Dianna Kelly outlines the battle between economics and education for families and students.
Dianna Kelly outlines the battle between economics and education for families and students.
GO TELL MOM – Ep3 Getting Kids Prepped for the Real World
It’s been tricky financially for most families over the past few years, courtesy of COVID. Yeah, there are jobs out there now, but lack of workers means the ones that ARE working are getting tagged for extra hours…and not ones that they get to choose. It’s particularly difficult when those workers are trying to boost their economic prospects by going to college. As a college professor and parent of two kids in their 20s, I get a first-hand look at the fallout.
Several of my students were wringing their hands about it…their bosses were actually asking them not to go to school during final projects week because they needed them in their stores. Frankly, “asking” is the polite term. “Ordering” would be more accurate. “My afternoon stocker just quit. I need you in tomorrow at two.” Not “could you please,” or “can you rearrange your schedule?” Just “you need to be there.” One of my students flat-out quit her job. Another took an incomplete in my class. Yet another asked for an extension on the deadline. And, sadly, another went M-I-A in class for the rest of the term.
No, this is NOT a good position to be in, as a worker. A couple of my students recognized they were being asked to skip classes that they couldn’t afford to miss to keep up their GPA and graduate on time. On the other hand, if they didn’t miss the class, they couldn’t afford to pay for school.
Their families are as worried about it as their instructors have been. No one wants to see their kid stuck in a low-wage job because they’re not allowed time to get an education while trying to earn money for that education. These students hire on, agreeing to a set schedule, and then the employer changes that schedule because they’re in a pinch…putting the student in a pinch.
These aren’t kids who are coasting; many of them are out on their own, paying rent, car payments, gas costs, and grocery bills.
Worldpopulationreview.com says there’s been at least a ten percent increase in rental rates in the past year in most states, with rents well above a grand a month. It’s hitting a lot of entry-level renters, such as my students and my kids. Where I live, some rents are up 20 percent.
Onemainfinancial.com pegs the monthly grocery bill for a single person at $230 a month – minimum. I hear my kids and my students talking about best ways to cook Ramen noodles to keep costs down. They’re doing grocery shopping at Dollar Tree. Of course, they’re also occasionally popping into class with a Starbucks cup. I suspect that’s on payday.
And then of course, we all know about the rollercoaster pricing at the gas pump.
My daughter just graduated from college and is, thankfully, in a position in her chosen field. But she’s on the bottom rung, in a just-under-fulltime-job, making the same money in her entry-level post that she made when she was a barista in high school. And her company isn’t in a hurry to move her into a fulltime gig. She has other friends in the same boat.
All of them were mildly panicked when they approached graduation because they were facing The Real World. My daughter had a meltdown in her junior year because she wasn’t sure she’d be able to afford a life for herself, and she definitely didn’t want to live with Mom once she was a graduate.
Mint.intuit.com says teaching kids to budget before they graduate sets up a crucial financial foundation for them. My daughter was required to take a personal finance class in high school, which I thought would set her up mentally for a budget. However, she tells me they focused on things like the stock market, getting a checking account, and general economics - not on how to actually plan a household budget.
So, during her spring break, when she was sobbing on the couch, I pulled out my laptop and split the screen between a document for her budget and a browser to search for the actual prices for what she needed to live. We looked up the average monthly salary for someone just beginning in her industry and used that as a starting point.
Her dad and I had bought her a car – ten years old, basic transportation, it’s true, but she had wheels to get to class. So, no car payment. Not all students are in that situation, I realize. In fact, I’ve had students who were torn between paying their rent, fixing an exhaust system for their beater, or paying for next semester at school.
Next, we looked at where she wanted to live.
She expected to be working downtown in our state capitol, so we tried to find places that were a half-hour commute or less, with at least two bedrooms (she anticipated having a roommate, and she likes living with other people – who are not related to her. In fact, she had three roommates in her college apartment.) Taking the cost of an apartment 24 minutes away, and splitting it in two, stopped her from hyperventilating. (There are services that match you with a roommate, by the way – my son is using one.) Recognizing that she’d be able to take furniture and bedroom and kitchen supplies I’d bought her for her college apartment calmed her down even more.
Each birthday or holiday, I’d get her something that would help her ease into apartment life…a coffeemaker, dishes, glasses, pots and pans, utensils, a microwave, a comforter and sheets for her bed – which I’d also bought for her. By the time she finished senior year, she was pretty well set. So, again, no “I’ll be sleeping on the floor and eating on paper plates” syndrome.
Then we calculated in the cost of gas to get to work and back, minor car repairs, cellphone and internet, utilities, and of course, food. During the first part of her senior year, she had to live with me because of a problem with the ventilation system in her apartment, and we ate in most of the time, reigniting her interest in cooking real food on a budget. We also changed to a 25-dollar-a-month cellphone plan, and I upgraded my laptop for my classes and gave her my old one.
Now, not all kids have those options. But there are ways to work around the system, particularly if you’re willing to share digs with someone else. Maybe one roommate has a couch passed on from a sibling or parent or grandparent. Maybe another has an old kitchen set that was moldering in the garage and just needed a good scrub. And personally, when I took a new job after my divorce and had to set up my own place, Goodwill became my department store of choice. Right after COVID, lots of cool stuff could be found there. My daughter, of course, winced when I suggested it. Until she realized the breakfast bar chairs she loved in my new place were thrift store finds.
Based on our calculations, we figured she would be able to survive in The Real World on a basic salary. But there would not be a lot of “extras” until she started to move up the ladder. The sobbing stopped. Plotting for reasonable second jobs started. Many of my students are working at least two jobs in addition to attending school, as are many of her friends.
Mint.intuit.com – and many other economists – insist that kids should plan to save at least 20 percent of their income, and live on 50 percent, with 30 percent for “discretionary expenses.” Apparently, none of these folks have had to pay back student loans. According to TheCollegeInvestor.com, the median payment for student loan borrowers is $222 per month. 50% of student loan borrowers owe more than $19-thousand on their student loans. Federal loan paybacks are usually ten percent of your monthly income. My kids are each paying back tens of thousands of dollars in student loans for their 4-year schools.
It's tough for students heading into adulthood, and tough as well for parents of those students.
The National Retail Federation says despite inflation, most parents are doing what they can to make sure their kids are stocked up for the school year this year. They’re cutting back on discretionary spending, shopping sales and buying store- or off-brand items, so they can purchase what they need for the upcoming school year. Most have seen higher prices on pretty much everything. But most parents seem to think with the right tools, their kids have a better shot succeeding in class. And if they succeed in school, their chances of succeeding in the real world improve considerably.
Lots of kids are trying to do their part by working one or more jobs while in school, whether it’s in high school or in college or trade school. While it’s great exposure to life after school, it’s taking a toll on their studies in some cases. Studentloanhero.com says one in four working students are skipping class due to their job. Nearly 25% of working students work more than 20 hours per week, while only 16% study more than 20 hours per week. Something’s gotta give.
Which is why I get a bit downhearted when I hear people complaining that kids “don’t want to work.” Maybe it’s just they want to work on the schedule to which they originally agreed…not on the schedule that wreaks havoc with their careful balance of school, work and life.
Go Tell Mom ep.3 Shownotes Links:
From WorldPopulationReview on rents: https://www.worldpopulationreview.com/state-rankings/average-rent-by-state/
From OneMainFinancial on groceries: https://www.onemainfinancial.com/resources/money-management/how-much-should-i-budget-for-groceries-each-month
From mint.intuit.com on budgeting: https://www.mint.intuit.com/blog/student-finances/how-to-teach-your-teen-to-budget-like-a-pro/
On student debt: https://thecollegeinvestor.com/33643/average-student-loan-monthly-payment/
On spending for students: https://nrf.com/media-center/press-releases/families-prioritize-back-school-and-college-spending-amidst-rising
On students working: https://studentloanhero.com/featured/working-students-college-survey/