Making College Pay
I often hear people say, “You go to college to get an education.” I’d say a more accurate statement is, “You go to college to prepare you to get a (good) job!” Too many parents and students miss the subtle yet profound difference in these two statements. Let’s think about this for a moment. Does it really make sense to spend four to five years and tens of thousands of dollars attending and graduating from college only to find out there are no jobs (or very low paying jobs) in the course of study you’ve chosen? However, it is my experience that many students give very little consideration to the long-term impact of choosing a particular major (I was one of those students!). Parents are often just as guilty in that they provide very little guidance.
Kiplinger Magazine published an article that focused on the ten best and worst majors and the results are worth noting.
Ten best college majors
Computer science; information management systems; software engineer; economics; finance; physics; statistics; civil engineering; actuarial mathematics and nursing. For the most part, the common theme here is math, science and computers. This group experienced many more job opportunities with starting wages in the $50,000 to $60,000 range.
Ten worst college majors
Culinary arts; music; child & family studies; animal science; media (radio, TV newspaper); interior design; drama; art; education; and graphic design. A strong theme here is creative arts. This group will often struggle to find jobs and starting pay will be nearly half that of those who graduate within a top ten major.
Why this matters
A few years ago, I was a trainer at a financial seminar and a sixty-something attendee came up to me after a session and said, “All this talk about money! Money is not that important!” My response was, “You’re broke, right?” After a moment of stunned silence, he said, “Well yes, but…”
Ok, I get that money is not the most important thing in the world and there are lots of things that are more important, but having enough money to pay your bills and save for retirement is immensely important. I’ve watched way too many families struggle their entire adult lives because they didn’t earn enough money. Understand that students entering college don’t have the perspective of not earning enough money because, in many cases, their parents have provided for most, if not all, of their needs. Many see college as a fun adventure and give little thought as to ‘what happens next’ after they graduate. They choose a major because it sounds fun. The result is often the frightening realization that there are no jobs for which their major has prepared them and they are forced to accept a low paying job and, too often, return home to live!
Here’s the takeaway
If you’re a student, before you choose your major, research what the job prospects are as well as the long range opportunities for advancement. If you’re a parent, do your best to steer your children during their primary education and early secondary education towards academic areas where they’ll have the best opportunity to succeed financially. I remember counselling a college student who had majored in accounting (a very good choice) but who was burned out had decided to take a management training job rather than continuing for one more year and getting his masters in accounting. My partner, Greg Weyandt, CPA, and I convinced him his future was ever so much brighter if he gutted it out another year. He did and he easily got a great job and has become a rising star in his field. My associate, Beth Moody, CFP, points out that there are many incredibly rewarding careers with only modest income prospects. If you choose this path, do so knowingly and prepare yourself to become a master of managing your money. The bottom line is that your choices make a big difference in the trajectory of your life so be thoughtful and deliberate.
One final point. My partner, Michael Wagner, CPA, pointed out that another major goal (opportunity) in attending college is to significantly expand your personal relationships. Understand that financial success is always built around other people so the more people you have great relationships with, the more likely you are to succeed. Use college as an opportunity to connect with lots of people through active participation in several campus organizations. Not doing so is probably my greatest college regret.
Stewart H. Welch, III, CFP®, AEP, is the founder of THE WELCH GROUP, LLC, which specializes in providing fee-only investment management and financial advice to families throughout the United States. He is the co-author of J.K. Lasser’s New Rules for Estate, Retirement and Tax Planning (John Wiley & Sons, Inc.) and THINK Like a Self-Made Millionaire. Visit his Web Site www.welchgroup.com. Consult your financial advisor before acting on comments in this article.