The title may seem ironic considering I give financial advice. Through my reading of many financial blogs/journals/magazines, I have found that there is some really bad advice out there. Much of it is really good. In fact, I would say most of it is very good.
I came across an article titled 9 Missteps on the Path to Financial Aid from Smartmoney.com the other day. Most of the information was very helpful to people who have children going to school soon. There was one bit of advice, however, that got my blood boiling.
The author suggested that you take steps to lower your annual income the year before you apply for the FAFSA in order to get more aid. This may sound like a decent idea, but I want to examine the very math the author used as an example. Ms. Ensign states that if you currently have an income of $150,000, for example, then you should “cut your pay” to $100,000 in order to be eligible for about $15,000 more aid annually.
So, let me get this straight. I should decrease my income by $50,000 in order to save $15,000. Is it me or does that seem absolutely ridiculous? I have a better idea. Still receive the $50,000, pay the college $15,000 and then you have an extra $35,000 to do whatever you want with! I mean, really. Is this even a discussion?
Unless I am missing something, the advice given by Ms. Ensign is terrible. My overall point is to be careful with what you read. This wasn’t just an average Joe sitting in his living room writing his opinion on money. This was advice from a very well established financial magazine. The same kind of dribble is often taught in college finance classes as well. Read and learn all you can about money, but make sure to think through all the advice given and, IF it makes sense, THEN put it into practice! Of course, that’s just my opinion and I don’t have over 800,000 subscribers.