Posted: 2018-01-15
by Sam Renick
College, Kids and Saving Interview Series
Award winning financial educator and children's author Sam X Renick interviews industry experts to get their insights on college, kids, and saving. Today's interview is with Christine Benz, director of personal finance at Morningstar, an independent investment research firm.
Sam X Renick: Do you have a favorite money memory or story from your college years?
Christine Benz: It's not a memory so much as a decision: I chose to work almost all of the way through college, first in the library and later in an art supply store. My parents paid for all of my school-related expenses, but I used my work income to pay for my extrasgoing-out money, concert tickets, or splurge-y clothes. (I still remember buying a pair of Guess jeans with my hard-earned money--$52!) I think I valued those extras more because I paid for them through my own paychecks. As a side note, having to juggle a job alongside my classwork helped me learn to budget my time.
Sam X Renick: What is the most significant lesson you learned about managing money in college that you apply today?
Christine Benz: Being in college teaches you how to get by on a shoestring and balance competing financial goals. Even after I started earning a paycheck, I tried not to lose that scrappy mentality I had in college.
Sam X Renick: What would you advise, if you could give ONE TIP on managing money to:
a. High school students getting ready to enter college?
Christine Benz: It's hard to argue against studying a subject you love at a higher learning institution you love. But as you start homing in on schools and majors, think about the return on investment you'll get from various schools and courses of study. If you have a mismatchyou've spent a lot on school and taken out big loans but your career path isn't particularly remunerativeyou could be putting yourself at a long-term (even lifelong) financial disadvantage. College is about more than financial returns, but ROI should be part of the discussion earlier for many families.
RELATED: Try the world's simplest college cost calculator
b. Parents of high school students getting ready to enter college?
Don't beat yourself up if you haven't saved enough in a 529 plan or elsewhere to pay for a full four years' worth of college for your children. Unless you're very wealthy, you won't likely be able to fund college through investments alone; you'll have to fund college through a variety of sources, such as loans, work-study, and perhaps even current cash flow from the parents' own incomes. Given the inflation that we've seen in the college costs over the past several decades, paying for college is a much heavier lift than it was before; it's not productive to compare what your parents did for you to what you're able to do for your own kids.
c. College graduates or young adults in their twenties?
Don't embark on any post-graduate study without a clear plan of what you hope to achieve and what you want to do with that degree when you're done. Too many people go to graduate school because they're not sure what to do nextthat's not a good enough reason, especially if you're going to have to take on a lot of debt. In most situations it's valuable to work a few years after college graduation to get a sense of what you like to doing and what you really don't enjoy.
d. Parents of young children who want to or are saving for college?
Just get started, even if you're starting small. The longer you wait, the more conservative your investments will need to beand the lower your college portfolio's return potential.
Sam X Renick: Do you have one suggestion on how all of us can do a better job of making saving for college or post high school learning a priority?
Christine Benz: As with any savings goal, try to make it as painless as possible by automating your contributions, even if you're only able to spare $50 or $100 a month. Make your college funding a regular part of your budget by steering a fixed amount from your bank account straight into a 529 plan each month. By automating your contributions, you're less likely to equivocate because the market is going down or find other uses for the cash.
RELATED: Learn more about your state's 529 plan
About Christine Benz
Christine Benz is director of personal finance for Morningstar and senior columnist for Morningstar.com. She is author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances (Wiley, 2010).
Benz is also co-author of Morningstar® Guide to Mutual Funds: 5-Star Strategies for Success, a national bestseller published in 2003, and author of the book's second edition, which was published in 2005. Before assuming her current role in 2008, Benz also served as Morningstar's director of mutual fund analysis. She has served as editor of several of Morningstar's publications over the years, including Practical Finance, Morningstar® Mutual Funds, and Morningstar® FundInvestor. She has worked as an analyst and editor at Morningstar since 1993.
Benz holds a bachelor's degree in political science and Russian/East European studies from the University of Illinois at Urbana-Champaign.
About Sam X Renick
Sam X Renick is the driving force behind Sammy Rabbit and the Dream Big Club. Sam and Sammy are dedicated to empowering kids' dreams and improving their financial literacy through the development of great habits and strategic life skills. Sam has read and sung off key with over a quarter million children around the world, encouraging them to get in the habits of saving money and reading! He has won numerous honors throughout his career including the New Jersey Coalition for Financial Education's Lifetime Achievement Award!
Free download: Sammyriffic coloring and activity book
College, Kids and Saving Interview Series
Award winning financial educator and children's author Sam X Renick interviews industry experts to get their insights on college, kids, and saving. Today's interview is with Christine Benz, director of personal finance at Morningstar, an independent investment research firm.
Sam X Renick: Do you have a favorite money memory or story from your college years?
Christine Benz: It's not a memory so much as a decision: I chose to work almost all of the way through college, first in the library and later in an art supply store. My parents paid for all of my school-related expenses, but I used my work income to pay for my extrasgoing-out money, concert tickets, or splurge-y clothes. (I still remember buying a pair of Guess jeans with my hard-earned money--$52!) I think I valued those extras more because I paid for them through my own paychecks. As a side note, having to juggle a job alongside my classwork helped me learn to budget my time.
Sam X Renick: What is the most significant lesson you learned about managing money in college that you apply today?
Christine Benz: Being in college teaches you how to get by on a shoestring and balance competing financial goals. Even after I started earning a paycheck, I tried not to lose that scrappy mentality I had in college.
Sam X Renick: What would you advise, if you could give ONE TIP on managing money to:
a. High school students getting ready to enter college?
Christine Benz: It's hard to argue against studying a subject you love at a higher learning institution you love. But as you start homing in on schools and majors, think about the return on investment you'll get from various schools and courses of study. If you have a mismatchyou've spent a lot on school and taken out big loans but your career path isn't particularly remunerativeyou could be putting yourself at a long-term (even lifelong) financial disadvantage. College is about more than financial returns, but ROI should be part of the discussion earlier for many families.
RELATED: Try the world's simplest college cost calculator
b. Parents of high school students getting ready to enter college?
Don't beat yourself up if you haven't saved enough in a 529 plan or elsewhere to pay for a full four years' worth of college for your children. Unless you're very wealthy, you won't likely be able to fund college through investments alone; you'll have to fund college through a variety of sources, such as loans, work-study, and perhaps even current cash flow from the parents' own incomes. Given the inflation that we've seen in the college costs over the past several decades, paying for college is a much heavier lift than it was before; it's not productive to compare what your parents did for you to what you're able to do for your own kids.
c. College graduates or young adults in their twenties?
Don't embark on any post-graduate study without a clear plan of what you hope to achieve and what you want to do with that degree when you're done. Too many people go to graduate school because they're not sure what to do nextthat's not a good enough reason, especially if you're going to have to take on a lot of debt. In most situations it's valuable to work a few years after college graduation to get a sense of what you like to doing and what you really don't enjoy.
d. Parents of young children who want to or are saving for college?
Just get started, even if you're starting small. The longer you wait, the more conservative your investments will need to beand the lower your college portfolio's return potential.
Sam X Renick: Do you have one suggestion on how all of us can do a better job of making saving for college or post high school learning a priority?
Christine Benz: As with any savings goal, try to make it as painless as possible by automating your contributions, even if you're only able to spare $50 or $100 a month. Make your college funding a regular part of your budget by steering a fixed amount from your bank account straight into a 529 plan each month. By automating your contributions, you're less likely to equivocate because the market is going down or find other uses for the cash.
RELATED: Learn more about your state's 529 plan
About Christine Benz
Christine Benz is director of personal finance for Morningstar and senior columnist for Morningstar.com. She is author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances (Wiley, 2010).
Benz is also co-author of Morningstar® Guide to Mutual Funds: 5-Star Strategies for Success, a national bestseller published in 2003, and author of the book's second edition, which was published in 2005. Before assuming her current role in 2008, Benz also served as Morningstar's director of mutual fund analysis. She has served as editor of several of Morningstar's publications over the years, including Practical Finance, Morningstar® Mutual Funds, and Morningstar® FundInvestor. She has worked as an analyst and editor at Morningstar since 1993.
Benz holds a bachelor's degree in political science and Russian/East European studies from the University of Illinois at Urbana-Champaign.
About Sam X Renick
Sam X Renick is the driving force behind Sammy Rabbit and the Dream Big Club. Sam and Sammy are dedicated to empowering kids' dreams and improving their financial literacy through the development of great habits and strategic life skills. Sam has read and sung off key with over a quarter million children around the world, encouraging them to get in the habits of saving money and reading! He has won numerous honors throughout his career including the New Jersey Coalition for Financial Education's Lifetime Achievement Award!
Free download: Sammyriffic coloring and activity book
