MONEY deals

5 Reasons September Is the Best Month to Go Shopping

Red lawn mower and sprinkler on lawn
PhotoSlinger—Alamy

September is an in-between month for consumers. It's not really a peak period to buy anything—which is why it's absolutely a peak month for savvy shoppers looking for deals on everything from lawn mowers to houses.

You may be still paying off your summer vacation. You may feel the need to start socking away money to cover your winter holiday shopping budget. There may be nothing that your household really needs to buy right now. Even so, there’s a good argument to be made that you can and should be shopping in September—and that you can feel smart, thrifty, and virtuous about it. Here are five reasons why.

1. Summer is over. The need for summery goods such as lawn mowers, barbecue grills, patio furniture, bicycles, bathing suits, and anything related to the beach is rapidly disappearing. So, naturally, stores want all typical summer purchases off their shelves and out of their aisles, pronto. Look for them at increasingly discounted prices until they’re gone. For instance, patio furniture should be listed at clearance prices of 50% to 75% off, according to dealnews. In addition to markdowns on summer items, Consumer Reports noted, shoppers can also expect stores to be discounting snow blowers for a similar reason—they’re just not top of mind for consumers, so some extra incentive is needed to make customers bite.

2. Kids are back in school. Retailers started pushing back-to-school sales in June, before most kids even started their summer vacation, and August is generally considered peak season for back-to-school purchases. But this year, at least, shoppers seem to have wised up to the simple fact that prices drop for those who wait. After a fairly lackluster summer season, stores were promoting early Labor Day deals to pump up apparel sales in particular. Even that wasn’t enough to drive many shoppers into stores.

“Consumers, not stores, are driving the trends these days, which means September will be the busiest back-to-school month this year, contrary to what stores and retailers may think,” the NPD Group’s Marshal Cohen noted recently. Here’s how Cohen explained why consumers have changed in their approach to back-to-school shopping:

Parents are prioritizing by purchasing supplies first, then some basic wardrobe necessities, and lastly following up with fashion, putting summer aside and purchasing clothing and apparel for colder rather than warmer weather. The reason consumers are delaying this significant aspect of their back-to-school shopping is twofold: they want to find out what’s “cool in school” before making their purchases and, looking at the broader trend, consumers don’t want to buy early anymore; consumers today want to buy in season.

Seasonality is just part of it; parents are also hip to the fact that prices are likely to drop on many back-to-school items and fashions once retailers consider peak back-to-school season to be over.

3. New gadgets are coming. Which means that older models will be marked down soon, if they haven’t been already. Consumer Reports suggests September as a great month for buying all sorts of small electronics (MP3 players, Blu-ray players, etc.), and dealnews points out that iPhones currently on the market are bound to be discounted when Apple introduces the new model, which should take place next week.

4. The winter holidays are looming. The overarching reason that stores are extra aggressive with markdowns in September is that they are eager to gear up for the Thanksgiving–Christmas shopping period. Sure, summer is an important season for retailers, but it pales in comparison to the end of the year. Some outlets routinely ring up more than half the year’s sales during the winter shopping season. So they understandably want to be fully prepared to make the most of it. To do so, it helps to start with a clean slate, with little or nothing in stores left over from the summer. Hence, major deals to clear out stores.

5. House hunting slows to a crawl. A new Trulia report explains that September marks the beginning of a sharp slowdown in people searching for homes to buy in most markets. For the most part, the arrival of Labor Day is bad news for owners who have listed their homes but have yet to close a deal with a buyer. On the other hand, fewer buyers in the market means an advantage for those who remain. Sellers who would have laughed off a lowball bid in, say, early June will be much more likely to consider such an offer come September.

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 College

What Your College Kid Isn’t Telling You About Money

More than half of students admit they keep financial secrets from Mom and Dad, a new survey finds. And one of the biggest may be how much debt they're racking up.

It is an American rite of passage. Little Johnny finally grows up, goes off to college, and starts handling money on his own. He probably spends a little too much, and racks up some debt.

Does Johnny tell mom and dad the truth—or keep it a secret?

More than half of college students (55%) admit they hide information from dear old mom and dad about all that money they are spending, according to the 2014 RBC Student Finances Poll. But only 33% of parents realize that’s the case.

Another disconnect: While 90% of parents claim to be on top of how much debt their kid owes, just 78% of students agree their parents are up-to-speed on their finances.

Welcome to a college course that is not really on the curriculum, but that every student is grappling with. Call it Secrets and Lies 101.

“It may be that a student doesn’t have as much money as their peers, and is trying to keep up with what their friends are doing,” says Christine Schelhas-Miller, a retired faculty member at Cornell University and co-author of Don’t Tell Me What To Do, Just Send Money: The Essential Parenting Guide to the College Years.

“Or they may be getting lots of credit card offers, and naively sign up,” Schelhas-Miller adds. “Then they’re not sharing this information with parents, because they’re afraid of getting into trouble.”

Of course, money disconnects between parents and kids are nothing new. In fact they are par for the parenting course, whether they revolve around tooth fairy money or allowance sizes.

The difference when kids reach college is that the sums involved are taken to the next level. Serious money, which can, in turn, have very serious consequences, like debt accumulation or poor spending habits that could dog families for years to come.

After all, the average Class of 2014 graduate with student-loan debt is in hock to the tune of $33,000, according to Mark Kantrowitz, publisher at Edvisors, a site about planning and paying for college. That’s the highest number ever.

The potential scenario, for a college student whose only financial-planning experience has been with Monopoly money? A couple of adviser Darla Kashian’s clients were gobsmacked to find out that their kid—unbeknownst to them—had blown through a significant inheritance in his last years of college, to the tune of tens of thousands of dollars.

“They didn’t know what he had done, and were astonished to find out,” says Kashian, who is an adviser with RBC in Minneapolis. “In their minds, he was using the inheritance to pay off his student loans, and now he was returning home with lots of debt. He was totally unprepared.”

Of course, students may suspect how badly they are screwing up financially. According to the RBC poll, 26% of college students admit they may be doing damage to their credit rating. Only 17% of parents think their little angels could possibly be doing such a thing.

Tough Talk

Such blind loyalty to one’s offspring isn’t cute; it’s actively harmful. But when it comes to such a delicate and emotional topic, many parents just don’t know where to start.

“It’s like the sex conversation: Parents are worried about how to even bring it up,” says Schelhas-Miller. “But they need to get over that hurdle, and think of it as a big part of their parenting responsibilities.”

Her advice: Arrange a pre-emptive strike, and have The Talk over the summer, before your kid even heads off to campus. Then arrange for regular money conversations throughout the school year—maybe once every couple of weeks, or maybe once a semester, depending on how responsible they are—to ensure budgets stay on track.

If you just avoid the subject and table the conversation for later, an unprepared college kid could stack up debt very quickly indeed, and it could be too late.

Kashian is a fan of online budgeting tools like Mint.com, a unit of Intuit, which can be set up to allow access to both parents and their kids. That, of course, requires plenty of trust from both sides.

“That way you can have real transparency, and open up a dialogue about the spending that is happening—instead of just shaming and screaming.”

More on student debt:

MONEY deals

Labor Day Sale Prices Are Here—a Week Before Labor Day Weekend

Banana Republic 50% off promotion
Jin Lee—Bloomberg via Getty Images

In a brutally competitive back-to-school season for retailers, clothing stores like Banana Republic and Abercrombie & Fitch have busted out extra-early clearance sales to the tune of 40% and 50% off everything.

Check out some of the impressive sales taking place right now:

Abercrombie & Fitch: 40% off everything in stores and on the web;

American Eagle: extra 50% off items already on clearance;

Ann Taylor: 50% off a broad range of merchandise;

Banana Republic: 40% off your entire purchase online with the code BRGET40, or $50 off when you spend at least $100 in stores;

Gap: 30% off for everyone (use code AUGUST), or 40% if you have a Gap credit card (code: $40STYLE) now through August 24, plus $25 in Gap Cash for every $50 you spend now through September 1.

If you didn’t know any better, you might have assumed that these big, across-the-board discounts are for Labor Day sales, or for post-back-to-school clearance sales. Heck, 40% off everything has more or less been the standard markdown level to get shoppers to bite on Black Friday and Cyber Monday, renowned as the best sales days of the year.

So why are retailers pushing such hefty discounts at such a seemingly odd time? One reason is that right now is an especially competitive, arguably desperate moment for apparel stores in particular. Iconic retailers like Target, Walmart, and Sears have been struggling mightily of late, and a wide range of clothing stores are trying to cope with consumers’ shifting fashion (and shrinking household budgets) that have brought about the need for deals like $10 jeans.

According to the National Retail Federation (NRF), household spending on clothes during the back-to-school period is basically flat compared with last year. Shoppers said they planned on spending $231.30 on clothes this season, versus $230.85 a year ago. What’s more, more parents seem to be taking the slacker approach to back-to-school shopping, procrastinating on purchases rather than prudently completing shopping lists long before school starts. As of August 12, an NRF poll indicates, 24% of families hadn’t done any back-to-school shopping yet, compared with 21% at the same time last year. Though fashionistas would disagree, trendy clothing is less of an essential for the start of the school year—kids need notebooks and markers more than new outfits—so it’s a safe assumption that procrastinators have been shying away in particular from clothing purchases, especially if they’ve been avoiding back-to-school shopping because of a tight household budget.

All of these factors add up to a situation in which stores simply haven’t been able to convince shoppers to buy enough clothing yet during the end-of-summer, back-to-school period. They could have waited to drop their big discounts on Labor Day Weekend, but because stores are constantly trying to beat competitors to the punch nowadays, sales tend to start earlier and last longer than ever—hence back-to-school deals beginning in June and Christmas advertising starting just after Labor Day.

Speaking of the winter holidays, they’re a major reason why retailers are being especially aggressive in clearing out summer and fall inventory right now. The November–December period is by far the most important time of year for all of the retailers mentioned above, and to make the most of it, stores want to start with a clean slate (and cleaned-out stores) as early as possible, to prep for the busy months ahead.

In fact, the world’s largest retailer already announced the launching of a holiday season initiative two weeks before Labor Day. “At Walmart, we never stop thinking about the holidays,” a post from Walmart’s Duncan Mac Naughton, chief merchandising and marketing officer, stated in mid-August. And yes, he was referring to the winter holidays: Starting around Black Friday, Walmart plans to have all of its store registers open during peak shopping times, according to a new Checkout Promise introduced by Mac Naughton.

All of which is a roundabout way of explaining why stores are resorting to big, broad markdowns at a seemingly strange time. But before you bite, bear in mind that next week, the sales will probably be even better on whatever merchandise hasn’t already been snatched up. The folks at dealnews anticipate that many stores will offer deeply discounted clothing during Labor Day clearance sales, sometimes with markdowns or 70% or even 80% off.

MORE: Why Parents Should Procrastinate on Back-to-School Purchases

MONEY College

12 Things We Wish We’d Known When We Were 18

Girl moving off to college
Eric Raptosh Photography—Corbis

Suze Orman and other experts share their financial advice for the Class of 2018. Follow these tips to keep your college experience from becoming a major money mistake.

Prepping for freshman year at college typically includes activities like shopping for dorm essentials, reviewing orientation packets, and Googling your new roommate.

Most students don’t spend a lot of time thinking about how they’ll manage their money in this new phase of their lives.

And yet, what you do in those first few years of parental emancipation can affect you for years—or decades—to come. Students graduated last year with an average $35,200 in college-related debt, including federal, state and private loans, as well as debt owed to family and accumulated via credit cards, according to a Fidelity study. Half of those students said they were surprised by just how much debt they’d accumulated.

To make sure the class of 2018 gets off on the right foot, MONEY gathered sage advice from top financial experts about the lessons they wish they, their kids, or their friends had known before starting school.

1. Limit your loans. “Do not take out more in student loans than what you are projected to earn in your first year after college. If you only expect to make $40,000, you better not take out more than $40,000. The chances of you being able to pay it back is close to nil. If you need to take a private loan, you’re going to a college you can’t afford. Remember, going to an expensive school doesn’t guarantee success. The school never makes you, you make the school.” —Suze Orman, host of The Suze Orman Show and author of The Money Book for the Young, Fabulous & Broke

2. Finish in four. “Many kids are finishing school in five or six years. But every extra year is potentially an extra $30,000 to 40,000 in expenses. Map out your coursework and figure out exactly what you’ll need to do each semester. Be vigilant about sticking to your plan. Try to catch up on any credits by taking classes at a community college over the summer.” —Farnoosh Torabi, author of You’re So Money

3. Study money 101. “Sign up for an economics or personal finance course. This way, when you graduate, you’ll be better equipped to manage money for the rest of your life.” —Brittney Castro, CEO of Financially Wise Women

4. Leave the car at home. “Everyone feels like they need a car, but with the combination of sharing services like Uber, Lyft, Zipcar and public transport, that isn’t always the case. If you’re living in a major metropolitan center or on campus, consider leaving your car behind. It’s much cheaper to use one of these car services than it is to pay for insurance, gas, parking, car maintenance and car payments.” —Daniel Solin, author of The Smartest Money Book You’ll Ever Read

5. Lead rather than follow. “Especially in college, you’re going to be surrounded by people doing dumb things financially. You’ll see people financing their lifestyle with student loans or their parents’ money. Don’t feel bad if you can’t afford the same things as others. I knew a student who was financing his whole college experience with debt and he was always asking people to go shopping with him. If I’d tried to keep pace, I’d have ended up in the same debt-ridden place as him.”—Zac Bissonnette, author of Debt-Free U

6. Find free fun. “You can still do fun things at school, without spending a lot of money. You’re paying an activity fee in your tuition, so you ought to make sure you’re taking full advantage of whatever the school offers for free—be it concerts, trips, lectures. The school I went to provided grants to help students travel abroad and offered free plays and trips through different clubs.” —Farnoosh Torabi

7. Be purposeful with plastic. “The idea that you need to build credit in college is wildly overrated. It’s not a bad idea to build credit, but having built up a bad credit history will hurt you more than having no credit history. You don’t need to feel pressure to get a credit card. You can get by just fine with cash and a debit card; no one is expecting you to have a ton of borrowing history when you’re getting your first apartment anyway.” —Zac Bissonnette

8. Put your budget on autopilot. “Keep track of the money you’re getting in from loans and your parents, as well as your expenses. Use an app like Mint.com, which lets you link your debit and credit cards to your online account to track your spending and easily help you keep on budget.” —Daniel Solin

9. Enlist Mom and Dad. “Check in with your parents once a month and review your spending with them. Talking about this will help you to avoid what I call ‘budget creep,’ where all of a sudden you’re spending $30 a day on food and entertainment. All those little extras add up and you could be spending over a hundred a week… on what?”—Neale Godfrey, chairwoman of Children’s Financial Inc.

10. Protect your stuff. “College students may not think they have a lot of valuable possessions. But think about the value of electronic devices alone, not to mention textbooks, clothes, even that ratty futon. The good news is that renters insurance is typically inexpensive and can protect you from fires, theft and other incidents. The even better news is that students’ stuff may be covered by their parents’ homeowners insurance. Check the policy prior to hitting the books.”—Kara McGuire, author of The Teen Money Manual

11. Establish rules with roomies. “If you’re renting an apartment with friends, be sure everyone and their parents sign the lease. Try to have everyone’s name on the utilities bills as well. Kids will take advantage of other kids, and you don’t want to be the one who is stuck being responsible for everything. If you can’t attach everyone’s names to all the bills, have them prepay. Also, make sure everyone chips in for general expenses like cleaning supplies and toilet paper, so you don’t end up paying for all of that as well.” —Neale Godfrey

12. Share with discretion. “Social networks are a public record. Your future employers will look you up on your social sites and judge you based on what they see. So something that you thought was cute in college could keep you from getting the job. Know that every move you make on those sites could have a direct consequence on your ability to land a job.” —Suze Orman

 

MONEY College

The Important Talk Parents Are Not Having With Their Kids

College tuition jar
Alamy

The new Fidelity College Savings Indicator survey reveals that parents are only on track to pay a third of college tuition—and that they're keeping mum on the topic.

Moms and dads expect their children to pay for more than one-third of college costs—but only 57% of parents actually have that conversation with their kids, according to a new study out by Fidelity today.

The cost of college has more than doubled in the past decade, and parents are having a hard time saving for it, Fidelity’s 8th annual College Savings Indicator study shows. While 64% of parents say they’d like be able to cover their kids total college costs, only 28% are on track to do so.

That jibes with reality: For current students, parents’ income and savings now only cover one-third of college costs on average, according to Sallie Mae’s recently released report How America Pays For College. Kids use 12% of their own savings and income. Loans taken by students and parents account for 22% of the funds, while another 30% comes from grants and scholarships.

Experts urge parents to have a frank conversation well in advance with their children about how much college costs and how much they are expected to contribute, either through summer jobs, their own savings or part-time jobs while in school. “If children know that they are expected to contribute to their college funds, they are more likely to save for it,” says Judith Ward, a senior financial planner at T. Rowe Price.

A T. Rowe Price study released earlier this week found that 58% of kids whose parents frequently talk to them about saving for college put away money for that goal vs. just 23% who don’t talk to their parents about how to pay for school.

There’s also reason to believe that parents shouldn’t feel so bad about not being able to take on the full tab. A national study out last year found that the more money parents pay for their kids’ college educations, the worse their kids tend to perform. In her paper “More Is More or More is Less? Parent Financial Investments During College,” University of California sociology professor Laura Hamilton found that larger contributions from parents are linked to lower grades among students.

Apparently, kids who don’t work or otherwise use their own money to pay for school spend more time on leisure activities and are less focused on studying. It’s not that these kids flunk out, according to Hamilton. She found that students with parental funding often perform well enough to stay in school, but they just dial down their academic efforts.

Given all these findings, parents should feel less pressure pay the full ride for their kids—especially if it means falling behind on other important goals like saving for their own retirement. “Putting your kids on the hook for college costs is better for everyone,” says Ward.

MONEY 101: How much does college actually cost?

MONEY 101: Where should I save for college?

MONEY College

5 Signs Your College is in Serious Financial Trouble

Academic building with "Going out of Business" sign on door
Gregory Olsen/Getty Images—iStock (sign)

An increasing number of schools are unable to balance their books. Make sure yours is not one of them.

When Corinthian Colleges Inc. agreed in July to sell off or close nearly all of its 107 campuses, it left 72,000 students wondering about their futures—and whether they should have seen the writing on the wall.

Today, with more colleges and universities than ever having trouble making ends meet, experts are urging students to pay closer attention to warning signs. “In this day and age, when there’s so much at risk, it doesn’t hurt to do some legwork and investigate,” says Mike Reilly, executive director of the American Association of Collegiate Registrars and Admissions Officers (AACRAO).

When colleges close, students face the wrenching process of having to find another place to continue their higher educations, often in the middle of semesters; plus, they may wind up tangled in the red tape of student loan paperwork and the often unsuccessful effort to transfer academic credits. If credits won’t transfer—and they often don’t—those students face the prospect of repeating course work they’ve already completed, which prolongs the time they spend in college and the amount it costs them. Alumni, meanwhile, see the value of their hard-won degrees decline.

Measures to protect students take different forms, depending on the nature of the school. A for-profit college like Corinthian, for example, must disclose serious issues to investors and the federal government. In January, Corinthian filed a regulatory report acknowledging that the federal government was preparing legal action against the company.

“But colleges are very far down the vortex of the funnel by the time problems are publicly acknowledged,” Reilly says.

So you’ll want to keep up with the early warning signs. Here are five to watch for:

1. The accreditors are circling. Most reputable colleges and universities are overseen by regional accreditors, which keep an eye on schools’ academic and financial health.

When City College of San Francisco’s budget fell apart, for instance, the Accrediting Commission for Community and Junior Colleges, stepped in and ordered the community college to close. That decision is on hold while a court battle proceeds.

Accreditors give schools several rounds of warnings before taking the rare step of ordering them to close. It’s important for students to know the difference between an early warning and more serious sanctions, says Mary Ellen Petrisko, president of the Western Association of Schools and Colleges (WASC), which accredits four-year schools in California and Hawaii and other Pacific islands.

“Students should not panic when they see there’s some sort of challenge to the institution,” Petrisko says. “Institutions go through challenges all the time.”

Accreditors like WASC post warnings and other actions after each meeting. The documents can be helpful for students who want to keep track of their schools’ financial health.

2. The credit rating agencies are raising flags. Another resource to pay attention to is the credit-rating agencies, such as Moody’s, which warn bond investors about at-risk schools. Among the schools that have failed Moody’s smell test is New York’s Yeshiva University, which was downgraded to junk-bond status after a series of financial problems.

Rabbi Kenneth Brander,Yeshiva’s vice president for university and community life, says some students had expressed concerns about their financial aid. But he added that there was no threat to scholarships or academics.

3. The D.O.E. gives the school poor marks. The U.S. Department of Education also provides a measure of schools’ financial strength through its annual “financial responsibility composite scores,” on which a score of less than 1.0 indicates problems.

4. There’s talk of a merger. Several colleges and universities have tried to stave off extinction by merging with other schools. Some mergers work out, but others fail and leave students marooned and without transferrable credits.

A merger “to me seems like a very tenuous strategy,” AACRAO’s Reilly says. “That seems like a trigger in my mind. I’d get a copy of my official transcripts at that point.”

5. The administration won’t come clean. Students at shaky colleges should press their student leaders to keep a close eye on the school’s future, says Reilly. A school that is confident it’s on the right track should have no trouble communicating details to students, he adds.

“One of the things is for students to look at whether an institution is being realistic about its future,” Reilly says. “Once a school closes, your options become a little more limited. I would start asking questions about what the plan is for the institution. If they’re doing nothing but making assurances to students, I’d be concerned.”

This story was produced by The Hechinger Report, a nonprofit, nonpartisan education-news outlet affiliated with Teachers College, Columbia University.

Related stories:
Higher education is headed for a shakeout, analysts warn
Colleges keep increasing discounts to keep students coming
Needing revenue, old universities open new campuses
Private, for-profit colleges see unaccustomed setbacks

MONEY Saving

Why Parents Should Procrastinate on Back-to-School Shopping

School supplies arranged in clock face formation
iStock

If you've been a slacker thus far in rounding up your kid's back-to-school supplies, there's good reason to keep on procrastinating.

The simple reason why this is so is that very soon, almost every store will be putting kids’ scissors, notebooks, glue, pencils, and other back-to-school merchandise on clearance. For that matter, clothing marketed for the back-to-school season will be deeply discounted starting around Labor Day as well if not sooner, in order to make space for the next big seasons for retailers—Halloween and Christmas.

Don’t tell your kids about this, especially not at the start of the school year when homework and exams are about to become painful realities, but the truth is that sometimes it pays to sit back and do nothing. Many consumers are utilizing this “strategy” this summer, though it’s unclear whether they’re doing so consciously—or, more likely, lazily and obliviously. The Integer Group estimated that more than half of shoppers wait until one to three weeks before school starts to buy school supplies, and that 36% of consumers won’t do any back-to-school shopping at all, up from 31% who skipped back-to-school purchases last year.

The most prudent, responsible, cost-conscious approach for back-to-school shopping is for a parent to dutifully browse for bargains throughout the summer and scoop them up when they’re optimal. Back-to-school promotions started even before the previous school year ended, and Staples, Walmart, dollar stores, and other retailers have periodically rolled out 1¢ folders, 25¢ rulers and protractors, and other loss-leader sales in order to rev up business. For that matter, truly savvy shoppers understand that kids tend to need more or less the same supplies every fall, so they strategically snatch up pencils, notebooks, and whatnot whenever they’re at rock-bottom prices throughout the year.

The ship has sailed on the chance to do the prudent thing and buy items whenever the optimal price appears. That approach is too time-consuming and requires too much attention for the average parent anyway. This late in the game, there are two options left: 1) Turn into a whirling dervish and hit one store to buy everything your student needs in the few days before school starts; or 2) make do with what you have for the first day of school, then complete your kids’ list sometime around Labor Day.

The first option is the more responsible one, of course, and ensures that your child will have all of the required supplies on time. Yet the Integer study found that price is the most important element in back-to-school purchases for roughly three-quarters of consumers, and with this first approach, shoppers will wind up paying more than is necessary for many school staples.

That leaves us with the second (slacker) option, which is attractive not only because you can do nothing for a little while longer, but also because of a bonus in the form of saving a bundle of money. By the time Labor Day arrives, the majority of what you need to buy will likely be marked down for clearance sales. You’ll get the cheaper prices on glue, notebooks, and such without having to shop around, monitor Sunday circulars, or hit multiple stores. All in all, you’ll save time, effort, and money, with the main tradeoff being that your kid might get dirty looks from the teacher if he shows up on the first day of school with an empty backpack—or perhaps no backpack.

“Like most seasonal items, the longer you wait to buy back-to-school items, the better your chances are of scoring a significant discount,” said Lindsay Sakraida, features director at the deal-tracking site dealnews.com. Normally, clearance aisles are a hodgepodge of random, undesirable leftovers, but this isn’t the case for basics like pens, notebooks, and calculators, which are more or less immune to trends and seasonality, said Sakraida. “While sorting through the clearance section can sometimes yield limited options, it’s less of an issue with school supplies, making this an even more appealing option for cash-strapped back-to-schoolers.”

She suggested starting to look for big back-to-school markdowns a few days before Labor Day weekend. Around that time a year ago, Staples and Office Max cut prices dramatically on many items, sometimes with discounts of more than 75%. Other retailers will surely be posting printable coupons good for 20% or 25% your entire purchase over the holiday weekend, said Sakraida.

And prices will only drop from there as retailers try to clear shelf space to prep for the next season’s goods. In terms of fall clothing and school supplies alike, “look for the deals to get pretty aggressive by mid-September,” NPD retail analyst Marshal Cohen told the Wall Street Journal.

Even if your kids are fully outfitted for this school year by then, it might be wise to hit the clearance section and round up some supplies for next fall. You know prices will be cheap. And perhaps by planning ahead you’ll show your children that even the laziest procrastinators can change their ways and become more responsible.

More Back-to-School advice:
Would You Spend $60 for Your Kid’s Lunchbox?
Parents Worry More About Back-to-School Shopping Than Bullying
4 Best Credit Cards for College Students

MONEY College

4 Best Credit Cards for College Students

Mom helping her daughter move in to college dorm
Blend Images—Alamy Make sure she's packed one of these cards.

Send your kid off with one of these options this fall, and you'll sleep better at night.

You’ve no doubt heard harrowing stories of college students applying for their first credit cards, then racking up thousands of dollars in debt. It’s the stuff of parents’ worst nightmares.

The CARD Act of 2009 lessened the potential trouble students could get themselves into. The law mandated that, in order to qualify for a card, applicants must be over 21, get an adult to co-sign or prove they earn enough money to make payments.

But it’s left many parents of underclassmen with a tricky decision. Do you sign on the dotted line for your kid—thus putting your own credit score on the hook if your kid doesn’t pay the bill?

Shielding Junior from having his own credit card may seem sensible, but it’s penny-wise and pound-foolish. Length of credit history accounts for 15% of one’s FICO score. So by protecting your son or daughter from plastic, you are inadvertently hurting his or her creditworthiness. You also miss out on the opportunity to handhold him or her through an important financial lesson.

Of course, striking a proper balance between the value of credit and the dangers of its excess is paramount. Revolving debt hurts a credit score, too, and can be very costly to a kid living on a ramen budget—with APRs averaging 15% and as high as 23%.

Three options for you to consider, depending upon how much risk you think your newly emancipated child can handle:

The Training Wheels: A secured card or a low-rate, low-limit unsecured card.

If you are worried that terms like “credit limit” and “due date” will be lost on your child, you might want to sign him up for a secured card, which uses cash as the credit limit collateral.

The benefit is that Junior won’t be able to spend beyond the cap, so it’s a good way to give him practice using a card of his own without doing a lot of damage to your finances or your credit score. The downsides: You’ll have to front the cash. And unless you set a large credit limit, he may use a high percentage of his available credit, which is bad for his credit score (ideally he should use no more than 20%).

Alternately, if you don’t want to put up your cash as collateral—or your kid has enough income to qualify on his own—you might start him off with an unsecured card that has a low rate and a low credit limit. This also pens him in until he demonstrates reliability.

Once he proves himself able to handle either of these cards, have him shift to one of the advanced cards in the next category.

The picks: MONEY’s Best Credit Cards winners Digital Credit Union Visa Platinum Secured or Northwest Federal Credit Union FirstCard Visa Platinum.

The APR on Digital Credit Union’s Visa starts at a low 11.5%. To apply for this secured card, you do have to be a member of the credit union, but that be accomplished with a $10 donation to Reach Out for Schools.

The FirstCard’s rate is even lower—a fixed 10% APR (most cards today are variable rate). This card, which has no annual fee, is designed for people who don’t have a credit history: It requires applicants to take a 10 question quiz on credit knowledge and has a credit limit of just $1,000.

The 10 Speed: A rewards card

Cards that offer rewards typically have higher APRs than those that don’t. So if you child revolves debt on one of these cards, he’ll likely erase the perks earned.

Thus, rewards cards are best reserved for those students who’ve already proven themselves capable of paying off a secured or low-limit card in full and on time for a year or so. These are also good choices for those students who are over 21.

The picks: Capital One Journey Student Rewards Card and Discover It for Students.

The no-fee Journey gets your kid 1% cash back on everything, but the reward is bumped up by 25% every month he pays his bill on time. “This is a good card for incentivizing students to have the right behavior,” says NerdWallet.com’s Kevin Yuann. There’s no foreign transaction fee (a plus for those studying abroad), but a late payment fee of up to $35 and a steep 19.8% APR should scare away parents who aren’t sure about their child’s bill-paying vigilance.

The It, which also has no annual fee and no foreign transaction costs, gets your kid 2% cash back on the first $1,000 at gas stations and restaurants each quarter, and 1% for everything else. Because of the extra rewards for gas, the It is a good card for commuters, says Yuann. Cardholders also receive a free FICO score, derived from TransUnion data, on monthly statements.

While there is no fee on the first late payment, your child will pay up to $35 after that; and after a six-month no-interest window, the APR ranges from 13% to 22%.

Whichever card you end up co-signing for your child, definitely make sure you ask to get account access—and sign up for balance alerts so that you know when you need to swoop in for a teaching moment.

RELATED:
Best Credit Cards of 2013
Money 101: How Do I Pick a Credit Card?

 

MONEY Shopping

$10 Jeans, and America’s Fading Love Affair with Denim

REBEL WITHOUT A CAUSE, James Dean, 1955
Courtesy Everett Collection The 1950s: James Dean made denim iconic in "Rebel Without a Cause."

Right now is a terrific time to buy jeans—partly because jeans haven't exactly been hot sellers lately.

CNBC recently cited data from the NPD Group indicating that jeans sales are down 6% year over year. What’s more, last fall, the NPD Group also reported that sales of higher-end jeans had dipped significantly, including a 40% decline on the West Coast for jeans priced at $75 and up.

The numbers may not seem like that big of a deal. But given that the average consumer has seven or eight pairs of jeans—and 25% of women own 10 or more —any drop in the sales of such a traditional, iconic fashion staple is a pretty big deal.

On top of the fact that most American closets are already clogged with jeans, another factor is the emergence of yoga pants, leggings, and “athleisure” wear as the day-in, day-out go-to choice for more consumers. “Athletic and activewear are certainly the new everyday wear and that’s happening no matter what age people are,” one analyst told CNBC.

Because consumers don’t feel compelled to buy the obligatory pair of jeans (or three) during retailers’ all-important back-to-school season, stores have been rolling out extra-large discounts to entice shoppers into squeezing a little more denim into the family budget (and closet). Target is currently offering 40% off jeans for the whole family. All jeans at American Eagle Outfitters are under $30. Rollback prices at Walmart mean some Levi’s jeans are now under $13. Hollister jeans are on sale starting at $19, while skinny jeans at H&M are down to $10, and Old Navy has gone as low as $8 for kids’ jeans during this back-to-school season.

None of this means that iconic American jeans—worn by celebrities for decades, celebrated in books like Alice Harris’s The Blue Jean—will be disappearing anytime soon. But much like what happens to the color and texture of denim over time, the ubiquity and everydayness of jeans seems to be fading. The shift isn’t merely about trends and changing tastes either: The cost of jeans, and how denim prices compare to other options, is certainly a factor.

It’s hard to say exactly when America reached Peak Denim, but it was probably not long ago, around the time that “premium denim” jeans were given list prices of $300 (and even $1,000) to see if anyone would bite, and when infomercials for Pajama Jeans were all over TV. We’ve since moved on to a period when jeans, or at least “jorts” (jean shorts) are widely mocked by the likes of Esquire and Buzzfeed.

The yoga pants craze may have been kicked off by a company (Lululemon) charging $90, but nowadays shoppers are more likely to turn to comfortable leggings. “I can wear leggings from yoga to going out at night,” one shopper explained to the New York Post. “Most people go for leggings because it’s easier and cheaper” than a pair of jeans, the manager of an American Apparel store in Manhattan explained. “Denim is just denim,” she said. “The leggings are more versatile.”

While leggings cost as little as $10, the average price paid for a pair of jeans has been measured at $34 and $39 in various studies. When you add in that the typical consumer already owns more than a half-dozen pairs, it’s no wonder that shoppers are increasingly choosing cheap, flexible leggings over yet another pair of denim bottoms. It’s also no wonder that stores are feeling forced to drop jeans prices to make them more appealing.

For a look at denim through the decades, check out the gallery below.

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