As someone who categorizes themselves as relatively risk
adverse, many of my past and current decisions have been made looking forward
to the future. In this post, I think that my decisions would be best understood
in the context of reducing income risk by grouping them into three categories:
college, extra-curricular, and financial.
The first category of decisions is those that deal directly with
college. Thinking back to when I was deciding what school to go to, I had
looked at different statistics in terms of post-graduation. I had looked at
graduation rates as well as job placement, specifically with my initial
program. I had come into college in the Actuarial Science program based on my
love of and skills in math. The University of Illinois is an accredited university
on the Center of Excellence list for actuaries, which is what employers look
for when recruiting students. While I am not in the program anymore, I knew
that overall the University of Illinois was highly ranked within the nation and
is known as one of the premier in state universities. In that aspect of the decision
making, I was thinking about the job prospects and the benefits of going to a
ranked university in terms of future income. Additionally, tuition in terms of an
investment was a factor in my decision. While I could have gone to other
schools out of state or smaller in state schools for less than the University
of Illinois, I made the decision that the investment now in a top school versus
less money for a less highly ranked school was one that was important to me in
terms of future payoff. Even though I am paying more now, my future reward in
terms of income from jobs that I am more likely to have based on being a
University of Illinois alumni will be worth it.
The second category of decisions would be my decisions
regarding utilizing my time outside the classroom with extra-curricular
activities. I have been heavily involved in the student government on campus,
as well as Student Alumni Ambassadors (SAA) and serving on multiple committees
at the campus level. While these extra-curricular activities have not directly related
to my academic studies, I have been able to develop skills and have valuable
experiences that have helped me to grow. This growth and skill set has been something
that I have worked to develop to make myself a better person in the long run
for future opportunities. In my past internship, I utilized the skills that I
had refined in my student government chair role on a project team with the
other interns. This was something that those parallels that I drew in terms of
skills were applicable in different situations. These activities that I have
invested in have not only allowed me to be an engaged student but to grow into
a young professional with skills that will be helpful in the long run,
investing in my own human capital to assist in the future, especially with job
opportunities and working to reduce that income risk.
Lastly, financial decisions that I have made have been
forward thinking. In terms of paying for college, growing up my parents
implemented a rule that half of the money that I received whether it was gifts
or babysitting had to go in the bank for my college fund. In the moment, I was
annoyed by this fact because other friends didn’t have this rule. However, now,
I am extremely grateful that they had implemented this. I have tried to keep
this rule in mind in my current time, both in terms of summer employment and college
employment. This is good practice for my future as well, especially with
starting salaries and potential risk.
My cousin graduated college last December from UW Whitewater
in Special Education. The job market for her was a little bit different because
she had a more specialized degree that is in high demand in Wisconsin, but one
thing that she continues being burdened by is her college debt. She was
pleasantly surprised about having a consistent paycheck as opposed to a college
job. I think that she wished that she would have saved more money when she was
younger, but has adjusted well to the financial aspects of being an adult. The
biggest change for her was the medical insurance costs as well as the car
payments. I think that for me, the biggest change will be the surprise
expenses, however I am confident that if I continue my practices of saving
money, I will be okay.
I found some disconnects in reading this post. You described coming to the U of I to be in the actuarial sciences program, because of the career prospects. I gather that you transferred out of that later and into economics. The decision to leave must have been driven by something else. Was the decision to go into economics still driven by career issues? It simply wasn't clear based on what you wrote.
ReplyDeleteThe savings that your parents forced you to accumulate are a kind of buffer. I am not clear whether you had to spend those on college or if your parents paid your tuition. An issue, post college, is whether the parents can be used as a buffer in a different way. So far this year no student has written about going back to live at home after graduation, but last year that was a pretty common theme in the posts - where student said it was an option in case they didn't immediately get a well paying job.
You mentioned acquiring skills from your work in student government. I'd like to point out that not all skills are human capital, meaning some skills are perhaps useful to you in social relationships, but won't help you earn income. I can't say from my perch which it is in your situation. So it would have been helpful to elaborate on those skills and explain why they are an enhancement to your human capital. Also, from a different point of view, since in class on Thursday we briefly talked about potential employers observing your grades, there is the matter of whether they can make heads or tails out of your extracurricular activities. (Even if your human capital was enhanced by participating in those activities, will they know that?)
Finally, let us talk about health insurance, which is a good thing to bring up. You are the first student to do so. One of the changes brought by ACA is that children can stay on their parents' health insurance until the age of 26. If your parents are currently paying for your health insurance (in addition to whatever medical benefit you get from McKinley) they can keep paying for a while. That should ease your transition into the labor market. There is much uncertainty now about how health insurance will be working in the future. One significant reason to want to have a job at a large employer is that then health insurance will come bundled with the job, one of the perqs that every employee gets. Otherwise, you may have to buy health insurance on your own. There is a tendency for young people who are in good health to purchase high deductible health insurance, because the premiums are lower. But that actually adds to the income risk.
I admire what you did for saving money for college and I believe that you've learned how to spend money wisely since the limited resource. Unlike me, my parents didn't set a rule like your parents did, which make me careless about money sometimes. Not saying that I spend money on expensive stuffs; my point is, sometimes I made terribly wrong choices because I didn't aware that I actually have a strict budget. Maybe I have to set strict rules for myself, such as that I can only spend half of my family funding to finish my degree.
ReplyDeleteAnother thing that I am wondering is, I heard that Asian people are very keen on saving money (like misers?) Western people are, however, more like to enjoy life, so they don't save money as serious as Asians. So I wonder that what if your friends who don't need to save money for their college, how they spend their money? Save it or just spend it?