Category Archives: College Money

Of Unions, Benefits and Steamfitters

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This post is in collaboration with Steamfitters Local 449.

Welder dressed in orange working on a huge, green pipe. Text reads, "Benefits of Unions: Pension, Healthcare, Truly Equal Pay, Opportunity for career and salary growth. Steamfitters449 on femmefrugality.com"

I’m a huge proponent of education. Sometimes that means college.

Sometimes that means trade school.

We need to remember that one is not superior to the other. In fact, if you’re measuring ROI over the course of your career, there’s a decent argument for trade school being the smarter decision.

CASE STUDY!!!!

Career Training Without the Student Loans via Steamfitters Local 449

Steamfitters Local 449 is a union here in the Pittsburgh region representing those who make, install and service piping systems. This includes occupations such as welders and your HVAC-R service person.

How do you learn these skills?

Through free career training.

Steamfitters Local 449 works with the United Association and the Mechanical Contractors Association to provide this free education at its training center in Harmony, PA.

After that union members pay a marginal amount into the apprenticeship fund for each hour they work, which continues the cycle of free education.

This frees you to use the money you’re bringing in while you’re training to do things like live in safe housing, afford groceries and plan for your financial future–things that are much harder to do if you’re spending your younger working years burdened by student loans.

Getting Paid to Learn

The first step in the training process will be uncompensated. But if you can make it through that initial training, the rewards are worth it.

The initial training for those interested in building trades is an 18-week course that runs in the daytime teaching you how to weld. If you’re more interested in the HVAC-R side of things, your initial training will only be 8 weeks.

If you complete this step successfully, you’ll be taken on as an apprentice. Apprentices currently start at $18.25/hour plus health benefits. If you make it through that first, probationary year, you’ll be eligible for a pay bump of  10% and gain access to Steamfitters’ retirement vehicles.

Keep doing well and you’ll continue to earn those 10% pay bumps each year throughout your five-year apprenticeship.

Live a Middle-Class Life

When you’ve completed your apprenticeship, you’ll start earning journeyman’s pay. That’s currently $41/hour or $82,000/year if you work fifty 40-hour work weeks. Nick Kappas, Director of Marketing at Steamfitters Local 449, notes that after you add in benefits like health insurance and access to retirement vehicles, the effective hourly pay jumps to about $65/hour.

Either way, that’s enough to live a solidly middle-class lifestyle in the Pittsburgh region. And you won’t have to worry about your first ten years of pay going to service student loan debt.

If you’d like to make even more money, journeyman status isn’t the end of the line. Steamfitters Local 449 offers further training, enabling you to become a working foreman, general foreman, area foreman, superintendent, diagnostician, estimator, scheduler and more.

Each of these positions include a pay bump up from the journeyman status, allow you to bring in an even higher income.

How the heck does a pension work?

A major benefit to union positions is access to a pension. Pensions are defined benefit plans, which means you’ll easily be able to figure out how much money you’ll be pulling in once you’re retired.

For example, Kappas says that a journeyman currently working 40 hours a week for 50 weeks a year will pull in $160/month in retirement for each service year they complete.

If you decided to stay at the journeyman position over a 35-year career, you’d be collecting $5,600/month–or $67,200/year–in retirement.

If you extend your career five more  years remaining at journeyman status, your retirement benefits would jump up to $76,800/year.

Closing the Pay Gap

Want to know who doesn’t face a gender pay gap?

Union members.

When everyone’s salary is public knowledge, it’s kind of hard to screw people over based on their gender.

Not only does joining a union eliminate your chance of facing a gender pay gap, but women are considered valuable assets at Steamfitters Local 449. Our cultural conditioning finally finds a place where it’s an asset as Kappas notes a phenomenon that Sam Paxson has previously put forth as a reason for hiring and retaining women:

“When we’re looking at trouble shooting, women tend to be a very valuable asset to us. They’re more patient and creative in finding solutions.”

He also says that these are assets that serve these union members at all levels, including welding and higher-paying administrative positions.

We as women also tend to be more concerned about long-term financial security, so we see the value that union benefits such as healthcare and defined benefit plans provide to us and our families–whether we’re working on a job site or doing the equally important work of managing the home front.

Learn More Live

If you’re curious and want to learn more about this career path, you’re in luck! Steamfitters Local 449 is holding its annual Expo up at its training center in Harmony.

It looks a long way from the city mileage wise, but as someone who has made every possible Pittsburgh commute over my adult life, I promise you that 279/79 is way easy to deal with as it has the least congestion, an HOV lane and is a legitimate highway where you can drive fast.

Yes, I’m looking at you, 51. You’re the reason I will never again willingly commute to the South Hills.

The Expo will be happening on May 23, 2019 from 12p to 8p, and will allow you to explore the field, ask questions of union reps and those currently working in the job position you’d eventually like to secure, and even learn through three continuing education courses.

If you, your child or your partner are interested in a career path that won’t end in dramatic debt you can never shake off, I’d highly encourage you to check it out. There is more than one way to secure upward economic mobility.

The Feminist Financial Handbook

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This book is so needed! Excited to be one of the first to get my hands on The Feminist Financial Handbook. Fighting the patriarchy and kyriarchy while building my wealth.

I’ve mentioned in passing that I’m writing a book.

Well, I can now say that I’ve written a book.

That’s right, guys. It’s getting real up in here.

Now that the manuscript is done, I wanted to tell you guys a little bit more about the project, what it entailed and what comes next.

The Feminist Financial Handbook

Even before I was blogging about money, I was interested in personal finances. I’d read book after book on how to make my money better. There were some crazy great hacks. Like opening CDs before the Recession. Or investing your money starting young so you could take full advantage of the power of compound interest.

And I was all, “I can’t wait until I can do this stuff!”

I wrote out goals and future budgets, but something was missing. That missing thing was an income which met more than just my baic needs so I could do things like save and invest. I was great at money management; I just didn’t have enough green to do all the responsible things I wanted to do.

I now recognize that there were some systemic road blocks in my way at that point in my life. I also recognize that there are women out there who face far larger and more frequent road blocks than myself.

And that’s the piece of financial advice that seems to always be missing: When you’re motivated, disciplined and hard-working,  yet you can’t seem to get around these massive obstacles, what do you do next?

That’s what The Feminist Financial Handbook is about. It’s about recognizing oppression and its  effects on our day-to-day personal economies. Without minimizing these struggles, it looks at ways you may be able to get a leg up so you can do all those fun things like watch your wealth explode over a period of 30-40 working years through diligent investing.

It’s about being real about the real-life situations so many of us struggle with every single day, and finding ways to take action despite them.

Defining Wealth

The first part of the book looks at how we define wealth. Does money actually  make us happier? I don’t want to spoil too much, but the answer is sometimes.

In this part of the book, we also take a deep dive into the things that actually can make us feel more content, and counting them holistically in our personal wealth equations. Because while money scarcity is no good, a relentless pursuit of cash isn’t healthy, either.

Earn More

It’s no secret that women tend to earn less than men. The gender wage gap is real. But I tend to think the commonly cited reasons behind it are sexist and fictitious. Some of these arguments include:

  • Women gravitate towards lower-paying fields.
  • Women don’t negotiate.
  • Women carry babies in their wombs.

These are all poor justifications for paying women less, and some are straight up untrue. in the book, we tackle each one of them.

Gender is not the only reason for lower pay, though. Whether you’re a single mother, disabled, a woman of color, transgender, gay, or bi, society is going to punish you economically. It’s not right. But there are some workarounds for financial success, even within a system that would have you believe you’re worth less.

You’re not worth less, by the way. And this whole section of the book outlines why that is and what we can collectively and individually do about it.

Save More

Not only is there a wage gap, but there is also a gender-centric investing gap. This gap starts young, and can result in poverty in old age. We take a look at some of the basics of financial planning and how to become more aware of any internalized sexism that may be affecting your investing decisions.

We also look at how you or your child can go to college for free–or sometimes even get paid to go back to school. I promise this is real. These strategies have worked for me in real life, and are backed by a professional in the higher education industry.

And, of course, we look at budgeting. Not just budgeting, but judgement-free budgeting. Just because you’re a woman doesn’t mean you’re not allowed to spend the money you earn, or that you can’t stash it all away in pursuit of financial independence. But to do either one of these things, you’re going to need a budget.

When One Thing Affects Everything

Ladies, we put up with some intense experiences in our lives. Because of the normalization of sexism and other -isms, we suffer much higher rates of mental illness and domestic violence. Both of these areas have real, long-term affects not just on our mental health, but on our finances.

We also tend to make less money than our male counterparts when a child is diagnosed with an illness or is pronounced differently abled. And that’s on top of the gender pay gap.

This final section of the book looks at all of these things, offering up solutions for living a wealthy life in spite of the effects oppression can take on our bodies, minds and finances.

Pre-Order The Feminist Financial Handbook

Believe it or not, these are just some of the topics covered in the book. The pages take a deep dive into so many issues–issues not typically discussed in the personal finance sphere. Because they’re hard issues to tackle, and there aren’t always easy solutions.

But at the heart of the matter is hope. Hope that we can fight the system to build a successful career for ourselves as women in business or a fat e-fund as homemakers. Hope that you can build a wealthy life even when the system would stunt your cash flow. It affirms that you are worth it and capable no matter what society tells you, because there is no “right” way to be a successful woman with motivation.

Now that we’re getting ready to launch, you can pre-order today from Amazon or Barnes & Noble.

I’d be so grateful if you could hop on board and join the waitlist so you can be one of the first to get your hands on a copy!

I can’t wait to hear what you think. It’s been a huge effort to produce, and I hope it opens up a lot of conversation about what we can do to make the economic plight of women better, whether we’re talking about society as a whole or ourselves as individual females.

This book was very much a collaborative effort. Because I cannot speak with experience to all the different issues women face, it largely features the experiences of others. These are the amazing women who gave so much of their time and heart to the effort:

Start Saving for Your Child’s College Education Today

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Today’s author–Dr. S–is a dad, husband, and finance professor. He discusses personal finance and financial independence on his site, Bull in Captivity.

 Wow, this is a must-read. Really shows the importance of starting to save for your child's college education early--like right now early.

Making sure that our children start their lives off without financial stress is a goal I can get behind. Turning 18 and jumping into reality is tough enough already. Adding the burden of student loans and financial hardship is not a comforting send off.

Unfortunately, college tuition is on the rise, and many students face the reality of not being able to afford higher education without supplementing their part-time income with student loans.

College Board estimates a 2017 annual college budget of $25,000 for state colleges and $50,000 for private schools. Parents seeking to reduce their child’s reliance on debt for college can start saving for their child’s education. But saying, “Start early,” isn’t good enough. It’s important to see the impact of early savings.

Importance of Starting Early

Because of the short time span of fewer than 20 years, college funds have a limited amount of time to take advantage of compound interest. This means that you should start investing as soon as possible. This timeline is equivalent to someone beginning to save for traditional retirement at 45. It’s not impossible, but the timeframe is considerably shorter.

Look at these three examples: Monica, Rachel, and Pheobe. Monica starts saving for her child’s college education as soon as the baby is born. Rachel waits until her child is eight before saving and Pheobe begins on her child’s 13th birthday.

Here are the results assuming that they all contribute $100 per month ($1,200 by the end of the year) and earn 8% on average per year.

compounding interest on college savings

As you can see, Monica has more money in the college account than both Rachel and Pheobe. The higher balance is not only due to the additional contributions Monica saved, but the interest on these investments.

Monica is earning compound interest, or interest on interest, the most powerful force, as described by Albert Einstein.

In its basic form, compound interest means that after year 1, Monica invested a total of $1,200. In year 2 though, in addition to contributing $1,200, she earns interest on year 1’s contributions. In year 3, in addition to another $1,200 in contributions, she earns interest on year 1’s contributions, year 2’s contributions, and (here’s the compound interest) the interest she earned in year 2 on year 1’s contributions.

I know it’s a mouthful, but the interest is acting as another contributor to the account. This is why starting early is so important. The sooner the savings begins, the more chances for compound interest.

Riskiness of Investments

In the previous examples, I assumed a return of 8%. This return is not unrealistic but is a return expected for stocks–which are risky.

As college nears, the account should not be invested in very risky investments. The worst thing that can happen is that the summer before your child starts college the stock market crashes and there simply is not enough time for the account to recover.

To mitigate this risk, the account will be invested in less risky assets as college approaches, for example, bonds. Here is an example of an asset allocation that becomes less risky as college drop-off day nears.

529 asset allocation

The average expected return for the portfolio is highest at the beginning of savings and drops as college gets closer. Higher risk, higher expected return. The lower risk only makes problems worse for Rachel and Pheobe in our example above. Not only do they have a shorter timeline to invest than Monica, but the returns they have available for compounding are less than Monica.

conservative 529 during childs senior year before college

Reusing the same table as before, but with the new expected returns, we see that the results are only amplified. Monica still does better than Rachel and Pheobe, but Pheobe’s account is not looking good.

Is it too late?

There are a few options available if you have not started saving as early as you would like for college education.

  1. Start now!
  2. Increase contributions. Instead of $100, you may have to invest $200 to get to the same goal as if you started saving when your child was born.
  3. Lengthen the timeline. Delaying college for a year or two through a gap year or community college are great ways to give you more time to save.
  4. Remember that every dollar helps. Just because you can’t pay for every dollar of your daughter or son’s college education does not mean you have failed. There are plenty of ways for students to pay for college including part-time jobs, grants, scholarships, and finally loans. Depending on the degree, a few loans are not the end of the world for your child. The loans would be even higher without your help.

College Savings Accounts

A 529 plan is the most popular college savings account. The withdrawals from this account must be used for school or a penalty is placed on the account, so if your child decides not to go to college, this could be a problem.

The IRS has a great Q&A resource on 529 plans.

Many states offer college plans with tax deductibility benefits. You will be able to save for college pre-tax, which helps you increase contributions. Many of the requirements and benefits for college savings plans are state-based so doing a brief search on your state’s options will give you a wealth of information.

Have a disabled child? Check out ABLE accounts.

Other options include a traditional brokerage account which is just an after-tax investment account. There are no tax benefits, but you can use the money for anything including buying your child’s first home or even starting a retirement fund for your child if college is not an option.

At the end of the day, any benefit you provide for your children going to college will be a big help. However, starting early means a bigger account from both your years of contributions and more importantly the help of compound interest.

How to Write A Successful Scholarship Essay

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These are great tips for writing a successful scholarship essay. I'm liking her track record, too.

A few weeks ago we talked about finding scholarships that give you good odds of getting awarded. But that’s just the first step. Now you actually have to apply, and a large part of your application is usually your essay.  After

I found the right approach to picking scholarships, I used this method and was awarded for everyone that I applied for.  It’s not a one-size-fits all strategy, but it is a one-size-fits most.

Don’t Tell a Sob Story in Your Scholarship Essay

While some scholarship essays will give you very specific and unique prompts, most of them come down to two basic questions:

“Why do you need this money?”

and

“Why should we give it to you?”

When presented with these questions, it can be very tempting to write the saddest sob story you’ve got. There are two reasons you shouldn’t do this.

The first is that someone will always have a sadder sob story than your own. Trying to compete in this way is almost always futile.

The second is that while your story may stir up some empathy, that empathy may not be enough to answer the second question. When someone considers awarding someone a large sum of money, they want to see the merit of the person. Horrible things that have happened to you are just that: things that have happened to you. Show them instead how you have built skills to be able to deal with difficult situations.

Do Use Your Scholarship Essay to Highlight Your Strengths

To begin, think of some adversity or hard decision you have experienced in your life. Brainstorm a few, as the hardest thing you’ve ever dealt with may not be the best thing to write about relative to the question or prompt.

To decide which experience is the best one for your essay, ask yourself, “How did I react? Did my reaction turn the situation around to end on a positive note or make my story one of triumph rather than tragedy?“

Now make sure you can take that experience and turn it into an anecdote. Stories make for a much more fun read for those reviewing essays.

Tie Your Story Back to the Prompt

Once you have your first draft of your anecdote, highlighting the characteristics and qualities that have made you successful, make sure to tie it back to the prompt.

Briefly cover why you need the money. You may have bills, children, a mortgage, or simply tuition rates that are outside of your economic capabilities.

Then remind the reader why you deserve that scholarship money. Reiterate the characteristics you displayed in your anecdote that will make their investment in you a good one.

Perhaps you’ll use your empathy in the world of medicine.

Perhaps you’ll use your motivation to achieve highest honors while in school.

Perhaps you’ll use your perseverance to apply for scholarships rather than just give up and say, “I can’t afford college.”

Revise Your Essay

Now that you have your entire scholarship essay written, go back and revise it. Make sure there are no grammatical errors. Make sure it makes sense. Make sure it flows well. Get someone else who will be honest with you to proofread it before sending it in.

Revision is the writer’s best friend.

 

 

Have you been awarded a scholarship?  What approach did you use in your essay?

How to Pick a Major Without Wasting Money

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I never would have thought to reach out to potential mentors so early on, but it's a very good point. Great tips for choosing a major.

It’s hard to know what you want to do right out of high school.

Shoot, it’s hard to know what you want to major in even if you go back to school at thirty.

You may think you have it all figured out, but then you get three years into the program and realize you hate the field. And you’ve spent how many tens of thousands of dollars on tuition?

Before you start your course of study, here are some options to consider when exploring your major and potential career path.

Enter as a General Studies Major

Entering as a general studies major allows you to explore a world of courses without being tied down to one.  You can get  your general education credits that will apply to most majors without having pressure from your advisor to immediately start on your major requirements or electives.

I know when I was entering college, I would have scoffed at the following piece of advice:

Seriously consider community college.

I thought I was too good for these “lesser” halls of scholarship when I was seventeen, but in the long term, community college was my saving grace. It’s affordable education that, if planned properly, can transfer to the institution of your choice.

Entering as a general studies major, or really any major, at a community college can save you thousands during your first two years.

Take Time Off

I rarely advocate putting off education.  Many people start down this path with good intentions only to never return to get their degree. It’s a dangerous path to tread.

But out of everyone I’ve met that has taken a Gap Year and subsequently returned to college, not a single one regretted it.

One of my friends spent time discovering herself in Brazil.

I know someone who WWOOFed in New Zealand.

I’m close with several others who just spent time traveling. This time allowed them to examine themselves, their interests, and how they relate to the world around them, all of which can have major impacts on what you decide to study and how you want to work long-term.

Explore Your Interests

Take some time and make a list of things you like to do. You’d be surprised at how many different career paths there are and how you can make a living doing what you already know you love.

Passion in a career makes all the difference in your life and the impact you have at work, though that’s not to say you can always make money by pursuing you passion.

Once you have your list of interests, sit down with a guidance counselor or a career counselor. See what they can tell you about applicable majors, and what potential careers you could have once you earn your degree.

Have an interest that you’ve never explored before? Take a class in it. Whether it’s at your community college, your university, your community center, or even your library, taking a course can give you an idea of if you love the area enough to work in it for the rest of your life.

Talk to Someone in the Field Before Choosing Your Major

Send an email or give a call to someone who works in the field with prepared questions about what you they do everyday and how the future of the industry looks. You’d be surprised how many professionals respond when you seek out their expertise.

Take any opportunities you can to shadow. If you don’t like the job you originally had your eye on, see if they know about any peripheral career paths that may fit your skills or interests better.

This is also a great way to begin networking before you even graduate.

Remember: You Don’t Have to Do Four Years

There are fields that pay extremely well without a Bachelors degree. To learn more about them, check out your local vo-tech school, applying the same strategies as above.

These fields will require some type of training, and usually include an apprenticeship. Another synonymous term you may see pop up is “journeyman fields.” Sometimes the apprenticeship is paid, and sometimes it’s not, but at the end you’ll come out with a skill that–if you’ve vetted the profession properly before starting your program–can earn you a nice income.

Although statistically speaking, those with a four-year degree make more money over the course of their lifetimes than those without, the real key is to make sure you are a trained and skilled professional in a field that has good career prospects.

If you put meaningful effort into the training, whether it be at a four-year school or through a journeyman program, you’ll come out ready to earn.