2004: How Much Should We Pay For College? (Encore)

**Farnoosh Torabi** (0:00)
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**SPEAKER_2** (0:32)
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**Farnoosh Torabi** (0:59)
Welcome to So Money, everybody. I'm Farnoosh Torabi. May 1st. Happy May Day, everybody.
Also known as the decision deadline for colleges and universities. National College Decision Day is May 1st. I know many seniors in high school nervous about this decision, and rightfully so in some ways. This is a huge decision not to scare them.
This is a huge decision, has a lot of implications on your life, whether you like it or not, and in your financial life, especially. This reminds me that this week I was also at an event in the evening, Wednesday night at Bank of America Center at Bryant Park. They had invited students from Brooklyn Tech High School in New York, which is one of the best high schools, public high schools in the city and the country to come and learn about money.
And yours truly was there to give them some some nuggets of wisdom. And I said to this audience, and they were in all different grades from freshmen and up.
I said, listen, I have a lot of things to tell you, but one of the most important things I want you to understand, and maybe your parents have already told you, your teachers have already told you this, but let me also tell you this, that your decision where to go to school is the first and probably most important financial decision you are ever going to make in your young adult life. It will have implications for your entire life essentially. So be smart about it, be really thoughtful about it. Good news, everybody in this room is smart, is ambitious. These were, imagine you're a sophomore in high school and you're coming to an evening event during the week to learn about money. I was like, I'm not that worried about you guys.
It is not lost on me that you have shown up to learn about this on a week night.
But that even that said, this isn't about sometimes intellect, right? It's about emotion. College becomes such an emotional decision that often we allow our emotions to obstruct our ability to make rational financial decisions. In college, as much as it is a cultural experience and a coming of age experience and where you're going to go and make lots of relationships and friends and make mistakes and all the things that we need to do in life, especially early years in our adulthood, it's also an enormous financial decision. Let's treat it like that. Let's look for that return on our investment. I'm going to talk later in the show today. One of the questions I want to address is, how much should you spend on a college education today? I know some people would say zero, because there is definitely a growing school of thought around, do we even need a college education? May 1st is also for me a month that one of the last months of the year before the year really starts to speed up, because what do we have after May? We have the summer and everybody goes away. Everybody's busy. You're not really thinking about your financial to do list.
May is a very important month to sit down and reflect on the last four or five months of the year and see how your finances have been doing. Have you been keeping up with your savings goals? How are you doing with your debt management payoff plan? Just a really good time to reflect and reset in some cases so that when you get into the summer months and things go out of your control, that you know that your money is working for you in the way that you wanted to. Back when you made that commitment in January, whatever the goals were. A lot of interesting financial news this week. Americans are feeling worse about their personal finances right now than at any point in the last 25 years. Yeah, a new study, a national study. And there was also a story in The New York Times that stopped me in my tracks. I've been telling everybody about this over the last few days since I read it about basically about a woman whose investment accounts disappeared seemingly overnight. She couldn't see her money when she would log in to her investment account. And that's pretty scary, right? We'll get into what happened, why it happened, and what we can all take away from this story. And then also, if you're having a hard time managing your finances, I want to put it all in some context and let you know that the government is also having a hard time managing its finances. Our government debt is now larger than our economic output GDP. Yeah. So if you feel like you're living outside of your means, the government certainly is, and major drivers of that debt, Social Security, Medicare, we'll talk a little bit more about how this happened and what it could mean also for us. We're talking here about things like Social Security and Medicare being one of the biggest drivers, being the biggest drivers of this debt. So does that mean that those things are going to go away? I have some thoughts. Before we get into everything, the news, the mailbag, I want to turn our attention to this week's episodes on So Money. In case you missed our episodes on Monday, we sat down once again with Amy Moran, who has spent her entire career helping people answer the question, what does it take to be mentally strong?