Let's Talk Money - The Series - With Stephanie from The Empowered Dollar

It's Wednesday and here we are with another edition of Let's Talk Money. I am excited to share this week's interview with you. The interview guest this week is Stephanie from the blog known as The Empowered Dollar. Stephanie’s blog is packed solid with brilliant financial information that college kids and their parents will find extremely important and useful before, during and after attending college. Let's jump right into the interview.

lets talk money with stephanieHi Stephanie, Please provide an introduction about yourself and your blog including when you created it and why.

Hi folks! I’m Stephanie and I’m a 25-year-old personal finance junkie living in Washington, DC. By day, I work for a non-profit designing financial education and college savings programs in schools around the country. By night, I help design financial education videogames and run my blog, The Empowered Dollar.

I started The Empowered Dollar to help kids, teens and college students avoid financial disaster and grow into successful, wealthy adults. My goal is to help parents ensure that their kids avoid unnecessary student loans and graduate from college feeling financially confident, regardless of the economy.

Have you ever been in a position where you didn't know how you were going to pay for all of your bills that month? What did you do to survive?

When I graduated from college in 2009 in the middle of the "Great Recession," I was living on my own, making just $1,000 a month, and dealing with $30,000 in student loans and credit card debt. I knew I'd hit my financial rock bottom when I had to choose between buying my monthly bus pass and paying for my prescription. At the same time, my parents were facing foreclosure on their home and had racked up thousands of dollars in medical bills. Debt was everywhere in my life.

I began reading personal finance blogs to help me live off my measly earnings. I started budgeting, researched creative ways to earn extra cash on the side and scoured for coupons and discount codes for every product I bought. I was not going to let debt get the best of me and I knew I had to be the one to shape my own financial future.

How did your mom and dad spend money, and how did that affect you?

My parents grew up relatively poor, and money was always a sensitive subject in our household. My mom and dad never spent extravagantly; at the same time, they didn’t deny us anything owned by our wealthier friends. We were certainly spending out of our means.

While their “keeping-up-with-the-Joneses” spending habits certainly didn’t help our finances, it was the recession that really broke my family financially. My father lost his job, our house went into foreclosure, and our family’s medical bills were through the roof.

My parents are still trying to dig themselves out of debt, and it’s motivated me to create a financial stable life on my own and help other families avoid similar situations.

Your blog focuses a great deal on student loans for college kids and the debt that they typically have to deal with after graduation. Do you personally believe that parents should pay for their son or daughter's tuition for college, or should each student pay for their own tuition either with their savings or with a student loan?

This is a tough one – I think that it’s all about managing expectations. If you’re a parent and you are willing and able to cover your child’s tuition, then go for it. I applaud you for having the foresight and the resources to pay for college.

If you don’t have the savings or the income to pay for tuition, it’s important that your child knows her options. If your child will need to cover the cost of school herself, make sure your child knows her obligations for earning scholarships, saving for college and picking a good-value school.

When it comes to student loans, your child also needs a realistic idea of what her student loan payments would look like after graduation. Studies and common sense have shown that 17- and 18-year-olds that borrow tens of thousands of dollars for college actually don’t know what the heck they’re doing.

So the sooner you can have this conversation, the better!

In light of the fact that college tuition, plus all of the other expenses associated with going to school are only getting more expensive, do you think that a person should skip college and avoid the student loan debt? Please explain.

I’ve been thinking about this question recently. Though I regret taking out so many student loans to pay for my expensive private university education, I know that my college experience opened up a lot of opportunities for me. At the same time, I wish I had taken some time before rushing off to college to decide if it was really right for me.

If you’re a teenager and you have the chance to take a year or two off before going to school to explore, travel and start your own business, try it. You’ll be surprised what you’re capable of and where your interests will take you. Just make sure you’re not coasting on mom and dad’s dime!

I noticed from your blog that you teach money management courses. If you had a friend or a co-worker that was deep in debt come to you for financial advice on how to get out of debt, what are the first 3 steps you would suggest for them to work on?

1. Know what you owe: The first step is so simple, but it’s something that many people avoid. Calculate everything you owe – student loans, credit cards, personal loans, medical bills. It’ll horrify you, but you’ve got to acknowledge it and accept it before you fight it.

2. Organize your debt: Now that you know how much money you owe, dig a little deeper into your debts. Are any of your accounts delinquent? Are any of your accounts maxed out? What are the interest rates on each of your accounts? Prioritize your debt using these characteristics. Now you’ve just formed the bare bones of your debt repayment plan.

3. Find help: Debt is embarrassing, but it’s hard to tackle it all on your own. Research your repayment options (especially with your student loans). Look for a local, well-trusted non-profit in your area that helps people get out of debt. Finally, make sure you have the right personal supports in place. Paying back your debt is easier with someone to hold you accountable and cheer you on.

recession proof your kidsYou have written an eBook titled "Recession Proof Your Kid". Can you please tell us a bit about your book and how it helps kids deal with the economy?

My eBook Recession Proof Your Kid is a parent’s guide to the new economy, where a college degree doesn’t necessarily guarantee a child’s financial success. I focus on the one thing that could make or break a child’s financial future (and 33% of parents aren’t doing it!) and I provide a simple financial checklist for parents to raise a recession-proof college graduate.

Thanks for featuring me!

Stephanie, Thank you very much for participating today and for sharing information that many will find very beneficial.

Readers, if you or someone you know have kids that will be getting ready for college in the next few years, visit Stephanie's blog and download her Free eBook and share it with others. You can also connect with Stephanie on Twitter @EmpoweredDollar.


Comments

    • Gillian @ Money After Graduation

      Gillian @ Money After Graduation 08/15/2012 7:43 a.m. #

      Great tips. Good for you for getting your stuff together, I recently graduated and always thought that it would have been so difficult to graduate when the economy was the worst. Kudos for getting through it smartly!

      And it's so true, when I was borrowing money I was NOT thinking how long it would take me to pay it back.. until I was so far in it was ridiculous.

    • Money Bulldog

      Money Bulldog 08/15/2012 4:16 p.m. #

      My mum told me for years that a degree doesn't always mean you'll be set for life. Luckily I took her advice and became my own boss.

      Now I see college grads stacking shelves, laden with debt and recognise how wise she was and still is.

      I hope your book inspires a generation Empowered Dollar!

    • Stephanie @ Empowered Dollar

      Stephanie @ Empowered Dollar 08/16/2012 7:04 a.m. #

      Gillian, I'm hoping to reverse that trend and find a way to instill some preventative, smart financial decision-making in the younger generations.

      Thanks, Money Bulldog! I hope so too :)

    • AverageJoe

      AverageJoe 08/16/2012 7:45 a.m. #

      Another fantastic interview. I'm interested in the video games Stephanie designs. Are they available?

    • femmefrugality

      femmefrugality 08/17/2012 8:09 a.m. #

      Love Stephanie's blog! And I couldn't agree more about managing expectations; paying for college isn't a must, but it's important your kids aren't living under an illusion and then have serious financial problems when they are going to school.

    • Jai Catalano

      Jai Catalano 08/17/2012 9 a.m. #

      Might need to pick this ebook up for the wife and me. I have 2 young ones. I don't think I fall in the 33% but I am sure the book will tell me if I do.

    • Stephanie @ Empowered Dollar

      Stephanie @ Empowered Dollar 08/20/2012 7:26 a.m. #

      @AverageJoe You can check out the game at www.PlayMoolah.com/parents - I loved working with these guys :)

Comments are closed.