Personal Finance 101
CLEP’s Impact on the Next Generation
Let’s face it, learning all the ins and outs of taking CLEP exams and how it transfers into a college is challenging. Like you, it took me a while to understand the process.
When I was in the beginning stages of learning about CLEP, I was sitting in the dentist’s waiting room reading a recommended book, College without Compromise, written by homeschooling parents Scott and Kris Wightman. “If you don’t want your grandchildren in daycare, you must plan for it now.” Their words rang true with me. It was a powerful sentence and to this day I share it in my workshop presentations.
By 2023, nearly 40% of borrowers are expected to default on their student loans.
Our financial dependence on loans is often cited as the reason millennials are adulting later in life than previous generations. Four milestones (expectations?) are used to define entry into adulthood: leaving home, marriage, parenthood, and employment. In 1975, 45% of young adults age 25 to 34 experienced all four milestones. In 2016, that number dropped to 24%.
Back to Broke
I was listening to ChooseFI, a podcast for millennials that is going viral. In episode 119, Mr. Refined talks about how and why he is pursuing financial independence after accumulating almost 6-figures in student loan debt. His story is compelling – The years it took him to get “back to broke” (out of debt) and how millennials today are losing their first decade of income after college graduation, paying back their loans.
Teaching Financial Independence to Your Children
Boost your efforts to help your student earn a debt-free college degree by teaching personal finance. Start young! Anyone can do this. Teaching teens personal finance at home makes them more valuable to their future employer. What’s your strategy? Here are a few ideas to get you started:
1. Stop buying your child clothes. Instead, give them a limited budget twice a year (cash in an envelop) and let them make their own choices.
2. Create a mock budget. What is the cost of living for the desired lifestyle your student wants to live? Will their chosen occupation support their lifestyle?
3. Teach family budgeting. Put them in charge of your family meals. Online grocery shopping makes this task a snap. Have them meal plan and stay within a budget.
4. Encourage saving with a 50/50 offer. Help your student save for that “want”. Whether it is sports camp or a new guitar, let them know you will match every dollar they save toward the wanted item.
5. Pocket your savings. For older teens, present a challenge that if they can find a way to reduce one family bill, they can pocket the first year of savings. They might check into alternative cell phone plans (Mint Mobile) or call the garbage hauler and ask for their best price. Turn them loose and see what they can do!
6. Encourage entrepreneurship! Carrie recently emailed me to share how their family implemented an idea after attending one of my presentations. In fact, their story was featured in the spring issue of Enterprise Minnesota (pg 18). She offers a micro-business idea that kids of any age can start: Pets and Plants!
Generational Blessings
You’ve heard me say it before … CLEP is simply a test. However, those who utilize credit-by-exam may find, as we did, that the blessings of smart money management extend beyond avoiding college debt. Because our children graduated without loans, they were able to achieve those 4-adulting milestones early. My husband and I are benefiting because we don’t have to be their financial safety net.
Finally, I wanted to share with you an email I received last week sent by Nancee, a homeschool parent in Wisconsin who hosted one of my workshops in 2014. (shared with her permission). I hope this encourages you!
Subject: THANKS A MILLION!!!!!!!!!… or at least $16,000
I just wanted to say thank you for the information about college credits by testing out. It made a huge difference in my daughter’s life. I will let you know her success story.
She wasn’t even sure she wanted to go to college, but the thought of just seeing if she could pass college level tests was appealing to her. So she took her first CLEP test in 10th Grade. She was excited and motivated by the results. She decided on a career path that she felt called to, and she was even more motivated.
Over 11th and 12th grade, she took many tests, and some that were difficult and had to be taken over – still saving money over tuition. In her last year of high school, she took 4 classes as dual-enrollment, to earn credit toward her degree. By the time she graduated High School she had 36 credits.
She was sure of what she wanted to do and was headed in the direction of a degree from Liberty University. She took courses through Straighterline because they offered a partner-discount. Even though Straighterline was more expensive than CLEP, she saved in the long run with the school discount. She did not want to go away to college, so she did her learning online. She completed one of her required courses through a test out only offered through her college (called an ICE exam), and then took a couple more CLEP and DSST tests while she was attending school full-time, in her summer time.
She attended college full-time from Jan of 2016 to May of 2018. And her last CLEP she finished in July of 2018. When they conferred her degree she had achieved 48 credits by testing, 72 as standard college credits, without ever leaving home. She graduated with her bachelor’s degree, Magna Cum Laude with a 3.75 GPA, making the Dean’s List several times in around 2 years’ time. Her degree cost her $7,286 in tuition. We figured we paid about $1,900 in testing fees over the course of those credits; this saved her $16,380 in tuition. Thank you Cheri, for sharing this gift with us! ~ Nancee
Copyright 2019 – Please share this article with friends and introduce them to Credits Before College
Category: Blog, Creating a Plan
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