Life in Transition

Navigating Personal Finances During Life Transitions

Archive for the month “March, 2012”


This week has been pretty good.  With March Madness going on no one has been productive but I manage to get a few wedding things done.  I founded a place to get my hair done and my fiance got his tux rental.  Only 37 days left until the big day!

Here are some posts I liked this week:

Kentucky: Where Education Pays–Part 2

Last week, I discussed the KEES scholarship, and how I used it to finance my education without taking any loans. Today I’ll talk about how I got scholarships from the universities themselves. Before I start, I want to state that I don’t think everyone should always choose the school offering the biggest scholarship. As with any financial commitment, you need to take other factors into consideration– such as location, student facilities, atmosphere, academic programs, class size, etc. I took all those factors into account when choosing a school.

My parent’s income was too high to for me to qualify for government aid packages. In fact, when it was younger sister turn to start college, they didn’t even bother to fill out the FAFSA forms. A lot of in-state public schools will offer merit scholarships, and I knew that those would be my best shot at a debt-free education. Like with any large endeavor, I broke the process down in several smaller steps (with some guidance from my awesome high school teachers).

First, I looked up what types of scholarships were available at each of the schools I planned on applying to, and whether an application was required. Then, I took note of which scholarship applications were due at the same time as the admissions applications, and which scholarship applications were due after being accepted. Generally, scholarships will require a minimum GPA and/or ACT/SAT score. So, I would set a reasonable ACT/SAT score to shoot for. For the school I ended up attending, the University of Louisville, any in-state student with a 30 or higher ACT score automatically receive a full tuition scholarship with a $3000/year stipend, and that was the scholarship I received upon getting accepted. Then, I found another scholarship that provided tuition AND a $6200/year stipend, which completely covered my room and board with some money left over, for ten students each year. To qualify, I needed to score one more point higher to reach the minimum ACT score requirement, and in addition, I would have to write an essay about a research proposal. So, I went for it, and long story short, I got the scholarship.

What surprised me was that a lot of my highly intelligent friends in high school and college didn’t take the extra time to study for the standardized tests to raise their scores by one or two points or take the time to apply for better scholarships. If you do a little math, the extra time translates to a lot of money. I don’t remember how much time I spent studying to take the ACT a second time, or how my time I spent writing my essay. Let’s estimate that I spent six hours each week for six weeks studying, and that the actual exam was four hours long, so I spent a total of forty hours on the test. And for the essay, let’s estimate that between researching a topic, and writing the essay, I spent five hours. So, in 45 hours, I made $12,800 (I took the difference between the four year total of the two scholarships) or $284.44 per hour! Now, I know that illustration a little simplistic, since I spent hours writing scholarship essays for other schools I applied to but ended up not attending. Still even totalling those hours or essay writing, I would be making a lot more money per hour than any job a high school student or college student would work. (My dad taught me that it was financially dumb to work a minimum wage job in high school to save up money for college when you could use that time to earn a scholarship). So, I ended up with a full tuition scholarship plus a $8700 stipend ($6200 with the university scholarship plus my $2500 KEES scholarship) each year.

I received varying amounts of scholarship money from the other schools that I applied to. Those other schools were good options, and I think I would be happy at any of those schools, but now that I am out of school, I am glad that I graduated without debt, and with enough savings to start an emergency fund.

Kentucky: Where Education Pays–Part I

If you drive down I-71 from Ohio down to Kentucky, you see a sign announcing your arrival to the bluegrass state, with the phrase “Where education pays” on the right hand corner.   Based on my own experience, there is some validity to that statement, if you plan ahead.   Not only was I able to get my tuition paid for, I was also able to  cover all my living expenses with scholarships.

KEES Scholarship

One of the major ways Kentuckians finance their education is through the Kentucky Educational Excellence Scholarship (KEES). To sum it up, it’s free money for good grades if you attend a  community college or four- year university in Kentucky.  Each year of high school you accumulate scholarship money based on your GPA, if it is at least a 2.5 (back when I was in high school, you began accumulating money with a 2.0 GPA, looks like they raised their standards during the recession).  Here is the GPA chart posted on the KEES website:

GPA Award Amount
2.50 $125
2.60 $150
2.70 $175
2.75 $187
2.80 $200
2.90 $225
3.00 $250
3.10 $275
3.20 $300
3.25 $312
3.30 $325
3.40 $350
3.50 $375
3.60 $400
3.70 $425
3.75 $437
3.80 $450
3.90 $475
4.00 $500

So, hypothetically, let’s say a student has a 3.00 GPA  his freshman year, a 3.75 his sophomore year, a 3.30 his junior year, and a 4.00 his senior year.  So, adding up the money he accumulates each year  he will receive a  $1512 KEES Scholarship each year of college for up to four years.   On top of that, students can receive an ACT bonus (those who take the SAT will get their scores converted to an ACT score) based on their score.  Here is the chart for the ACT bonus:

ACT Score Bonus Amount
15 $36
16 $71
17 $107
18 $143
19 $179
20 $214
21 $250
22 $286
23 $321
24 $357
25 $393
26 $428
27 $464
28+ $500

Let’s say the same hypothetical student got a 26 on his ACT.  He would receive a $428 bonus, which brings his annual total to  $1940.  So if he went to a  four-year university,  he would receive  a total of $7760 from the state of Kentucky without having to fill out a scholarship application.  I realized that  compared to how much the tuition bill is,  $7760 over four years seems like just a drop in the bucket.  But when you think about how much you can save on interest if you take out a  loan, or how many, hours you have to work at a minimum wage job to save up that amount a money,  $7760  is a nice sum of money.  I used an online loan calculator with the following parameters: Interest Rate: 6.8% Loan Fees: 1.0% Loan Term: 10 years Total Years in College: 4 years The total interest paid would be over $3000, which can be better spent elsewhere.    If you worked a part time minimum-wage job (which is $7.25 in Kentucky during college , you would have to work 1070 hours to make $7760 if you don’t take taxes into account.  Based on these calculations, I think it is important for high school students to keep their grades up; grades are worth money. I received the maximum KEES reward of $2500 a year during undergrad.  My high school didn’t have a plus/minus system for grades, which made it easier for me to get a 4.0 each year.  Also, for most of my high school classes, all I had to do was turn in my homework assignments on time, pay attention and take good notes in class, and  participate in class discussions to get A’s.  To me, I was getting free money for being a responsible student.

Current State of Finances Part 2: Targeted Savings

From part 1, you may have noticed that I have a lot more money in my checking account than my two saving accounts combined, which is unusual.   Let me explain.   I have a rewards checking account with my credit  union, which as an  interest rate of 3% on a $20,000 average monthly balance if you meet certain requirements: have a direct deposit and use the debit card on ten purchases totalling at least $200 every month.  I easily meet those requirements, so  put as much of my cash into my checking account as possible.  Since the interest rate on the total balance drops to 0.25% on balances over $20,000, I park the rest of my cash with an online banking account.  I keep a little bit of money in my credit union savings account just to meet the minimum requirements of keeping it open.  With that said, the majority of the money currently in my checking account isn’t for day-to-day spending.    I keep track of the “hands off” money in an excel spreadsheet.  Here is what I have:

  • Dental School Tuition: $16,797.67  My fiance saved up a ton of money during undergrad and was able to pay his first year of dental school without borrowing a penny.  This is how much he has left, which will hopefully cover one more semester (I’m hoping and praying that tuition won’t increase too much).  He put the money in my account since 1)  He doesn’t meet the requirements to get the 3% interest rate on his checking account and 2) I use my rewards credit card to pay his tuition so get points.
  • Wedding Fund: $2383.44  I already saved $7500, and this is how much I have left  to  spend
  • Honeymoon Fund: $869.63 We’re taking a delayed honeymoon, so we still have more time to save
  • Vacation Fund: $400.00  This is for a weekend trip to St. Louis in June.  I am a huge gymnastics fan and the National Championships this year is located within a reasonable driving distance from home. Whatever is left over from the trip will be stashed  in the honeymoon fund
  • Christmas Fund: $50.00
  • Emergency Fund: $5321.04 The goal is to save $6000 by the end of the year, should be very do-able

Total Targeted Savings: $24,952.15
Total Day-to-Day Cash: $1940.28

Right now my finances look pretty good because I am sitting on a ton of cash, but as soon as my fiance’s tuition bill comes, a large chunk will be wiped out, and we will have to start taking out loans.

Current State of Finances Part 1: Net Worth

I want to give a snapshot of where I am at financially, to give you all (and myself ) a frame of reference for future posts. I recently graduated with a bachelor’s degree about a year ago, and I am working full time as an administrative assistant. I am currently engaged to a first year dental student, and we’re getting married in a couple of months, so we have begun merging some of our finances.

First, we’ll take a look at my net worth
Bank Accounts

  • Credit Union Checking: $19,726.30
  • Credit Union Savings:$125.22
  • Discover Savings: $7,040.21

Total Cash on Hand: $26,891.43

Investment/Retirement Accounts

  • Roth IRA: $3,203.07
  • Vanguard Account:$3741.25 This is money that I rolled over from a gift trust I cashed out when I was 19. The fund that it was in performed pretty poorly, so I put it in an index fund. I already used part of the money to by a condo with my parents and my sister (more on that in future post, to keep things simple I won’t include the condo in my net worth calculations) and to start my Roth IRA. As of now, I’m not sure what the money will be used for, but I am open to suggestions.

Total Investment Money: $6944.32

Car: $5000.00

None so far, but will change in the near future when my fiance exhaust all of his savings on his dental school tuition. Last semester his tuition, fees, and equipment rental topped $16000.

Total Net Worth: $38,835.75

My net worth looks impressive for my life stage, but as I learned in my statistics class, numbers are just numbers if you don’t know where they come from or what they mean. A large portion of my cash belongs to my fiance, which will be used for his tuition next semester. So, I do think that my net worth is a bit inflated, and I know it will change drastically before the year is over.

My First Post (I can’t think of a more clever title)

Welcome to my new blog! I have always enjoyed reading blogs, and have thought about starting my own for quite some time. And as with any new endeavor, my biggest challenge was getting started.

So how did a twenty-three old get interested in personal finance? At some point in towards the end of high school, I realized I had finite resources, and to make the most of it, I would have to disciplined in keeping track of where my money went. So, I began tracking my expenses on a spreadsheet. Soon after, I learned how to create a budget and then began researching ways to each dollar stretch further. Through my college years, I learned a lot about managing my own money. I don’t claim to be an expert since I still have plenty to learn. Right now, I am going through a transition of sorts. I just graduated college, which means my parents will no longer help me financially. I am also engaged, which means money decisions will soon be a team effort. I hope to chronicle what I have and will learn about personal finance here on this blog.

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