buy something high quality versus replacing cheap but shitty items? Even at $80, which is cheap by Oakley standards. In a place I call “me in 5 years”, I’d have 2 pairs of these: http://www.oakley.com/products/4673/25152. One prescription, one not. Because some days I don’t want to wear my contacts, but I also want to wear sunglasses while I run/drive. I know, I know, I have the definition of a 1st world problem.

So…should I have worked harder to find another $2.99 pair?

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Link Love: Blogger Outreach Edition

by Ryan on August 25, 2011

I’ve been a crappy blogger lately – it’s been forever since I spread some link love around to some of my favorite blogs and posts I’ve read lately. I’m changing that today with a link roundup:

Carnival of Personal Finance: Diminished Expectations Edition @ Financial Uproar.

How Much and What Kind of Debt Have You Incurred In Your Lifetime @ Bible Money Matters - I’m up to around $11,000. Almost all of that is student loans, with around $1,800 being the balance I’m carrying on my AMEX with no interest.

Netflix Price Hike: Your Netflix Alternatives @ Free From Broke – I recently reactivated my Netflix membership. Yes, it’s another $8.99 to pay every month, but I think it provides a great value. I have access to tons of older (mostly) movies and can catch up on dozens of TV shows. I also think it’ll be nice to have access to familiar movies when I’m away from home.

How to Not Suck At Travel Planning @ Studenomics – I like to plan all the big stuff out when traveling, but usually leave the small things up to chance. One day in Italy I’d like to wake up and just fly somewhere picked at random with my roommates and see where we end up.

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EuroTrip Financial To Do List

by Ryan on August 23, 2011

Summer is really ending. A few of my friends have already moved back to school and I’ve finally left “I-leave-in-a-few-weeks-or-something” mode and entered “holy-shit-I-leave-for-Italy-in-9-days” mode. I’d like to avoid ever being broke in a foreign country, hanging around dark alleyways looking for cash that a hooker may have dropped. Not my idea of a good time. So I’m doing a few things to prevent that from happening. Yep, I plan for every contingency.

Call CC companies to let ‘em know I’ll be using my cards out of the country.
Change the PIN on my new Capital One debit card to something I’ll actually remember.
Transfer enough money to my Capital One checking account to get me through until my student loan refund check is deposited and transferred back home.
?!?
Profit

I also have a ton of other stuff to do that’s not exactly finance related, like pack. Which can get real expensive real quick if I’m not careful. US Airways gives me one checked bag free along with a carry-on bag and one personal item like a laptop. If I need to check another bag, I’m ~~screwed~~ gonna be annoyed about paying $55 ONE WAY for that bag. Giving more money to the airline is not on my to do list, so I’m thinking that my bags are gonna be holding clothes and that’s about it. I can buy stuff like shampoo (heavy when you think about it) and sheets (not even sure what size I need) when I get there.

What do you do to get your finances in order before a long trip? Also, I’d like to hear any packing tips if you’ve got ‘em!

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Life Can Be Tough In The Graduate Jobs Market

by Ryan on August 17, 2011

Today we have a sponsored post from Total Jobs.

There has been a lot in the news recently about the troubles facing the young generation. Recent unemployment figures, for instance, put youth unemployment at around 20%. Similar trouble is afflicting many graduates, with a lot of people leaving university finding it hard to find suitable work and many working in unpaid internships in order to gain valuable work experience that could help them to land a paid job. But is it all bad news, or are some graduates bucking the trend and coming out of the tough economic and job climate better than others?

Recently, Total Jobs conducted a graduate jobs survey to find out about the sort of graduate jobs people go for and other trends associated with graduates. One interesting statistic to emerge from the survey was that 80% – a huge majority – of graduates thought things were harder for them now than they were 10, 5 or even 2 years ago. This perhaps reflects the growing number of graduates going after each job, as well as the lingering after-effects of the recent recession on the graduate jobs market.

Also, a significant minority of students – 47% – believe that university is now just ‘education for education’s sake’. This might sound worrying and as though the value of a university education is not as great as it once was, but there is still much cause for hope. That same statistic shows that a majority of students still think there is more to university than just education for its own sake. Many say that they would repeat their university experience simply because they enjoyed it, suggesting that it is about more than simply getting a good job at the end of it.

Another thing to consider is that 87% of graduates questioned felt as though their education gave them the skills they need to succeed in an entry-level graduate job, which arguably suggests that a lot of the issues lie within the job market itself rather than what students are learning on their degrees.

Many universities also now have a greater focus on recruitment and the majority of graduates said they felt their degree makes them more employable. Also, more graduates seem to be turning to alternative options to make the most of their skills in a challenging environment; 53% have considered setting up their own business as an alternative to getting a job. All of this suggests that while times aren’t ideal in the job market, the value of university is still high and savvy graduates can definitely still turn things around to their advantage.

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Wisdom Teeth Are Expensive

by Ryan on August 16, 2011

I had no idea how much it cost to get those suckers taken out! After spending $5,000 on braces, my dad wasn’t taking chances letting 4 rouge teeth ravage my straightened mouth. Two of them had already broken through and started to hurt. Since I leave in 17 days, I wanted them taken care of ASAP. Teeth removal or surgery should not be part of my study abroad experience.

The total bill – $1,560! Each tooth cost $295 plus $335 for general anesthesia and $45 for some other drug they gave me. My insurance paid for 80% of each tooth and almost all of the drugs. On the bill they gave us, each tooth is listed as “Partially Bony”. I always thought my teeth were fully bony but I guess not!

Lessons Learned:

Dental insurance is good to have. Thanks Mom & Dad!
Having parents able to easily pay what insurance doesn’t is nice too.
Vicodin. I’m fond of that drug. Keep it comin’!

An expense like this can be hard to plan for. Not that I personally needed to, but I know someday I’ll have to pay for stuff like this without relying on Mommy & Daddy. This wasn’t an emergency that came up at 4pm on some random Tuesday but it also wasn’t unknown. I’m sure they knew that at some point, they’d need to have to money available to pay for the slicing and dicing.

I’ve gone on and on about how much I like having separate savings accounts for different things. I’ve thought of a new one. It’s called the “I Knew This Was Coming, But It’s Still Sort of Sudden” savings account. For all that stuff that you know is coming, but you’re not sure exactly when or what the $ will be. Like getting wisdom teeth removed.

Everybody’s number will be different, but even $50 a paycheck will help soften the blows from stuff like this. If you’re an Adult with kids and a white picket fence™, you’ll probably want to be saving a lot more. Kids are expensive – just ask my parents.

p.s. - You could just include this saving in with your emergency fund or general savings, but where’s the fun in that? Plus, I know some people have a problem “taking” money from their e-fund if it’s not a real emergency.

p.p.s. – If I have any international readers who live in countries that have universal healthcare, I’d like to hear how this would be handled in your country. Is it free like emergency care or is dental stuff treated different?

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Account Whoring

by Ryan on August 10, 2011

After opening my Capital One Interest Checking account yesterday, I realized that I now have 3 4 checking accounts. Add that to the 4 savings, 3 brokerage, 6 credit, and 2 Paypal accounts I have, and I’d say that I’m an official account whore. What can I say – one of each just ain’t enough.

5 of these accounts are located at ING Direct – the king of “sub-accounts”. Not sure why they everyone calls them sub-accounts though. Each account gets its own number and everything. The part that’s awesome is that ING keeps EVERY account you open attached to the same log in. Makes checking balances and transferring money much easier. ING makes online banking so easy that sometimes it kicks my OCD into overdrive and I think about creating dozens of savings account for every possible scenario. Then I pop a Zoloft and step away from the keyboard.

But like I said yesterday, ING Direct isn’t the best international travel companion. So I turned to Capital One for their very cool “no fee on foreign transactions & we reimburse you for ATM fees”* checking account. *Not what they actually call it. The rest of my accounts are spread across a half dozen other banks and companies:

Brokerage: One (or two?) E*Trade account(s) where I hold my company stock and the remains of a Roth IRA I haven’t transferred yet. My other Roth IRA is at Vanguard, currently dropping in value like crazy. Finally, one Treasury Direct account where I hold a few savings bonds.

Credit: Rocking the Chase Amazon, Chase British Airways, Citi AAdvantage, Discover More, AMEX Blue, & Old Navy Visa cards.

PayPal: One for personal stuff like eBay and buying stuff online. Another for my “small business” AKA this website. Every few months, an advertiser will offer me some easy cash and I have them send it here.

According to my math, that makes a total of 19 accounts. How many accounts do you have? What do you use your separate accounts for?

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Operation: “International Checking Account” Is Go

by Ryan on August 9, 2011

I hate paying fees just for using my own money. That means any dollar paid to a bank or ATM is a dollar too much. When I was 15, I paid $72 in overdraft charges. I’ve learned since then. I’ve used my ING Direct checking account for the past few years and have never paid a dime. In fact, I’ve been paid by the bank just by holding my cash there. Every once in a while, I’ll pay $2 or $3 to withdraw money at an ATM, but other than that, I refuse to pay money to access my own.

Free checking and access to cash are easy when I’m in the United States. But I’m 23 days away from living in a foreign country. Or 23 days away before I have to start paying MasterCard 2% of every transaction, not including the fee they charge for the currency conversion. Getting cash at ATMs is a similar story – I could easily wind up paying $5 0r more just to withdraw a few bucks.

I need a new checking account that I can use in Italy without getting bent over to do so. I love you ING Direct, but I can’t take you overseas with me. I’m paying plenty as it is and every dollar I spend getting money is a dollar I can’t use to buy beer when we go to Oktoberfest.

I need an account that has: no monthly fee, free international ATM access, and convenient online access. I think I’ve found it: Capital One’s Interest Online Checking Account (not an affiliate link). It has no usage fees or minimum balance requirement and I earn 1% on my money sitting there. Capital One eats any currency conversion fees when making a debit card purchase or withdraw and will even reimburse me for some ATMs outside the United States – up to $25 per month.

Opening it online took about 10 minutes. Just had to enter my name, address, social security number, and a million other pieces of information. I was surprised when I found that I had to enter my driver’s license # – I don’t remember ING Direct ever asking for it. I was even more surprised when the application asked me to enter my height & eye color according to my license. I didn’t realize banks had access to BMV records. Creepy.

Now comes the waiting game. In a day or 2 I have to verify two deposits Capital One is making in my existing savings account so they know that it’s really my account. (I wish there was a quicker method…it is 2011 after all.) Then the initial funding can come through and I should be ready to make withdraws by the time I head to Italy.

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They Don’t Service Loans Like They Used To

by Ryan on August 4, 2011

Like everyone else and their mother, I have student loans. I’m rocking a Stafford loan that I owe around $6,000 on and a Parent PLUS for $4,000. Expected payoff date: Who knows. I’ve handled the extra cash I receive from refunds pretty well – I even sent most of it back as payments. On July 8th, I made a $1,000 payment to help reduce interest charges. Two weeks later and there’s no record that any payment was ever processed:

That’s not cool, so I call up My Fed Loan Servicing. Not the most creative name, but it works I guess. After holding for an unacceptable amount of time, I had the dumbest conversation of my life.

Me: “I made a payment on the 8th of July for $1,000 that isn’t showing up.”

Phone Rep: “Let me look into your account, one second…..OK, I am showing that payment on my screen.”

Me: “So why can’t I see it?”

Phone Rep: “Well, any funds returned 120 days after a disbursement are considered a cancellation payment and don’t show up.”

Me: “Then why can I see 2 previous cancellation payments?”

Phone Rep: “I’m not entirely sure.”

Me: “Well this makes it just about impossible to keep track of what I actually owe…”

Phone Rep: “I agree completely and I believe they’re working on a way to let borrowers see all payments made.”

Me: “Yeah, they should get on that. Thanks.”

What kind of company is this? Their only purpose is to manage student loans and collect payments. How hard is it to actually, you know, manage the loans?!? Right now I’m being told I owe $4,100. I have no idea if that’s actually the correct amount. My net worth update from June, before the payment was made, says I owed around $5,200. So a $1,000 payment in July does seem to match with the new balance.

Still, not showing all payments is the dumbest thing I’ve ever heard of. Over 4 years of school, it’d be extremely easy to lose track of how many payments you made and good luck getting a straight answer out of the people you sent the money to.

Do you have any student loan horror stories? Mine isn’t really all that bad, but it’s still frustrating. Let’s hear ‘em!

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Net Worth Update: July 2011

by Ryan on August 3, 2011

Crazy how fast summer is going! Feels like I just got out of school a few weeks ago and now I’m 29 days away from heading to Italy for an entire semester. Still have lots to do – and buy! Let’s see how July hit my wallet:

The Detail$:

Checking (-1,057) – A decrease! Makes me a sad panda (South Park reference). I bought a digital camera in June on my credit card that I paid in July. Make sense? Also bought gas and ate out with friends. A lot.

Savings (-$946) – Made another student loan payment. Don’t recall having to spend anything in my savings this month.

Roth IRA (-$35) – Nothing added, but a bit lost. That’s the market though.

ESPP ($5) – I’ve stopped buying my company’s stock, so all activity in this account is from the market swinging up and down. I expect this to increase as back to school pushes sales.

Treasury Direct (+$1) – Only have another 5,000 years before these mature.

Stafford loan (+$11) – All interest I paid for the privilege of the government letting me borrow money that they also borrowed.

Parent PLUS (-$1,022) – Made a payment. NBD. There’s some funny business going on with my payment actually showing up, but that’s another post. All I know is I definitely sent in $1,000.

Credit cards ($40) – Made another payment on my flight to Italy. Will knock this out at some point when my financial aid is disbursed and my no interest period is almost up.

My net worth for July 2011 went down $831. Damn life, U expensive! August should be better. I know I’ve made at least $400 and I’ll still be getting another paycheck or 2 from work before I live.

Later!

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