A Financial Education Event
     

Car Buyer’s Market Amplified by COVID-19

Traditionally, the end of a car model (2020) means the beginning of the new models (2021), which means a significant savings on buying your next car. This is the beginning of a great car buying season that is actually even more buyer friendly in light of a COVID-19 environment and a 20% decline in global auto sales.

On our popular podcast The Money Millhouse, we recently interviewed Rod Griffin on an episode  about the kind of credit score associated with buying a car.  He said that this time of the year is one of the car buying seasons because dealerships are getting new models and are even more motivated to unload last year’s inventory.

Even though you may have a goal to eventually drive your cars for free , you can still be informed about credit scores in relationship to buying used or new cars.

Let me start by asking you the question we ask our audiences when we speak on a Heroes at Home tour: How do you lose around $8000 in 8 seconds?

Did you get the answer yet?

The answer is: you drive your brand new car off the lot.

Yes, the average new vehicle will depreciate $8000 in the first year. Since most folks finance that new vehicle, it’s more like losing $10,000 in 8 seconds!

So WHY oh WHY do you continue to buy NEW?

Some folks answer, “for the warranty.” But if you bought the vehicle a year old, you could do two things to make up for that 12 months of warranty you lose over buying new:

  • Warranty Purchase – you could purchase an extended warranty, which (depending on the car you drive) is only $800 to $1500 per year. This is WAY LESS than the 8K–10K you are losing by buying new. Plus warranties are negotiable. When I had to renew the warranty on my Mercedes 280SLK, the dealership gave me their best price. Then I called USAA, telling them the best quote I got and they beat the price by $800. Plus, instead of the $200 deductible I had with the other quote, the USAA deductible was $0! I used that warranty at my local Mercedes dealership (world’s best service department) and paid $0 deducible and got the same excellent service that I normally get.
  • CPO or Certified Previously OwnedIf you get a vehicle with a CPO on it, then part of the deal is that the dealership extends the warranty a year and this is a full manufacturer’s warranty. Plus, there are more stringent inspection standards and additional roadside assistance. Once, I had a shady salesperson who told me the car was CPO, “All our cars are CPO” she said, but she never presented me with CPO paperwork to sign at the deal’s closing. You guessed it, the vehicle was NOT CPO and she lied. Be sure you get CPO paperwork if you are told it is a genuine CPO. It costs the dealership anywhere from $800 to $2500 to CPO your vehicle, depending on the year, make and model. You HAVE TO sign CPO paperwork that is dated from BEFORE the date you buy the car or it’s not valid. Remember that asking a dealer to make a vehicle CPO is part of the negotiating process and this will increase the value of the deal anywhere from $1000 to $2500.

A couple years ago, I was on my way to Disneyland to meet another author friend and a careless driver made an unprotected left hand turn right into my vehicle (about 5 feet off the bumper). I had NO TIME to react or even take my foot off the brake. The fact that Mercedes are so well built and the fact God sent his angels to protect me are the only reasons I walked away from this terrible crash with only a few cuts and bruises.

This accident put me back in the market for a vehicle. So this time I decided to try USAA’s car buying service. Since we had an extra car at home, I could take my time to find the best deal. The car buying service told me the price, the discount, gave me free access to a CarFax report, showed me a chart of similar cars purchased in my area to indicate an average, good, or great deal, and more. I compared the prices I saw on the site to Kelley Blue Book and did all my research. Then I followed the same three steps we teach in our Heroes at Home Financial Events.

Step One: Negotiate Price First

Negotiate the price of the car at a dealership apart from the value of the trade-in. Tell the salesperson you want to determine the price of the car without the trade-in. The reason you want to do this is because salespeople will often give you far more for your trade than you expected—thus hooking you on the deal. However, this higher-value-for-the-trade-in shtick can be part of the technique they use to get you to purchase the car. If a higher value is given to the trade, then they will give a lower discount on the price of the vehicle, because all the discounting went into the value of the trade.

Step Two: Negotiate the Value of the Trade-In

Now that you’ve determined the price of the car, ask what the dealer will give you for your trade-in. Most likely, you will get more for your car if you sell it yourself. A little elbow grease and some top-notch detailing can net you hundreds of dollars more than a dealer can give you, if you can find a buyer. Some people (like military families) don’t always have the time to sell their car because of moving schedules and so forth. So if you are going to try to trade in your car, look up the value of your existing car at Kelley Blue Book or Edmunds, then print the page (or screen shot it), and bring it with you to the car lot to negotiate the price. Bottom line: try your best to gather enough facts beforehand so that you make a wise decision.

Step Three: Secure Your Own Financing

The F&I (finance and insurance office) is where the lion’s share of a dealership’s profit is made. In this office, you will have to navigate interest rates, payments, terms, additional services, and warranties. Unless you put miles on your car for business or you are purchasing a car that will cost a lot to repair (and you intend to keep it longer than the warranty lasts), extended warranties are usually not a good value. When it comes to vehicle financing, you can generally do better on interest by selecting your own creditor unless the manufacturer is offering a lower APR. Keep in mind that the .99% APR offers only go to the top 10% of those who are the FICO score elite, chances are good that you will not qualify. The credit life insurance that dealers offer is more expensive than raising your regular insurance premium by twenty thousand dollars to cover this expense. And don’t forget to research the price of insurance on your new car so you can afford both the payment and the insurance.

By following my own advice, I talked to my sales representative and I was able to:

  • Negotiate the best price on the vehicle.
  • Get the USAA discount added to the deal.
  • Get a car that had less than 3K miles on it.
  • Get CPO added to my vehicle.
  • Drive a vehicle that is now under warranty until 2022.
  • Get a like-new car that had only been in service officially for a mere three months.
  • Save $9K off the brand-new-plus-CPO price.
  • Pay cash for my car (stay tuned for next week’s blog on how to pay cash for cars).
  • Get the year, make, model and color of the car I wanted.
  • Walk away feeling good about the deal and the value I got.

When are you in the market to get a vehicle, which of these tips will you follow to get the best deal?

Ellie Kay

A Closer Look at Father’s Day

Dad. Papa. Old man. World’s Greatest Fighter Pilot. We call the fathers in our lives a lot of different things (some more well-received than others), but most of us can agree that we appreciate them. With Father’s Day coming up soon, it’s time to start thinking of ways to show that gratitude to your paternal unit.

To celebrate our 100th podcast episode, we invited the fathers & husbands in our life into The Money Millhouse studio to get their spin on our show. Even we (Bethany Bayless and Ellie Kay) were surprised to hear their inputs and we learned something about these great guys and fathers.

According to digital offers destination, RetailMeNot, a survey found more people buy Mother’s Day gifts for mom than Father’s Day gifts for dad (86%* vs. 77%). Other findings include:

•Nearly half (48%) of consumers surveyed believe that people spend more on Mother’s Day gifts than on Father’s Day gifts

•20% of consumers surveyed admit they are more creative with gifts for their mom on Mother’s Day than for their dad on Father’s Day

•Gift cards (17%) and quality time with the family (17%) top dads’ Father’s Day wish lists this year. 

He might act like he enjoys that tie or bottle of hot sauce you get him every single year, but a unique gift every now and then can go a long way. Best of all, it doesn’t have to be expensive. Here are three unique ways to show your father or father figure some love this year, without spending a ton of cash. 

Use Online Coupons: Use RetailMeNot.com, or download the app. Whenever you have an idea of what to get dad, type in that store to get coupons to be used online or in store. You should never have to pay full price when you have coupons so close at hand!

Give dad some time off this year: Use sites like travelzoo.com to find great destination packages for great deals for later this summer or fall. It could even be a weekend getaway close to where he lives–you are able to search by location for the best deals around. 

Customized gift: We’re not talking just coffee mugs or canvas photos here (find these at Walgreens with same day service and coupons on their website or Retail Me Not)… we’re also talking something completely customized and unique. My son Daniel surprised me last Mother’s Day with a framed “Kay Family Rules” listing all the sayings we would tell our kids when they were growing up. It was funny, memorable and something even a father would appreciate.

At other craft sites like Etsy, you’ll find a wide variety of handmade and vintage gifts that can be personalized with a simple note to the seller. They even have a convenient section up right now that lists dad-like items such as guitar pick bracelets, dog tags, robes and phone holders.

Do-it-yourself project: Pinterest is our go to place for ideas. And while it’s another great option for finding a customized gift, it’s an even better starting point for something you can make yourself. For example, if your father has a particularly defined “power stache,” like Papa Kay, there’s a gift on Pinterest for a jar with an outline of a mustache, which can easily be made and personalized yourself. (Plus it makes a pretty good place for him to store his combs, razor and other items.)

The gift of an experience: If you’re lucky enough to live by your dad, one of the most memorable gifts you can give him is simply spending some time with him. You could toss baseballs at the park (while social distancing) cook his favorite meal (barbecue, anyone?) or go to a hike or bike ride. 

When it comes to a Father’s Day gift, a more expensive gift isn’t necessarily a better gift. Put some thought into it and he’ll be happy. Just be sure to call him by one of the names he likes–The World’s Greatest Fighter Pilot agrees.

Ellie Kay
America’s Family Financial Expert (R)

Revive and Thrive Virtual Women’s Conference

In my podcast, The Money Millhouse, we are addressing financial issues for women who make and manage money–especially during a pandemic. We believe in supporting each other.

In these unprecedented times, women need more support and encouragement than ever. We need words of hope and truth to spur us on in our “new normal” and help us live lives of greater joy and purpose despite our circumstances. Revive and Thrive is a virtual conference we’ve created to do just that! I will be presenting “Living Rich for Less.” 

We’ve gathered a group of amazing teachers, speakers, and authors to pour into women’s lives in on a variety of subjects that will educate, equip, inspire, and challenge. Best of all, it can be
enjoyed at your leisure in the privacy and safety of your own home.  As added bonuses, each speaker has offered a free downloadable gift and will personally host one live video chat in the weeks after the conference airs so you can connect with her, ask questions, and interact with other women. My zoom chat will be on June 2 at 4:00 PM PST.

I know that at times I feel I’m doing fine in the midst of sheltering in place despite the fact I’ve cancelled 11 trips (many for business.) I’m trusting that as I continue to do the right things for the right reasons, I can trust God for the results. Watching some of my fellow speakers talk about these very feelings I’m experiencing has been revitalizing for me. One of my biggest takeaways was from Dr. Michelle Bengtson’s talk on “Breaking Anxiety’s Grip” where I learned to say “I get to” instead of “I have to.” That tiny little change was so very hard but it completely changed the way I’m viewing this season of life.

I look forward to seeing how you will revive and thrive as a result of this virtual conference!

Car Buying Season

On our popular podcast The Money Millhouse, we recently interviewed Rod Griffin on an episode  about the kind of credit score associated with buying a car.  He said that this time of the year is one of the car buying seasons because dealerships are getting new models and are even more motivated to unload last year’s inventory.

Even though you may have a goal to eventually drive your cars for free , you can still be informed about credit scores in relationship to buying used or new cars.

Let me start by asking you the question we ask our audiences when we speak on a Heroes at Home tour: How do you lose around $8000 in 8 seconds?

Did you get the answer yet?

The answer is: you drive your brand new car off the lot.

Yes, the average new vehicle will depreciate $8000 in the first year. Since most folks finance that new vehicle, it’s more like losing $10,000 in 8 seconds!

So WHY oh WHY do you continue to buy NEW?

Some folks answer, “for the warranty.” But if you bought the vehicle a year old, you could do two things to make up for that 12 months of warranty you lose over buying new:

  • Warranty Purchase – you could purchase an extended warranty, which (depending on the car you drive) is only $800 to $1500 per year. This is WAY LESS than the 8K–10K you are losing by buying new. Plus warranties are negotiable. When I had to renew the warranty on my Mercedes 280SLK, the dealership gave me their best price. Then I called USAA, telling them the best quote I got and they beat the price by $800. Plus, instead of the $200 deductible I had with the other quote, the USAA deductible was $0! I used that warranty at my local Mercedes dealership (world’s best service department) and paid $0 deducible and got the same excellent service that I normally get.
  • CPO or Certified Previously OwnedIf you get a vehicle with a CPO on it, then part of the deal is that the dealership extends the warranty a year and this is a full manufacturer’s warranty. Plus, there are more stringent inspection standards and additional roadside assistance. Once, I had a shady salesperson who told me the car was CPO, “All our cars are CPO” she said, but she never presented me with CPO paperwork to sign at the deal’s closing. You guessed it, the vehicle was NOT CPO and she lied. Be sure you get CPO paperwork if you are told it is a genuine CPO. It costs the dealership anywhere from $800 to $2500 to CPO your vehicle, depending on the year, make and model. You HAVE TO sign CPO paperwork that is dated from BEFORE the date you buy the car or it’s not valid. Remember that asking a dealer to make a vehicle CPO is part of the negotiating process and this will increase the value of the deal anywhere from $1000 to $2500.

A couple years ago, I was on my way to Disneyland to meet another author friend and a careless driver made an unprotected left hand turn right into my vehicle (about 5 feet off the bumper). I had NO TIME to react or even take my foot off the brake. The fact that Mercedes are so well built and the fact God sent his angels to protect me are the only reasons I walked away from this terrible crash with only a few cuts and bruises.

This accident put me back in the market for a vehicle. So this time I decided to try USAA’s car buying service. Since we had an extra car at home, I could take my time to find the best deal. The car buying service told me the price, the discount, gave me free access to a CarFax report, showed me a chart of similar cars purchased in my area to indicate an average, good, or great deal, and more. I compared the prices I saw on the site to Kelley Blue Book and did all my research. Then I followed the same three steps we teach in our Heroes at Home Financial Events.

Step One: Negotiate Price First

Negotiate the price of the car at a dealership apart from the value of the trade-in. Tell the salesperson you want to determine the price of the car without the trade-in. The reason you want to do this is because salespeople will often give you far more for your trade than you expected—thus hooking you on the deal. However, this higher-value-for-the-trade-in shtick can be part of the technique they use to get you to purchase the car. If a higher value is given to the trade, then they will give a lower discount on the price of the vehicle, because all the discounting went into the value of the trade.

Step Two: Negotiate the Value of the Trade-In

Now that you’ve determined the price of the car, ask what the dealer will give you for your trade-in. Most likely, you will get more for your car if you sell it yourself. A little elbow grease and some top-notch detailing can net you hundreds of dollars more than a dealer can give you, if you can find a buyer. Some people (like military families) don’t always have the time to sell their car because of moving schedules and so forth. So if you are going to try to trade in your car, look up the value of your existing car at Kelley Blue Book or Edmunds, then print the page (or screen shot it), and bring it with you to the car lot to negotiate the price. Bottom line: try your best to gather enough facts beforehand so that you make a wise decision.

Step Three: Secure Your Own Financing

The F&I (finance and insurance office) is where the lion’s share of a dealership’s profit is made. In this office, you will have to navigate interest rates, payments, terms, additional services, and warranties. Unless you put miles on your car for business or you are purchasing a car that will cost a lot to repair (and you intend to keep it longer than the warranty lasts), extended warranties are usually not a good value. When it comes to vehicle financing, you can generally do better on interest by selecting your own creditor unless the manufacturer is offering a lower APR. Keep in mind that the .99% APR offers only go to the top 10% of those who are the FICO score elite, chances are good that you will not qualify. The credit life insurance that dealers offer is more expensive than raising your regular insurance premium by twenty thousand dollars to cover this expense. And don’t forget to research the price of insurance on your new car so you can afford both the payment and the insurance.

By following my own advice, I talked to my sales representative and I was able to:

  • Negotiate the best price on the vehicle.
  • Get the USAA discount added to the deal.
  • Get a car that had less than 3K miles on it.
  • Get CPO added to my vehicle.
  • Drive a vehicle that is now under warranty until 2022.
  • Get a like-new car that had only been in service officially for a mere three months.
  • Save $9K off the brand-new-plus-CPO price.
  • Pay cash for my car (stay tuned for next week’s blog on how to pay cash for cars).
  • Get the year, make, model and color of the car I wanted.
  • Walk away feeling good about the deal and the value I got.

When are you in the market to get a vehicle, which of these tips will you follow to get the best deal?

Ellie Kay

Service Academies and Military Funded Education

BGadmin

 

 I recently spoke at Congresswoman Katie Hill’s (25th Congressional District) Military Academy night.  The audience members were parents and students in high school.   These federal academies are highly competitive and look at the whole person. So it’s not enough to be a brainianc (super smart), they are also looking for students who are exceptional in the area of athletics, community involvement and leadership.  In return for this amazing education valued at $450,000, your student will be required to serve in the military for their “commitment” period. The commitment is a minimum of 5 years of service and can be longer, depending on a number of factors in regards to additional training after graduation.  If you have a “hero at home” who wants to go to a service academy, there are several things to keep in mind.


One of the first places to visit is your service academy’s admissions site:

USAFA – The United States Air Force Academy

USNA – The United States Naval Academy
USMA — The United States Military Academy

USMMA  The Merchant Marine Academy

USCGA    Coast Guard Academy (does not require a congressional nomination)

From Prospect to Appointee:  

  • Prospect: A student who has filled out the initial response form showing interest. This means they are essentially on an admissions mailing list. You can fill this out as early as middle school by going to the academy’s website.
  • Applicant: The individual has filled out a pre-candidate questionnaire and provided initial info on PSAT/SAT/ACT scores, grades and extra-curricular activities. This is usually done NO LATER than the spring of their junior year. This is also the time to contact your congressman and senator in regards to a nomination. In addition, if the student’s parent is qualified for a Presidential nomination, (see nominations and appointments below) then the student can contact the academy directly to pursue this nomination as well.
  • Candidate: To move from applicant to candidate indicates that you have cleared your first competitive hurdle. This step is decided by the Academies admissions staff in the early summer of a student’s Senior year. Not all students will get to this point, but this is when they will be interviewed by the Academy Liaison Officer (or the equivalent). It is from this list that appointments will be offered as early as the fall. For example, one of our sons was offered an USNA appointment by October.
  • Appointee: This means that the candidate has been offered an appointment into the Academy. They can choose to accept it or turn it down, but it means they have not only received an official nomination, but they have also been approved by the Academy’s admissions board and offered an actual appointment.

The Essay

It’s never too early to begin to think about what you would like to write in your admissions application essay. These are very important and should be well thought out before submitting. Be sure to have you liaison officer review it before you submit it or ask an academy graduate to help. It also wouldn’t hurt to have a faculty member from your school review it as well. More eyes on the project can mean a broader perspective, but it still needs to be your own voice, so you will have the final word on the essay.

Back to College – The Kay Way – part two

BGadmin

When people ask me how we are put our kids through college debt free, the answer is multi-fold.

First, we train our children from a young age that going to school, doing your homework and getting good grades is their primary “job.” By teaching them a good work ethic, we are laying the groundwork for scholarships and more.

Secondly, we send them to schools that we can afford or where they get the best scholarship offers to cover the most expenses.

Thirdly, we have saved a modest amount of college money to help them pay their room and board and partial tuition in some cases.

Lastly, but certainly not least, we require that they work part time in the summers or during the school year (through a work/study program or a regular job) in order to do their part in paying for college. By implementing these four disciplines, graduated debt free, with our most recent grad finishing up this past May. The older Kay kids had over ½ million in scholarships and and the last two garnered over a million dollars in scholarships.

Priorities
In any discussion of college costs, it’s important to keep priorities straight:
Parents need to leave yourself some fun money for retirement. How else can you afford that mechanical bull riding lesson and those parasailing flights (been there, done that, LOVE it)?
I really believe that you, as a parent, should try to avoid borrowing on your future in order to pay for your child’s future. Why would you want to take one of your greatest investments and leverage it for college expenses? Yet millions of parents make that devastating financial choice every year. I’m talking about avoiding any college funding plan that includes a home equity loan, a HELOC (home equity line of credit) or refinancing of an existing home mortgage. These options reduce the amount of equity in your home, increasing the risk of possible foreclosure and you incur costs in interest charges that may cost you more if the term on the new mortgage is greater than the remaining term on the existing mortgage.

The College Mantra
When I began a young adult, got married and began having kids (in that order) I was first exposed to the whole idea of “the college my child gets accepted to.” As a mom of many I frequently heard, “What college did they get accepted into?” The part of that question that amazes me is that the answer that is most impressive are also the most expensive (Columbia, Harvard, Stanford, Yale, etc). While an average of 40% of the students who attend these schools either get financial aid, grants or scholarships, they only average out to an assistance of $9600 per year. This leaves a boatload that the student and mom/dad owe for college. Most of this is usually in loans of some kind. So then the average student graduating from some of the most prestigious colleges have student loans upwards to $80,000 or more.
So why is the question: What college did they get accepted into?
The question should be: What college did they get accepted into that they can afford?
Why do you want to leverage your future (through HELOCS or loans) or leverage their future (through massive consumer debt) when it will take many years of earning power, for them to pay back those loans? One of the most common problems in young married Millennials is the burden of dual student loans in a marriage.

Three of our children went to service academies, which each have a value of about 425k that is paid back in a minimum of five years of military service. You can read more about those in my service academy blog, which will come out next week.

I’m doing what I can to help families minimize student loan debt so that both the parents and the graduates can have a better quality of life with more flexibility once they start those new careers. For more practical aspects of very specific ways you can pay for college. Please email assistant@elliekay.com and put “College Crunches” in the subject line. Our offices will send you a wonderful resource file that I wrote to help you fund a quality education for a fraction of the debt.

Ellie Kay

 

Back to College – The Kay Way – part one

BGadmin

Back To College

When Bethany was four years old, she came running in the house sobbing uncontrollably. I smoothed her blond curls and held her, “What’s wrong, Bunny?”
“I don’t want to leave you and go to college!” Her chubby arms held my neck tight.
“Um, well, Bunny, you don’t have to go to college any time soon!” I soothed, while rubbing her back.
She sat up straight, “I don’t?”
Wiping away her tears, she sniffed, “Good! Can I go back to Julie’s house and play again?”
I figured out later that all the drama was because Julie’s older brother was leaving for college and her friend’s family was sad to say goodbye. She thought she was going to have to leave us and it made her sad.
Fast forward the better part of two decades and she’s now a rising senior at Moody in Chicago, majoring in media communications. She’s not crying when she goes back to school, although we miss her. The good news is that she, along with all our other kids, are graduating debt-free! We don’t have any student loans and we didn’t have to refinance our house. Here are a few quick tips to pay for college. For more info, email assistant@elliekay.com and ask for the “College Crunch File.”

1. Make the Right Choice – Choose a school not because it’s the best, but because it’s the best value. Change the conversation from “I’ll go to the best college that I can get into” to “I will go to the school where I can get the best education possible for the least amount of student loan debt.” Our son, Daniel, chose the University of Texas (Arlington) over the scholarship he got to Syracuse and TCU because he would still have 60K in student loan debt after the scholarships ran out. He graduated with honors and a degree in journalism. He’s a working writer in Texas and doesn’t regret his college choice. In fact, when his department downsized and he needed to find another job, many in his section were overwhelmed because of their student loan debt. But his lack of college debt allowed him the freedom to find a job he really enjoys and he didn’t have to take the first job that came along.

2. Save Big on Books by Renting – The average student pays more than $600 for course materials – the largest expense after tuition and room and board.  You may want to look at renting textbooks through Follett’s Rent-A-Text program, students can cut costs by 50 percent or more. Or go to amazon to find used textbooks, making sure that you have an amazon prime account and can filter the options with the prime filter to get free shipping.

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3. Make Scholarships a Part-Time Job – Millions of dollars of scholarship money go unclaimed every year. This is free money that parents or prospective students who are willing to do some detective work may find more quickly than they think. Have your student go to College Board or Fast Web  to find scholarships that might be a fit for your student.

4. Create a Budget, and Stick to It – As a parent of a college student, your love for your student is unconditional, but your money is conditional. That’s what we’ve always told our kids. To ensure students are making the most of their money, set a budget for spending and manage it by downloading Mint to help track spending. And determine which on-campus retailers accept financial aid to be certain you’re making the most of your college dollars.

Join us next week for part two of our Back To College series and let me hear your tips and idea to make college more affordable!

Ellie Kay
America’s Family Financial Expert

Service Academies and Military Funded Education

 

 I recently spoke at Congresswoman Katie Hill’s (25th Congressional District) Military Academy night.  The audience members were parents and students in high school.   These federal academies are highly competitive and look at the whole person. So it’s not enough to be a brainianc (super smart), they are also looking for students who are exceptional in the area of athletics, community involvement and leadership.  In return for this amazing education valued at $450,000, your student will be required to serve in the military for their “commitment” period. The commitment is a minimum of 5 years of service and can be longer, depending on a number of factors in regards to additional training after graduation.  If you have a “hero at home” who wants to go to a service academy, there are several things to keep in mind.


One of the first places to visit is your service academy’s admissions site:

USAFA – The United States Air Force Academy

USNA – The United States Naval Academy
USMA — The United States Military Academy

USMMA  The Merchant Marine Academy

USCGA    Coast Guard Academy (does not require a congressional nomination)

From Prospect to Appointee:  

  • Prospect: A student who has filled out the initial response form showing interest. This means they are essentially on an admissions mailing list. You can fill this out as early as middle school by going to the academy’s website.
  • Applicant: The individual has filled out a pre-candidate questionnaire and provided initial info on PSAT/SAT/ACT scores, grades and extra-curricular activities. This is usually done NO LATER than the spring of their junior year. This is also the time to contact your congressman and senator in regards to a nomination. In addition, if the student’s parent is qualified for a Presidential nomination, (see nominations and appointments below) then the student can contact the academy directly to pursue this nomination as well.
  • Candidate: To move from applicant to candidate indicates that you have cleared your first competitive hurdle. This step is decided by the Academies admissions staff in the early summer of a student’s Senior year. Not all students will get to this point, but this is when they will be interviewed by the Academy Liaison Officer (or the equivalent). It is from this list that appointments will be offered as early as the fall. For example, one of our sons was offered an USNA appointment by October.
  • Appointee: This means that the candidate has been offered an appointment into the Academy. They can choose to accept it or turn it down, but it means they have not only received an official nomination, but they have also been approved by the Academy’s admissions board and offered an actual appointment.

The Essay

It’s never too early to begin to think about what you would like to write in your admissions application essay. These are very important and should be well thought out before submitting. Be sure to have you liaison officer review it before you submit it or ask an academy graduate to help. It also wouldn’t hurt to have a faculty member from your school review it as well. More eyes on the project can mean a broader perspective, but it still needs to be your own voice, so you will have the final word on the essay.

Back to College – The Kay Way – part two

When people ask me how we are put our kids through college debt free, the answer is multi-fold.

First, we train our children from a young age that going to school, doing your homework and getting good grades is their primary “job.” By teaching them a good work ethic, we are laying the groundwork for scholarships and more.

Secondly, we send them to schools that we can afford or where they get the best scholarship offers to cover the most expenses.

Thirdly, we have saved a modest amount of college money to help them pay their room and board and partial tuition in some cases.

Lastly, but certainly not least, we require that they work part time in the summers or during the school year (through a work/study program or a regular job) in order to do their part in paying for college. By implementing these four disciplines, graduated debt free, with our most recent grad finishing up this past May. The older Kay kids had over ½ million in scholarships and and the last two garnered over a million dollars in scholarships.

Priorities
In any discussion of college costs, it’s important to keep priorities straight:
Parents need to leave yourself some fun money for retirement. How else can you afford that mechanical bull riding lesson and those parasailing flights (been there, done that, LOVE it)?
I really believe that you, as a parent, should try to avoid borrowing on your future in order to pay for your child’s future. Why would you want to take one of your greatest investments and leverage it for college expenses? Yet millions of parents make that devastating financial choice every year. I’m talking about avoiding any college funding plan that includes a home equity loan, a HELOC (home equity line of credit) or refinancing of an existing home mortgage. These options reduce the amount of equity in your home, increasing the risk of possible foreclosure and you incur costs in interest charges that may cost you more if the term on the new mortgage is greater than the remaining term on the existing mortgage.

The College Mantra
When I began a young adult, got married and began having kids (in that order) I was first exposed to the whole idea of “the college my child gets accepted to.” As a mom of many I frequently heard, “What college did they get accepted into?” The part of that question that amazes me is that the answer that is most impressive are also the most expensive (Columbia, Harvard, Stanford, Yale, etc). While an average of 40% of the students who attend these schools either get financial aid, grants or scholarships, they only average out to an assistance of $9600 per year. This leaves a boatload that the student and mom/dad owe for college. Most of this is usually in loans of some kind. So then the average student graduating from some of the most prestigious colleges have student loans upwards to $80,000 or more.
So why is the question: What college did they get accepted into?
The question should be: What college did they get accepted into that they can afford?
Why do you want to leverage your future (through HELOCS or loans) or leverage their future (through massive consumer debt) when it will take many years of earning power, for them to pay back those loans? One of the most common problems in young married Millennials is the burden of dual student loans in a marriage.

Three of our children went to service academies, which each have a value of about 425k that is paid back in a minimum of five years of military service. You can read more about those in my service academy blog, which will come out next week.

I’m doing what I can to help families minimize student loan debt so that both the parents and the graduates can have a better quality of life with more flexibility once they start those new careers. For more practical aspects of very specific ways you can pay for college. Please email assistant@elliekay.com and put “College Crunches” in the subject line. Our offices will send you a wonderful resource file that I wrote to help you fund a quality education for a fraction of the debt.

Ellie Kay

 

Back to College – The Kay Way – part one

Back To College

When Bethany was four years old, she came running in the house sobbing uncontrollably. I smoothed her blond curls and held her, “What’s wrong, Bunny?”
“I don’t want to leave you and go to college!” Her chubby arms held my neck tight.
“Um, well, Bunny, you don’t have to go to college any time soon!” I soothed, while rubbing her back.
She sat up straight, “I don’t?”
Wiping away her tears, she sniffed, “Good! Can I go back to Julie’s house and play again?”
I figured out later that all the drama was because Julie’s older brother was leaving for college and her friend’s family was sad to say goodbye. She thought she was going to have to leave us and it made her sad.
Fast forward the better part of two decades and she’s now a rising senior at Moody in Chicago, majoring in media communications. She’s not crying when she goes back to school, although we miss her. The good news is that she, along with all our other kids, are graduating debt-free! We don’t have any student loans and we didn’t have to refinance our house. Here are a few quick tips to pay for college. For more info, email assistant@elliekay.com and ask for the “College Crunch File.”

1. Make the Right Choice – Choose a school not because it’s the best, but because it’s the best value. Change the conversation from “I’ll go to the best college that I can get into” to “I will go to the school where I can get the best education possible for the least amount of student loan debt.” Our son, Daniel, chose the University of Texas (Arlington) over the scholarship he got to Syracuse and TCU because he would still have 60K in student loan debt after the scholarships ran out. He graduated with honors and a degree in journalism. He’s a working writer in Texas and doesn’t regret his college choice. In fact, when his department downsized and he needed to find another job, many in his section were overwhelmed because of their student loan debt. But his lack of college debt allowed him the freedom to find a job he really enjoys and he didn’t have to take the first job that came along.

2. Save Big on Books by Renting – The average student pays more than $600 for course materials – the largest expense after tuition and room and board.  You may want to look at renting textbooks through Follett’s Rent-A-Text program, students can cut costs by 50 percent or more. Or go to amazon to find used textbooks, making sure that you have an amazon prime account and can filter the options with the prime filter to get free shipping.

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3. Make Scholarships a Part-Time Job – Millions of dollars of scholarship money go unclaimed every year. This is free money that parents or prospective students who are willing to do some detective work may find more quickly than they think. Have your student go to College Board or Fast Web  to find scholarships that might be a fit for your student.

4. Create a Budget, and Stick to It – As a parent of a college student, your love for your student is unconditional, but your money is conditional. That’s what we’ve always told our kids. To ensure students are making the most of their money, set a budget for spending and manage it by downloading Mint to help track spending. And determine which on-campus retailers accept financial aid to be certain you’re making the most of your college dollars.

Join us next week for part two of our Back To College series and let me hear your tips and idea to make college more affordable!

Ellie Kay
America’s Family Financial Expert

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