The Penny Hoarder talks about saving and paying for college

http://www.savingforcollege.com/articles/the-penny-hoarder-talks-about-saving-and-paying-for-college-732

I recently had the pleasure of speaking with Kyle Taylor, founder of The Penny Hoarder blog. Kyle started clipping coupons with his mom when he was just 15 years old, and today he is best known for finding and sharing “weird and wacky” ways to earn, save and grow money. In the following interview, Kyle offers some great advice for parents, college students and recent grads:

1. Your blog, the Pennyhoarder.com, is one of the largest personal finance blogs. What was your inspiration to start writing?

I was a broke college student with tuition bills to pay for. For side income, I once worked as a beer auditor where I would have to buy beer and report back to the store owner about whether the cashier had carded me. On top of the extra money, I also got free beer!

My blog actually started out as a hobby. After about two years, traffic began to grow and I was attracting attention from the press and local news.

2. I’ve seen a few posts on your blog on paying for college. What is some advice you would give to new parents who plan on sending their children to college?

First, I would remind parents that they don’t have to pay for their child’s college. Saving for your own retirement should always be a first priority.

If you have your retirement covered, tuition savings plans are a great tool to save for college. A lot people have trouble coming up with the extra money to fund their savings plan. I recommend a strategy that involves 50% cutting back on expenses and 50% making extra money.

3. How about advice for current college students who need some help paying tuition? Is it possible to earn money while keeping focused on your schoolwork?

It’s definitely possible. In fact, I think students should work while in college. There are so many different part-time jobs that work well for students, for example online side jobs or even a grocery cashier. One of my favorite options is website testing – you can make up to $700 a month by putting in as little as 4 hours per day.

4. What about the 40 million Americans with student loan debt – any advice for paying it off?

Develop a strategy based on the types of loans you have, and pay off the ones with the highest interest rates first. Start with PLUS (parent-owned), then pay the unsubsidized loans, and finally the subsidized loans. Subsidized loans are the least expensive option since the government pays the interest while you are in school. I’ve found the best way to tackle student loan debt is with “snowflakes” – any little amounts of extra money that come in. Use these solely to pay down your debt and for nothing else.

5. Do you think it’s a smart idea for today’s students to take out loans?

Do your best to try and avoid taking out student loans. There are so many grants and scholarships available, and you should always fill out the FAFSA. Last year, The Penny Hoarder launched a $2,000 “Frugal Student” scholarship that rewarded one lucky participant who exemplified creative budgeting and frugality.

If you have to take out loans, be sure you know what you’re getting into and try to stay on a budget.

6. What are your thoughts on college students and credit cards?

I believe that college students should have a credit card in order to build credit, but they need to use it responsibly. Parents really need to teach their children about personal finance before they get to college. Credit cards can be used for things like gas and groceries, but be sure to pay the balance in full right away.

7. Any advice for college graduates who racked up too much credit card debt?

Use any extra income that comes in, your “snowflakes”, and pay down the card with the highest interest rate first. Use your tax refund, graduation money, income from part-time work at a farmers market, anything!

8. Who are your personal finance role models?

I ‘d say a little Suze Orman and a little Ramit Sethi – founder of iwillteachyoutoberich.com.

Kyle Taylor is the Editor-in-Chief of ThePennyHoarder.com, the largest money-saving blog in the world with more than 5 million visitors a month. His unique tips on how to save money have been featured on Oprah.com, Woman's World Magazine, and ABC News.