SHOW ME THE MONEY

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Princess Wynn, 17, is waiting for answers from the colleges she got into. A senior at St. Jean Baptiste High School in Manhattan, she’s waiting to find out how much she will receive. Her parents can’t help her cover all of the tuition, so she might have to apply for loans.
However, Wynn doesn’t know much about student loans or how they work. She is also thinking of getting a credit card when she turns 18. But she says she is worried she might get in trouble with it. “I like to spend,” she said. “I like to buy sneakers.”
Wynn is not uncommon among people her age, consumers on the verge of adulthood who don’t know a lot about the financial challenges they will soon face. A new study suggests that fewer students are prepared to confront the difficult decisions that may lie ahead. More than half of college-bound students lack basic skills in the management of personal finance, according to the JumpStart Coalition’s biennial survey for Personal Financial Literacy.
“People of all income levels are having to adapt to the changes that are being made,” said Dr. Lewis Mandell, professor of Finance and Managerial Economics at SUNY Buffalo, referring to the current downturn of the economy.
The study posed questions to almost 7,000 high school seniors in 40 states. According to the results, on average the students answered correctly 48.3 percent of the questions, a decrease from the senior class of 2006, which answered 52.4 percent correctly. The study showed that most high school seniors don’t know what are the best choices for them regarding banking, saving and investing, skills they may need the most considering the uncertainties about the future.
“These are the skills that people need for survival,” said Dr. Mandell. “We lost the ability to teach people life skills.”
Mandell likens the scenario to someone who lacked agricultural skills in America 200 years ago, when they would be vital to survival. “Now those skills are no longer agricultural or manufactural, but they involve really sophisticated decision making, in particular in finance,” he said
In one of the multiple-choice questions, students were asked what the best way to put away money for a period of 18 years was. Only 17 percent gave the correct answer: stocks. About 5 percent said a checking account, 37 percent said a U.S. government savings bond and 41 percent said a savings account.
Only 40 percent knew that they would lose their health insurance if their parents became unemployed. And only 48 percent knew that a credit card holder who pays only the minimum amount on monthly card balances will pay more in annual finance charges than somebody who pays their balance in full.
For the first time, the survey, which was funded by the Merrill Lynch Foundation, was also given to about 1,000 college students. Their performance wasn’t much better. These students answered on average 62 percent of the questions correctly. Their scores increased with their rank in school. For example, freshmen scored 59 percent, while seniors got 65 percent of the answers right.
Vanessa King of the Bronx is concerned about sending her 17-year-old daughter to college in the fall. “She’s afraid [of getting in trouble with money], and I am concerned about her money management,” King said. “I’m concerned about credit cards. I’m glad she’s going to be close to home, at St. John’s University.”
Mandell explained that the current unusual economic conditions may have made it difficult for students to identify things that would be true in normal times. For example, stock prices tend to go up, and buying a house with a fixed-rate mortgage is considered one of the best investments against inflation.
Laura Levine, executive director of the Jumpstart Coalition, says the group she leads advocates for financial to be integrated into schools. She said young people should learn about savings and investments, risk management and insurance, credit and debit, in a comprehensive way.
“We are not trying to teach kids to memorize facts, what we want to teach them is how to solve problems,” she said.
Alicia Antonio, 17, a senior at Grover Cleveland High School in Queens, will attend college at St. John’s University in the fall. She says she had a hard time figuring out how to apply for financial aid and finding the resources to finance her education.
“They don’t prepare you for that in high school,” she said. “We take an economics class, but every senior needs to take it for the credit. No one really pays attention, because it’s your last year, and they only speak about the economy in the past.”

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Show Me The Money

Written by None - Do not Delete on . Posted in Breaking News, Posts.


“There’s no money in poetry, but then there’s no poetry in money, either,” wrote Robert Graves. And that’s never been truer than right now in NYC, when college students graduate and immediately start working 9 to 5 or even 8 to midnight. “Work” is now a four-letter word, but it didn’t used to be this way.



Twenty-first century youths are now doomed to hunch all day in front of a computer screen for the rest of their lives. After a long, hard day, they finally go home and gobble down take-out until they pass out and start again the next day. They have no choice: Within six months of leaving school, twentysomethings have to repay student loans, and the average debt has doubled during the past decade. Recent grads need health insurance ASAP, and they need enough green to pay ever more astronomical rents. To survive in the city comfortably, most newly minted baccalaureates plan ahead and plot their way to jobs in finance, law or medicine. Unless they’re willing to sacrifice, most can’t afford to follow their dreams.



Entry-level paralegals typically make $35,000 but might start out higher with a law background and there’s usually plenty of overtime. Faced with such a prospect, Jessica Fjeld, a 2006 graduate of Columbia College, seems outright brave: Her first job was at Random House, then she moved on to become writer James Atlas’ assistant. A prize-winning poet, she’s entering the MFA in poetry program at UMass Amherst this fall.



Nina Covalesky, another graduate from Columbia (1999), began in development but decided her true calling was acting. For a year she switched to inhuman hours in management consulting, then quit and started auditioning. Meanwhile, she created her own Christmas ornament company where she makes about $30,000 a year, all earned during November and December. She has an agent now and has acted Off-Broadway but is still waiting for her big break.



Daniel Brook, recent Yale grad and author of The Trap: Selling Out to Stay Afloat in Winner-Take-All America, a new book about the erosion of the middle class in America, criticizes our brave new world where young people are forced into drone jobs at corporations and foregoing fulfilling careers in non-profits, the arts and .



“In 1970, entry-level teachers in NYC made only $2,000 less than entry-level Wall Street lawyers. Today they make $100,000 less,” he told me. Brook bemoans a country where, post-Reagan households with incomes over $50,000 doubled, millionaires nearly tripled and billionaires quadrupled. Even graduating from an Ivy League institution with honors doesn’t guarantee high earnings anymore. The so-called “best and brightest” have to get serious and get a “real” job.



Now more women than ever are on the market, upping the competition. Among workers without college degrees, women actually earn more than men on the average and, according to figures Andrew Beveridge compiled in his demographic study for Queens College, 16 percent more women than men have college degrees in Manhattan. But among college-educated candidates, girls generally earn about $5,000 less than the boys in entry-level jobs. In the same study—which Beveridge freely admits is from self-reported census samples, so they’re not comprehensive—women’s salaries drop dramatically mid-career compared to men. No wonder girls try to date rich dudes: Male lawyers, doctors and financiers generally earn more than double than their female counterparts.



Again, Brook notes, “From 1961 to 1986, one in three school teachers were male. Today it’s one in five.”



Jess Fjeld believes women demand more balance, often because they may someday want to start a family. “People in finance don’t live balanced lives; they’re all about work. It’s a masculine culture that doesn’t allow you much time for a social life.” But even in less stressful fields, lady professors, managers, editors and reporters generally earn about $20,000 less, according to another study by Beveridge. In female-dominated jobs, women secretaries, nurses, designers, social workers and authors earn the same or even more than men, but I’m not about to break out the Dom Perignon.



A report by the Wasserman Center for Career Development focused on New York University’s class of 2006 and found male graduates earned $51,830, and female graduates earned $46,875, a difference of $4,955. Paula Lee, the director of NYU’s Career Development Office, said that the reason the salary statistics for women tend to be lower is because they are more apt to take jobs in lower paying fields such as publishing, education and law (legal assistants/researchers), traditionally female-dominated occupations with lower starting salaries. “Men and women in the same position at the same firm come in with the same salary, unless one of the candidates has more experience, but the difference in pay has nothing to do with gender.” According to Lee, more women are entering fields like nursing and financial services, which traditionally pay more and this has helped narrow the gender salary gap reported in previous surveys. “The job picture this year is actually better than it was in 2006, so that’s the good news,” she explained. “Graduates these days have even more options.”



I know so many graduates personally because I’ve been working at Columbia University for the past 18 years as an administrator, the last 10 years for the Department of Classics. From my perspective, most students these days choose their career based on income, not passion, and start working right away. After a year or two, they go back to school for a graduate degree. The students who’ve worked in my office the last few years have taken jobs at the finance firm D.E. Shaw, Lehman Brothers, Citibank, Citicorp and TIAA-CREF. Joe Fisher, class of 2005, began in marketing but returned to Columbia Business School and hopes to work in management consulting with the promise of $110,000 starting salaries, but “you’ve really got to work hard.”



Some of the top classics majors go into doctoral programs where they’ll eventually become professors. There are jobs teaching Latin, believe it or not—though most of them not in NYC. One of my assistants, English major Finn Dusenbery, is studying for his LSATs in hopes to become a criminal lawyer. But when it’s time to pay student loans, corporate law is hard to resist.



The fact remains that some of the students’ entry-level salaries are higher than mine. Although I have three Columbia degrees—a BA from General Studies in Literature-Writing, an MFA in Fiction from School of the Arts and an MS in Journalism—I’m working during the day managing an office and stay up all night writing freelance articles, since writing has always been my ultimate career goal.



I live in a rent stabilized apartment and cut costs by cooking at home, shopping at Goodwill and hoping my dates will pay for the booze. I didn’t take a summer vacation this year, and I wash my laundry in the bathtub because a load of wash costs $3.50 in my building.



In fact, I’ve been continuously enrolled at Columbia in a degree program so I don’t have to pay my student loans back. If I wait much longer, I may be a senior citizen and then the Department of Higher Ed may take pity on me. All I can tell you is, maybe I should have taken that law degree after all.

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