The False Dream of Recruitment

Families with college aspirations for their kids are erroneously relying on the dream of sports scholarships instead of the challenging work of savings.

The practice of saving is very tough.  A study by the Pew Charitable Trust reveals a third of all adults are not saving at all!  It is no surprise then that just 48% of parents who want their kids to go to college are saving for that expense according to a study funded by Sallie Mae.  Parents who are anxious about college expenses are on the hunt for alternative funding.  Their kid is special, and so there must be funds available!  Enter the youth sports machine.  The financial situation in recruiting and youth travel sports, now a $7 billion business, is summed up beautifully by Michael Rosenwald of the Washington Post:

“In the past two decades, sports has become an investment to many parents, one that they believe could lead to a college scholarship, even though the odds are bleak. Parents now start their kids in sports as toddlers, jockey to get them on elite travel teams, and spend small fortunes on private coaching, expensive equipment, swag and travel to tournaments.”

The draw of getting a piece of the $3.3 billion in athletic scholarships is logical, but parents are on the wrong track.  The ‘investment’ in youth sports would serve them better in traditional savings mechanisms.

As in any financial discussion, the first question should be, “Is it worth spending money on?”  Sports and a college education have long been desirable to parents of American children.  Why?  The National Federation of High School Athletic Associations reports that high school athletes have better attendance, better grades (up to a whole point higher in some states), better school spirit and optimism, and higher graduation rates.  Moreover, according to Brigham Young University, women who play high school sports are 41% more likely to graduate from college.  This does not even touch on the anecdotal beliefs of improved teamwork, work ethic, and problem-solving skills.  A college degree reduces unemployment (in 2013) to 3.5% versus 7.5% for a high school graduate.  A Georgetown University Center on Education and the Workforce study released earlier this year found college grads make $1,000,000 more than a high school grad over their lifetimes.  STEM degrees make even more! Ok, so yes, it is worth paying for both sports and college.  However, can sports pay for college?

With the big youth sports machine and the thousands of recruiting agencies that have popped up hounding families with offers of intangibles like ‘connections’ to universities and products like polished videos and sports resumes, it is easy to get caught up in the fervor.  However, there are currently university sports roster spots for 2% of the kids playing high school level ball.  That is across all divisions, and Division 3 schools do not even offer athletic scholarships!  If your kid is not KILLING it in your metropolitan area, there is little chance she will play on a D1 or D2 team.  These companies are exploiting our bias of how amazing our kids are and our fears of not being able to provide for them.

Before we get into the scholarship scene, let’s talk a little about how great our kids are.  Mine are terrific.  Truthfully, my daughter may graduate as valedictorian.  That is right, people, valedictorian.  One in a million, right?  Well, 1 in 67,000. There are approximately 67,000 public and private high schools in America, and each one has a valedictorian every year.  That is a serious reality check.   On the sports front, there are 7,500,000 high school athletes, and there are about 150K roster spots at US colleges.  To play at a D1 school, a player needs to be a varsity starter all four years and All-everything up to All-State selection.  So my daughter probably isn’t going to play lacrosse for Maryland, but I still love to watch her play. Keeping our perspective of where our kids fall in comparison to the other applicants can help us understand our true odds of getting a full ride.  The odds are not good.

There are only a handful of sports that guarantee full ride scholarships.  These are called ‘head count’ sports and include football and basketball for men and basketball, gymnastics, tennis, and volleyball for women — at Division 1 schools only.  All other sports programs are called ‘equivalency’ sports and the scholarships are based on a total dollar value, which usually results  in partial scholarships.  Individual equivalency programs CAN give a full ride if they feel it is necessary to secure a specific athlete, but it is rare.

This begs the question:  If your little darling is a prodigy and garners a coveted university roster spot, would a $2000 a year scholarship ($8000 over her career) make up for the untold thousands you spent on camps, coaches, and combines?  Unlikely.  A family can spend $2000 on sports extras each year in high school alone.  If those funds are saved, it will cover the $8000  — and then some with interest!  A $150/mo contribution to a 529 plan at 5% starting her freshman year in high school will be able to cover it.  The takeaway here is you are not going to get your sports ‘investment’ money back.

Ok, so no; sports are not a tuition cash cow.  Here are a few numbers:  2013-2014 sports scholarships equaled about $3.3 billion.  Total grant aid to students was $112 billion in 2012-2013, which roughly represents only half of total student financial aid.  Athletes received $11.1 billion of those grants for reasons other than their sport.  So, the money comes from elsewhere.

Where does that leave us?  Go ahead and put your kids in sports.  It is good for them.  Skip the travel team and private coaches, and put those fees in savings instead.  Don’t spend a ton of extra money on recruiting companies when you can do that work yourself (or better yet, your student can do that work HERSELF.)   Coach contact information is on the University web page, and coaches claim to prefer contact from players and parents to the “spam” they get from recruiting agencies.  Compile your own video of sports highlights to distribute or post to public domains like YouTube.

Stop paying for extra sports training, and pay for a tutor.  Academic performance has more to do with a child’s admittance and funding than any other factor.

College tuition will be one of the greatest expenses of raising your children.  If you have not started saving, start right now.  Look into your state’s 529 plan and education IRAs which both offer tax benefits, and make some deals with your kids.  A college degree is a critical factor in lifelong financial success.  However, it does not have to be a degree from a fancy private school.  There are many ideas and plans out there to minimize college costs from doing a few years in community college to applying for every little scholarship for which you qualify. The books listing all known scholarships are three inches thick and available in the counseling office of your child’s high school, your public library, and book stores.  Be creative and do the work yourself.

Paying for college need not be a dream.

Guest Contributor: Jean Himelspach, an AFC® and a ridiculously proud parent of two obviously extraordinary little darlings, who is tired of the games and wants to go back to just playing sports.

December 15, 2015 at 3:00 pm, by admin | No Comments | Category financial education, General, saving

3 Tips to Help Teenagers Track Their Finances

Most parents desire their teenagers to be a wealth of financial savvy – saving crazily and spending wisely. However, the reality is that at this point in their lives, our teenagers may not hold the same affinity to become financially stable adults.

My teenager is a case in point. He is a content young man who has worked enough to save up some money (primarily due to us, his parents, telling him to save). However, he also has access to his checking account, and debit card. Knowing that it was time for him to start keeping track of his money, I sought out an app for him to use on his smartphone. While there are a wealth of apps available, I found that many are too intricate to help a teenager track his very modest income and expenses. Below are some guidelines to help your teens start a basic financial tracking of their mone

  1. Keep it simple! Even if your teenager works a part time job, most likely, they only have a few bills that are their responsibility. They need very basic income and expense categories. My son currently has about four expense categories. It is a good place to start, and it helps him see where his money is going. We found an app (Easy Spend) that has the basics perfect for his style. There are plenty of apps out there, but the key is to find an easy, simple format.
  2. Keep it safe. We want to ensure that our kids can safely track their money without cyber intrusion. Doing just a little bit of research on the company that produces your app of choice can help you safeguard your teen’s information. Also, discuss identity theft with your teen and educate them on risks. They are young and sometimes too trusting. Having discussions on keeping their wallets safe, their IDs inaccessible to others, and their debit cards secure are a good foundation for safety.
  3. Help them become spending savvy. The hope is that if you give your teen freedom, they can learn good spending habits early in life. While you are still available for assisting, let your teens make mistakes and learn from their spending habits while they are young, and you are there to engage them in useful discussions. At birthdays and holidays, help them set goals for spending and see if they stick to them. When they want to buy their fast food, let them see how quickly those stops can add up. If they want to purchase games, let them see how much those expenses add up over time. If they handle small amounts wisely, the hope is that as they mature they will develop valuable life skills that will carry over into the young adult years.

Teens need to become aware of how to track their expenses in easy ways without being inundated with all of the expenses that come in our adults years. If they can learn to balance their finances as teenagers, they will build a foundation of skills that will enable them to make more independent decisions into adulthood.

Guest Contributer: Ester Johnson, AFC®

December 8, 2015 at 11:46 am, by admin | No Comments | Category budget, financial education, General

Supporting a Grieving Client

As a Financial Counselor, if you have never gone through the process of grief yourself, then you may find it difficult to know what to say to, or how to work with, a client who is currently grieving. The first step is to understand some of what your client is experiencing.

Grief is different for every person and for each loss they experience. However, some best practices can be applied when working with nearly all grieving clients.  As a counselor, it is also important to be aware that the process of grief does not happen in a sequential order of stages, and it does not have an exact end date.

When a grieving client works with you, s/he may appear to be okay on the outside, but it is imperative that you realize what can be going on just barely beneath the surface.  Unlike having a physical injury, which is visible and easy to identify, a grieving client carries their trauma internally.

At any time that a grieving client is sitting in front of you, s/he may be dealing with any or all of the following issues:  shock, devastation, confusion, lack of memory, cognitive impairment, unbearable pain and sadness, uncontrollable crying, feeling scared that other people they love or they will die soon, frustration, exhaustion, panic, anger, urgency to get things done in case they die soon, or lack of knowledge of how to manage the finances. Feelings of isolation can occur very quickly, if family or long-time friends avoid the grieving person. This may leave your client feeling a significant lack of support, caring, and understanding.

So, the question is: how do you work with a client who is experiencing these complex emotions?

Be as kind and as gentle with them as possible.  Use a great deal of patience with them as you may need to repeat yourself several times before the information you are trying to relay registers fully with them.  You may even want to block off extra time on your schedule when working with a grieving client to accommodate for this, or for a conversational diversion.

Tune in to the needs of the client.  If they need to talk about their grief or the deceased person some, let them (which is usually what grieving people need most – just to express their feelings).  By simply letting them talk, you are acknowledging and validating their feelings.  There is no need to say anything other than affirming that you hear them.  There is no advice you need to give as there is nothing that will take away their pain or make them feel any better.  You only need to let them feel whatever they feel and let them share it.  Although you may eventually need to gently guide the conversation a bit to help them stay on the track of finances, this is not the time to force the conversation in any way.

If necessary, provide resources for private grief counseling and/or a grief support group.  Being around other people who can understand what a person is going through, and also having the chance to share feelings, pain, love, and experiences, helps to make the burden of grief just a tiny bit ‘easier’ to carry.

Guest Contributor: Lynn Thibeau, AFC®

December 4, 2015 at 10:05 am, by admin | 1 Comment | Category financial education, General

Mindful Spending: The Emotions Behind Your Financial Decisions

One important factor in planning a financial strategy, and a step so often overlooked, is taking a look at the emotions behind the purchase. Emotions are closely linked to financial habits. If you spend time thinking about the philosophy behind your purchases, you will likely find yourself in a better financial situation.

Everyone has a different goal in life, but I’m going to guess that most of us hope to make a positive impact on the world. So, how can we do that with mindful spending? Being a leader and making a positive impact takes many forms. Some people make an impact on the direct service of their job, through financial donations, still or by modeling good behavior and asking those around them to do the same. However, no matter how you plan to be purposeful in your life and with your actions, ensuring a solid foundation in your personal well-being is important. We cannot take care of others if we cannot take care of ourselves.

Start by thinking about the two things that you spend the most money on, excluding essentials such as rent or bills. The answer will be different for everyone. Next, think about what this large expense does for you. Ask yourself, “Does this expense have a purpose?” That purpose could be personal enjoyment, necessity, gifts, or more. If every dollar you spend is with a purpose, you are far ahead of the pack. Most of us spend money and cannot always remember what we bought. Are there meals you don’t remember or events that you went to, not because you were interested, but because a friend wanted to go?

For the next week, I challenge you to think about your money as you use it. Don’t blindly swipe your card or hand over cash. Be purposeful with your spending. Think about how the purchase aligns with your values and your goals. Is the purchase necessary? Is there something better that you could do with that money? Is the purchase in line with the type of person you see yourself as or the person you want to be? Is there something you want more than where you’re currently spending your money? Do you want to start your own business one day? Could you be saving the money for that? Does someone you care about have a birthday coming up? Whatever it is, just think about it. Once you have carefully thought through the expense, then go ahead and make it, but be purposeful about it.

Over time, you will see what expenses are fulfilling to you, and you will have an easier time saying no when something doesn’t serve a true purpose. Simply being aware of your financial habits and motivations is the first step on the journey to proper money management.

Guest Contributor: Natalie Daniels, AFC®


December 2, 2015 at 11:47 am, by admin | No Comments | Category financial education, General

Money, Marriage & Communication

Money affects all areas of an individual’s life. Issues with money are still a leading factor in divorce. The following tips are essential to every marriage and every budget:

  1. If you’re not working together, you’re working against each other. conducted an eye opening poll that revealed, “One in 5 Americans in a relationship say they have spent $500 or more and not told their partner, and 6 percent maintain secret accounts or credit cards.” The key word there is ‘secret.’  There is no room for secrets in any aspect of your marriage.  Secrets directly lead to a lack of trust. Think of trust in your marriage as the foundation of a house.  Regardless of what top-of-the-line finishes you have, if it was built on an unstable foundation, it will surely crumble.

  1. What’s your Money Personality? offers a free quiz to know your (and your spouses) money personality.  This breaks it down even further than just a spender or a saver.  Not only does this quiz break the ice to open the conversation about finances but it allows you to learn more about your partner.  This is an essential step in teamwork.  You must know his/her strengths, weaknesses, opportunities and threats as they pertain to finances.  How does your spouse perceive money, its value and its worth?  What is it that money provides your spouse? Security, confidence, excitement, status, etc.?  If you know what drives each other, you’ll be more inclined to make sure everyone’s needs are met.

  1. Get Synced!

It’s easy to forget to take a purchase off the checkbook at the end of the day and it’s even easier to get out of sync with your spouse’s purchases during a busy work week.   There are many apps out there that allow you to sync your phone with your partner’s phone, to keep track of purchases.  I recommend ‘Good Budget’ especially if you are a fan of the envelope method, but not so much of carrying around cash.

  1. Take Charge Together!

If money is a leading factor in the climbing divorce rates, how do you make sure your marriage does not become a statistic? The answer is by mutually taking charge!  When you work together, you either fail together or you succeed together.  As a result, there will not be one person to blame or one person to praise.  By implementing no.3 above, by mutually paying bills and/or creating monthly budgets, and by creating financial goals, you’ll be working together.  Each person will be individually responsible.  This will allow each person to have a part in the day in, day out part of the budget.  If both people are in control, there is no power struggle and no resentment.  When you each have an active role in the household finances, it is a sure fire way to not only boost, but propel your marriage into the future.

Guest Contributor: Mandi Furness, AFC®

November 23, 2015 at 12:30 pm, by admin | No Comments | Category financial education, General