Happy thanksgiving! Now, don’t be a turkey!

Hey friends, here’s hoping that (if you celebrate it), you are looking forward to a wonderful Thanksgiving holiday with lots of time for friends, family and (most of all) turkey…

Me, selfie, tomorrow at the table…

We’ve reached a season of gratitude and as we pause for reflection, I want to take a moment to note how grateful I am to all of you who are reading and responding to the blog. When I started the blog I hoped that I would reach an audience who could benefit from some financial aid tips and advice, and I am so pleased that the blog has been a source of information and inspiration for many of you.

Next month, we will be spending some time focused on making it through the holidays without spending all of your money, and looking at what happens when the unexpected occurs (how to manage emergency expenses). As we prepare for the holiday season, I would love to know if you have tips for managing the Christmas / Hanukkah / Kwanzaa / Winter Solstice present extravaganza. What do you do to live within your means?

More to share in the coming weeks, but here’s a great early read entitled “16 Ways to Celebrate a Budget Christmas”.

And in the meantime, a quick poem for the the Thanksgiving holiday with an important message about Black Friday buried in it:

Twas the night of Thanksgiving,
and all through the house,
not a creature was stirring
not even a mouse.

We all had had more than
our share of good food,
eating turkey and stuffing, and
not to be rude

but our waists had expanded
past one more belt notch,
was it fate that demanded
that last glass of scotch?

Well, now that the eating
is finally done
and all of the “younglings”
are resting their “tums”,

it’s time to start planning
the shopping excursion,
we’ll take in the morning,
some say it’s perversion

the sheer gabs of money
we spend on our gifts
when all the world over
the need is for thrift

but we spend our dough
as though it will never
diminish and so
we think we are clever

when deficits rise
(both our own and the national).
Can you sense the surprise?
We don’t think that it’s rational

when our stomachs and purses
fill up, pop our buttons,
the rest of the nations
know we are just gluttons.

InDirectIon

Last night I had a rehearsal with my improv group. We are working up to a public performance and as part of the process we are working on learning new games. One of the new games we learned last night was “He Said, She Said”.

It’s a game of direction. One actor says a line, and then their scene partner adds “…he said while [they make up an action or an emotion].” The person who originally spoke the line must then do whatever was said. Now it is the second actor’s turn to say a line, and after the line is delivered the first actor gets to add “…she said while [they make up something else]” and the second actor must do whatever is said. Sound confusing? Check out this video and you can learn a little more about the game.

and I mean the improv game only…

What’s fun about this game is that you get to take turns being an actor, and a director. At some points you are creating the dialogue (and moving the scene forward) and at other points you get to be the one deciding the blocking or emotional state of the other actor. It’s fun, but confusing. Switching back and forth between Direction and inDirection (see what I did there?) can tire your brain.

Of course if you’ve seen the blog before you should know that this kind of introduction leads to a somewhat connected topic about financial aid. Today is no different. In the world of college expenses, we often talk about Direct vs. Indirect costs, and today I want to spend some time explaining what this means.

Direct costs refer to those charges which will show up on your bill (or your student account statement). These charges will include tuition and fees and may (depending upon your situation) include room, board, books or other expenses that you are being charged by the institution directly. If you live on campus, you will see direct charges on your billing statement for housing and (likely) dining. You may not see charges from the bookstore on your bill if you paid for them yourself or got them from some other source.

Indirect charges are those costs that are part of your COA (or Cost of Attendance) but are not ones that are charged to you from the college or university itself. For example, you will have costs related to your transportation to campus (even if you live on campus, you’ll need to get there at the start of the year, and come home for breaks or at the end of the year). Your transportation cost (gas, wear and tear, airplane tickets, bus fare) isn’t a direct cost you pay the school, but it is a cost you will have to pay during the year, so it counts as part of your COA. If you live off campus, room and board costs (probably for you more like rent and groceries) are also an indirect cost. You aren’t paying the college for these expenses, but you do have to pay them somehow.

Many students get confused about how financial aid can be used to help you pay your indirect costs. If you receive enough financial aid so that your direct costs are covered by your financial aid, any extra financial aid you receive will be sent to you in the form of a refund which can then be used by you to cover any of your indirect costs. The issue here is timing.

Usually refunds aren’t available until a month or longer into a semester. This means you will need to be prepared to pay for your indirect expenses out of pocket until your refund is available. If you aren’t clear on the timing, check with the financial aid office at your school. We know you need the refund as quickly as possible, but there are processes on our side that do sometimes cause delays; working with your financial aid officer proactively can help eliminate those delays.

Also keep in mind that when you receive your refund, you need to carefully manage what can be a large amount of money. Don’t treat it like a lottery win and spend it all immediately. Keep in mind, this is your money for (usually) the semester. Make a budget (more on this later) and stick with your budget. This way you won’t run out of funds before the semester ends.

So, what kind of improv games have you played? What kinds of direction do you appreciate?

I could use some direction from you!!! Have these entries been helpful? What questions are on your mind. Leave a comment below!

“…Gently Down the Stream”

So I was going to write an entry last night, but then Disney+ launched.

For anyone not paying attention, Disney+ is the new streaming service introduced by Disney to provide direct streaming service to consumers. This service, featuring Disney, Disney Pixar, Marvel, Star Wars, National Geographic, ESPN, and other content (I’m talking about you, Bart Simpson), is a direct competitor to Netflix, Amazon Prime, HBO Go, and Hulu. And last night we watched our first content from the service.

The service does come with a cost. You have to pay a monthly fee for the service which basically translates to about $7 a month. Not a large cost BUT it is worth it? Are you subscribing? Are you giving up your other streaming services to pay for this? Have you cut the cable cord and only rely now on streaming services?

Like me, I imagine you are living on a budget (at least I hope you are). Have you built a budget to look at your income and your expenses and make sure that you can really afford everything in your mandatory and discretionary expenses? I know that many of us might imagine that streaming services (or entertainment) is a “need”, not a “want”, but the reality (of course) is that entertainment should be reasonable part of your budget, not the entirety of your budget.

Life is just a stream, sweetheart

The difference between “needs” and “wants” is an important one to learn. What counts as a “need”? Clearly housing, food, clothing, and water are needs. The economic definition of “need” is something you need to survive.

What’s a “want”? This is something you desire to have, and you may or may not be able to afford. Wants may feel important, but they aren’t necessary to survive.

This becomes an important concept to understand not just while you are a student but also for the rest of your life. If you remember last time I wrote about COA (or Cost of Attendance). In the COA budget, you will have an amount for living expenses, food, books, as well as tuition, fees and other expenses. Your job as a student is to help manage the “wants” in your budget.

So, for example, when we build a COA budget in the financial aid office we use average expenses for a student. But you have a chance to work within that budget to save money.

For example, at one institution where I worked, we had lots of residence halls. Each type of room had a different expense. Needless to say, a single at the newest dorm was much more expensive than a quad in one of the oldest dorms. Our COA was build with an average room expense, but you as a student could save money by choosing the cheaper residence.

This works with many things: books, clothes, food, etc. Do you need to buy every textbook new? Could you purchase a used textbook (or rent one) and save money from the original budget? Do you find yourself eating out all of the time? What would it look like if you packed a meal for yourself?

Don’t forget to meet your basic needs (food, shelter, water, clothing) while you are a student, and it is not unreasonable during your time in school to have more expenses than income (that’s what financial aid is for), but if you are able to limit your “wants” and focus on your “needs” then the amount you will need to borrow to help pay for college will be limited, and you will be doing much better financially when you graduate.

So I guess Disney+ might be a want? If so, no worries… There are plenty of free ways to watch movies (anyone have a library card?)

More about budgeting next time, including the difference between direct and indirect costs.

It’s not really the ABCs, but…

Have you heard about the controversy sweeping the internet? Yes, that’s right. Someone rewrote the ABC song. You know, the one you sang as a child when you learned your alphabet? In order to make the letters more understandable, the new version changes the classic “lmnop” part to “lmn”. I know, mind blown!!! Check it out here and let me know what you think.

Is it really that bad?

I’m not sure that it is that bad, but it certainly isn’t the version I grew up with. But since we are talking alphabet, let me introduce you to some (perhaps) new letter combinations to you: COA – EFC = NEED.

What is that? And what does it have to do with financial aid? I’m so glad you asked.

COA stands for Cost of Attendance. The Cost of Attendance is an estimate of how much a year of education will cost for the average student at each college or university. Each school determines their own COA, and they may have several different versions of the COA depending on factors like living on- or off-campus, qualifying for in-state tuition, or going part-time vs. full-time.

The COA is not supposed to only represent the amount that you would pay the school directly if you were paying the whole cost of school. It is supposed to represent both direct costs (those you pay the school, like tuition and fees, on-campus housing and meal plans) and indirect costs (like transportation, books, off-campus housing and meals).

So, if you have your COA, the next important letters to know are the EFC (or Expected Family Contribution). In a previous section of the blog, I went through in great detail how we determine your EFC, but as a reminder here, keep in mind that the EFC represents an estimate of how much your family can absorb in college costs in a year. Again, no one expects you to be able to write a check for this amount, but rather this number represents your contributions from savings (if any) and current income based on the Federal formula.

The difference between these two figures, your COA minus your EFC, represents your NEED. This is the amount of need-based financial aid you can qualify for at the college. Each college will have a different COA, but you should have (approximately) the same EFC no matter which college you attend (*with a side note about private colleges who have money of their own to give away), so your NEED will be different college by college.

The way the financial aid system is supposed to work, though, your EFC should be the same school by school, so all that really changes in your COA and your NEED. This means that no matter which school you attend, your contribution (how much you and your family have to pay) should be the same.

Now there are many reasons this may not work in reality (maybe you applied late, maybe the college has limited resources, maybe your EFC is higher than the college’s COA so it appears that you are paying less), but generally this is the way the system works.

It’s a classic. No need to make a new version (unlike our new alphabet song).

We will be talking more about budgets and budgeting this month. Let me know if you have any questions about any of the topics, or suggestions for questions which are bothering you.