May 17, 2019

Should You Delay College and Work To Save up Money Instead of Taking Loans?

The Simple Dollar today discusses the question Is a Gap Year Better Financially Than Going Straight to College?

Setting the other reasons for gap years aside, lets look at the finances.    Does it make sense to work a job before college in order to save up the money to pay for tuition so you can avoid taking out student loans?

My reply to that is below :

For the financial decision, it almost always makes more sense to finance college vs working to save up money.
Why? Because going to college gets you a good paying job and by delaying college you're just trading good job wages post college for low wages before college. If you're not banking on making good money after college then I'd ask why you're doing it at all considering that paying for it isn't trivial.
Look at the 5 years in question and the choice really boils down to :
Gap year : 1 gap year working unskilled job and 4 years in college 
no gap year : 4 years in college and 1 year working after college with a degree and some student loan debt
So you're really trading a year before college working unskilled wages versus a year after college with a degree and the debt.
The average new college graduate makes $50k /yr. Lets take Trents assumption that working pre college is making $20/yr. Really you're trading $50k of income for $20k of income. After tax and minimal expenses you ought to be taking home probably $30k vs $12k. If your first year after college nets you $30k you could pay off the $12k in loans your gap year might avoid and have $18k extra cash.
Now the choice is :
Gap year : work 1 year and net $12k then go to college for 4 years
no gap : go to college and take out $12k extra in loans then work a year and net $30k and pay off that $12k pocket $18k more
Of course the particular numbers will matter. Depends on how much money you can make in the gap year vs your planned post college career.
Gap years can make sense for other reasons. If you're really not ready for college, doubt it will work for you, don't know what you want to do with your life, etc, then those are potentially better reasons to do a gap year.

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May 6, 2019

15% back at Ebates (now Rakuten) on 400+ Stores

Ebates  is celebrating its 20th anniversary with 15% back at 400+ stores right now.   

Also note that Ebates  has now apparently changed its name to Rakuten so don't be surprised if the page redirects to that new site.

Smal sample of some major name stores with the deal :

Ann Taylor
Advance Auto Parts
Dicks Sporting Goods
Columbia Sportswear

Some may also give 20% back, I'm showing "exclusive" 20% rates on several stores.   I guess thats a YMMV deal but I'm not sure how it works.

Standard Ebates blurb: To get cash back from Ebates you need to be signed up with Ebates.  Then simply go to Ebates to get the referral to the store before you do your shopping.  I also get a referral bonus if you use my links to sign up with Ebates.  

-- This article may contain referral links which pay this site a commission for purchases made at the sites.

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