E TO EN AG
2 IN $ 0 SE
$
ACK P EB
T TER O W
BY TEENS FOR TEENS
C I H C
M O T N E E G Y S S N M E E A T R T FO O G A
Entrepreneurs You Should Know Page 6
SPRING 2014
SUMMER 2014! Saving on College Costs Pages 8-15
R
Famous Women in Business
Page 5
TABLE OF CONTENTS
INTERNS
PAGE 3
PAGE 12
Letter From the City Treasurer & Intern with On the Money
Merit and Need Based Scholarships
PAGE 4
PAGE 13
College Funding/Saving & Preparing for College Financially
How to Avoid Student Debt
PAGE 5
PAGE 14
Women in Business
Which College Major is Right for You & Standardized Test Scores
PAGE 6
PAGE 15
Faces of Entrepreneurship: Succesful Local and Global Entrepreneurs
Cost of Senior Year & Illinois Jumpstart Coalition
PAGE 7
PAGE 16
Why Advertise?
New or Used?
PAGE 8
PAGE 17
How to Make a “Major” Decision & Traits of Successful Entrepreneurs
Healthy Eating & If Only Food Were Magic
PAGE 9
PAGE 18
Business Majors: Which One is for You?
The Powerful Middle Class
PAGE 10
PAGE 19
Is College Really Worth It?
Advertisements or Buyvertisements? & Budget: A Plan for College Success
PAGE 11
BACK PAGE
Paying for College & Teen Mom
In the Know & Young Illinois Saves
Janette Andrade Senior, John Hancock High School Kamal Bilal Senior, Whitney M. Young High School Goldene Brown Junior, Lincoln Park High School Jeshaiah Campbell Senior, Gwendolyn Brooks College Prepatory Academy Kimo Cox Senior, Urban Prep West Justus Eason Senior, Schurz High School Dayanara Guyton Freshman, University of Illinois at Chicago Amy Jin Senior, Whitney M. Young High School Julian Jones Senior, Mount Carmel High School Clark Lewis Junior, Whitney M. Young High School Samantha Mallett Sophomore, Lane Tech College Prep Kaprisha Martin Senior, North Lawndale College Prepatory Sana Moore Senior, Chicago High School for the Arts Kendall Nelson Sophomore, Urban Prep Bronzeville Adriana Nunez Senior, UIC College Prep Tyreesha Owens Senior, Simeon Career Academy Robert Robinson Senior, Urban Prep Bronzeville Charter School for Young Men DeVante Sherod Senior, De La Salle Institute Crystal Stonewall Junior, Chicago High School for Agricultural Sciences
ABOUT ON THE MONEY On The Money magazine is written by teens for other teens. On The Money covers entrepreneurship, business, finance, credit, saving and more... providing real world experiences and resources that can help students learn to meet their business, money and career goals. On The Money is provided by the Economic Awareness Council through collaboration with Chicago Public Library, DePaul University, the Office of the City Treasurer of Chicago, Stephanie D. Neely, and True Star Magazine.
ABOUT THE EAC The Economic Awareness Council (EAC) is a financial education non-profit organization has program attendance of over 20,000 each year.
THANKS TO OUR PROGRAM PARTNER
On the Money Magazine would like to thank HSBC, the Office of the City Treasurer of Chicago, State Farm Insurance Companies®, Republic Bank, Fifth Third Bank and MB Financial for their sponsorship of this issue. 2
Magazine design and layout by Jessica Alessi
CITY TREASURER STEPHANIE D. NEELY COMMENTS ON THE VALUE OF MONEY SMART WEEK IN CHICAGO Money Smart Week is April 5th – 12th in Chicago. We asked City Treasurer Stephanie D. Neely to comment upon the importance of this effort. WHY IS MONEY SMART WEEK IMPORTANT? “Money Smart Week has been a great platform to raise the importance of learning financial life skills in the minds of young people and their parents. The numerous Money Smart Week events and online resources provide a tremendous opportunity for families to learn and discuss everything from learning good savings habits to how to fund a college education.” WHY DOES FINANCIAL EDUCATION MATTER FOR STUDENTS? “At each stage of school students are preparing for life as an adult. They not only need to learn important skills to achieve their career aspirations but life skills to help them manage adulthood. One of the most important life skills is how to manage personal finances. Too many young people enter adult life not knowing how to use a bank, to spend wisely, or the importance of a credit report and lose control of their financial lives. We need ensure that all young people are empowered to make good financial decisions at each stage of their life” WHAT DOES BEING FINANCIALLY LITERATE MEAN TO YOU OR WHAT ARE YOUR HOPES FOR FINANCIAL EDUCATION IN THE CITY OF CHICAGO? “A financially literate person is someone who has the skills and knowledge to make good financial decisions regardless of the situation. Becoming financially literate is a process that begins at a young age where a child learns the difference between needs and wants, the value of delayed gratification and the value of money. Then it moves to learning tangible skills such as what to do with your first paycheck from a summer job and how to pay for college. And finally, learning about adult decisions such as insurance, taxes, homeownership, and retirement planning. It is my goal to help provide opportunities to improve literacy at every stage of life by empowering our teachers to incorporate personal finance concepts in the classroom and working with community-based organizations provide more opportunities for adults to build their financial capability. Find Money Smart Week activities in your neighborhood at MoneySmartWeek.org.
tern with Want to In ey? n On the Mo il at e n ma Send us a ncil.org nCou OTM@Eco to apply! ow to learn h
On the Money interns visit with a representative of the Federal Reserve Bank of Chicago
3
COLLEGE FUNDING/SAVING Saying goodbye to your high school years may be difficult, but your upcoming college experience can be a thrilling and exciting new chapter! The following financial insights can help you prepare for the next stage of your life. Short-term: Set-up or fine-tune your budget If you haven’t already done so, get a solid grasp on your finances. A good understanding of your cash flow can help lessen the financial anxiety many college students face. Know how each dollar of your income is allocated and spent, including federal and state taxes, gas money, clothing, savings and entertainment. Establishing a solid budget, sticking to it and using your credit card wisely can help you avoid money mistakes your freshman year. Long-term: Plan wisely for college debt With high school graduation right around the corner, it’s not too early to start planning your finances beyond college. While you may not be 100% certain of your career plans yet, you can begin investigating what a typical first year salary might be once you graduate. A good rule-of-thumb is to make sure that, when you graduate, you have no more in student loans than what your first year’s salary may be. If your calculations are worrisome, you may need to consider a less expensive school, start out at a junior college for a year or two, or even aim to graduate in three years. Your college years can be some of the most thrilling and anxious times of your life. Having a solid plan for your short- and long –term finances can help you focus on the other aspects of your college years – thought-provoking coursework, a newfound sense of independence and friendships that can last a lifetime! Visit YourMoneyCounts.com for more information. Sponsored by
Carlo Airdo Vice President, Corporate Sustainability HSBC
START PREPARING FOR COLLEGE FINANCIALLY THIS SUMMER! Freshman? Sophomore? Junior? It’s never too early to prepare for college financially! This summer: 1) Save some of your summer earnings for college. Having an emergency fund or money for books or school fees can go a long way in easing your transition to college! 2) Start researching college costs and available scholarships. Many college scholarships have early deadlines or require essays or other preparation. The earlier you start the more prepared you will be! 4
AIN’T I A WOMAN CLARK LEWIS
“Ain’t I a woman” are the words made famous by African American and women’s rights activist, Sojourner Truth, in a speech advocating for rights in 1851. In today’s society, men and women are still not equal in the workplace nor do they experience it with the same ease. Of the entire labor force, 46.8% are female (Catalyst). Women who work full time make only 76.5% of what men receive (Catalyst). Women aiming to be successful face additional hardships and disadvantages compared to their male counterparts. The gap between women’s wages and men’s wages is at least partially caused by certain choices and outside factors. For example, women are more likely than men to leave and re-enter the labor force due to family obligations such as childbirth (Consad). Also, women tend to be attracted to more “family friendly” jobs; which limits the jobs available (Consad). Personal finance expert Terry Savage says she became interested in pursuing a career in finance after she realized her own abilities to pick things up and saw how the industry was dominated by “all men and money.” While women have made progress in creating a professional place for themselves, only 23 women are CEOs out of the Fortune 500 companies (Catalyst). Hardships, however, aren’t limited to gender. City Treasurer of Chicago Stephanie D. Neely states that people are discriminatory for a variety of reasons, such as race and height in addition to gender. However, she stresses that women working to make it in any industry “never take ‘no’ for an answer, work hard and dream big”. Women in modern society have to fight harder to be successful in their careers. Although people face many disadvantages during their careers, no one should let these hardships limit or stop them from pursuing their goals.
Clark Lewis with Chicago Financial Journalist & Author Terry Savage
Clark Lewis with Chicago City Treasurer Stephanie D. Neely
5
FACES OF ENTREPRENEURSHIP – SUCCESSFUL LOCAL AND GLOBAL ENTREPRENEURS ROBERT ROBINSON Christopher Robinson is a 23 year old local entrepreneur, photographer, videographer, and inspiring director. Christopher works with local and regional clients who potentially have what it takes to fullfil their dreams of being in the music industry. Christopher defined an entrepreneur as “someone who creates an enterprise [and is] willing to take initiative and risk.” Mr. Robinson explained how he began, “I bought my first camera when I had a clothing brand a while back. I didn’t want to pay others for a photo-shoot so I purchased my own camera.” What tips does Mr. Robinson have for other entrepreneurs? “I set goals, I organize business plans, and I execute.” Steve Mills, CEO of Ink Mill Corporation has a BS in Chemical Engineering and has authored and co-authored patents in the area of adhesives, ink and printing systems. In 2007, he received a green printing award from the Canadian Government for his contribution to reducing the environmental impact of printing by inventing an ink based on corn, rather than petroleum oil. Mr. Mills’ definition of an entrepreneur is “somebody that has a vision to build wealth and is willing to risk time and money to see that vision come to fruition.” Mr. Mills told me the story of how his business started. “My best friend from college and I were travelling together on a business trip. Our flight got delayed, so we missed our connection and ended up having to spend an unplanned night in Washington, DC. We started talking, and ended up sketching out a plan to start our own company. After this, we took advantage of the New Hampshire Small Business development organization to help us write a business plan. After finalizing our business plan, we sought out investors, mostly family and friends.” What are Mr. Mill’s plans for the company? “We feel that we can grow the company to a certain point... After we reach that point, we will probably have to have a larger organization behind us to handle the kind of growth that we see on the horizon.” This can be YOU! Stop procrastinating. If you have the dreams and aspirations to change the world, do it NOW! If you have that itch to be great in any way, strive towards your goals and achieve them.
HAVE A BUSINESS THAT YOU WANT TO SHARE? EMAIL A DESCRIPTION OF YOUR BUSINESS, BUSINESS PLAN OR FINANCIAL SERVICE LEARNING PROJECT TO OTM@ECONCOUNCIL.ORG. WINNING ENTRIES WILL BE INVITED TO A COMPETITION AND EXHIBITION AT THE HAROLD WASHINGTON LIBRARY CENTER 400 S. STATE ST. LOWER LEVEL MULTIPURPOSE ROOM, 5-7PM ON 4/23. VISIT ECONCOUNCIL.ORG TO VIEW WINNING ENTRIES.
6
WHY ADVERTISE? DAYANARA GUYTON Products and services are promoted to us by corporations. Products and services get old and suppliers come up with something new immediately. Advertisements are everywhere. Advertising products and services builds the brand of a company. When the structure and ranking of advertisements is the topic of discussion, there is a wide range of perspectives. “Advertisements can be, and often are, evaluated on a variety of different metrics, such as creativity and popularity” (Kellogg School of Management, 2014). The Kellogg School of Management at Northwestern has designed a certain criteria to follow known as ADPLAN. This strategic assessment will define the weakness and strengths of an ad. Attention, distinction, positioning, linkage, amplification, and net equity are the six components analyzed. Over time, advertising transforms into branding. Branding is more effective than just advertising products to buyers. Branding strategies connect to people’s lifestyles. Branding is very expensive and is more of an ambitious project. Branding involves many people’s input and collective data. But this research may be worth it, “The average cost of a prime-time spot is just shy of $110,000 a pop” (Anthony Crupi, 2011). The cost normally depends on the channel and time the ad is shown.
ADPLAN: Attention Distinction Positioning Linkage Amplification Net equity
The goal of an engaging promotion is to gain active consumers. Creating a brand gives the corporation more value, although branding is not the only factor that shapes successful corporations every business desires to make its mark.
Eloy Garcia, Marketing Representative from State Farm, states: “We all have a target audience we want to reach but as a company we need identify the right mediums and message to make that connection. Television is a great medium for building brand awareness and consideration, but to be most effective we need to have a “surround sound” approach where we reach the target audience wherever they are, which includes print, television, radio, internet, mobile and social media.” State Farm Insurance Companies® supports the Economic Awareness Council and On the Money Magazine’s peer led financial education outreach efforts in the community. We thank them for their support.
7
HOW TO MAKE A “MAJOR” DECISION JESHAIAH CAMPBELL Choosing a college major is like unlocking the door to the rest of your life and career. No pressure though! All majors have their pros and cons; however, there is no right or wrong major. It’s about choosing the major that’s right for you. It’s ideal that you choose one based on your passion that leads to a job with a high potential for employment and a good salary. Did you know that nationally more than 40% of declared engineering majors change their minds and switch majors by the time they graduate? Majors in STEM (Science, Technology, Engineering and Math) typically have salaries starting at about $64,000 and typically have an unemployment rate of less than 2%. But if your math homework makes you want to cry, you might not want to pursue majors in this field. Liberal arts majors (ex. English, Sociology, and Fine Arts) tend to be the most popular, yet sometimes are lower paying and have higher unemployment rates. If you choose to major in this area, don’t get discouraged. Mrs. Aurora Diaz, a professional school guidance counselor says, “It’s important to follow your passion, whatever it is. If you have a major where finding employment is sketchy, you can obtain a minor where you can easily gain employment. All in all, the most important thing is to have a backup plan.” Here’s an example. Let’s say you want to major in Theater Arts, which tends to have a high unemployment rate. You can minor in Secondary Education, and teach a Drama class at a school. That way while launching your acting career, you can earn some income at the same time. College is expensive so it’s important to get the most from your major. If you’re completely unsure about what you want to major in, visit www.whatsnextillinois. org/careerplanning and take an interest profiler, which can match you up with different majors you may be interested in.
THE #1 TRAITS OF SUCCESSFUL ENTREPRENEURS: A TIESTA TEA INTERVIEW SAMANTHA MALLET Dan Klein, the CEO of Tiesta Tea, sat down for an interview and gave On the Money his secrets on how to become a successful entrepreneur. Tiesta Tea is a tea corporation established in 2010 by Dan Klein and friends after a vacation to Prague where they tried loose-leaf tea for the first time and decided when they came back to the United States to share their discovery with others. Klein’s favorite tea is Lean Green Machine which gives him feelings of a slender body and the benefits of being healthy without losing its flavor. If you are interested in buying Tiesta Tea, there are many vendors that distribute it, including Mariano’s. Klein’s top tips for being successful involve determination, staying on track, and utilizing resources. “No matter what your business is, there will be good and bad, but determination helps you to progress.” He continued. “Successful people take something terrible and make it positive.” Staying on track in college is important as well because temptation surrounds you, but you have to be able to manage your time well. Klein concluded by advising to use your resources at school because there is an abundance of free resources that are not utilized by students.
8
BUSINESS MAJORS: IS ONE FOR YOU? AMY JIN College decision letters are flying in, and the excitement for the next few years is mounting. Before starting the collegiate journey, we must first sift through hundreds of courses to find the ones that appeal to us the most. The National Center for Educating Students states that out of the 1,650,000 bachelor’s degrees conferred in 2009-10, the largest numbers of degrees obtained were in the business field. There are many opportunities in this area of study; and to guide students towards whatever career goals they have, colleges offer many different business concentrations. Which one is for you? (Source: Business Degree, bls.gov) • Accounting: Do you have an aptitude for numbers and a skill in staying organized? From creating tables of accounts to generating reports on the financial health of a company, you will need control and structure in daily tasks working with lots of numbers. • Finance: This is the one for you if you can embrace cognitive-thinking skills and enjoy analyzing data. You will be drawing conclusions from financial evidence and using the findings to improve a business. • Information technology (IT): Do you have a knack for coding, programming, and possess a mindset for problem solving? If you find interest in utilizing technological advances to enhance business operations, IT is the field for you. • Management: If you hold strong leadership abilities and would be able to handle a lot of responsibility, this may be the one. Strong communication skills are a must, as you will be negotiating agreements with other organizations, and collaborating with others to resolve issues. David Borom, a business valuation intern at Loop Capital, states that he got into this field of study because “...it’s all about the people. Tasks such as communicating to turn around a failing business give you an opportunity to help the clients on a human level.” • Marketing: Like conducting research and strategizing ideas to improve brand positioning? Want to also apply psychology and sociology to assess effectiveness and customer satisfaction? If so, management is the one for you! In college, students can seize the opportunity to explore different courses in each field until they find what suits them best. Lubin Zhuang, a Senior Business Analyst at Capital One, gives the business field a quick shout-out as she says that she chose to pursue it because of “the analytical, strategic, and collaborative nature of the work.”
ONEY & ON THE M IS SAVES LINO YOUNG IL TO THANK E L WOULD IK BANK L B U REP IC PORT SUP FOR THEIR
9
IS COLLEGE REALLY WORTH IT? KIMO COX Imagine an America where crime and poverty is a rarity. Imagine a United States where everyone could support their families with relative comfort, not leaning on anyone to help them make ends meet. This America is not some distant utopia, but a possible reality through a college education.
I then asked my mother, who recently attained her associate’s degree. She explained that the chance to better her life was the main reason for her returning to school. The chart below shows the financial benefits of obtaining additional education beyond high school. Median earnings of bachelor’s degree recipients with no advanced degree working full time in 2011 were $56,500, $21,100 more than median earnings of high school graduates.
College education is becoming a staple in America’s economy as more businesses require a college education to be employed. However, the ever looming question is one that I will answer in this article: is college worth it?
Today, four years of college at an in-state public school costs about $36,000 on average (2014 The College Board), and while college is expensive, there are many scholarships and loan opportunities for college students. College, like everything else, has its setbacks; however, the long term benefits of being college educated vastly outweigh the risks. In conclusion, the higher the degree level, the greater your financial potential is and the greater your chance to live in comfort.
College provides many opportunities that are nearly unattainable elsewhere. Now don’t just take my word for it. I recently interviewed Mario Gage, a senior at the University of Chicago. When asked if college opened any opportunities for him, he stated, “I definitely feel that attending college has opened a lot of doors for me and that my degree will continue to open doors for me in the future.”
EDUCATION PAYS
http://trends.collegeboard.org/college-pricing/figures-tables/tuition-and-fees-sector-and-state-over-time (Bureau of Labor Statistics)
Thank you ers, ny volunte to our ma d writing n partners a DePaul m o coaches fr y. Universit
10
PAYING FOR COLLEGE JULIAN JONES Ok! You did it! You finally made it into the school of your choice. Go ahead, it’s time to celebrate. After celebrating your achievement, it’s time to open your checkbook. College is expensive and most students are not getting full rides, but there are other ways to help pay for college. The first step is to see just how much a typical four year university costs. The average cost of attendance for a public and private university is $22,826 and $44,750, respectively. These costs are not only for tuition but also room and board, books, supplies, meal plans, and transportation. You can pay for these fees through loans, which are a useful way to pay for college, but they also add up with extra interest costs through the years. Another way to pay is through scholarships. There are many organizations willing to give perspective college students money to pay for their education and the requirements vary. For example, some scholarships are just looking for people over 6 feet! Other scholarships are simply asking for a book report, like the one offered by the Ayn Rand Institute. There are many ways to find scholarships, but the student has to be motivated to find them. Two websites that the Illinois Student Assistance Commission Katrina Morales recommended were WhatsNextIllinois.org and CollegeGreenlight.com. The last way to pay for college is through government financial aid. This aid can come in the form of grants, loans, or federal work study. The amount of aid offered differs from person to person. To apply for federal aid, you have to fill out the free application at fafsa.gov. The application calculates your aid based on parents’ income and the school you’re applying to. THERE’S A LOT OF MONEY TO GO AROUND. A STUDENT JUST HAS TO FIND IT. THERE’S NO NEED TO MAKE COLLEGE MORE EXPENSIVE THAN NECESSARY.
TEEN MOM KAPRISHA MARTIN Sixteen and Pregnant, is a hot reality TV show that illustrates the problems teen mothers go through by having children at a young age. Even though reality TV is not always real, there is some truth to the lifestyle of those teen moms. Teen pregnancy can put your future on hold. Ambitions can still be reached, but they’re much harder to achieve. According to Modernmom.com in How Teens Pregnancy Affects Job Opportunities “40% of pregnant teens never finish high school” (http://motherhood.modernmom.com/teen-pregnancy-affects-job-opportunities-11672.html). It is mostly because they don’t have time for school and spend most of their time caring for a baby, either during their pregnancy or after birth. Also, pregnant teen mothers are limited to the type of jobs they can have. To support a child, teens often have to get jobs that There is help for those who want it. interfere with school work. Taquita Dobyne, a senior and teen mom who had her baby These are teen pregnancy help centers: last October says, “Being away from school for so long has been difficult. I am going to New Moms graduate this year and hopefully go to college with my baby.” 5317 W. Chicago Ave. Chicago, IL 60651 Phone: 773-252-3253 Email: contact@newmomsinc.org Website: http://newmomsinc.org/
Having a child early can postpone your college plans. Less than two percent of mothers who have children before 18 have a college degree by 30 (http://www.ehow.com/ about_4623637_teen-pregnancy-affects-job-opportunities.html). Elizabeth Witman, a Prevention Program Coordinator for Teen Parent Connection and previous teen mom Teen Parent Connection herself, says, “When I began college, having a child meant having to really manage 475 Taft Avenue my time carefully and work hard. I was not able to live on campus and have a typical Glen Ellyn, IL. 60137 college life.” Time management is the key to continuing you education while being a Phone: (630) 790-8433 I Email: Info@TeenParentConnection.org mom. For all the teen parents reading this, don’t panic; having a child at an early age Website: http://teenparentconnection.org/ may seem like the end of the world, but it’s not. You can still live out your ambitions and succeed, but it will be challenging. To those who are sexually active or want to become teen parents, remember to take not only your life into consideration, but the future of your child!
STUDENT A OR STUDENT B: MERIT & NEED BASED SCHOLARSHIPS CRYSTAL STONEWALL Student A: Has 4.6 GPA and is enrolled in all honors and AP courses. This student participates in several enrichment programs and internships throughout the year. This student also is the president of student council. This student is not considered low income. Student B: Has a 2.0 GPA. Does not participate in enrichment programs, and does not show any leadership skills. However, this student is considered low income. Based off the two student descriptions, which student do you think is most deserving of a scholarship for college: Student A (the student with an excellent academic portfolio, but is not considered low income) or student B (the student that has just an average academic portfolio, but is considered low income)? Obviously, both students are uniquely different. Student A would qualify for a merit-based aid scholarship. Student B would qualify for a need-based aid scholarship Rick Cooper, who has a Ph. D. in Economics and has taught at various universities throughout the United States, stated, “There always will be a role for both merit based and need based scholarships... they allow for all kinds of students to pursue an education that might not have a chance without it.” Merit-based aid is awarded based on either academic and/or extracurricular achievements. This type of aid comes in the form of grants, tuition reductions, or scholarships. When searching for colleges that offer merit aid you should (1) find out if the college offers aid based on merit, (2) take a look at the college’s merit aid track record, (3) determine whether you would be considered a top student at the college, and (4) evaluate other ways you might be valuable to the college. When asked about his merit-based scholarship at University of Wisconsin, the first year student stated, “I am grateful for receiving this scholarship. By receiving this scholarship, I feel as if all my hard work in high school finally paid off. This scholarship is the pot of gold I have been seeking for.” Need-base aid is awarded based on financial need. This type of aid comes in the form of partial or full tuition, housing costs, and sometimes stipends. The government and colleges assess “need” by looking at the total cost of attendance, minus what they estimate your family can afford. That estimate, which is referred to as your Expected Family Contribution (EFC), is determined based on the information you provide when you fill out the Free Application for Federal Student Aid (FAFSA). When asked about his need-based scholarship at University of Wisconsin, the first year student stated, “I do not know how I would have paid for college without financial assistance. I am very thankful. I can only work harder from this point and on.”
REMEMBER THE FAFSA (Free Application for Federal Student Aid) is available in January and is first come first serve so visit http://studentaid.ed.gov/fafsa and get ready to apply TODAY! (Applications end June 30th but apply early for the best results!)
12
HOW TO AVOID STUDENT DEBT DEVONTE SHEROD In 2012, the average student loan debt for graduating students was $29,400, and 64% of Illinois graduates leave with debt. The price of higher education is what stops many people from getting their degree, but there are ways around this. The best way to solve this huge problem is to find as many scholarships as possible. There are many types of scholarships, but the most common are academic, athletic and service scholarships. Academic scholarships usually require additional essays to help the providers get a better understanding of the student. Most schools will automatically consider students for their scholarships when they apply. Aliyah Abu-Hazeem, a student at Oberlin College, barely has to pay anything in college because of all the hard work she did finding scholarships in high school. “I attained most of my scholarships through hearing about them from various sources, specifically my college/career coach and senior counselor.” Finding out about scholarships is the hardest part of the process. There are websites and people dedicated to helping students find out about these scholarships that are hidden. Senior counselors are a great help in finding scholarships and websites like collegegreenlight.com help out too. Daryl Brown, a Posse Foundation Scholar, utilized his resources to find the scholarship best for him. Posse foundation is a very competitive scholarship and only 110 students get it. The most difficult part for him was “not thinking I could get in after seeing the odds.” Even though most scholarships are extremely competitive, it’s still very important to simply believe in yourself.
On the Money would like to thank Fifth Third Bank for hosting our 2013 Release Party with Chicago City Treasurer Stephanie D. Neely and for their support of On the Money Magazine. 13
DECIDING WHICH COLLEGE MAJOR IS RIGHT FOR YOU SAMANTHA MALLET College majors that tend to lead to the highest salaries at a faster rate generally are involved in sciences, but there are numerous other beneficial majors as well. During interviews with Stephen Murray, a high school counselor at Notre Dame College Prep, and Amy Homkes-Hayes, a counselor at the University of Michigan, both agreed that you should stick to the fields you are most passionate about for higher results. Although it is typically swell to have an idea of what degree you would like to major in, there is still plenty of time for you to change your mind. “For quite some time I thought that [one major] was for me,” stated HomkesHayes, “but, I ended up practicing social work after I graduated from the University of Michigan, and eventually pursued by Masters in Social Work degree.” If you are still indecisive about what field is right for you, a Liberal Arts degree is suggested. Murray believes that students with a Liberal Arts Degree have great flexibility as they have not locked into one specific area, “they have a breadth of knowledge which could be useful in a number of fields.” In order to be successful in today’s economy, science fields are in popular demand. Computer Sciences, Health Care, and Engineering are doing extremely well. According to bls.gov, some of the highest earning careers are generally marketing managers (median pay $114,000) air traffic controllers, computer and information system managers, engineering managers and surgeons (median pay over $187,000 per year) to name a few. Keep in mind that no matter what major you choose, you can always change your career path down the road. Stay with what you are passionate about and your hard work will pay off.
DO STANDARDIZED TEST SCORES AFFECT MERIT-BASED SCHOLARSHIPS? KENDALL NELSON If you’re bad test taker, you’re probably praying that the answer to this question is no. A lot of people believe that you need to get a crazy high score in order to get money for school. In fact, I know people who would say their G.P.A. loud and proud, but when it comes to saying their ACT or SAT score they claim that they “don’t remember” as an excuse or just don’t say it at all. It’s pretty alarming that colleges would give a college student on average 25% of their entire financial aid package. That’s a lot huh!?!? Well, there are other ways to get your money without a high standardized test score. For those people who already know that they are not experienced test taker, I’m here to tell you that all hope isn’t lost. Urban Prep - Bronzeville’s college counselor, Marshall Hatch, says, “If you’re not a good test taker, it is essential that you participate in extracurricular activities or have high grades. If you can combine both of these two, then a low standardized test score can be overlooked.” He’s got a point! In my research, I found out that there are some scholarships out there that have nothing to do with standardized test scores; they are only dependent on grades and community service. According to my research, http://www. prweb.com/ explains that the Posse Scholarship and the Bill Gates Scholarship are some of the United States leading scholarship foundations. In fact the Gates and the Posse Scholarship combine to benefit over 9,000 scholars to date. So, it is important that if you want a full scholarship, foundations like these are life savers especially if your standardized test scores aren’t very high! 14
THE COST OF SENIOR YEAR ADRIANA NUNEZ The last year of high school is seen as an eventful year with college applications, prom and specifically graduation, but people often don’t consider how expensive it is. Application Costs ACT and SAT testing, CSS profile and college fees, and the costs of college applications add up. The average application fee that 1,229 ranked institutions provided in spring 2013 was $38.39, the highest it’s been in six years according to data from U.S. News and World Report. (although there are many fee waivers to low income students.). Sara MacCallum, a College Counselor at UIC College Prep High School, advises seniors to “make sure you apply to schools that you are interested in” as well as research schools ahead of time. Before college application time comes, students must take their ACT and SAT, a standardized test that cost $35. At times, students might take it twice until they get their best score. There is an additional fee to send the score to colleges. The CSS profile, a financial aid form required by many colleges to develop a student’s financial aid report, costs $25. Prom and Entertainment Costs ASB Card $20-$40 Senior year is not all work. There is the very much anticipated prom. Each Yearbook(Annual) $50-$90 year the cost increases. In 2013, families planned to spend 5 percent more than Class Ring(Boys) $250-$300 the year before, with an average cost of $1,139, according to an annual survey Class Ring (Girls) $150-$200 by Visa. Amy Jin, a senior at Whitney Young High School, comments on Cap & Gown (Rental or Purchase) $20-$50 buying a prom dress: “Prom dresses get pretty expensive; but students can Senior Panoramic Picture $15-$25 Graduation Announcements $1.00/announcement check out The Glass Slipper Project, which accepts gently used dresses as Graduation Name Cards $15/100 cards donations, and provides them (and accessories!) to high school girls prepping for prom.” For men, many stores rent tuxedos for an affordable price. Prom is not the only expense senior year. Don’t forget about graduation costs, yearbook fees, class ring, sport fees and senior pictures which in many high schools must be paid before attending prom. This is especially evident in the Northeast and South, which have a tradition of formal coming-of-age parties. Average spending by families with teens attending prom is considerably higher than in other parts of the country, with families in the South expected to spend about $1,047, while Northeastern families will spend an average of almost $2,000, according to the Visa survey. In the West and Midwest, families will spend an average of $744 and $696, respectively, the survey found.
ILLINOIS JUMP$TART COALITION: ANNUAL RECEPTION & AWARD PRESENTATION CLARK LEWIS Established in 2004, the Illinois Jumpstart Coalition is an organization dedicated to improve personal financial literacy among Illinois youth. In addition to furthering financial capability, the organization also recognizes outstanding teachers, students and “key stakeholders” in the community. On December 3, 2013, the coalition along with sponsors including Fifth Third Bank, Finance for Teachers and Great Lakes Credit Union hosted a holiday reception to award notable students, teachers and community leaders. The Jumpstart Coalition, along with Allstate Insurance, presented decorated journalist, author and personal finance expert Terry Savage with a lifetime achievement award for her contributions to the advancement of financial literacy. In future receptions, the Illinois Jumpstart Coalition will award the “Terry Savage Award” to commendable recipients. Former On The Money Intern Kiara Hardin was awarded a scholarship for her efforts in financial education and her academic achievements.
15
former On the Money Intern Kiara Hardin winner of 2013 Winter Jumpstart scholarship
NEW OR USED? JANETTE ANDRADE Have you ever thought about buying a car? If so, would it be new or used? Buying a car is a huge financial decision, so before you choose a car do your research! Because this is your first car, plan how you will spend money on this car such as in gas, insurance, interest rates, etc. Also, remember when one buys a car lenders will always look at the three Cs of credit, which are character, capital and capacity. Character in a credit score shows what one has used credit in before, how one pays bills on time, and how long one has been in their present job. Capital is how many assets one has such as personal property, investments, or savings in with which one can repay debt if income is unavailable. Capacity refers to the ability that one has to repay debt. There are many advantages to buying a new car. According to Cassey Baca, a representative at a local car dealersip, “You get a brand new car with a great warranty.” When one gets a new car they are the first owners of the car and only they know what their car has been through. Insurance for a new car is also less expensive than it is for a used car because a new car isn’t going to start with any problems, such as mechanical problems. As one buys a new car it also has a better finance rate because new cars usually have a low interest financing rate or a cash rebate that is usually offered at the dealer. A NEW CAR CAN ALSO HAVE DISADVANTAGES: “A NEW CAR LOSES 11% OF ITS VALUE THE MOMENT YOU LEAVE THE LOT,” ACCORDING TO EDMUNDO.COM. WHEN ONE BUYS A $20,000.00 CAR, THE MOMENT THAT THEY DRIVE OUT OF THE CAR DEALER THEIR CAR AUTOMATICALLY LOSES VALUE TURNING IT INTO A $18,000.00 CAR (HTTP://WWW.ENTERPRISECARSALES.COM/WHY-BUY-USED). A used car can be a great deal for many who are looking to buy a car for a low price. “I own a used car and it has lasted me for over three years now, it has been working very well for me and it hasn’t failed me at all. My APR and interest rate has been low for now because I keep up with my payments,” mentions Christina Mayer, a college student. Many used cars can really be a good fit especially if they don’t have many miles. One has to have in mind that a used car often does not come with warranty whether it’s from an individual or a dealer. If something happens to the car, it will be up to one to pay that out of their own pocket. Also, be sure to consider insurance: “If you go for a bigger [insurance] company it’s more guaranteed that if anything happens to your car it will be fixed because they respond to you quicker. I started off with a no name insurance companies that were cheaper, but I had bad experienced when I needed them, it took a long time to resolve my claim or to get the car fixed when I was a teenager,” http://national.deseretnews.com/article/1088/Driving-forces-When-buying-a-newsays Mr. Salazar, a Journalism teacher at Hancock car-is-smarter-than-buying-used.html High School.
16
HEALTHY EATING JUSTUS EASON
“Junk food drags you down,” says the Chicago Public School System. But interestingly enough, CPS school systems sell foods like hot crunchy curls, high sugar carbonated drinks, sugary fruit snacks, etc. On average, 40% of children’s diets are made up of added sugars and unhealthy fats . The marketing of unhealthy foods is still common in U.S schools today. 74% of all middle and high schools have vending machines . The primary way that schools make money off of these vending machines is through the 10% commission they receive from the vendors. So, are schools selling their students’ health for money? “Proper nutrition promotes the optimal growth and development of children,” says the CDC. The principal of my school, Schurz High School, provided me with the fact that our school does receive 10% of the vendor’s earnings. He also did say that our school is looking at finding a healthier alternative to our current vending machines. I decided to go out and research a healthier alternative. I had the chance to speak to a privately owned eco-friendly vending machine company that provides vending machines for about 15 school districts and is still growing at a fast pace. Human Healthy Vending provides about 1,200 vending machines to hospitals, YMCAs, schools, and corporate locations. Their price is on the expensive side but when considering student health and how much it contributes to student performance; school systems should absolutely want to invest in a healthier alternative for their student body!
IF ONLY FOOD WERE MAGIC GOLDENE BROWN Taking a bit of time out of your day or out of your week and doing regular grocery shopping can add up to nice savings over time. Even though making a lunch is cheaper than buying, one reason people may not do it could be that they’re too lazy to wake up a few minutes early to fix a lunch or another possibility is that they think restaurant food tastes better. What many people fail to realize is how much money they could save if they made lunch. According to bankrate.com the cost of a bagged lunch is three dollars and the take out lunch price is around six to seven dollars. “How I feel about it is if you don’t like the school lunch and you’re allowed to go out for lunch, go out. If you’re too lazy to fix a lunch in the mornings or the day before, go out for lunch” [Daminique Garcia, School]. On average, buying lunch every day costs workers about $2,000 a year, says a survey in Workonomix conducted by Accounting Principles. “For most adults, they may not make lunches because they don’t have the time. Like me, I have to come to school and look after all of you. By the end of the day I’m tired and have no time. As for students, some have multiple sports, a load of homework and some are all and all just lazy” [Michael Boraz, principal Lincoln Park High Sschool]. Whatever the reason you don’t fix lunch, stop, second your motion and think about how much money you could save. Maybe it’s a little, maybe it’s a lot, but it’s something. 17
THE POWERFUL MIDDLE-CLASS: HOW CONSUMERS ARE A FUNDAMENTAL PART OF JOB CREATION KAMAL BILAL A concept that has been widely accepted by America’s general public is the idea that the people with the highest earnings create the most jobs; therefore, the people with the highest earnings should receive the most tax breaks. These financial incentives will make the wealthy wealthier and give them the ability to generate more jobs. However, this theory, based on the nation’s policies of the past half century, is flawed. “An ordinary middleclass consumer is far more of a job creator than a capitalist” (Nick Hanauer). In fact since 1979 to 2010 the federal taxes of the top one percent income have declined from 35% to 28%, but the unemployment rate rose from 5.9% to 9.7% (Congressional Business Office). Businesses only tend to hire when it is absolutely necessary, or when demand is rising. Who is in control of demand? The consumer. U.S. consumers account for approximately 70% of the national economy (Henry Hazlitt). Without a healthy middle class, demand for products will be low, and businesses will be more inclined to fire their workers. However, when the middle class is spending, and demand is on the rise, businesses will have no other choice but to employ new workers. Since 1980, the share of income for the richest Americans has more than tripled while effective tax rates have declined by about 14% (taxpolicycenter.org). With the notion that a wealthier upper-class will create more jobs, Americans should be flooded with job opportunities; however, we are suffering from record high unemployment rates. So how can we create a stronger economy? If we were to tax the rich at a greater rate and use that money for investments that benefit the average consumer, the middle class might be able to spend more. Moreover, would this increased demand grow business and help the country’s economy thrive? What do you think? Voice your opinion.
Visit OTMSURV EY.COM to take ou r Money Sm art Surve y and be en tered to win
VISIT OTMSURVEY.COM!
$20
Over 50% of students were concerned about illnesses and school fees as urgent events.
“ITEMS THAT STUDENTS REPORTED WOULD MOST MOTIVATE THEM TO SAVE FOR EMERGENCIES WOULD BE INTEREST AND SAVING INCENTIVES OR A SAVINGS MATCH.”
Over 50% of students look for bank accounts with low fees, interest and convenience.
18
ADVERTISEMENTS OR BUYVERTISEMENTS? TYREESHA OWENS There are many factors that encourage teens to spend money such as peer pressure and family income, but advertisements have a big influence on our spending habits. Most teens may not realize how big of an influence ads have on their everyday decisions. According to the American Academy of Pediatrics “Young people view more than 40,000 ads per year on television”. “The average young person views more than 3000 ads per day on TV, the internet, on billboards and in magazines. “ Just think about how much money you could save if you set a budget and spend less money on advertised products. Teens spend most of their money on clothes and food. Tiffany Brown, 17, Kelly H.S Junior said, “Sometimes even if I’m not hungry, I will buy food because it looks good on the paper.” In most cases teens spend before they think. Most teens do not take the time to evaluate if the item they would like to buy is a need or a want. According to the American Academy of Pediatrics: “Advertising is $250 billion/ year industry with 900,000 brands to sell….” This graph provides a visual to show the comparison between the amounts of money spent by teens ($155 billion), children under 12 ($25 billion) and the amount of money teens and children influence their parents to buy ($200 billion) (American Academy of Pediatrics). “I buy clothes just because I have the money to spend and it looks nice when I see it” (Mariah Collins, 18, Simeon Senior). You can save a lot of money if you budget, and you do not have to buy everything you see in ads. Always ask yourself is this something I want or is this something I need before you purchase anything. DO NOT LET ADVERTISEMENTS STOP YOU FROM SAVING!
BUDGET: A PLAN FOR COLLEGE SUCCESS SANA MOORE “Congratulations senior! You have been admitted into our college.” This is what every senior loves to hear during admission season. Getting admitted into your first choice or just any college you apply to is a big deal. While the thrill of college life and being away from home is awesome to dream about, there are other factors to consider. While in college, it is important that you budget your money the best ways possible. A few steps to creating a budget for yourself while in college are determining how much money you plan for purchasing books, tuition fees, spending money, as well as money for emergencies. A current college student, David Borom, said that as a freshman he spent most of his money on clothes and food. However, as he got older he spent less money on clothes and more on food! Wise words for Borom were, “Start saving money as a freshman as much as you can, the sooner you choose to save, the better off you are as you get older.“ According to Nationwide College Student Spending, 3 out of 4 students have a job in college and through these jobs as well as the help from Mom and Dad the average college student brings in $1,200.00! This isn’t bad as a college student, but 84% of undergraduates have at least one credit card and 21% have a credit card balance of $3,000-$7,000. Also, the average student spends $765.00 on food alone (Huffington Post, 2011). A current senior from De La Salle, Devante Sherod, agrees when he attends college he will most likely spend money on food. Remember that saving money for college at an early age is vital and helps out in the long run. According to the Huffington Post 92% of students from the ages of 18-25 agreed that saving money is a priority in college! Create a college budget today at CollegeBudgetBuilder.org!
19
IN THE KNOW 1) On page 6, Robert Robinson highlights 2 entrepreneurs. What were some business strategies recommended by these entrepreneurs? Identify 2 strategies below. 1:
Visit OTMSURV EY.COM to take ou r Money Sm art Surve y and be en tered to win
$20
2: 2) In Tyreesha Owen’s article on page 19, she highlights two areas that equal the majority of teen spending. What were these areas? What are 3 tips you can use to reduce your spending overall? Teen Spending Category #1: Teen Spending Category #2:
Tip 1: Tip 2: Tip 3: 3) In Kimo Cox’s article on page 10, Cox describes that median earnings of bachelor degree recipients with no advanced degree, working full time in 2011 was $56,500. This was $21,100 more than median earnings of high school graduates. Draw a bar graph below to show the difference in these annual earnings.
$60,000 $40,000 $20,000 College
High School
4) On page 9 Sana Moore discusses budgeting for college. Visit CollegeBudgetBuilder.org to create your own budget for college. Print this or record your income and expenses below from your budget. Income ____________
— Expenses _____________
Or visit www.YoungIllinoisSaves.org to pledge online. (Must be 13 years of age or older)
= ____________