Wrapping Up for Now

I have some news to share: some good, and some bad.

Let me begin with the bad. After a whole bunch of thought and racking my brain about what my passions are, I've decided to stop posting new content to Young Adult Financial, at least for the time being. I've had a great time writing articles and (hopefully) helping people make better financial decisions, and I've especially enjoyed interacting with the different readers who have reached out to me for help, but it's time for me to take a break from this and try to apply my financial skills in other domains. I apologize for not posting more often this past month while I worked out my decision--I've been exploring all sorts of related paths, and I wanted to make sure that I really nailed down my plan before posting anything final.

Which brings me into the first bit of good news: I will be joining the Intercollegiate Finance Journal as their Head of Content, helping to make financial issues more relevant to college students. It's definitely a work-in-progress as of now, but I'm excited about the journal's leadership and its potential scope in helping students think about how financial issues affect them. If you have any ideas about how financial publications could be better suited for students, or if you'd like to get involved, please don't hesitate to contact me!

I also have a second bit of good news: I will continue checking the Young Adult Financial email address, and I am more than happy to continue talking with readers who have financial questions. As per the usual, I'm not a lawyer or certified financial adviser, so I can't promise that my thoughts are anywhere near comprehensive, but if you're just looking to talk to another young person about a financial issue that you're dealing with, I've still got your back. I plan to keep that portion running for as long as people continue to reach out, so feel more than free to send me your questions.

That's it for now. I've had a blast running the site, and I'll be leaving it up as a resource in case you ever need to refer back to it. For now, I wish you the best of luck in handling whatever financial situations may come your way!

Steven Adler

Building Your Resume the Right Way

Spring is coming up quickly, and lots of young people are gearing up for applications, interviews, and—hopefully—the coveted spring internship. Some of these internships will provide genuinely great learning experiences: you’ll get to see the inner-workings of an organization, and you’ll be more prepared for similar work later in your life. Of course, some of these internships aren’t valued just for the learning opportunities they provide. Instead, many young people will pursue these internships and achievements simply to pad their resumes—perhaps en route to their next internship, or even toward an eventual job.

I’m not going to completely denounce resume-padding or pretend that I’ve never been drawn by its allure (taking on a lot of commitments—not lying, which is different). In a competitive economy, young people need any edge they can get, and having a noteworthy name on your resume can count for quite some bit. Still, there is a right way and a wrong way to go about building your resume, and going about it the right way will serve you much better in the future.

Making the Most of Discount Opportunities

As we approach April, there are going to be more articles related to pressing time-sensitive issues—things like completing your taxes, saving for coming months, and getting ready for summer. For now, however, we’re going to continue with the theme of one of the financial resolutions for the New Year: saving more money.

Saving money can be tough when it means cutting down on your purchases, so thankfully there are other ways to save your money as well. Perhaps the easiest is using different discount opportunities available online, either to students or the general public, to buy things that you were going to buy anyway.

Of course, following through on this recommendation is not always simple; that’s where this article comes in handy.

Following Through on Your Finances

It’s been a few weeks since the post about financial resolutions for the New Year. Have you been keeping up on yours? Or has something come up that’s caused you to “take a break,” “focus on something more important,” or just generally leave the pledge behind?

Setting New Year’s resolutions often seems appealing at the time, but by the end of January many people have left theirs behind. Some of the time this abandonment makes sense—you genuinely might not have time or interest in following through on your pledge—but other times this abandonment is an unfortunate loss of willpower that bumps up against our self-image. People don’t like to think of themselves as weak or lacking determination, so we rationalize our behavior with excuses and move on—even if it isn’t what’s best for us in the long-run.

With that said, how can you get back on track after leaving your resolution in the past? And in the future, what tactics can you use to help yourself stick to pledges that you want to uphold?

Textbooks: Buy or Rent?

As the school year approaches, students are faced with a complicated (and costly) question: Should they buy their textbooks, or should they rent them? The College Board estimates that the average student will spend well over $1,000 on textbooks this year, and that number is on the rise since the year 2000.

Of course, students now have much better textbook shopping options than they did in the past. Before the rise of the Internet, students were essentially forced to use their school’s university bookstore. They had little power to turn elsewhere, and they could be gouged for higher prices because they needed the store’s books. The Internet, along with its third-party textbook vendors, sites for resale, and other technologies, changed that.

Financial Resolutions for the New Year

Another year is in the books, and it’s been a wild one—marked most notably for you, I’m sure, by the creation of this website. Pat yourself on the back for a great year, and get ready to gear up for another one.

With a new year, of course, come resolutions for how to improve in the coming months: vows to lose weight, exercise more, be nicer to people, and plenty of other goals. With all that ahead of you, why not take the opportunity to set some financial goals for the upcoming year?

Next week’s article will focus on how you can achieve your goals at a higher success rate. For now, let’s discuss some viable financial resolutions and how they matter to your long-term financial health:

Smart Shopping After the Holidays

The holidays have come and gone, and hopefully you’ve gotten to enjoy the things that truly matter. You’ve gotten some time with your friends and family; you’ve gotten some much-needed rest off from work or school; and you’ve gotten to catch up on the sleep you’ve been missing.

Those are the things with a lasting impact during the holidays, but people also make a big deal of the shopping that comes with them. For stores looking to unload their merchandise, it isn’t enough to have big sales leading up to the holidays. Instead, when the holidays pass, they continue with the steep discounts to get rid of the inventory they still haven’t moved. It’s all one big cycle, but it’s one out of which you can make the most if you come prepared.

Here are some tips for smart shopping after the holiday season:

Saving Money on Flights

It’s now winter break, and many of us are headed home for the holidays. Soon, if not already, you will probably be booking plans for your return to campus. And that’s where this article comes in.

The recent boom in web technology and user interfaces has given regular people access to a ton of information about flights. With all those resources out there, it can be a bit overwhelming at times to book a trip. How do you know if you’re really getting the best rate?

Fortunately, there are a few tips that I can recommend for saving money on your next bit of air travel:

The Importance of (Free) Tax Preparation Software

After a brief hiatus from our series on taxes, we're back with a new article about how to make the process incredibly simple.  In the past, filing your taxes required getting together a ton of paperwork, filling out forms by hand, tallying up all the numbers, and sending in the proper documentation. No longer. Today, over 80% of tax returns are filed electronically, either through a tax professional or with independent software. And the amount of people filing those taxes on their own is on the rise.

For young people, downloading free federal tax software is a must. There is no cost to it, as long as you earn below roughly $50,000, and if anything, it is another resource that could be used in conjunction with something like professional advice. Here are a few other reasons to use free federal tax software:

Spotting Phony Investment Secrets

I’ve written previously about what I think are the best investment strategies for young people (well worth another read), but this is a topic that needs rehashing. Especially as the country approaches the fiscal cliff (automatic decreases in government spending and increases in taxes that could harm consumer demand), people are anxious about the stock market. And because people are anxious, they are prone to making some poor decisions.

What’s the problem with people being anxious about the markets? Well, for one, they might be tempted to pay large premiums for “expert advice”—even though they would be better off passively managing their money. That is, instead of turning to an expert who promises to get them large returns in uncertain times (but fails), they could be putting their money in low-cost index funds and earning a higher, more consistent return.

There are other problems with fears about market conditions: People are more likely to buy at peaks of the market—when conditions seem to be going great—and to bail out of it at the bottom—when things seem as if they could not be going worse. The problem is then, of course, that people are buying high and selling low; they are losing a lot of money on their purchases by getting scared, instead of letting the market build back up. And that is just one mistake that people make with stock trading in times of uncertainty.

Saving Money on Holiday Gifts

Giving holiday gifts is about more than their cost. Gift-giving makes you feel good; it lets people know that you care about them; and it provides a great opportunity to bond with people that you otherwise might not get.

Of course, to say that gift-giving is more than the costs is not to say that the costs don’t matter. In fact, the costs are quite significant. Online spending was over $1 billion on Black Friday—a day known more for its in-store sales than for its online deals—and that amount isexpected to be even higher for today’s Cyber Monday.

In other words, people are spending veritable fortunes on holiday gifts. Because it’s so easy to get carried away in the holiday spirit and spend more than you expect, it’s important to take cost-saving measures where you can. And that’s where we can help.

Here are a few tips to save money on gifts during the holiday season:

The Importance of Giving

In the spirit of Thanksgiving, I’d like to take a week off from the technical tax stuff I’ve been discussing, and instead talk about something potentially more meaningful: how to give effectively.

A lot of the material on this site talks about furthering your own finances—how to invest it wisely; how to save it for the future—but I don’t mean to suggest that hoarding is the only way, or the best way, to live life. I don’t think that there’s anything inherently wrong with having a lot of money; I think that a lot has to do with how you use your wealth. And to that extent, I think that giving away a portion of your money is a good social action.

A Guide to Paying Your First Taxes (Part Two)

In Part One, I discussed a few basic questions related to paying taxes. Here are a few more issues that young people often face:

Where can I go for tax assistance if I need help?

For people who make below $50,000, there are a few options available. One that I definitely recommend is taking advantage of free tax preparation software, which I will be discussing in the next post. You are also able to get free tax-preparation advice on top of that software, as outlined on the IRS’s website here.

A Guide to Paying Your First Taxes (Part One)

The tax-paying process often gets a bad rap in the media as complicated, difficult, and overly stressful. Those descriptions can certainly be true at times, but if you approach tax-paying with certain knowledge and the right mindset, you can handle it with relative ease.

Unfortunately, a lot information about taxes is convoluted and difficult to find. That is where this guide comes in. Although it is not a substitute for professional tax assistance—or better, the kinds of free tax preparation software that I’ll be discussing in a future post—this guide will attempt to cover the most important concepts for young people to understand to pay their taxes properly. (If you have any questions about a term discussed here, or one omitted, please add it in the comments section!)

Here is a list of common tax questions, and answers that are relevant to young people:

The Finances of Surviving a Hurricane

A hurricane has hit much of the east coast, and people are being warned to prepare for the worst. If you live in the hurricane’s projected path, not only are you likely getting calls from worried parents telling you to stock up on water and non-perishables, but you might also be getting emails from stores trying to lure you in. Natural disasters present a big opportunity to increase spending, and businesses are not shy about using that to their advantage.

What makes natural disasters so difficult to navigate is that it is hard to assign a dollar value to your life or well-being. (Does the small chance that you might need another gallon of water justify its purchase?) Not only is it difficult to decide some value for your well-being, but it is also just uncomfortable. People don’t enjoy imagining the worst, and nobody wants to admit that, at a certain point, they might put money ahead of their well-being.

What to Watch Out for with Free Trials

Last week’s article discussed situations in which free merchandise might not actually be so free. It could, for example, contain hidden costs of your time or health, or it could lock you into purchasing other complementary items. In other words, free isn’t always so free.

Despite these hidden costs, however, marketers often use the concept of free to lure in new customers—particularly with promises of “free trials” or “money-back guarantees.” These programs can offer great opportunities to explore a product and decide if it is for you, but they aren’t really risk-free. In fact, if not used properly, free trials and money-back guarantees can wreck havoc on your decision-making.

Want to get the most out of your free trials and money-back guarantees? Here are some important tips to keep in mind:

When Free Isn’t So Free

Getting items for free can be great: there’s no apparent cost; you get to enjoy the item you receive; and your brain might even receive a small buzz from finding such a great deal. All in all, choosing to get something that is free seems like an obvious decision. If you want the item, then you use it. If you don’t, then there was no harm to the transaction—because it was free, right?

Unfortunately, free isn’t always so free. In fact, free can sometimes be downright costly. Consider this example from Dan Ariely, a professor at Duke University and whose book, Predictably Irrational, I cannot recommend highly enough:

A New York City nightclub recently promoted an event by giving out “free tattoos” with admission. Somewhat surprisingly, over 70 people signed up for these tattoos over the course of five hours. On the surface, this appears to be a great outcome: the club was able to attract customers for its event, and the customers who came out presumably had wanted to get a tattoo anyway. So what’s the big deal?

Can Certain Passwords Cause You to Spend Less?

Presh Talkwalkar of MindYourDecisions, one of my favorite sites about interesting decision-making dilemmas, had a great article recently (re-posted below) about how people's passwords could influence their rate of savings.

Although not backed with data, Presh muses that using passwords such as 'SaveforRetirement' or 'Thinkofthecollegefund' could cause people to spend less impulsively because they have to consider alternate uses for their money. I am a big fan of this approach because of the way it leverages what psychologists call priming.

Earning Money in College: Don’t Sleep on Potential Gains

I started college on the wrong foot financially.

One afternoon, I returned to my dorm and found my roommate tracking his sleep schedule on a spreadsheet. He had signed up for the university’s sleep study, he told me, and he was being paid to record his daily sleep and wake up times.

The sum was laughable: $1 a day, with a potential to earn more for streaks of compliance-—for example, an extra dollar after five consecutive days. He recommended that I, too, should sign up for the study, but I resisted. After all, was it really worth my time to track my sleep schedule for a mere dollar?

Why Your Credit Score Matters More Than You Think

Last week’s article discussed what a credit score represents and how young people can build up their scores. Now it’s time to get into a bit more detail about why your credit score is so important.

The FICO credit score—the most widely used credit score for individuals in the US, and the one discussed in the previous article—ranges from 300 to 850. Of all people, about 60% fall between 650 and 800. A fairly typical score is 720. These scores play a critical role in determining both what credit you are able to obtain and at what rate of interest. But a fair question remains: Just how important are these consequences in credit and rates?