Pro­tect your nest egg when pay­ing for kids’ col­lege

South Florida Sun-Sentinel (Sunday) - - Success - Jill Sch­lesinger Jill on Money Jill Sch­lesinger, CFP, is a CBS News busi­ness an­a­lyst. A for­mer op­tions trader and CIO of an in­vest­ment ad­vi­sory firm, she wel­comes com­ments and ques­tions at [email protected]­lon­ By Thomas Koulopou­los

Bal­ance. That’s the word I think about when con­tem­plat­ing how fam­i­lies need to think about ed­u­ca­tion fund­ing.

It’s im­por­tant to strike the right bal­ance be­tween fund­ing a child’s near or longterm fu­ture and your own fi­nan­cial in­de­pen­dence.

When chil­dren are tod­dlers, that might mean whether your fam­ily can af­ford to have one par­ent stay at home. When faced with this choice, you need to ac­count for the loss of po­ten­tial earn­ings (and re­tire­ment con­tri­bu­tions) and the cost of day care or babysit­ters.

As chil­dren get older, the case for putting their ed­u­ca­tion needs first is com­pelling. Ac­cord­ing to re­search from the Fed­eral Re­serve Bank of St. Louis, the amount of money earned over a ca­reer in­creases with ed­u­ca­tion.

On av­er­age, those with more ed­u­ca­tion are able to re­tire ear­lier and they are con­sis­tently less likely to be­come un­em­ployed dur­ing their ca­reers.

Ac­cord­ing to the re­search, av­er­age life­time earn­ings for a high school diploma are $1,777,152. For a bach­e­lor’s de­gree, it’s $2,683,824.

These num­bers might en­cour­age you to pull out all of the stops when it comes to fund­ing your kids’ ed­u­ca­tion, but the tricky part is that you still need to take care of your­self. Af­ter all, there are myr­iad op­tions to help fund col­lege: fi­nan­cial aid, schol­ar­ships and loans. But none of these are avail­able for your re­tire­ment.

So where to start? As al­ways, the best bet is to cre­ate a game plan that in­cor­po­rates ed­u­ca­tion and re­tire­ment fund­ing with other cash flow needs. You may want to plug in some num­bers for col­lege, but prices vary dra­mat­i­cally.

As you be­gin to in­ves­ti­gate the op­tions, note that there is a big dif­fer­ence be­tween the pub­lished price of tu­ition and fees and the price af­ter grants and schol­ar­ships have been ap­plied.

Schools now use “net price,” which is the av­er­age price stu­dents pay, in­clud­ing tu­ition and re­quired fees, books and sup­plies and room and board, af­ter ac­count­ing for grant and schol­ar­ship money re­ceived. The na­tional av­er­age net price for a pub­lic school is $12,272, while the na­tional av­er­age net price for a pri­vate school is $21,778.

With that in­for­ma­tion in hand, you may joy­fully dis­cover that you can fully fund both ed­u­ca­tion and re­tire­ment, but it’s more likely that you’ll need to make tough choices. Your re­search should also be able to re­veal whether ed­u­ca­tion de­ci­sions will sad­dle young grad­u­ates with debt bur­dens that pre­vent them from buy­ing a house or at­tain­ing other goals.

With the money plan in place, it is also im­por­tant to com­mu­ni­cate with your kids.

Ac­cord­ing to Beth Kobliner, author of “Make Your Kid a Money Ge­nius,” the con­ver­sa­tion should start early.

“Talk­ing with your kid about col­lege when he’s a fresh­man in high school — or even at the end of eighth grade — may seem pre­ma­ture. All that stuff will work it­self out in a cou­ple years, right? Think again. The fi­nan­cial aid and col­lege ad­mis­sions process will be stress­ful no mat­ter what, but wait­ing will only make it worse. By not talk­ing about your kid’s col­lege pos­si­bil­i­ties and your own ex­pec­ta­tions now, you could end up dis­ap­point­ing him (and let’s face it, your­self ) down the road if he’s think­ing one thing and you’re en­vi­sion­ing an­other.”

If you’re the in­tro­verted type, you likely think peo­ple with whom you in­ter­act at work don’t like you. You likely are wrong.

A study con­ducted by re­searchers at Cor­nell, Har­vard and the Univer­sity of Es­sex and pub­lished in the As­so­ci­a­tion for Psy­cho­log­i­cal Science, looked at our per­cep­tion of how liked we think we are in the course of hav­ing con­ver­sa­tions.

The find­ings un­cov­ered that the shyer you are, the larger the gap be­tween how much you think you are liked and how much you ac­tu­ally are liked. So, if you are very shy, and prone to avoid­ing in­ter­ac­tions, you will rank your­self as much less lik­able than oth­ers do.

Ac­cord­ing to the authors, “Our re­search sug­gests that ac­cu­rately es­ti­mat­ing how much a new con­ver­sa­tion part­ner likes us — even though this is ... some­thing we have am­ple prac­tice with — is a much more dif­fi­cult task than we imag­ine.”

Study par­tic­i­pants were asked to con­duct con­ver­sa­tions with each other. The par­tic­i­pants, ex­tro­verts as well as in­tro­verts, al­most al­ways said that they were liked less than they ac­tu­ally were. Also, the lik­ing gap oc­curs for men and women equally and it seems to per­sist no mat­ter the length of the con­ver­sa­tion.

Yale Univer­sity psy­chol­ogy pro­fes­sor Mar­garet S. Clark, said: “We’re self-pro­tec­tively pes­simistic and do not want to as­sume the other likes us be­fore we find out if that’s re­ally true.”

This is an in­cred­i­bly self-lim­it­ing view­point that can eas­ily turn into a vi­cious cy­cle of neg­a­tive re­in­force­ment. Your be­lief that you are not lik­able in­hibits your at­tempts to put your­self out there, which in turn re­in­forces your be­lief.

This is espe­cially dan­ger­ous if you need to com­mu­ni­cate as part of what you do pro­fes­sion­ally. For ex­am­ple, you may need to speak at con­fer­ences, present your ideas or sim­ply try to con­nect with co-work­ers, col­leagues, cus­tomers and busi­ness part­ners.

I’ve seen this time and again in my work coach­ing peo­ple on pub­lic speak­ing. I re­call one case where some­one I was coach­ing on pre­sent­ing to a cam­era was asked to role play. The set­ting was non­threat­en­ing, a room with six other peo­ple and an un­manned video cam­era.

Half­way through his pre­sen­ta­tion he stopped cold and said: “I just can­not do this any­more. I’m mess­ing up. I can tell. I want to stop.”

I asked the other stu­dents what they thought and ev­ery one was of the opin­ion that he was killing it. “No way,” he said. “You’re all just try­ing to make me feel bet­ter.”

So, I played back the video. He was pol­ished, well-spo­ken, calm and per­fectly com­posed. You couldn’t tell any­thing was wrong.

“I don’t like look­ing at my­self,” he said. “I’m not good on cam­era.”

It’s as­ton­ish­ing how we bend the truth to fit our nar­ra­tives, even when it’s star­ing us in the face.

Much of how we think we are per­ceived is a fic­tion that we cre­ate in our heads. It’s based on ar­ti­facts of an im­age we have of our­selves that, in turn, are based on our worst fears and our weak­nesses rather than an ac­cu­rate re­flec­tion of our­selves and our strengths.

It typ­i­cally goes some­thing like this: “I’m shy. That’s just who I am. There­fore peo­ple don’t like me or what I have to say.” My stu­dent couldn’t see his com­po­sure and au­then­tic­ity.

It’s hu­man na­ture, and even the most ex­pe­ri­enced pre­sen­ters and per­form­ers deal with it. Even af­ter three decades of pre­sent­ing reg­u­larly to au­di­ences of thou­sands, I still look at videos of my­self with an eye to­ward de­tails and im­per­fec­tions that likely would be lost on my worst critic.

The only way to re­shape this self-im­age is to take ev­ery op­por­tu­nity to put your­self out there and cre­ate more ex­pe­ri­ences that re­in­force the pos­i­tive as­pects of who you are and how you come across.

As for the the quirks and idio­syn­cra­sies, well, I hate to tell you this, but they will al­ways be there. Your job is to look be­yond them to what does work, your strengths and then am­plify these. Yeah, I wish I had an eas­ier way for you to de­velop an ac­cu­rate self-im­age. I don’t. It takes com­mit­ment.

Those of us who are shy and in­tro­verted have the dis­tinct ben­e­fit of also be­ing more crit­i­cal of our­selves than we should be. That can cre­ate anx­i­ety, which isn’t pleas­ant, but at the same time it can pro­vide the great­est im­pe­tus to grow and im­prove.

At the very least, the next time you are meeting a new client, talk­ing with a co-worker or pre­sent­ing an idea at work, re­mem­ber that the peo­ple you are in­ter­act­ing with prob­a­bly like you.

Thomas Koulopou­los is the author of 10 books and the founder of the Del­phi Group.


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