MONEY Shopping

The 6 Best Apps for Labor Day Shopping

The Level Money app can help you make sure you don't blow your budget.

Sales abound this holiday weekend. You'll improve your chances of nailing the best deal if you download these free apps and tools before you hit the stores.

Summer is about over, but don’t despair. Labor Day weekend means some of the best shopping deals of the year. And the right mobile apps and tools can show you shortcuts to the best sales and countless ways to streamline your shopping experience, making a good thing even better. Here are a few of our favorites.

PriceBlink

Think you’ve found the perfect Labor Day sale online? There may be a lower price out there, and PriceBlink can find it for you. Available as a free browser add-on for your iPad, PriceBlink scans more than 4,000 merchants to let you know if you’ve missed a better discount. To sweeten the deal, you’ll also automatically be alerted to any current coupons.

Smoopa

When you’re looking to compare prices from your iPhone or Android, Smoopa lets you know where to find the best sales. Browse or scan products, and if you’ve found the lowest price on an item, a green button will appear. If you see a yellow button you’re cautioned not to buy yet, and you’ll be directed to a better deal.

RedLaser

Before heading to the register, scan an item’s barcode from your smartphone with RedLaser to make sure the price isn’t lower elsewhere. This app knows which retailers are close by and compares prices at thousands of local and online stores. It also stores all your loyalty card information, so you won’t miss out on points. RedLaser is available for iPhone, Android, and Windows phones.

Aisle411

Tired of wasting time trying to find what you’re looking for in large, confusing stores? Download the Asle411 app to your iPhone or Android phone and get maps of more than 12,000 U.S. stores. This app pinpoints your location in the store, directs you to the merchandise you want, and sends you alerts about special sales and offers.

Coupons.com

Once you’ve located the best deal, use the Coupons.com app to search for and “clip” thousands of coupons that could slash the price even further. It’s compatible with iPhone and Android, and you can redeem coupons from major retailers such as Sears and Nordstrom in stores or online.

Level Money

In all the excitement of Labor Day shopping, it’s easy to overspend. Having a budget app handy can help keep you in line. This secure app is one of the simplest budgeting tools around, letting you know how much cash you have available for today, the rest of the week, and the entire month. Simply link the app (available on iPhone or Android) to your bank and credit card accounts, and enter your goals.

Technology takes most of the work out of researching the best Labor Day discounts, and can help keep you on budget. By downloading just a few useful apps, you’ll be left with more time to enjoy your purchases. And you’ll have some extra cash to spend—remember, Black Friday is less than three months away.

Matthew Ong is the senior retail analyst at NerdWallet, a website that compares everything from shopping deals to credit cards to save consumers cash.

MONEY Health Care

Why a Trip to the ER Could Cost You More Than You Expect

If a holiday weekend mishap sends you to the emergency room, watch your wallet. You shouldn't owe more if the hospital is outside your insurance network. But that could change if you're admitted.

When you need emergency care, chances are you aren’t going to pause to figure out whether the nearest hospital is in your health insurer’s network. Nor should you. That’s why the health law prohibits insurers from charging higher copayments or coinsurance for out-of-network emergency care. The law also prohibits plans from requiring pre-approval to visit an emergency department that is out of your provider network. (Plans that are grandfathered under the law don’t have to abide by these provisions.)

That’s all well and good. But there are some potential trouble spots that could leave you on the hook for substantially higher charges than you might expect.

Although the law protects patients from higher out-of-network cost sharing in the emergency room, if they’re admitted to the hospital, patients may owe out-of-network rates for the hospital stay, says Angela Gardner, an associate professor of emergency medicine at the University of Texas Southwestern in Dallas who is the former president of the American College of Emergency Physicians.

“Even if the admission is warranted, you are subject to those charges,” she says.

If you live in a state that permits balance billing by out-of-network providers, your financial exposure could be even greater. In a balance-billing situation, a hospital may try to collect from the patient the difference between what the hospital billed and what the health plan paid for care. Such practices aren’t generally allowed if a consumer visits an in-network provider.

Consumers shouldn’t expect that the hospital will inform them of potential out-of-network coverage issues, so they need to inquire, says Gardner.

“At least being informed and knowing what you’re getting into can set you up to handle it with your insurer,” she says.

And while you’re at it check into being transferred to an in-network facility if it’s feasible.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

MONEY Workplace

What Labor’s Win at Market Basket Means for Your Job Security

140829_RET_Market_1
Elise Amendola/AP

The victory at a New England grocery chain might seem like a fluke. But economic trends show that workers may be finally getting some leverage.

You don’t often hear about it, but every day, in countless workplaces, people make difficult choices to do the right thing by standing up for co-workers—often at great risk to their careers. These workers are the true heroes of this and any other Labor Day. Which is why what happened recently at Market Basket is so unusual: labor won a major victory, and it got a lot of press.

For those who don’t live in the Northeast, Market Basket is a family-owned New England grocery chain. A bitter family feud led to the ouster of the revered CEO, Arthur T. Demoulas. Market Basket’s workers backed his reinstatement with protests and rallies, which ratcheted up after the company threatened to fire some of them. Public opinion was heavily in the workers’ favor. Today the majority owners of the company announced their decision to sell their shares to Demoulas, who not only gets his job back but control of the company to boot.

It’s not everyday that you see relatively low-paid supermarket workers demonstrating on behalf of their CEO. But what’s really unusual here is the display of an all-too-rare commodity in an American workplace: trust between workers and management.

The Great Recession should have been dramatic evidence to those who manage and staff the nation’s workplaces that we’re all in this together. But, of course, it wasn’t. Employers cut payrolls and benefits—remember defined benefit pensions?—some of which perhaps was unavoidable. They also outsourced jobs and even entire operations to lower-cost markets, creating armies of freelancers who work without full salaries or even a 401(k) plan. Yet many companies, if not most, continued to provide upper-management lavish pay packages and perks that further distanced them from the people whose labor was essential to their long-term success.

Some people feel workers will never recover the ground they’ve lost. But there are encouraging signs that labor may be gaining some leverage.

Like an economist who has correctly predicted nine of the past two recessions, I have repeatedly stressed that the U.S. economy is running out of workers. Even though many Baby Boomers are continuing to work past traditional retirement age, the numbers of boomers who have retired exceeds the flow of new entrants into the labor force.

Up till now labor shortages were masked by steep employment declines during the recession. But the recovery has slowly reduced unemployment. The Congressional Budget Office just forecast improved economic growth rates over the next few years. And the Wall Street Journal, among others, recently reported that shortages of unskilled labor are forcing up wage rates in some parts of the economy. And other indicators show that the job picture is brightening for those looking for work.

No question, this recovery remains very disappointing. We haven’t recovered enough lost jobs. Real wage gains remain elusive. There are few if any signs that the economic gap between rich and poor is narrowing. But even abysmal growth will, over time, lead to spot labor shortages. And with immigration reform stalled, boosting the nation’s labor supply with more newcomers is not going to happen anytime soon, which will give workers more bargaining power.

Employers may already be responding. Gallup reports that 58% of workers—both full- and part-time—are “completely satisfied” with their job security. That’s a new high, which exceeds levels just before the recession and even the levels during the dot-com euphoria of the late ’90s. Gallup also found that 71% of workers were completely satisfied with their relations with co-workers, 63% with the flexibility of their working hours, and even 60% with their boss or immediate supervisor.

Confident employees are more likely to push back against their bosses and to seek other jobs if current employers fail to meet their needs. If today’s attitudes do translate into more employee assertiveness, we can expect to see not only higher wages and improved retirement benefits, but also increased demands for restructuring jobs and job responsibilities. This would mean jobs with more flexibility, jobs that use technology to allow teams to work together from different locales, and jobs that measure outputs and judge workers on results, not the number of hours they worked or time spent at meetings in the office.

Achieving such results will stretch both managers and employees. And it will require major efforts to rebuild trust. For now, I will just wish you a happy Labor Day, with a special shout-out to the folks at Market Basket.

Philip Moeller is an expert on retirement, aging, and health. He is an award-winning business journalist and a research fellow at the Sloan Center on Aging & Work at Boston College. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

MONEY Saving

This App May Let You Retire on Your Spare Change

Acorn App
Acorn

The new Acorns app rounds up card purchases and invests the difference for growth, with no minimums and low fees.

Americans spend $11 trillion a year while saving very little. So it makes sense to link the two, as a number of financial companies have tried to do over the past decade. The latest is the startup Acorns, which hopes to hook millennials on the merits of mobile micro investing over many decades.

Through the Acorns app, released for iPhone this week, you sock away “spare change” every time you use your linked credit or debit card. The app rounds up purchases to the nearest dollar, takes the difference from your checking account, and plunks it in a solid, no-frills investment portfolio. So when you spend, say, $1.29 for a song on iTunes, the app reads that as $2 and pushes 71¢ into your Acorns account. With a swipe, you can also contribute small or large sums separate from any spending.

The Acorns portfolio is purposely simple: Your money gets spread among six basic index funds. The weighting in each fund depends on your risk profile, which you can dial up or down on your iPhone. More aggressive settings put more money in stocks. But you always have some money in each fund, remaining diversified among large and small company stocks, emerging markets, real estate, government and corporate bonds. The app will be available for Android in a few weeks and through a website in a few months.

Why Millennials Are the Target

Micro investing via a mobile device clearly targets millennials, who show great interest in saving but have been largely ignored by financial advisers and large banks. Young people may not have enough assets to meet the minimum requirements of big financial houses like Fidelity, Vanguard, and Schwab. With Acorns, there are no minimums. There are also none of the commissions that can render investing in small doses prohibitively expensive. “We want small investors who can grow with us over time,” says Acorns co-founder Jeff Cruttenden.

This approach places Acorns in the middle a rash of low-fee, online financial firms geared at young adults—including Square, Betterment, Robinhood, and Wealthfront. Such firms hope to capitalize on young adults’ penchant for tech solutions and lingering mistrust of large financial institutions. Cruttenden says a third of Acorns users are under age 22. They like to save in dribs and drabs—and manage everything from a mobile device.

Acorns charges a flat $1 monthly fee and between 0.25% and 0.5% of assets each year. The typical mutual fund has fees of 1% or more. Yet many index fund fees run lower. The Vanguard S&P 500 ETF, which invests in large company stocks, charges just 0.05%. If you have a few thousand dollars to open an account, and the discipline to invest a set amount each month, you might do better there. But remember that is just one fund. With Acorns you get diversification across six asset classes—along with the rounding up feature, which seems to have appeal.

Acorns has been testing the app all summer and says the average account holder contributes $7 a day through lump sums and a total of 500,000 round ups. Cruttenden says he is a typical user and through rounding up his card purchases has added $521.63 to his account over three months.

A New Twist on an Old Concept

Mortgage experts tout rounding up as a way to pay off your mortgage quicker. On a $200,000 loan at 4.5% for 30 years your payment would be $1,013.38. Rounding up to the nearest $100, or to $1,100, would cut your payoff time by 52 months and save you $26,821.20 in interest. Rounding up your card purchases works much the same way—only you are accumulating savings, not cutting your interest expense.

Bank of America offers a Keep the Change program, which rounds up debit-card purchases to the nearest buck and then pushes the difference into a savings account. Upromise offers credit card holders rewards that help pay for college. But Acorns’ approach is different: the money goes into an actual investment account with solid long-term growth potential.

One possible drawback is that this is a taxable account, which means you fund the Acorns account with after-tax money. Young adults starting a career with a company that offers a tax-deferred 401(k) plan with a match would be better served putting money in that account, if they must choose. But if you are like millions of people who throw spare change in a drawer anyway, Acorns is a way to do it electronically and let those nickels, dimes, and pennies go to work for you in a more meaningful way.

Read more on getting a jump on saving and investing:

 

MONEY Kids and Money

The Best Thing You Can Do Now for Your Kid’s Financial Future

CAN'T BUY ME LOVE, from left: Patrick Dempsey, Amanda Peterson, 1987.
Your teens summer earnings can't buy love, but they can buy a bit of retirement security. Buena Vista Pictures—Courtesy Everett Collection

Open a Roth IRA for your child's summer earnings, and talk her through the decisions on how to invest that money, suggests financial planner Kevin McKinley.

In my last column, I extolled the virtues of opening—and perhaps even contributing to—a Roth IRA for a working teenager. In short, a little bit of money saved now can make a big difference over a long time, and give your child a nice cushion upon which to build a solid nest egg.

Besides underscoring the importance of saving for retirement early and regularly, opening a Roth IRA can help your child become a savvy investor (a skill many people learn the hard way).

Here’s how:

Make the Initial Contribution

Your child needs to earn money if he or you are going to contribute to an IRA on his behalf. For the 2014 tax year, the limit for a Roth IRA contribution for those under age 50 is the lesser of the worker’s earnings, or $5,500.

The deadline for making the contribution is April 15, 2015. But you can start sooner, even if your teen hasn’t yet earned the money on which you will be basing the IRA contribution. (If the kid doesn’t earn enough to justify your contributions, you can withdraw the excess with relatively little in the way of paperwork or penalties.)

For a minor child, you will have to open a “custodial” Roth IRA on her behalf, using her Social Security number. Not every brokerage or mutual fund company that will open a Roth IRA for an adult will do so for a minor, but many of the larger ones will, including Vanguard, Schwab, and TD Ameritrade.

As the custodian, you make the decisions on investment choices—as well as decisions on if, why, and when the money might be withdrawn—until she reaches “adulthood,” defined by age (usually between 18 and 21, depending on your state of residence). Once she ages out, the account will then need to be re-registered in her name.

Depending on which provider you choose, you may be able to make systematic, automated contributions to the IRA (for example, $200 per month) from a checking or savings account. To encourage your teen to participate, you might offer to match every dollar he puts in.

Have the “Risk vs. Reward” Talk

How an adult should invest an IRA depends upon the person’s goals and risk tolerance—the same is true for a teen. You can help set those parameters by pointing out to your child that, since he’s unlikely to retire until his 60s this is likely to be a decades-long investment, and enduring short-term downturns is the price for enjoying higher potential long-term gains.

You might also show him the difference between depositing $1,000 now and earning, say, 3% annually vs. 7% annually over the next 50 years—that is, a balance of $4,400 vs. a balance of $29,600. Ask your child: Which would you rather?

No doubt, your kid will choose the bigger number.

But you also want this to be a lesson in the risks involved in investing. You might talk about what a severe one-year decline of 40% or more might do to his investment and explain that bigger drops are more likely in investments that have the potential for bigger growth. Now how do you feel about that 7%?

Some teenagers will be perfectly fine accepting the risk. Others may be more skittish.

You also might explain that there are options that will not decline in value at all—such as CDs and money market accounts. But should he choose those safer options, he’ll be trading off high reward for that benefit of low risk. In fact, while his money will grow, it will likely not keep up with the rate at which prices grow (“inflation,” in adult terms). So his money will actually be worth less by the time he’s ready to retire.

Some risk, therefore, will likely be necessary in order to grow his money in a meaningful way.

Choose Investments Together

Assuming he can tolerate some fluctuation, a stock-based mutual fund is probably the most appropriate and profitable strategy—especially since a fund can theoretically offer him a ownership in hundreds of different securities even though he may only be investing a few thousand dollars. You might explain that this diversification protects against some of the risks of decline since some stocks will rise when others fall.

A particularly-suitable option might be a “target date” or “life cycle” fund. These offerings are geared toward a specific year in the future—for instance, one near the time at which your child might retire.

Target date funds are usually a portfolio comprised of several different funds. The portfolio allocation starts out fairly aggressive, with a majority of the money invested in stock-based funds, and much smaller portion in bond funds or money market accounts.

As time goes by—and your child’s prospective retirement draws nearer—the allocation of the overall fund gradually becomes more conservative.

The value of the account can still rise and fall in the years nearing retirement, but with likely less volatility than what could be experienced in the early years.

One low-cost example of this type of investment is the Vanguard Retirement 2060 Fund (VTTSX).

Of course, if you choose a brokerage account for your child’s Roth IRA, you have the option of purchasing shares in a company that might be of particular interest to your kid. Choosing a company that is familiar to your child may not only inspire her to watch the stock and learn more about it, but eventually profit from the money she is spending on “her” company’s products.

If you’re going to go this route, you should include a discussion on the increased volatility (for better or worse) of owning one or two stocks, rather than the diversification offered by the aforementioned mutual fund.

Kevin McKinley is a financial planner and owner of McKinley Money LLC, a registered investment advisor in Eau Claire, Wisconsin. He’s also the author of Make Your Kid a Millionaire. His column appears weekly.

Read more from Kevin McKinley:

 

MONEY

How This Weekend’s College Football Rivals Stack Up as College Values

The college football season has kicked off. We looked at which of the schools in this weekend's games are the winners in Money's Best Colleges rankings.

  • Texas A&M v. University of South Carolina

    Left: Reveille cheers on the Texas A&M Aggies. Right: South Carolina Gamecocks mascot Sir Big Spur on his perch during the game.
    Brian Bahr/Getty Images (left)—Joe Robbins/Getty Images (right)

     

    When: Thursday Aug. 28, 6 p.m. EDT

    The Winner: Texas A&M, which came into the game ranked 21st in the AP poll, upset the 9th-ranked Gamecocks.

    MONEY’s pick for college value: Texas A&M.

    Texas A&M is one of the most affordable and highest quality public universities in the country. MONEY estimates that the total cost of a degree for freshmen starting this fall will average $86,000—$14,000 less than a degree from the University of South Carolina. Also, Aggies earn, on average, about $52,000 a year within five years of graduation, according to data from Payscale.com. Gamecocks report earning only about $41,300.

  • Penn State v. University of Central Florida

    When: Saturday, August 30, 8:30 a.m. EDT

    Oddsmakers’ pick to win: UCF is given a slight edge thanks to its returning veteran defensive line.

    MONEY’s pick for college value: Penn State

    True, Penn State is expensive—a degree costs Nittany Lions an average of $142,000, or $41,000 more than Knights pay for their degrees—but Penn Staters are much more likely to graduate and earn healthy salaries. Penn Staters report earning almost $51,000 within five years of graduation, almost $10,000 more than UCF grads.

     

  • Florida State University v. Oklahoma State University

    140828_FF_Rivalries_FSUOSU_2
    Getty Images

     

    When: Saturday, August 30, 8 p.m. EDT

    Oddsmakers’ pick to win: FSU, last year’s national champion, is also the top-ranked team this fall, and has top-notch players at nearly every position.

    MONEY’s pick for college value: It’s a tie.

    Schools within about 30 places in our value rankings are very similar, as shown by the slight differences between Oklahoma State, ranked 194, and FSU, 223. OSU’s graduation rate of 62% is significantly worse than FSUs 75%. But OSU students who do make it through tend to earn more: $44,400 a year within five years, versus FSU’s average of $41,600.

  • University of Miami v. University of Louisville

    When: Monday, Sept. 4, 8 p.m. EDT

    Oddsmakers’ pick to win: Louisville beat the Miami Hurricanes soundly in the 2013 Russell Athletic Bowl. But oddsmakers are giving them only a slight edge in the rematch.

    MONEY’s pick for college value: Louisville

    MONEY ranks Louisville No. 382 for value in the country–not great–in part because of its painfully low graduation rate of just 51% (compared with 81% for the University of Miami.) But as a public school, Louisville charges Kentuckians, on average, less than $100,000 for a degree, about half what students at the private Miami typically pay. Those high costs are one reason we ranked Miami 536 out of 665 on our list.

     

  • University of Notre Dame v. Rice University

    When: Saturday, August 30, 3:30 p.m. EDT

    Oddmakers’ pick to win: Notre Dame, even though some its best players have been sidelines by an academic investigation. The Fighting Irish are ranked 17 by the AP poll; Rice is unranked.

    MONEY’s pick for college value: It’s a tie.

    You really can’t lose with either of this schools. MONEY ranks both Notre Dame and Rice equally at 20th place for value. They both have stellar graduation rates of more than 90%. And students go on to earn salaries in the mid $50,000s within five years of graduation, according to Payscale.com. Notre Dame costs more (a degree costs about $185,000, versus $150,000 for Rice), but the higher cost was balanced out by unusually high earnings reported by Notre Dame’s non-science majors.

    See more of Money’s Best Colleges:
    The 25 Most Affordable Colleges
    The 25 Colleges That Add the Most Value
    The 25 Best Colleges That You Can Actually Get Into

MONEY College

The 10 Top Colleges Students Really Want to Attend

Stanford University
If you're accepted at Stanford University, chances are you'll go. iStock

A new study of which schools high school seniors actually pick turns up prestigious names you know. Good thing these colleges also offer good value.

Not surprisingly, if you get into an elite college, chances are high you’ll say yes. But which of the elite schools are most likely to be students’ first choice? In a new analysis of acceptance and enrollment data, Stanford, MIT, Harvard, Yale, and Princeton top the list for this fall,

Parchment, a company that specializes in transferring student records from high schools and colleges, analyzed the college acceptances of 27,723 high school seniors who filled out the company’s survey this spring and summer. The company’s analysis, says chief executive officer Matthew Pittinsky, reveals which schools students are flocking to—and from.

Overall, the typical student in the study reported being accepted by three or four colleges. By comparing the schools the high schoolers got into with the ones they picked and rejected in the end, Parchment calculated a popularity score for 726 schools. Of the 265 colleges for which Parchment had records of at least 100 decisions, the 10 below are the most popular.

This report provides a slightly different and more up-to-date view of college popularity than the standard federal statistics on the percentage of admitted students who enroll. By those numbers, Harvard, with 81% of the admitted students enrolling in 2013, was the most popular elite school in the country. On this list, it’s No. 3.

Some of Parchment’s most popular schools are somewhat surprising given their official acceptance stats. Almost 100 members of the study group got into the University of Chicago and at least one other college, for example. And those students generally chose Chicago, where just about half of accepted students say yes, over almost every other school.

The good news is that these 10 most popular schools, while elite and expensive, also offer some of the best bangs for the tuition buck in the country, according to Money’s new college value rankings, which take into account net total costs after scholarships and grants as well as typical post-graduation earnings.

And some of the more expensive schools in the country appear to be students’ safety or backup schools in Parchment’s analysis. More than 100 members of the study group got into Drexel University (where only 8% of accepted students enroll) and at least one other college, for example. But most of those students opted for another choice.

In Money’s rankings of the 665 schools with graduation rates at or above the median and enough data for Money to examine, Drexel ranked 596th, in part because of its high cost. Money estimates a degree from Drexel, after all costs are included and grants or scholarship from the college are subtracted, will cost current freshmen about $218,000. That’s $72,000 more than a typical degree from highly popular Princeton University, for example, and $20,000 more than a degree from Chicago.

Popularity rank* % accepted who enroll College Money value ranking Net cost of a degree
1 76% Stanford University 5 $168,800
2 72% Massachusetts Institute of Technology 3 $154,700
3 81% Harvard University 6 $181,200
4 66% Yale University 15 $182,800
5 65% Princeton University 4 $146,200
6 63% University of Pennsylvania 11 $201,600
7 42% Duke University 32 $192,800
8 60% Columbia University 22 $206,800
9 53% University of Chicago 101 $188,800
10 58% Brown University 19 $192,000

*Of schools with at least 100 decisions.

MONEY College

Don’t Bash Ivy Leaguers: They’re Just as Greedy as Everyone Else

140826_FF_IVYLEAGUE
Michael Burrell—Alamy

In Excellent Sheep, William Deresiewicz slams the Ivy League for having a "finance-first" culture. But it's not just Harvard grads who run to high paying industries, it's everyone.

College entrants, beware. Choosing your dream school might be the worst decision you’ve ever made. That’s the message from William Deresiewicz, author of the recently released book Excellent Sheep. The ex-Yale professor’s latest work blasts the Ivy League, and other similarly prestigious schools, for turning young, idealistic learners into the titular livestock, who end their time in college by wandering aimlessly toward Goldman Sachs.

The heart of the argument, which Deresiewicz summarized last month in an article for The New Republic, rests on the fact that about a third of Ivy Leaguers go into big business (namely finance and consulting) and not his preferred areas, which include the clergy, the military, politics, and academia. Schools like Harvard may teach their pupils, sure, but all they learn are the “analytic and rhetorical skills that are necessary for success in business and the professions.”

In contrast, Deresiewicz says, public and lower-ranked schools like Wesleyan, Sewanee, and Mount Holyoke “have retained their allegiance to real educational values.”

So should Harvard‘s freshman class start filling out transfer applications? Not so fast. A closer look at the book’s claims reveals a sobering truth: Ivy Leaguers might be greedy little sheep eager to join the ranks of Wall Street—but no more so than students outside their hallowed halls.

In fact, the Ivy League simply is not unique in the way Deresiewicz wants it to be. Yes, it is true that 20% to 30% of elite college grads go into finance or consulting. But at Reed, a school Deresiewicz specifically uses as a model for a less money-hungry higher education, 28% of students went into business and industry—a category that includes consulting, finance, and other profit-heavy sectors—based on its 2014 alumni database.

That’s compared with 27.3% of Yale students who went into consulting or finance in 2012, 24.5% of last year’s Princeton class employed in finance, insurance, or professional services (including consulting), and 22% of Brown’s class of 2013 that entered finance, banking, or consulting. (These categories vary slightly since there is no standard method among colleges of grouping professions.)

Many public schools are no different. UCLA, a top ranked state institution, reports that 32% of its graduates go into business or consulting. Penn State, another public institution Deresiewicz mentions favorably, has even named its career services center after Bank of America. For those with an aversion to these industries, there aren’t many academic oases left.

Why do such a large portion of graduates everywhere rush to join the Morgan Stanleys of the world? Because they pay well and offer plenty of jobs. The financial services industry alone accounts for 7.9% of the economy and over $1.2 trillion; it’s so large that no small group of schools could ever hoard a significant share of it. According to data from NACE International and the U.S. Census, finance and insurance offer the 5th most jobs and the highest average salary of any sector.

Shockingly, students at Reed and UCLA seem about as likely to want a sustainable career and high incomes as their peers at Harvard. (And what’s wrong with that again?)

It’s also incorrect to assume that students at Ivy League schools are any less likely to go into more charitable trades. One might be surprised after reading Deresiewicz’s article to learn that the largest employer of recent Columbia graduates is not Goldman Sachs or J.P. Morgan, but Teach For America. Princeton, which has a reputation for sending grads straight to Wall Street, recently announced 22.6% of the 2013 graduating class is employed in the nonprofit sector.

Does this mean Ivy League schools aren’t often annoying and pretentious? Not at all (I should know, I went to one). But it does mean we shouldn’t label them as educationally deficient because their graduates behave just like everyone else. As MONEY’s own college rankings show, there are plenty of great schools, both in and outside the ancient eight. Choose based on educational quality, price, and yes, how employable students are after they graduate. And by those measures, the Ivies do pretty well.

MONEY Insurance

Why Millennials Resist Any Kind of Insurance

Young adults are the most underinsured generation of our time, which makes sense—up to a point.

Millennials are the most underinsured generation alive today—which makes a certain amount of sense. They have relatively few assets or dependents to protect. Still, the gaps in coverage are striking and offer further evidence that this generation has been unusually slow to launch.

Roughly one in four adults aged 18 to 29 do not have health insurance, twice the rate of all other adults, according to a survey from InsuranceQuotes.com, a financial website. (Other surveys have found lower uninsured rates, but this age group is still the most likely to go without.) Millennials are also far less likely to have auto, life, homeowners, renters, and disability coverage.

Young adults have always been slow to buy insurance. They often feel invincible when it comes to potential health or financial setbacks. But something additional appears to be at work here. This generation has famously overprotective parents who awarded them trophies just for showing up. Millennials may view moving back home or calling Mom and Dad for a bailout as their personal no-cost, all-purpose insurance plan.

Millions of young adults routinely boomerang home after college or get other family financial support. The trend is so broad that psychologists have given this new life phase a name: emerging adulthood, a period that lasts to age 28 or 30. MONEY explores this trend, and its costs, in the September issue reaching homes this week. Remarkably, the parents of boomerang kids don’t seem to mind providing the extended support.

A quarter of parents supporting an adult child say they have taken on additional debt; 13% have delayed a life event, such as taking a dream vacation; and 7% have delayed retirement, the National Endowment for Financial Education found. Yet 80% of such parents in a Bank of America Merrill Lynch survey say helping is “the right thing to do,” and 60% are willing to work longer, 40% to go back to work, and 36% to live with less if that’s what it takes to help their adult kids.

“Millennials have had very supportive parents throughout their life,” says Laura Adams, senior insurance analyst at InsuranceQuotes.com. “When you don’t have a fear of the unknown, a fear of life’s what-ifs, you are not likely to think about insurance.”

Yet young people overlook certain types of insurance at their peril—even though these policies may be relatively inexpensive. Most striking is how many skip health insurance, even though the Affordable Care Act mandates coverage and allows children up to age 26 to remain on a parent’s plan. Millions more young people now have health coverage as a result, recent studies have found, and their uninsured rate has dropped. But, still, as many as one in four still go without.

This may be classic pushback against a law young adults see as unfair. They understand that their insurance premiums subsidize the health benefits of older Americans who are far more likely to need care. Yet if Mom and Dad won’t pick up the bill, a visit to the ER can cost $1,000 or more for even a simple ailment. Things get much more expensive for broken bones and other treatments that even the young may need. Among other findings:

  • 64% of millennials have auto insurance, compared to 84% of older generations. Many millennials may have decided to skip car ownership. But if you rent a car or borrow one from your roommate, you have liability. It probably pays to have your own policy, which might cost $30 a month.
  • 10% of millennials have homeowners insurance, compared to more than half of those aged 30 to 49 and 75% of those 65 and older. Fewer millennials own a house, for sure. But this generation isn’t buying renters insurance either: only 12% have it. Renters insurance is cheap: $10 to $15 a month, and it comes in handy not only when someone steals your bike from the storage area but also if Fido bites a neighbor.
  • 13% of millennials have disability insurance, compared with 37% of those 30 to 49. This kind of coverage costs around $30 a month and may seem unnecessary. Yet one in three working adults will miss at least three months of work at least once in their life due to illness, Adams says, adding, “Anyone can throw out their back.”
  • 36% of millennials have life insurance, compared with 60% of those 30 to 49. Again, this coverage is relatively cheap: around $20 a month for $500,000 of term life. If you have no dependents you might skip it. But if you have debt that Mom and Dad co-signed, you should have enough coverage to retire the debt. It’s only fair, given your parents’ years of extended financial support.

 

 

MONEY Estate Planning

When Tragedy Strikes a Young Family

hospital bracelet on patient
Fuse—Getty Images

A cancer diagnosis prompts a financial planner to reflect on the fragility of life and the importance of preparing for the worst.

I have a client who is 39. He’s married and has two young children. He has an extremely successful career. He and his family are really hitting their stride.

One day he started to feel unwell. Eventual checkups led to a diagnosis of cancer. His wife called me on a Saturday morning to discuss the shock of what they were going through, and to get some basic sense of what to expect next, financially.

There’s no way to prepare yourself for this kind of devastating news. Brené Brown discusses this eloquently when she talks about “foreboding joy” — the sense we sometimes have, when things are going well, that something terrible will happen to us or someone we love.

This mental rehearsal for the worst-case scenario doesn’t make it any easier when we get tragic news; instead, it gets in the way of our truly feeling joyful and present in the moment right now.

What can give us a lot of peace of mind is financial preparation — the knowledge that our families will be taken care of if something happens to us. Here are some important elements of that planning:

  • Life Insurance: If you have young children who are depending on your income, a good 20- to 30-year level term policy is a solid foundation to help support your family through the children’s school years.
  • Disability Insurance: Being injured or sick and unable to work is often more financially catastrophic than death, since your expenses have likely increased to deal with your treatment, but your income has gone away. A good disability policy through your employer or through a private insurer is great protection, since it will provide at least part of your income while you’re unable to earn a living. This coverage is more expensive than life insurance, since it is far more likely a person will become disabled rather than die early, but disability insurance has substantial benefits.
  • Emergency Fund: A baseline amount of cash is the protective foundation to any financial plan. This isn’t because cash is such a great deal, since returns in savings accounts nowadays are minimal at best. Emergency funds are a great deal because they allow us to weather financial storms — for example, covering waiting period before the benefits on a disability insurance policy kick in — and ultimately to take advantage of opportunities when they present themselves.
  • Wills, Living Wills, and Powers of Attorney: If you have young children, this is essential. The issue isn’t if you or your spouse die; it’s if both of you die, since those kids will inherit life insurance proceeds, retirement plan benefits, and more. If you and your partner both get run over by the proverbial bus, you need to make provisions for who will take care of your children. You should make that decision, and not leave the courts to decide if you’re not around. Living wills allow you to state your end-of-life choices; while never easy to carry out, they always provide a level of peace to families who know they’re carrying out their loved one’s wishes.

A few weeks later, I had lunch with this couple. The husband was about to have surgery. “If I don’t wake up,” he asked, “what’s going to happen?”

It was the best of a bad situation: He had insurance. They had an emergency fund. They had the necessary end-of-life and estate-planning documents. Were he to not pull through, his wife and children would be in a position to try to find a new normal. (In fact, he did pull through, and he’s working on his recovery.)

The most important thing for any patient with a long-term illness is to focus on his overall health and mental outlook. Having financial plans in place allows a patient to set other worries aside. He can tell himself, “In the worst-case scenario, my family will be all right. Now I can focus on ‘What can I do to be well?'”

All our days are numbered. The question is, can you be present for the time that you have? The right financial plan can ease the way.

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H. Jude Boudreaux, CFP, is the founder of Upperline Financial Planning, a fee-only financial planning firm based in New Orleans. He is an adjunct professor at Loyola University New Orleans, a past president of the Financial Planning Association‘s NexGen community, and an advocate for new and alternative business models for the financial planning industry.

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