Millennials and debt

by Rhett

How Millennials Became Spooked by Credit Cards

Discuss.

Advertisements

206 thoughts on “Millennials and debt

  1. “I don’t want to go out and buy, buy, buy, even though that’s what society wants me to do,” Mr. Towner said. “I want to save and invest for the long term.”

    Sounds like a future Totebagger! Really, all the people interviewed sounded like they were making smart decisions, in the face of the “professionals” telling them that they had to get credit cards and spend money because it was good for the economy.

  2. True & Not true in my data set of 2:
    – DS1 has 2 credit cards. One is a general “points” card which he’s had for a while and has a high enough credit limit ($4000) where he could get into minor trouble. He’s used it responsibly for a couple of years now and had enough points to recently cash them in for $150 in gift cards toward a new TV. He’s pretty much stopped using it because he has a shiny new credit card with a much lower limit which as its come-on is offering 20,000 bonus points (=$200 in travel spending credits) if he spends enough in the first 3 months and he gets 1.67 points per $ spent, so he thinks it’s a better value. He’s been transferring $ from his checking acct to his savings acct as he spends (this is the true part…he really does not want the cc debt), so he’s essentially using his cc as a debit card.
    – DS2 has 1 card. He uses it for things like concert / sports tickets where it’s just easier to use a card (both he and I know he could use paypal for those things but…) and he just got a surprise match of the prior year’s cash rewards, so he likes having it. He does let the bill come before he pays for the purchases, but he pays the bill within a few days of getting it.

    They both got their first cards in their own names when they were 18 or 19.

    I’ve remained fairly uninvolved in this beyond pointing out the convenience of having a card, the responsibility that comes with that, and the advantages/rewards that can accrue if the card gets used enough.

  3. This sounds like me. I guess I was before my time. I always associated credit cards with financial irresponsibility, because I saw my parents and other friends parents use them when they had no money in the bank. Using a credit card at the grocery store in particular was seen as an embarrassment, so I still can’t bring myself to do it. I use a debit card a lot. However, I refuse to use PayPal – I worked on online payment systems back in the early 00’s, and know too much about them to trust them

  4. “Using a credit card at the grocery store in particular was seen as an embarrassment”

    I agree. True for other common transactions like gasoline and drug store things. Maybe that’s why the cash back for using our Amex is highest at those three places?

    Hell, when I was growing up I remember my mom saying in a disapproving whispering voice (though I don’t know why a whisper, we were in our house and the people she was talking about were not there) that so-and-so got a new car, but they borrowed money for it rather than paying cash from savings.

  5. I think it’s generally a good thing for those who line up with the trend that the article cites, but it seems that there’s a common theme in reporting on Millennials in which the author discovers a data trend — one that usually aligns with his or her own pet causes — and determines that it’s a generational shift in values when the real explanation boils down to taking longer to grow up. We’ve seen this before: Millennials don’t like cars, Millennials don’t want houses, Millennials only want to live in urban areas…

  6. I can think of two problems with this.

    1. I’ve known plenty of people who got a CC at 18, got in trouble with it, and learned their lesson. If these young people already know how to not get in trouble then great. However, if they just delay getting into trouble till they are 40 or 50 than it’s going to be a much bigger problem for them.

    2. The vast majority of America’s small business startup capital comes from HELOC’s and credit cards. Without that, one would think, the rate of small business formation will fall considerably.

  7. “these kids will soon rue the day that they did not get credit cards because they’ll have no other way to purchase things like a washer and dryer”

    As if Lowe’s or Home Depot would actually deny a credit app from any even marginally qualified in-store customer, thereby sending them to the competition. Yeah, sure, the credit limit might be only 110% of the cost of the washer/dryer set, but now they’ve captured another customer.

  8. My millennial and his wife have credit cards and use them responsibly. They also took out a car loan instead of paying cash because they wanted to establish a credit history to prepare for buying a house. Seemed reasonable to me.

  9. Fred – Does that CL link look stolen to you? It looks too good to be true. There are a few like that, and then other ones are about $300 for a pair from a store, older looking and about what you’d expect in that price range.

  10. What I find really really hard to understand is that how or why a mere fact of having a credit card makes people feel free to charge it for stuff that is not within their monthly budget.
    As far as I am concerned a credit card is a tool of convenience. It has no bearing on how how much money I can spend. So it always surprises me when I read stories about people charging a large amount to it that they cannot then pay off. And that freezing of cards so you cannot get to it impulsively! I do that to chocolate so that I cannot eat it before thawing it and then self control prevails!

    I guess we can chalk it up to marketing by card companies that makes people feel like somehow it is near free money–till it comes due.

  11. As a young adult I started to have a store cards, credit cards, it was starting to get out of hand. I decided to close all those open credit lines and just have one debit and one credit card. I noticed that during the financial crisis, my one credit card never reduced my credit limit which was a good thing.
    A lot of people at different income levels and ages are more wary of debt and the older people still more due to the crisis.

  12. I finally got around to watching the Big short this weekend! Ordinary people had no chance! What a scam!

  13. “As far as I am concerned a credit card is a tool of convenience. It has no bearing on how much money I can spend.”

    Agree.

    Reminds me of the old joke “I can’t be out of money…I still have checks in my checkbook!”

  14. Fred – just saw the link you posted on Friday’s topic. Agree! And such a totebaggy trip – the culture! The salt + vinegar french fries! The foreign language! — haha.

    Denver – I’m sorry your DS is having trouble in HS. I agree w/ LfB and the others that we should discuss this as a separate post (and Cordelia’s Q too, re: college, if we want to blend), since it’s so important.

    For now, I will say that when our kids have had tough times in various places (school, camp, their other parent’s place, etc — we’ve had more than a few desperate situations), we have made it clear that we are open to discussion, but have also given them a time period for which we expect them to stick it out. Kids can be so impulsive; we always wanted them to make a reasoned decision after a bit of a cooling-off period. So, “I’m not saying you can’t come home. I’m just saying I want you to give it a whole week, and then we can reconsider.”

    For your DS, what about something like, “I would like you to stick it out for the semester, and then we can revisit it”? And while he’s sticking it out, you work on the various issues – have him see a therapist, talk to his teachers, brainstorm the problems and possible solutions, etc. (Depending on how overwrought you feel he is, you might say the quarter, rather than the semester).

    I’m sure others have great thoughts, and we can talk about it all tomorrow or whenever you post goes live. (I submitted an insignificant post about podcasts that was going to run on Wed, and I would be very happy for CofC to run your topic instead that day).

  15. “Early use of credit cards has, in the past, helped young Americans develop a comfort level with credit that can last a lifetime and lead to a succession of big purchases financed by debt.”

    Umm, yeah. I think the millenials quoted would identify that as a bug, not a feature.

    For me personally, what Dell said. I never understood the point of putting stuff on credit — if I didn’t have $XX to buy it now, how was I going to have $XX + Y% to buy it next month? When I was in college on my mom’s card, it was for true emergencies, i.e., the plane tickets home if my mom got hit by a bus (and therefore couldn’t send me tix to be at her bedside). When I had an income, it was to avoid having to be That Guy writing out a check in the grocery line. But always pay-as-you-go.

    I am a little underwhelmed by the thought process of the millenials quoted, though — yes, the economist is stupid, but the rejection of CCs seems to be very reactive and emotional (there’s a huge difference between swearing of CC *debt* and swearing off CCs entirely). For ex., I’d rather have a CC than a debit card, because I don’t want someone pulling $$ directly from my account — I want the right to dispute transactions with the default being I don’t owe, and if my card gets stolen, I want the default to be my money still being in my account vs. having to convince someone at the bank to give it back. Plus DD’s debit card periodically racks up a usage fee at some stores, and I haven’t figured out why — not so with my CC. Plus all the various mileage and bonus deals. So it just seems logical to me that even if you’re conservative, you have one card, it’s a credit card, and you treat it like a debit card.

  16. Here’s another way that I am not a real Totebagger. I got my first credit card my senior year of college. I was poor then and poor in law school, so I would charge random things in those years and not pay the balance off. By the end of my second year of law school, I had $5-6k on the card and it really stressed me out. I paid it off my second summer of law school because I had a job that paid enough and I haven’t carried a balance since, but most of th stuff that I charged during that time wasn’t strictly necessary. Including one spring break trip.

  17. I read this article when it first came out. I found it interesting, but also agreed with one sentiment – they are probably deterred by rule changes. I remember how easy it was to get credit, get a house, etc. Now, the paperwork required has tripled. And I don’t think that credit card companies are allowed to prey on college kids the same (remember the old “sign up for a card, get a t-shirt” things?).

    Are parents more/less willing to talk money with kids? As Totebaggers, we call it part of our parental duty, but for non-totebaggers, is it the same? The lack of conversation may make credit cards and loans seem “scary” and verboten.

    When I see my millenial family members I should ask them if they have credit cards and how they use them… just for curiosity sake.

  18. What Milo said about Millennials not wanting to grow up. We use cards to pay for everything for convenience and rewards. My mother made me get a credit card when I went to college and I was responsible for paying it. I remember she picked this certain card because it could also be used as a calling card (this was before cell phones were everywhere). I rarely used the thing in college (mostly just used cash because drinks were cheap) but definitely started using it when I moved into my first apartment after college.

  19. Kate – I’m not a totebagger at all in this respect. We got into ~$10k debt with c-cards through grad school. Since my “actual” job we’ve been paying off the cards as fast as possible (literally every extra cent), and when we get those “transfer and get 2% interest on the balance” we do that (usually from one card to my BoA card). That’s how we’ve gotten rid of > 50% of our debt in <2 years. We've finally gotten to the point where we can start the transition between debt reduction and aggressive savings.

  20. I grew up truly lower middle class. My Dad had a secure but low paying job with pension. But debt was highly frowned upon. If we did not have money for it, we did not get it. No money means no new clothes, forget about trips etc.
    Debt avoidance was taught as a virtue, and that value always contrasted with others…..”Look how stressed Mr. Neighbor is. They have everything but they have debt. Mrs. Neighbor even buys clothes on credit! How shocking!” And so on.

  21. Agree with LfB.

    I had a CC after I turned 18 in college but rarely used it. For my overseas singing trip my parents gave me their CC since I wasn’t 18 yet. :) Now, I also use store CCs for the points or coupons, if it’s a store I shop at anyway and will buy more stuff from in the future.

  22. Regarding Denver Dad’s question on the other thread — If anyone wants to write something up and sent it in I would be happy to post it on Wednesday as offered by Risley. I agree it’s an important topic that many parents have experienced.

  23. Rhode – I got a tshirt for signing up for my credit card. That is how I picked which one I got; it had the best tshirt!

    I also put a Paris trip on my credit card for a trip right after I graduated from law school. My now husband wanted to go. We had just met and I didn’t want to say no even though neither of us had any money. It was so fun and I regret nothing! I need to turn in my Totebag card now.

  24. What I find really really hard to understand is that how or why a mere fact of having a credit card makes people feel free to charge it for stuff that is not within their monthly budget.

    It’s the same with anything. If you’re not at your goal weight, why does the mere presence of food make you think that you can eat it? The thought process is the same – the food or credit diet will start tomorrow.

  25. We spent some time with our extended families at two different events this weekend. In both cases, we discovered many 50 – 60 something parents that are still paying for auto insurance, cell phones, and more. I wonder if these millennials are able to have this attitude because their parents are still paying for so much stuff!!!!

    I’ve posted so many times about how I love making these credit cards benefit me…as long as you can pay the bill every month. We sat in upgraded seats on the airplane last week for free, and were upgraded to a two bedroom suite due to our credit cards. We pay some fees for these Amex cards, but the benefits can be awesome if you know how to work the system, AND you don’t get into trouble by having too many cards/debt.

  26. Kate – I’m not really much better – my first card had a pretty picture of my college on the front… The company was MBNA then…

    We also charged trips. It’s only been recently that I’m pretty sure we’re paying for the trips as we spend the money (using the card for online airline purchases, but paying off the next month). I regret none of the trips and at the time, those breaks were needed. Sure I could have done cheaper things, but I had the time to be adventurous. If I waiting until now, I wouldn’t have done some of the trips.

    I honestly tend to use cards over debit to control against fraud. Even though we don’t have a lot in the checking account, Capital One is certainly better with fraud protection than my BoA checking account. But we pay them off monthly now.

  27. “Why carry cash when you can whip out a debit card for the smallest transaction — a sandwich or a bottle of soda — or use an app like Venmo or an online payment service like PayPal? All of those typically draw funds directly from a bank account.”

    Debit card use is much more common among teens and young adults than it was in previous generations. It’s not uncommon for parents to give their young teens debit cards to use in place of cash. I’ve seen where millennials have the debit card habit so ingrained that they don’t see the urgency of using credit cards as I did when I was young.

    “The vast majority of America’s small business startup capital comes from HELOC’s and credit cards.”

    Interesting. Did not know that.

  28. Us too Lauren! Currently DH is deciding between Amex platinum and new chase card. I see an Asia trip in our future!

  29. “I need to turn in my Totebag card now.”

    Sorry, Kate, you are part of our crowd, as you paid off your credit card debt when you got your first job. Now if you bought a BMW on credit to celebrate your new job…

  30. Vancouver has some of the highest housing prices in the world, largely due to Chinese money flowing in. I wonder if that is drying up? I would kill to retire to Vancouver – maybe I should snap up property!!!

  31. Rhode – ditto re: fraud. I always use the CC for that reason. They catch the stuff happening right away, whereas with the debit card we have to notice it ourselves and complain to the bank.

  32. Kate – when I was a summer associate at a large firm in Dallas, one of the young associates, who’d had his job lined up since his 2L summer, told me that once he finished the bar exam, the partner he was in most contact with at the firm made the associate *promise* he would take a huge vacation b/w the bar and starting work. The associate told the partner he had no $$, and the partner allegedly would not take that for an answer, and made him promise to put it all on his credit card and go. The partner said, “You’ll have plenty of money later. You’ll never again have this much time.” Honestly, I have a mild regret that I didn’t do the same thing myself.

  33. ” I would kill to retire to Vancouver – maybe I should snap up property!!!’

    Apparently, you should wait just a bit. I’m hearing prices are going to come down.

  34. Well, I sent my four kids to college on unsecured credit, quite a bit of it on credit cards that back in the day offered teaser rates and then disqualified you by slow processing in th he days before electronic banking (the class action suits never paid out anything meaningful). I started the pay down process by balance transfers for lower rates and borrowing enough from the meager 401k to pay off one high interest card and then pay my account back over a year, rinse repeat. I did fund rerirement accounts, but i was in an still overall negative asset position. I had 85K of unsecured debt at 50. By 54 I had paid it all off. I wasn’t willing to get married until I was debt free.

    I don’t advise this life plan, but sometimes you have to bet on yourself

  35. Okay, DD sent in a school transition post that will run on Wednesday.

    Louise, would you resend your post. For some reason I don’t see it in my inbox. Thanks!

  36. “Honestly, I have a mild regret that I didn’t do the same thing myself.”

    I could have requested a month off between grad school and my job. I had one week. I regret not having more time. I was so afraid of money and not having any because of the flood and pregnancy that I let that cloud my better judgement (who’s always on island/margarita/Jimmy Buffet time). Having one less month at grad school (or even 2 less weeks) wouldn’t have changed how I left. I spent most of that time cleaning or organizing anyway.

  37. I have to get two students to a conference in Texas next month. They are presenting a research project they had worked on with me. We have travel money, so they will get reimbursed for their costs. But I just discovered that neither one of them has a credit card, so I am now trying to figure out how to get advance money for them. I can’t really afford to do it myself.
    They don’t drive, either.

  38. A bunch of our friends spent a ton of money when they got their high paying first jobs – cars, trips, sound systems. They did party like it was 1999. It was…

  39. MM – when I hear of millenials without cards and licenses this is what I see – the inability to front business expenses when you aren’t in the position of having the company card. Will the U pay for the plane tickets and hotel deposit?

    Meme – ‘betting on yourself”… I never saw it this way. But I like the framing. I think a re-frame of a lot of stuff on my plate right now is better put by saying “I’m betting on myself” than the way I’m currently looking at it.

  40. Re: trip after bar exam – I had my job lined up and figured the worst that was going to happen is that they fired me after a while, but I was pretty sure that I would at least last a couple months before that happened. I will say that it is much easier to be responsible with money/a Totebagger when there is enough to go around. I can see how it is easy to get in to some trouble when the funds are low. And if you add kids on top of that, it could get very bad very fast.

  41. @Risley: My first real non-Totebag moment was spring of my 3rd year of law school: I discovered that the Law Review would offer $2K in loans to members, at some ridiculous-at-the-time low interest rate. So I took out the full $2K (my only law-school debt) — and promptly signed up for a month-long bike tour of Europe between the Bar Exam and my start date. It’s probably the one time I ever thought like that partner. And it’s still the longest trip I’ve ever had!

  42. The article was published in our local paper yesterday.

    It’s flawed in that the writer repeatedly conflates use of a credit card with accrual of debt. He seems unaware of the possibility of using a credit card and paying the entire balance every month.

  43. the inability to front business expenses when you aren’t in the position of having the company card.

    I think these fears are highly overstated. If you need a CC for your first job Amex will give you a personal Amex if you have a letter from HR saying you need it for work related expenses. It doesn’t need to be a corporate card.

    The same goes for getting a new car. Honda Motor Credit will happily finance any new college graduate with a pay stub and a pulse as long as you have no negative marks on your credit. The absence of credit isn’t an issue.

  44. He seems unaware of the possibility of using a credit card and paying the entire balance every month.

    That’s still debt until it’s payed off.

  45. Rhett – not in MM’s case. Not in a lot of college/grad school cases. The fact that those students don’t have cards to take care of things like this, is becoming a larger problem. And, unless a job ad specifies the need for a card or a car, the company cannot ask the employee to get one. And we can’t assume that the employee will realize the need either.

  46. And, unless a job ad specifies the need for a card or a car, the company cannot ask the employee to get one.

    Why not?

  47. “the partner he was in most contact with at the firm made the associate *promise* he would take a huge vacation b/w the bar and starting work. The associate told the partner he had no $$, and the partner allegedly would not take that for an answer, and made him promise to put it all on his credit card and go.”

    Risley, I had that exact same conversation with a partner, but he got me an advance on my salary (we also had to use CC).

    We would not have been able to get through graduate school without using credit cards, especially for the extensive repairs needed for our hand-me-down car. Neither set of parents was in a position to give us any “start-up” funds, as we have done with our kids, so by the time we both started real jobs, we had several thousands in CC debt. But after paying that off, we used the CC primarily for convenience and emergencies. Oldest DS got his CC before the rules changed; younger ones just don’t see the need for a CC, even for an emergency when they are traveling overseas. Agree with Milo that this “trend” has more to do with the extension of adolescence than with any meaningful rejection of consumerist values.

  48. MM,
    Why not suggest that your students get credit cards? This will not be the last time they need to travel to a conference.

  49. DS1 has a credit card, which is linked to ours. We have to force him to use it, so he learns how. Once in a while, we’ll ask him to “pay” when we go out to eat, he will input credit card data when paying for things online, etc.

    He doesn’t have a debit card yet, as he hasn’t needed one. I think getting him a debit card will be on our “to do” list this fall.

  50. +2 on MIlo and Scarlett’s comments that it is not a trend but mommy and daddy paying for the smart phone, the vacations and the like, for the most part they aren’t more responsible/frugal, they are just enjoying the extended ride!

    We generally use our cards for points and pay them off each month. I did get a credit card at 18 and bought some frivolous items and then realized that I was still paying for that jacket and those boots at the end of college and how much I “overpaid” for those two items with interest. It was a good lesson to learn young!

    The one credit card reform I wish would go into practice is the ability to close an account without it affecting your score. Currently if you close an account it gives the same “hit” that the company closing the account does. We should be able to close an account and give a reason like “This company’s policies and use terms suck” and not have it affect your score. They could go one more and track them so other people could see them just like reviews.

  51. Scarlett, I don’t think it would be appropriate for me to suggest that. I think that would be crossing an ethical boundary.

    Many of our students come from families that are too poor for credit cards, so I have to keep things like that in mind.

  52. Agree with Milo that this “trend” has more to do with the extension of adolescence than with any meaningful rejection of consumerist values.

    I wonder how much of it is that and how much of it is a shift in consumer preferences overall. It seems that due to technology shopping, as a hobby, seems to be in decline. I wonder how that impacts how and if people accumulate debt.

    https://www.washingtonpost.com/business/economy/shoppers-are-choosing-experiences-over-stuff-and-thats-bad-news-for-retailers/2016/01/07/eaa80b5a-b4a7-11e5-a76a-0b5145e8679a_story.html

  53. MM,

    I don’t know if it’s unethical. I assume these kids are good CS students and as such will end up at least upper middle class. I think part of your role may be to help them with that transition.

  54. “Urban Outfitters has sought to adapt to this new reality by investing in a company that is far away from its core business of selling hipster clothes to the college set. The company recently bought a pizza chain called Pizzeria Vetri, saying that it saw big opportunity to expand the chain in a moment of strong spending on casual dining.”

    Wtf? Yes, let me use my depressed stock to buy the inflated stock of a hot property in a business I know nothing about. #sellnow.

  55. “Well, I sent my four kids to college on unsecured credit, quite a bit of it on credit cards that back in the day offered teaser rates and then disqualified you by slow processing in th he days before electronic banking (the class action suits never paid out anything meaningful). I started the pay down process by balance transfers for lower rates and borrowing enough from the meager 401k to pay off one high interest card and then pay my account back over a year, rinse repeat. I did fund rerirement accounts, but i was in an still overall negative asset position. I had 85K of unsecured debt at 50. By 54 I had paid it all off. I wasn’t willing to get married until I was debt free.

    I don’t advise this life plan, but sometimes you have to bet on yourself”

    Meme- you continually astonish me, I want to be you when I grow up

  56. Something for all of us to pass along to our teen/college kids:

    Chipotle (CMG) — The company announced that it will give a free soda drink or iced tea to all high school and college students with the purchase of an entrée during the month of September.

  57. I got my first credit card when I was close to college graduation, I never would have charged anything I could not afford to pay off the next statement

  58. MM,
    DH gives his students advice on job interview attire. I agree with Rhett that asking students to consider getting credit cards might be part of your role in helping them transition to the professional world. Their parents’ financial situation should be irrelevant, unless they can’t get cards without parental cosign.

  59. the first time I had a balance on CC was about a year after we go married we went to Gatlinburg, couldn’t pay off a few hundred on the card, but we paid it the following month

    we did use 0% CC to help with business financing

    as Meme said

    ‘but sometimes you have to bet on yourself”

  60. Are millennials really in less debt that GenX or just less CC debt? What about all the articles bemoaning all the student loan debt they supposedly have? Does it really matter if they use CC less if they still have the same or higher debt load? I guess student loans are usually a lower interest rate.

    Both DH & I overused credit cards & carried large balances well into our 20’s. Because charging things we wanted was more fun than being responsible. Not Totebag at all. I won’t even qualify it with “we paid it off when we got our first job” or “it was for a once-in-a-lifetime vacation”. It wasn’t – we were just having fun & living beyond our means. A lot of it was blown on really stupid sh*t. When we met in our late 20’s, our combined CC debt was somewhere in the $15K range. We together decided it was time to grow up & start being more responsible in order to do things like save for a wedding, buy a house, etc. So we changed together. I really think that shared experience has been good for our marriage and ultimately our finances. Although I do sometimes bemoan the fact that I overshopped/overspent when I was 24 and it could be worth X today, I mostly think it turned out okay even though we weren’t doing all the right things earlier.

  61. I think there is a huge difference between discussing professional attire (jeans and IT logo Tshirts for our majors?) and telling them they should take on debt.

  62. telling them they should take on debt.

    You’re teaching them how things work in the adult professional world.

  63. my business professors told us to get a credit card, charge a minimal amount, maybe just use for gas, and pay monthly

  64. DH and myself didn’t have any family around to advise us on financial products – we were on our own. For instance, as a student I went shopping and my debit card was stolen. I immediately went to the bank and somehow I knew that I had to point out my normal spending pattern from larger fraudulent purchases further from my college.
    My point is that although I can impart the knowledge I have to my kids, at some point they have to figure it all out on their own.

  65. I agree with MM. It is unethical for a job or a prof to tell/ask/encourage students/employees to get a credit card. It’s not the position of the job (as boss or HR) or prof to counsel that person on credit management either.

    It has to be done though and it’s obviously not being done at home. I don’t know the solution. Unless it’s a mandatory course in college or HS or both. But it shouldn’t come from a trusted advisor college level, or a boss at the professional level.

  66. I always find it funny which kids really pick up lessons on money from their parents. My parents are really terrible examples, but yet my sisters and I are pretty responsible with money (and same with DH really). I had a close friend from college who was from a very affluent, but extremely frugal family in NJ (kids all went to private colleges, but the mom was reusing Lipton tea bags and had holes in her socks). My friend was just an over spender and I have very vivid memories about going to Walmart with her to buy makeup and her whipping out her credit card and saying “if this one is declined, I can use this credit card instead”. She’s cleaned up her act now that she’s married with kids but I think she was honestly rebelling against the super frugalness of her parents.

  67. “My friend was just an over spender and I have very vivid memories about going to Walmart with her to buy makeup and her whipping out her credit card and saying “if this one is declined, I can use this credit card instead”. She’s cleaned up her act now that she’s married with kids but I think she was honestly rebelling against the super frugalness of her parents.”

    I should add to my post above. DH & I both have very frugal parents. My parents lectured me relentlessly about being responsible with my money. I do think part of why I started spending so freely in college & beyond was a response to that. My tendency is to be a spender anyway – now that I’m older, this is something that I have to work at keeping in check more than something that is natural for me. I think that’s why I sometimes like to read MMM – because it’s a reminder that no, I don’t NEED another pair of jeans or whatever.

  68. But it shouldn’t come from a trusted advisor college level, or a boss at the professional level.

    Why not? It what way is it unethical? At the orientation at my first real job they had an Amex application in the welcome paperwork along with the health, 401k etc. information. You had to fill it out as part of the onboarding process. How would you prefer they handle it?

  69. It’s not taking on debt, but rather making sensible arrangements to be able to incur expenses upfront that will be fully reimbursed by the college. students who are smart enough T put together a research presentation should be expected to manage a credit card without going into debt.
    Perhaps the university has an arrangement with a credit card company for situations like this one.

  70. I think it blurs the lines between professional and personal. My having a credit card or using a credit card is in no way my HR department’s business. Nor my college advisor’s. Nor my grad school advisor’s.

    It sounds like it was your company policy to do that. And one that is probably spelled out in the handbook. That’s a whole different story. It is not in the college’s handbook (student, faculty, or otherwise) to hand out credit card applications. In fact, I think some of the latest credit card laws were to prevent what could be seen as preying on college students who were likely to rack up debt.

    I also don’t agree with the company “forcing” (or strongly encouraging you) to fill out paperwork that amounts to taking on debt, regardless if it was in their policy to do so. That application sets the employee up, potentially, for a lifetime of hurt. Now if the Amex application was so that you received a company credit card, paid for by the company to be used for company business, that’s different – that’s not personal debt (though it may count against your personal credit score… never having a company card, I don’t know). Not all companies have that.

  71. “And, unless a job ad specifies the need for a card or a car, the company cannot ask the employee to get one.”

    But the company can decide not to bring someone in for an interview if that person doesn’t have a credit card and thus can’t rent a car or front the money to cover the trip.

  72. Between graduation and starting my job, I took about two months off and mostly just hung out at home with my parents, helping them with their home improvement/repair/cleanup projects. It was the first time I’d had that much time with them since the summer after freshman year, and I never had that much time with them since.

    I have absolutely no regrets about doing that.

    BTW, I had virtually no expenses during that time. During that time, I only used my credit card for one job interview trip.

  73. In the words of Steve Jobs, Oh wow.

    I just realized that after this year, DW and I may never have extended time with DS again. He’ll probably go to school somewhere on the continent, and quite possibly will spend his summers on internships, doing research, or in study abroad programs.

    I guess I really hope he takes a grad school application year and spends it at home.

  74. I’ve mentioned before my regret to not travel after either HS and/or college graduation

  75. A few companies I worked at wouldn’t issue credit cards to junior employees who had to take only occasional work trips. Usually these were a drive to another location and a day trip. They would reimburse you cost per mile driven, meals, gas etc. When air tickets or hotels were involved these would be prebooked for you but meals etc. would be reimbursed later.

  76. Wow, Finn. That’s a big one.

    Strangely, I am discovering start of sophomore year to be weirder than freshman — and I realized it’s because that’s when I started at the same school. Makes me feel *much* older, and the remaining time so much shorter.

  77. OT: There are still a number of companies that expect you to cover business expenses, and they will reimburse you for them later. It sucks when you’re young and have no money, but it’s a fact of life, and so better to learn that sooner rather than later — i.e., build up enough in savings to cover a few months of business expenses, because you can’t assume that the reimbursement will come through before the CC bill does.

  78. so that you received a company credit card, paid for by the company to be used for company business, that’s different – that’s not personal debt

    That ‘s not very common. In most cases, if you have a “company card” the card is your responsibility and is issued based on your credit and you pay it out of your account when your expense report is paid.

  79. ITA with Scarlett 2:08.

    I remember my senior project advisor taking a few minutes during one of our meetings, as I approached graduation, to make sure I had a basic understanding of mutual funds and employee stock purchase plans.

  80. “In most cases, if you have a “company card” the card is your responsibility and is issued based on your credit and you pay it out of your account when your expense report is paid.”

    The company cards I had typically also came along with company contracted travel agencies, and travel arranged by them, e.g., air, hotel, car, would be billed to the company card, but upon approval of the trip report, reimbursement for those items would be made directly to the CC company.

    In one case, we’d also put things like meals and gas on the company card, and include that in the expense report.

    So as long as the card was only used for company travel, we’d never have to pay the CC company ourselves.

  81. “build up enough in savings to cover a few months of business expenses, because you can’t assume that the reimbursement will come through before the CC bill does.”

    Also build up some money to cover startup expenses, like rental deposit and first month’s rent.

    That’s when it really helps to be willing to do things to sleep in a sleeping bag on the floor for a few months, i.e., continue to live like a struggling college student, until enough money can be saved from paychecks to facilitate purchases like furniture without taking on debt.

  82. That’s when it really helps to be willing to do things to sleep in a sleeping bag on the floor for a few months, i.e., continue to live like a struggling college student, until enough money can be saved from paychecks to facilitate purchases like furniture without taking on debt.

    Considering that almost every furniture store offers 0% for 5 years and the value of a good night sleep when you’re working your first professional job – that seems like extraordinary terrible advice.

  83. I truly think that all high schools should require a semester course in basic finance and personal finance for graduation.

  84. “That’s when it really helps to be willing to do things to sleep in a sleeping bag on the floor for a few months”

    Or hand-me-downs. My whole college apartment was outfitted by (a) my childhood bedroom furniture, and (b) cast-offs from my dad’s/friend’s attics. When I got my first real job, I “upgraded” with some Ikea bookshelves ($39) and a Sears sale sofa ($349).

    You don’t need to buy a whole brand new suite of furniture to get 8 hrs sleep.

  85. “…I may never have extended time with DS again.”

    Yeah, this was me a few years ago in the really big picture sense. I realized we’d have zero kids in the house regularly 4 years from then. What it really changed for me was what I cared enough to get angry about, and since then I’ve basically taken the approach of “life’s too short to get worked up about piddly things like that (you know, all the frustrating things kids do).” Doesn’t mean I don’t care, it means I take a different approach as in “will this really matter tomorrow/next week/next month/next year/ in a hundred years?”

    So now, we’ve got one more year with DS3 in the house. He’s really loud, talking, putting things away in the kitchen, etc. Just loud, really. DW says yesterday “He’s so damn loud.” Me: “You’ll miss that starting a year from now.”

    Smaller picture, when I helped DS1 into his apartment 3 months ago, he had to go to work before I had had a chance to shower up before leaving to drive home at the end of the weekend. So I got ready to leave and decided to write him a “congratulations on this next step in your life” note. It was really hard. I am happy for him, truly, but it hit me that this was it; he’d moved out. Not that he’d really been “at home” much for the preceding 9 months, but this was so much more definitive.

    [Finn, I full realize the geography makes it much different for you…I can decide to drive and see him anytime I want and be there in a few hours; you not so much.]

    Passages. And I remind myself of the goal: raise good adults so they, too, can contribute something to this world.

  86. You don’t need to buy a whole brand new suite of furniture to get 8 hrs sleep.

    Right, but you should at least have a mattress on the floor, borrowed or bought.

  87. “Right, but you should at least have a mattress on the floor, borrowed or bought.”

    Totally.

  88. “My first tv stand was a moving box wrapped in a white sheet.”

    Ooohhh, awesome Friday topic: name your bad make-do furniture!

    My mom’s desk was two big doors propped in an L shape across 3-4 file cabinets. Even better: it was wrapped in like 1968 yellow/orange flower contact paper, and the file cabinets were mustard yellow. She finally upgraded when she discovered we were storing a big generic corner desk set down in our basement because it didn’t fit in our current office (yes, this is within the past decade, approximately 40 years into her teaching career). She agreed to take the desk as a “loan” from us.

    I also grew up with the cinder-blocks-and-plywood shelves and the coffee tables from those giant spools they used to use for electrical wire, covered with wine bottle labels and varnished.

    I, for one, was delighted when Ikea moved into town. There are some hand-me-downs that are just better, you know, not.

  89. the coffee tables from those giant spools they used to use for electrical wire

    We had one of those on our lanai.

  90. “Right, but you should at least have a mattress on the floor, borrowed or bought.”

    Do they still make futons?

  91. And, while not exactly totebaggy (or generally located in neighborhoods where totebaggers live) there are Aaron’s Rents and Rent-A-Center stores for a reason. When DW & I started out we rented a couch, 2 dressers and a fridge from a place like that. Soon enough we decided to take advantage of Levitz’ (remember them?) 6 months same as cash offer and bought a decent enough couch and some functional bedroom stuff. The fridge we actually ended up buying thru renting (very bad deal btw) since we didn’t want to buy a fridge when we first moved into our apartment, not wanting to be stuck with something if we moved soon. Typically those rental contracts let you out whenever you want out and there’s no minimum.

  92. Since I never had a college “apartment,” or any way to acquire my own furniture, and since I graduated with a steady job in a low interest-rate environment, I saw absolutely nothing wrong with taking a road trip immediately after exams (and before graduation), finding an apartment to rent, and then going to Rooms to Go to furnish it with 18-month no-interest financing. You save a lot when you buy the whole room. :)

    I even brought the little brochure from the rental office that showed the layout of my apartment, and I handed it to the sales lady saying that I needed to fill up this space.

  93. I agree about the finance thing in HS. It was taught in 6th grade!!! in our district. I think it is nice that DD knows who to write a paper check, and create a simple household budget, but she doesn’t really have the context for this stuff at 11/12.

    She is learning via gift cards how to make choices and spend money using “cards”. It is an interesting process to see her choices, and to see that she has picked up some of my thrifty habits. She tried to find an online coupon for a purchase when traveling with camp, and gives our rewards card number at CVS for discounts.

  94. When my husband and I were engaged and then married he worked for a large company in sales.
    He used his personal credit card for entertaining clients and put in for reimbursement. I could not understand why a large company expected their employees to float the money on their cc and have to pay the bill before their reimbursement came through. In 1974 he had a bill of $1800 from the Knife and Fork in AC – can’t remember if that included the tip. That was a huge amount of money for a junior salesman.

  95. @Milo: that was DH’s approach, too. When we married, I inherited several rooms of lovely matching suites of oak-and-brass furniture from American Home Furniture. :-)

    I still haven’t manage to get rid of all of that crap. . . .

  96. My first credit card wasn’t really mine, but a card in my name on my parent’s account. They gave it to me when I first started driving in case of an emergency for which I didn’t have enough cash – they were thinking tow truck or unexpected breakdown. However, they always told me that unless you are in dire straights, you pay your bill off every month.

    By the end of college/grad school, I had a few store cards and a credit card through the bank I banked at. I carried a little debt for about 6 months right after graduating. The need for (1) business attire when that really meant suits and heels for women, (2) moving expenses – 1st month’s rent, deposits, cost to move furniture, and (3) a car repair was needed too.

    The only other time I carried a balance was when I moved out when going through a divorce. It was really a timing issue. I didn’t want to break a CD, which was paying a decent price at the time. The CC interest was less than breaking the CD.

    My DD#1 (16) now has a CC with her name on my account. She took it overseas and as she is driving now, it is in case of an emergency. Her bank account is not very flush, so a few hundred on a debit card on the wrong day could be problematic, whether for a car repair or an ER copay visit.

    At my old office, we had issues with people who had bad enough credit that they could not be issued a company credit card. It was a nightmare to get them advances for travel. Even some of the young people who got them didn’t understand they were for work only and would charge personal items. Even though they paid the card, they would be reprimanded.

    I use a cash back card, pay the balance monthly and it is basically free money as it accrues. I think it is prudent to be prepared with some level of credit to handle an emergency and/or a timing issue for cash flow. It is also foolish to think that you can charge things you don’t have the money for or can’t see how you can pay for the whole balance in a short time frame.

  97. At a previous company we only traveled for conferences, basically perks. If you required prepayment of expenses, then you only got invited to go to a conference once due to the nightmare of getting prepayments.

  98. “I still haven’t manage to get rid of all of that crap. . . .”

    Almost all my furniture for my first apartments during the first few years out of college was rented, and I bought some of it after the leasing period ended. That ugly tan tweed couch and chair just refused to die; it never showed dirt and was more durable than an army tank. The laminate end tables were also pretty indestructible.

    “At my old office, we had issues with people who had bad enough credit that they could not be issued a company credit card.”

    You reminded me of my experience working with a team of traveling wholesalers who made very good money. But there were always some who had horrible credit histories and needed special treatment and special company cash arrangements so they could manage their rather lavish client entertainment activities.

  99. My company, too, makes you charge your travel expenses and reimburses you after the fact.

  100. I also don’t understand why advising college students to have a credit card would be unethical. Having a credit card for basic things like on-line purchases, airline tickets, etc. seems like basic Adulting to me. Which in turn makes me agree with Milo – failure to get a credit card in place seems like more of an extension of adolescence than some well thought out statement against incurring debt.

  101. Even some of the young people who got them didn’t understand they were for work only and would charge personal items. Even though they paid the card, they would be reprimanded.

    That really is a carry-over of the old rules from the cards where the employer paid the bills to the new type where the employee is personally responsible for paying the card (and is putting his / her own credit on the line). It’s not reasonable, imo, to make the employee take all the personal responsibility but have none of the personal benefit from carrying a credit card.

  102. Hijack..I need advice.

    Our long time cleaning lady is leaving us. Mostly age-related so she’s not really able to do that kind of work anymore. She still has a ‘day job’, so she’s just giving up he under-the-table side gig(s). From the way DW talks it’s definitely not just us she cleans for.

    Anyway, as I said, long time. As she said to DW when she gave her notice, I’ve seen your kids grow up, I expected to be here longer. Probably at least 15 years. So we (DW more than I, but anyway) want to do something for her. Additional cash or simply a (big) gift card to some coffee casual place seems a bit crass. She doesn’t seem like the fancy restaurant type, but maybe a dinner at a nicer place we like that she’d never go to would be appreciated?

    Anybody been thru this? All ideas are welcome.

  103. It is interesting for me to see the different feelings about requiring an employee to have to complete a cc application and obtain a specific cc. This happened to me almost every time I left a bank because each bank had a different requirement. Amex corporate, Chase, even Diners Club. If I did not obtain the cc, and use that card – I could not get reimbursed. I was never allowed to use a personal card for business travel on a plane or rental car. I know it is the same at DH company about corporate Amex.

    I worked for at least six different financial firms, and I don’t think there was even one firm that allowed me to use a personal credit card for travel or expenses. Corporate travel always had to be on the corporate card. One benefit was that a rental car company would rent to me as an under 25 with a corporate card.

  104. I think a gift is a really nice idea, but I would give cash or a Visa gift card. I think it would be appreciated even though it might feel cold.

  105. @ Fred. Cash. With a card that says we appreciate everything you’ve done for us, please treat yourself to something special in your first step to retirement.

  106. She doesn’t seem like the fancy restaurant type, but maybe a dinner at a nicer place we like that she’d never go to would be appreciated?

    I’m 110% sure she’d prefer the cash.

  107. ok, so I’ll suggest cash. (pending other ideas…). Now, how much? If a Christmas gift/tip = 1x to 1.5x a week’s price then how much for this?

  108. Lauren,

    Were these cards under your credit paid by you or under the company paid by the company? I recall that when Lehman went bankrupt the employees who traveled had their unpaid expense reports convert to unsecured claims on the bankruptcy estate.

  109. Fred – Cash, with flowers or a picture of the family (or her with the family) for old times sake?

  110. . I could not understand why a large company expected their employees to float the money on their cc and have to pay the bill before their reimbursement came through.

    We were told it was because giving new hires a company paid card was an HR and administrative nightmare. It seems today you can tie a corporate Amex account into your expense reporting system so the statements auto reconcile. But, back in the day ,that reconciliation was an entirely manual process.

  111. At my workplace now, all travel, hotel and transpiration is to be booked on a company travel site. You have to get a company credit card and put all work expenses on that. They are quite strict about this. No personal expense on the corporate card. Usually after a trip, you check to make sure all the charges are correct and electronically submit it. The CC is paid automatically. Very efficient. You get to keep the miles if you have a lot of air travel.

    I wanted to say that for a young person, not driving can be a problem. When, I was a junior employee one of my employers moved from downtown to the suburbs. There was a shuttle from the old location to the new location for a couple of months but after that you had to make your own arrangements. I was a late driver but I wished I had overcome my nervousness and driven earlier.

  112. I think a credit card is a tool of modern convenience necessary for adult living. I think treating young adults like they can’t be trusted with it is really babying them. It feels a little like the argument that we shouldn’t teach birth control because that would “promote” bad behavior.

  113. Fred, agreed, cash and card with 2x Xmas tip.

    My firm *just* switched to company cards – the statement comes right in to the office and accounting gets it paid. This was like 6 months ago – otherwise you had to charge travel etc. on your own card and get reimbursed. (We don’t travel far, usually, but there is a lot of travel to different counties for those of us that go to court.)

  114. My one experience with a corporate cc was that I still had to pay the balance myself and then submit the receipts for reimbursement. We also had issues with the issuer (I think it was First Tennessee) having a very short period to pay and being slow with processing payments, so if you didn’t mail the payment the day you got the bill (and sometimes even if you did), it would be late and the bosses would have to talk to you about not paying your bill on-time. None of us ever understood what the point of having to use a company card was under those conditions.

  115. This goes back to a previous discussion we had, about students with so-so GPAs looking for jobs. I have been getting emails all day from a student who graduated in the spring, with a CS degree and minor in healthcare IT. He has been looking all summer with no success. He did do an internship, doing fairly grunt level work so I don’t know how much it helps him. And he has a 2.57 GPA, with Ds in all his programming courses, and mixed B’s and C’s in the healthcare and businessy type courses. I suspect he is pretty clueless on interviews, and he has gotten nowhere. I am at a loss to tell him what to do.

  116. “Even some of the young people who got them didn’t understand they were for work only and would charge personal items. ”

    There was a very high-profile case locally in which an elected official was caught doing this.

    It was very unfortunate because he was something extremely rare: a very promising politician.

  117. My take on what Mooshi was saying was a little different. She can correct me if I am off base.

    One of the hardest thing for lower SES individuals or some children of immigrants to do is to navigate successfully the transition to the routines and expectation of middle class or more assimilated society. Let’s just say that the college student who lives at home passes the zip code test for a card. His parents’ info may be required to get it, even if it he doesn’t need a formal co signer. Maybe his parents work under the table. Maybe even though he is a legal resident one of them is not. But perhaps he can get one because the college has some sort of arrangement or he has a decent school time job or his parents can fill out the forms. Will he know enough to use it responsibly and understand interest and the requirements to pay it timely? Let’s say he does all that , but his grandmother needs something at the pharmacy or grocery store and his new card means that she doesn’t have to wait for her monthly check – she’ll pay him back. But before she does pay him back, his cousin gets in trouble again and she is a soft touch, so no money for the good student. And then when it blows up, there is no middle class parent to give a lecture, pay off the card and ask for 10 dollars a month in “repayment”. The kid’s credit is simply destroyed, and credit history is a major factor in job screening.

  118. Finn, the p-cards are paid by the government employer, not by the employee, so it’s a different situation from an employee charging personal items on a card that the employee himself pays the bills for. In the first, your personal charges are effectively an unapproved loan from your employer even if you pay it back; in the second, your personal charges have no effect on your employer and in fact your business charges may end up being a loan from you to the employer if the reimbursement isn’t speedy.

  119. At one point we had to have them no matter how much/little we traveled. Then they got it down to “regular” travellers. For awhile I was one and we had to submit the travel voucher for payment, hope it came before the bill for the card as we had to pay it before the due date. Yes, and back in the day when paying by mail was the only option. I will say that after a big wig had to pay out of pocket before being reimbursed for a costly trip, all travel vouchers were turned around in 5 days from when you turned it in (previously was 10 to 15 days). Now, delaying turning it in was your problem!

  120. @ rhett, the situation changed with the credit cards as described by a couple of people. I always had to complete a credit card app, and my name and the company name would be on the card. This was true with corporate Amex, and corporate Chase. I had to use corporate Amex at 4 of the 6 banks, and that was how I started to accumulate so many points with Amex.

    During the earlier years, my credit card bills were paid directly by the bank. I would just have to wait for any cash I spent on tips or small meals to be reimbursed back to my after I filed a report. At some point point, the policy changed and I would receive a bill in the mail at work. The cards were always billed at the corporate address, and I would have to file an expense report to get the bill paid. It was actually a good thing for the banks because it forced me to file my T & E report as quickly as possible to get reimbursed. As some people mentioned, eventually the book your own travel web sites were the norm to book travel instead of travel agents. It became very messy at that point because those airline tickets could be reimbursed right away, but everything else had to be submitted after the expense was actually incurred.

    I am pretty sure that I remember seeing my corporate cards on my personal credit report. It was listed with my name and the name of the employer.

  121. Meme excellent points. Then I would say even more so these students need a mentor who can point out all these pitfalls because those will never go away but as his/her paycheck increases so will the expectations of those in his/her life. To have responsible people around these students take the attitude that they shouldn’t point out how the “real” world works because they don’t want to be “involved” is sad. I wouldn’t be where I am today if it weren’t for professors/bosses dispensing great advice and pointing out expectations and possible areas of trouble. T

    One of the best programs at a hospital I worked at was a manager who made connections in the lower SES sections of our city and got those kids entry level jobs, taught them how to dress, conduct themselves and what was expected at a job. He helped them navigate going to either programs at night or getting technical certificates and launching them into viable careers in other departments within the system thus improving their lives and opening the entry level position back up to a new student. By then end of his 30 year tenure, he did this for close to 100 people and trained his replacement to do the same.

    Mooshi, your school granted this student a degree so has said to him and those in the world that he is a competent computer science major – if that is not true then the fault is the university’s. I guess the answer depends on how much you want to get involved. You could sit him down and tell him exactly why you think he is not getting the job or you could try going through mock interviews with him and point out areas of growth. Since he has a healthcare minor, you could point him towards a “Help Desk” at either a hospital system that has some self-developed software or towards implementation or support at a healthcare vendor which would get his foot in the door to “prove” himself. Or if you don’t want to get that involved, you could point him to Career Services at your school and stop answering his emails.

  122. Moxie, DS sleeps on a futon purchased on sale at Odd Lots for $80. He likes it. His Pottery Barn bedding probably cost the same amount. He likes that too.

    Mooshi, your university must have a few credit cards, if nothing else than at least for gas when someone takes a university Van. If you can’t convince whoever holds the cards to let your students use them, I would think that the presentations bring enough good press to the university that higher-ups would want to make sure they can use the money that’s been allowed to them. Creative thinking would be to put the travel grants in a debit card, to be backed up with receipts, but that might be more than the uni will do.

    Fred, your “don’t sweat the small stuff, they’re almost gone” sounds a lot like my approach to parenting during the first few years. Sure, it was hard, but I’d waited so long for him, was just glad he was finally here! It sounds like you’re ok with the cash now. If it still feels weird, you could think over what you’ve heard her talk about that she’d like for herself or her kids that you take for granted, then ask her if she’d like you to pay for a week of camp or weekend getaway or season tickets to the theater or whatever.

  123. Rhett, that is not a job in his field. He has applied at MSKCC, for jobs actually in his field, with no luck. He knows about HIPAA compliance and radiology workflow from his internship, but I doubt he has the office skills for an administative assitant position.

  124. I didn’t have a card in college because I listened to too much Dave Ramsey nonsense. I was an authorized user on my parents’ card for emergencies, but apparently that doesn’t build your credit score. I immediately applied for one when I graduated so I would have it for business expenses, but my credit limit was only $500, despite a respectable new grad salary and easily 5 figures of cash in my bank account. A couple months into the new job I was asked to take a business trip and use my own card to book several thousand in hotels and flights, and I had to tell my boss that my credit limit was too low, which was quite embarrassing. My boss had a company card and he put it on that, and by the next trip my limit had been increased. But I felt like it made me look immature or irresponsible or something. I make sure I tell all college student relatives this story and encourage them to get a card now, and use it for one small thing per month, like a trip to the gas station. And of course set up auto pay.

  125. “Mooshi, your school granted this student a degree so has said to him and those in the world that he is a competent computer science major – if that is not true then the fault is the university’s.”

    I strongly agree with this. Degrees that don’t mean anything are a big part of the problem in this country with spiraling higher education costs.

  126. MM brings up something I am hearing from some parents around me that concerns me – College grades don’t really matter it is that you got the diploma. I get that when (1) it has been a number of years since you graduated and you have had a few jobs under your belt and/or (2) when you are already working somewhere and you need the degree to move up – where you already know you are a “good” employee.

    But, it seems that when you are a newly minted graduate, your grades matter to get you in to talk about what you know. Then, even if you have good grades, you have to be able to answer questions that show you understand and/or can apply what you learned.

    My first job was sort of an exception – They took a wide range of majors, but they wanted to be able to see that you could reason your way out of a paper bag, could be curious enough to find 20 questions to ask about a topic they gave you, and could support a position with a logical rather than purely emotional argument.

  127. Rhett, that is not a job in his field.

    According to you and his grades, he’s not qualified for for a job in his field. That said, could he get a night shift help desk job and work his way up from there?

    but I doubt he has the office skills for an administative assitant position.

    I assume you don’t mean MS Office. Is he just spacey and absent minded?

  128. Rhett – I do believe they matter. My DD#1 also believes they matter. What concerns me is that other parents and even some teachers around us say they don’t matter as long as they are passing and you graduate. I agree that now, almost 30 years out of college, the only reason HR ever looks at my transcript is to verify that I do indeed have a degree. As, whatever I learned 30 years ago is pretty dated and a lot of new things have come along. But, when I graduated those grades was what the employer had to use before the interview to make a judgment about me.

  129. DH did internal support for a credit card company after graduating with a degree in Computer Engineering during a recession. He has not quite risen to his level of incompetence, but he has worked through a succession of jobs which require engineering and specialized computer knowledge. However, finding that job certainly didn’t happen straight out of fancy engineering school.

    I guess my point is that you apply for the job that you can get, learn a few things, and work your way up (or into a new organization). If MMs student can’t get the jobs he applies for, he needs to apply for different kinds of jobs.

  130. And of course set up auto pay.

    I completely disagree. Auto pay makes it very difficult to resolve problems because they already have your money. It can also be difficult to get it turned off.

  131. “What concerns me is that other parents and even some teachers around us say they don’t matter as long as they are passing and you graduate. ”

    All the better for our kids that do put in the effort to get good grades.

  132. Austin,

    They matter, obviously. But, if you’re happy with house #2 then it’s not that big a deal. I think totebagers have a tendency to wildly overestimate what it takes to end up in house #2.

  133. “And of course set up auto pay.”

    I am going to suggest to DS that he set up direct payments from his bank account to his CC account, and at least initially get into the habit of scheduling a payment to his CC account each time he uses his CC. Thiswould give him visibility to make sure he’s not spending money he doesn’t have, and would also prevent him from missing payments.

  134. Rhett, I agree you can get house #2 with much less than you might think. Our house is closer to that cost than house #1. Of course, for us it means we have totebaggy values – (1) socking away retirement funds, (2) vacation/experience spending, (3) private school, and (4) being debt-free.

  135. I had a store credit card when I was in college. When I was short of cash, I would go make a purchase at one location, then drive to the other location and do a return with no receipt, and they would give me the refund in cash. I would pay it off when the bill came in. They changed that procedure after a couple of years, but it helped me with my cash flow issues as an undergrad.

    My kids debit accounts are linked to mine, so I can easily transfer them cash when needed for emergencies, so I don’t worry too much about them having credit cards. I did get the older one a card in her name on my account when she started traveling without us so that she wouldn’t have issues checking into hotels.

    In case my preceding example was not a clue, I was careless with credit in my early years. A car accident right before I got married demonstrated why it is a good idea to have a lot of available credit on your card, and not run it up on bar tabs and dinners out. So – lesson learned and I reformed (plus I also started my career, which helped on the income side).

  136. “Mooshi, your school granted this student a degree so has said to him and those in the world that he is a competent computer science major – if that is not true then the fault is the university’s. ”

    Yes, on an intellectual basis I agree. But you have to understand – if we enforced this, we would graduate only about half the studenst we graduate now. And even now we have an appalling 4 year completion rate. And it isn’t just us – it is every university and college below the top tier, and I hate to say it, even some in the top tier (I worked with a kid who graduated with a C average from Columbia in CS, and he knew little more than our C average students).
    The pressure to graduate students in 4 years, no matter how mimimally qualified, is intense and getting worse. It comes from both Democrats (equal access!) and Republicans (efficiency! make those profs work harder!). Someone I know pointed out today that at his school (USC), Pell eligible students come in about 2 tro 3 years behind other students, yet they only have 4 years to make them all equal.
    This is what happens when you move university governance away from faculty and give it to administrators and state legislatures.

  137. Meme’s comment on Mooshi’s dilemma resonated. It’s hard to follow (upper?)middle class financial norms when you are the best financial resource for your relatives and they’ve done nothing that justifies ignoring their needs.

    There are many people from situations more difficult than mine but one of my criteria for my first apartment after moving for my first engineering job was “Lease does not require a consignor.” I wanted /needed to be as independent as possible. And at 21, I slept just fine in a sleeping bag for a month till my first paycheck arrived.

  138. “Pell eligible students come in about 2 tro 3 years behind other students, yet they only have 4 years to make them all equal. ”

    Which raises the question, discussed here previously, of whether colleges are doing any favors for such kids that they bring in for the sake of diversity, both ethnic/racial as well as SES. Are those kids pawns brought in to make the school look better (or at least help their admissions department look better)?

    Of course, when a Columbia grad doesn’t look any better than a marginal grad from MM’s school, that doesn’t make Columbia look very good.

  139. College students come in all stripes. I recall my room mate spending her money on cigarettes and booze but then she had no gas money to drive home. She didn’t want to ask her parents again, so she asked me (I had a little bit of money from my part time job) but that was it. So, I gave her $20 which I wasn’t repaid. Those days I didn’t have much spare cash and didn’t have parents, relatives or friends to ask for cash if I needed money urgently. Wire transfers took a couple of days, my parents wired college tuition, board and a little bit more each semester but that was it.

  140. Meme and HM – short stories of Rabindranath Tagore are on Netflix. I wish my literature classes had taught his works but none were covered. Such wasted opportunity ! Though I don’t know how I would have felt if I had to answer exam essay questions (causing cramps in my hand), analyze, do homework – would have killed the joy of reading his stories.

  141. Mooshi,

    By C students I assume you mean they would never be able to do your parsing billing files job? I get that they won’t be working on Google’s self driving car software anytime soon. But, there is (at least it seems to me) to be a Crystal Reports writer/billing file parsing middle ground. Or, are these kids not even bright enough to do that?

  142. Yes, Rhett, a student with C’s in programming classes very likely can’t write the code to parse a file. They got the C *because* they couldn’t do tasks like that in their course.

    And while the problem is worsened by being underprepared, I do have enough colleagues at various liberal arts schools to know that a student who got C’s in their programming classes probably can’t do even basic programming tasks. I even saw it when I was a TA at a major R1 engineering school. The difference there was that students who got C’s in that first programming sequence weren’t allowed to continue.

    Is it like that in writing intensive courses? If you consistently get C’s in your writing courses, does it mean you really can’t write well, or is the grading squishier?

  143. Or, are these kids not even bright enough to do that?

    I’m not familiar with the job duties you describe, but I’m inferring that a competent high school graduate could handle them.  This is certainly the case with many jobs now being filled by college graduates, where employers are using a college degree as a basic screening tool.  No doubt there has been a credential inflation, with a college degree having become an expensive and often meaningless entitlement.

    The pressure to graduate students in 4 years, no matter how mimimally qualified, is intense and getting worse. It comes from both Democrats (equal access!) and Republicans (efficiency! make those profs work harder!). Someone I know pointed out today that at his school (USC), Pell eligible students come in about 2 tro 3 years behind other students, yet they only have 4 years to make them all equal.

    The Obama administration pushed for efficiency a few years ago when it tried to implement a federal ranking system that would be used to determine if colleges were eligible for federal aid.  Unsurprisingly, this proposal was met with strong opposition by colleges and by members of both parties.  Too many beneficiaries from the present system apparently.  I’m not sure how to solve the current problem, but encouraging and having taxpayers pay for hordes of unqualified students to enroll in college is an important source of the problem.

  144. No, a high school graduate could not write a program to parse a file, unless he or she had taken a high school programming course, either the AP or something pretty close. They cover file parsing in the AP curriculum in fact.

  145. And in college, file parsing is a standard topic in the second semester programming course. You can’t do it until you know how to work with loops, if statements, simple I/O and probably arrays. That is the first semester.

  146. The Dumbing Down of College Curriculums

    There once was a time when employers could be reasonably certain that college graduates had a basic sense of the world and, as a minimum, could write a coherent business letter. That is simply no longer the case, as some academic leaders appear ready to admit.

    Harvard’s former president, Derek Bok, mildly broke ranks with the academic cheerleaders when he noted that, for all their many benefits, colleges and universities “accomplish far less for their students than they should.” Too many graduates, he admitted, leave school with the coveted and expensive credential “without being able to write well enough to satisfy employers … [or] reason clearly or perform competently in analyzing complex, nontechnical problems.”

    Bok noted that few undergraduates can understand or speak a foreign language; most never take courses in quantitative reasoning or acquire “the knowledge needed to be a reasonably informed citizen in a democracy.” Despite the massive spending on the infrastructure of higher education, he conceded, it was not at all clear that students actually learned any more than they did 50 years ago.

  147. Mooshi,

    In my experience no one ever writes a new parser, they just tweak an existing one. Is that what your curriculum teaches or are you talking about having them create something out of whole cloth?

  148. Definitely sad about Gene Wilder here. Don’t really have words to sum him up; he sort of resists any effort to 25-words-or-less him. I just hope some TV station will run a movie marathon this weekend so I can tape the ones I don’t own already.

    @Mooshi: A C student could put a sentence together. But they probably couldn’t put together a coherent argument with flow and any kind of logical analysis. I don’t know how that correlates.

  149. Rhett, software people write parsers all the time. JSON, XML, HL7, crazy flat file formats that some administrator dreamed up. If your group is parsing a lot of JSON, you are likely to start with one that already works, but you are going to need to change it all over because JSON is simply a formatting framework, and doesn’t specify the actual tags. And you can’t tweak a parser if you don’t understand how it works and if you have never written one yourself you don’t understand it. So yes, at college after college after college, and in AP too, students write parsers. So they can LEARN how they work. And if they can’t do it in their course, they don’t understand it well enough to tweak anything.

  150. Rhett – a lot of people at workplaces are afraid to tweak and fix to improve things. They don’t want to lookup things and teach themselves or ask if they don’t know. If it is not completely broken, people will use the inefficient limping version.

  151. So LFB, is it likely that a graduate who mainly had C’s in their writing courses could get hired into a job for which writing is important?

  152. “This is what happens when you move university governance away from faculty and give it to administrators and state legislatures.”

    On the contrary, it is the faculty who come up with nonsense majors such as gender studies, peace studies, queer studies, and the like, and the nonsense courses that become required when these programs are adopted. State legislatures aren’t dreaming this stuff up. It comes from marginal departments desperate to keep their numbers up by pandering to increasingly unprepared students.

  153. to increasingly unprepared students.

    Haven’t we agreed that students are more prepared than in the past?

  154. Consider that many college graduates leave with below a 3.0 GPA, and the vast majority of them are employed somewhere by age 25. And not living with their parents by then.

  155. Rhett, longtime faculty do not agree.

    They’ve been bitching and moaning since Socrates. I have serious doubts about the accuracy of those complaints.

  156. The top end of the distribution is very impressive, but I consistently hear from faculty even at our selective school that, apart from that top end, students cannot write. Notwithstanding their high SAT scores and inflated 4.0+ GPAs. Inability to write is usually an indicator of inability to think clearly. Check out the letters to the editor or comments on any student newspaper. Or read some college application essays by straight-A students with good test scores. DH was at a public university before we moved and he definitely noticed a decline over the 20 years.

  157. The Totebag kids are more prepared, but so many of kids are not prepared for college level work. The common core was supposed to improve preparedness, but I’m not sure if that’s happening. I’m a fan of the CC because I can see the results, but many of my neighbors have kids that can’t keep up with grade level math or reading. What happens to all of these co taught and over tutored kids when they college?

    Also, the majority of kids are not in a state like Mass with a solid public school system across the state. A lot of kids in the US don’t receive an adequate k -12 education to prepare them for college level classes.

  158. Mooshi – I can’t answer from a writing standpoint, but I can tell you that for accounting, if someone could not master the entry-level courses they would have a lot of difficulty moving on. If they continued, it would likely involve cheating. They could work at an entry-level job where you are instructed on what rote tasks to perform (and these used to not require a degree) but could not move above that level where they would encounter new or non-routine issues where someone would expect them to be able to answer the question as to what GAAP requires.

  159. A lot of kids in the US don’t receive an adequate k -12 education to prepare them for college level classes.

    And they did 20 years ago?

  160. I’m not sure if so many of these same kids would have been pushed to college 20 years ago.

  161. @MBT – I agree 100%.

    “Consider that many college graduates leave with below a 3.0 GPA, and the vast majority of them are employed somewhere by age 25. And not living with their parents by then.”

    Right – there are a lot of regular, average people between the Top 10% and the Bottom 10% of college grads. There are plenty of college grads who have a GPA maybe somewhere around 3.0 that have the basic skills to get hired and be relatively successful in an entry level job at a local/regional company. Learn more on the job, have decent communication/social skills, maybe even go back to a non-Top 10 business school and learn a little more on the technical side, and continue to progress to Rhett’s VP Finance at 5th 3rd Bank.

  162. I’m not sure if so many of these same kids would have been pushed to college 20 years ago.

    The percentage hasn’t really changed in 25 years .

  163. “I’m not sure if so many of these same kids would have been pushed to college 20 years ago.”

    Right, but isn’t that part of the degree as new credential problem too. 20 years ago, you didn’t need a 4-year Accounting degree to be an A/P clerk, but now you usually do. Same for other fields.

  164. Looking at that chart the percentage going on to college was even higher 20 years ago.

  165. The college prep curriculum was more than adequate 50 years ago, but college access was more limited in those days. 25 years ago when my kids went to school (in Massachusetts) there was still a high quality vocational track in many communities where college attendance was only 50% of the population, but the lower level non vocational path did not prepare kids for success in a 4 year college.

    And the worst faculty at perpetuating their disciplines are not the flavor of the decade identity studies, but the endowed chair old white European liberal arts – how many universities have multiple professors of classical languages and no students other than a few grad students churning through to keep feeding the machine.

  166. I think 20 years ago it wasn’t that different. You have to go back 40 or 50 years to get to the days when a diploma or an AA degree could get you into the workforce.

  167. “Looking at that chart the percentage going on to college was even higher 20 years ago.”

    That’s because your chart is looking at NEW high school graduates. What’s exploded in the past 20 years is the number of non-traditional college students.

  168. “So LFB, is it likely that a graduate who mainly had C’s in their writing courses could get hired into a job for which writing is important?”

    IMO, no. Except that so few people can write that standards are pretty ridiculously low to begin with. My Kelly Girl job involved working for a middle-management business person in a medium-sized company who literally could not write a basic, comprehensible letter; I spent an hour rewriting one one-page letter, because it took me that long to figure out what she was trying to say, and she edited it back to total gibberish. I mean, how was this lady employed in a role that required written interaction with anyone?

    I see it in my job, too, which is pretty writing-intensive. You have people coming in from highly-ranked law schools, and yet their idea of building an argument is to just list a bunch of facts, without being able to distinguish the ones that matter from the ones that don’t or explain why a certain fact is relevant. It goes beyond my various Ms. Grammar Twit pet peeves (e.g., “her and I”). As Scarlett says, the fundamental problem is that this inability to write really derives from an inability to think clearly or reason through an issue. Language is just a tool to get to the solution — but if you can’t reason your way to the solution, you’re never going to explain it well.

    I actually do believe kids are less prepared today for college, maybe than ever. They are definitely more prepared for the *workload* — we train them from kindergarten to sit for hours a night. But we are training them to regurgitate facts and fill bubbles and write a standardized BCR. No one is helping them learn to think and reason; no one demands that they work their way through an argument logically, or helps them learn to break their points down into sub-points.

    Anecdote: DD just started AP World History. She had 50 pp of (boring textbook) reading assigned by the 2nd class. And her teacher has told her that when she writes an essay, all he cares about is the substance; he doesn’t care about spelling, or transitions, or even complete sentences, as long as she dumps onto the paper the right points. WTF?? DD will probably do fine, assuming she gets through the reading without spacing out; she is awesome at memorizing irrelevant trivia. But I certainly expect a GT/AP-level HS kid to be able not just to remember important facts, but to put those facts together into a cogent structure to support a thesis.

  169. “I think 20 years ago it wasn’t that different. You have to go back 40 or 50 years to get to the days when a diploma or an AA degree could get you into the workforce.”

    Exactly! The mid to late 80’s is when the push came for more students to go to college. It also coincides with the prices raising dramatically and government backed loans. We are now in this cycle that you need a “degree” to do jobs that a hardworking student before could get “on the job” training. And now the student leaves school with debt, or wants the taxpayer to assume the debt, and without any true knowledge in the degree that s/he has been “given” because it certainly wasn’t earned! And what are schools spending all the money they are getting on? It isn’t on programs to make sure their graduates are well prepared!

  170. Scarlett, those gender studies programs are typically first championed by administrators, who then hire people in those fields. Administrators love the identity majors because they are CHEAP. The faculty are cheap, no labs are needed, no fancy equipment. New programs don’t happen without administrators to champion, and these days, to cook them up.

    At my school, adminstrators drive all the program decisions, and they get some really weird ideas. We have a couple of administrators who are really into drones and 3D printers, so we keep getting pressure to start a drone program. Um, yeah, so we will have a major where students fly little drones around and print plastic geegaws on 3D printers??? My 10 year old does that in summer camp.

  171. Meme is right about the fusty old guys who are hanging onto ancient programs for dear life. When they croak, though, the programs die. At many schools, there are no FT faculty left to teach languages – it is all outsourced.

  172. College is right for just about everyone, just not necessarily at 18yo.

    And for almost everyone, I believe it does not matter what college you get your bachelor’s from as long as the diplomas says “with Honors.”

  173. I believe it does not matter what college you get your bachelor’s from as long as the diplomas says “with Honors.”

    Then, by that logic, kids should attend the least rigorous school they can.

  174. The fusty old white guys aren’t paid very well. Few new endowed chairs in classics or philosophy because donors aren’t interested. And few majors. There are a LOT of kids majoring in communications or media studies. At our university, DH has sat through many presentations by faculty from dying departments trying to come up with new concentrations or minors that will involve Romance languages or art history or gender relations. They are all driven by faculty. It is obviously different at MM’s school

  175. “fly little drones around and print plastic geegaws on 3D printers??? My 10 year old does that in summer camp.”. So did saac at that age, and now he knows the stuff you said is first semester (except I’m not sure what I/O is)

    Scarlett, I agree that communications & several other business degrees are intellectually extremely light.

  176. “fly little drones around and print plastic geegaws on 3D printers???

    drones combined with remote sensing technology seems to be a growing field. I’ve a fair bit of applications and companies in the past few years promoting that technology.

  177. Cordelia, a few Remote Sensing programs are using drones, I think, but for the most part they seem to be a hobby that a lot of cartographers/Remote Sensing people enjoy.

  178. Personally, I think we have barely even scratched the surface on drones and 3D printing. I suspect that the “fun toys for geeks” appearance has allowed some of the very significant business uses to slide under the radar (as it were). I would not be at all averse to DS studying something in those fields (although he is currently focused on robots as the Coolest Thing Ever).

  179. Drone technology is certainly booming and useful. In terms of educational programs, however, it is really just a subtopic within robotics and remote sensing. That is typically a specialty within engineering programs, bringing together CS, EE, and mechanical engineering. The problem is, we don’t have an engineering program, and that isn’t what our administrators are thinking of at all. They keep mentioning students having fun with drones.

    I think drones are reasonable to discuss in business and law enforcement programs, but as one of many topics

  180. Rhett, for the vast majority of people, and especially for those who really don’t have college aspirations but are being pushed there by e.g. parents, that would actually work. It’s still not a given that a kid will earn a ‘with honors” distinction, but for many who adopt this strategy they’ll probably be at a place better suited to their needs/abilities than if they were to go to a HSS.

  181. short stories of Rabindranath Tagore are on Netflix

    I’ve had them on my queue but haven’t started watching yet.

  182. Mooshi, yes, engineering has been trying to take over remote sensing for years. Unfortunately for them, the thing that most people are interested in sensing remotely is the earth, and there is an entire discipline related to its study. http://www.physicalgeography.net/fundamentals/2e.html Physical geography depts know it’s a money-maker and are unlikely to give it up.

  183. I used to be bad with credit cards when I was in college. I blew them on whatever I wanted. I ended up with a small amount in my bank account by the time all was said and done. I now have 2 credit cards, only use them for items I need, and I end up paying them off at the end of the week to avoid that mistake again. I also use them to get rewards points, which gets converted into giftcards.

Comments are closed.