Ouch, ooch, yeow!
That was my first reaction to the following hot potato I saw tossed around on the Your Money message board:
Have stay-at-home moms with expensive bachelor's degrees wasted the money?
I share the frustrations of the many readers who weighed in on this overheated topic, which is now rocking the party over on the Women in Red board. To wit:
- The equation itself is flawed. Obtaining a degree, at whatever cost, has nothing to do with deciding to become a stay-at-home parent. The whole idea is misguided, says reader MeginPhilly, because it suggests "that the ONLY reason for a degree is to have a commensurate income."
- A college degree shouldn't be validated by economic output alone. "Why demonize the stay-at-home parent with a degree?" argued a reader named Startsmart. "Do you really think skills and information you learn can only be useful if you're drawing a paycheck? Give me a break!"
- Few undergrads know where they're headed. One reader who goes by sbcaligirl, who is now a stay-at-home mom, traveled several different paths:
"When I started college, I intended to go to med school but decided that it wasn't conducive to the type of life I wanted. After that, I thought I'd get a Ph.D. in history. I decided against that and instead went into the workforce. After a few years, I had the opportunity to get an MBA with my employer paying for some of it. During the program, I discovered that corporate America and I don't get along -- but I finished up the degree anyway."
What touches a nerve for most people is the idea that someone might seek out a high-priced private-school education but have no plans to "use it."
A controversial article in The New York Times in 2005 said that many women at elite colleges set a career path to motherhood. (The outrage it sparked was so great that the reporter had to write another article in defense of her thesis.)
And the debate continues: Because college is expensive, because motherhood is devalued (especially stay-at-home motherhood) and because there is no clear-cut way to make these intensely personal decisions add up solely from a dollars-and-cents perspective.
A better use of everyone's time and energy would be to urge lawmakers to create policies that would make life saner for all moms: universal day care, flexible work policies and, for pity's sake, paid parental leave. Join this truly family-friendly group if you agree.
A step that might stop foreclosureIf you're worried about foreclosure, get thee to a mortgage counselor.
A new study by the Urban Institute, a nonprofit in Washington, D.C., released last week found that at-risk homeowners who got counseling were 60% more likely to avoid foreclosure than those who didn't.
This is big news at a time when banks are being slammed for their reluctance to help homeowners who are "underwater." With the right help, perhaps, there is hope.
One big factor, the study found: People who obtained counseling through the National Foreclosure Mitigation Counseling Program were more likely to reduce their mortgage payments, says Peter Tatian, co-author of the study.
The study was commissioned by NeighborWorks, a nonprofit that administers the nationwide NFMC program, which is funded by Congress.
Thus far, more than $400 million has been allocated to local outreach programs in every state. About 760,000 homeowners have gotten counseling since its inception in 2007.
In an e-mail message, Tatian added that counseling made a significant difference in the size of people's payment adjustments. A preliminary evaluation "found that counseled homeowners who got a loan modification received a larger reduction in loan payments -- on average $454/month larger -- than non-counseled homeowners who also got loan modifications."
According to Tatian, homeowners may get help understanding their mortgage documents, communicating with their lenders and figuring out a basic budget in order to determine a mortgage payment the homeowner can afford.
Given that 23% of homeowners are living in homes that are worth less than what they owe -- and thus are at high risk for foreclosure -- don't waste a minute if you think counseling might help keep your roof over your head.
Gift cards: Use 'em or lose 'emBefore you give your brother, mother or husband that gift card, there's something you need to know.
You've probably heard that, thanks to the uproar about punitive gift-card fees and expiration dates, many retailers are changing or have changed the rules -- supposedly to benefit consumers.
Some states have imposed laws that protect the value of gift cards -- by phasing out expiration dates and lowering fees, for example. And starting next year, the Credit CARD Act will restrict the terms that some companies can apply to gift cards.
You might be able to keep a card for a year before fees apply, and for five years before it expires.
While this sounds fair, it might not actually work, according to a study by marketing professors Suzanne B. Shu and Ayelet Gneezy.
The longer you have to redeem your gift card, the less likely you are to use it, says the study, soon to be published in the Journal of Marketing Research.
In two studies, the researchers found that people who had a free coupon were more likely to use it when they faced a tighter deadline. My favorite was a live experiment in which Shu and Gneezy gave 64 undergrads a certificate for a free slice of cake and a beverage.
Of the 32 students who got a coupon with a three-week expiration date, 10 had their cake and ate it. Of the group with a two-month expiration date, only two people got their freebies.
Human beings, it seems, are perpetual victims of their own inertia. When it comes to gift cards, the threat of "use it or lose it" is far more effective in getting people to shop. (Interestingly, this system works well in getting employees to use their FSA funds before year's end).
Whether you're giving or getting a gift card this season, take advantage of the cash -- and all the post-holiday sales -- and spend it before it gets buried in your sock drawer.
Published Dec. 1, 2009