Picking the wrong major: Big mistake

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| By Liz Weston, Reuters

Aiming for a degree that doesn't match a student's interests and skills could turn into a big waste of time and money.

Many U.S. high school students may be headed for trouble in college because they plan to major in a subject that doesn't match their interests.

Only one out of three students who took a recent ACT college assessment test intended to major in a subject that was a good fit for their strengths and preferences, according to the organization that administers the exam.

Nearly as many choose majors that are a poor fit, according to College Choice Report: Preferences and Prospects, a report by ACT, the Iowa City, Iowa, testing and research organization.

Picking the wrong major can be an expensive mistake. College students whose majors don't reflect their interests are less likely to graduate on time and more likely to drop out, said Steve Kappler, ACT assistant vice president and head of postsecondary strategy.

"If I change my major two or three times, it's going to take longer to get my degree," said Kappler, citing studies by ACT researchers. "A significant number don't complete, for a variety of reasons."

College consultant Lynn O'Shaughnessy said she frequently hears from families who are dead set on a college major that doesn't match the student's interests or abilities. One student, for example, planned to major in engineering even though he wasn't great at math. Another was told by her parents that her education would be paid for only if she majored in accounting. She did, O'Shaughnessy said, and she's employed -- but she's miserable.

"Parents and students are increasingly focused on pursuing majors that will provide a great salary," O'Shaughnessy said. "Their greatest fear is they will invest all this money and the kid will wind up working at Starbucks."

Career assessment tools, including the ACT Interest Inventory used in the study, aren't crystal balls. Many people discover interests in college, and future careers, that they never would have imagined in high school, college experts said.

Most students take the ACT in the spring of their junior year, although about 25 percent take the exam in their senior year.

Trying out different subjects should be a part of the college experience, said Northwestern University political science professor Andrew Roberts, author of "The Thinking Student's Guide to College."

"It always seems strange that a first semester freshman will take chemistry, history, English, and math when that is exactly what they took in high school," Roberts said. "Why not try linguistics or psychology or art history, to mention just a few subjects not offered in most high schools?"

Blindly pursuing a degree solely for financial reasons can backfire if a student washes out because of lack of ability or switches majors, or schools, because of a lack of interest, O'Shaughnessy said.

The misalignment of majors and interests is a big deal, said David Hawkins, director of public policy and research for the National Association for College Admission Counseling. "ACT has touched on something we've seen as a problem for a while."

Ideally, high school counselors would help students sort through their educational and occupational options. Three out of five students in the ACT study said they would welcome such help.

Many high schools don't offer that kind of assistance, however, so it may be up to parents to help uncover their children's strengths and figure out a career path, Hawkins said.

"Parents should check their own assumptions and prejudices at the door," Hawkins said. "It shouldn't be about what school bumper sticker you want on your car ... It should be helping the student understand and flesh out what they're passionate about, what lights their fire."

Once parents are clear about their children's academic strengths and interests, they can help tidentifyhem identity potential majors and professions - which will in turn help them pick colleges that support those goals.

The good news, ACT's Kappler said, is that these conversations are much easier and more fun than parents' usual lectures about the importance of getting good grades.

"I've had this conversation with all three of my daughters," said Kappler, whose children are now in college. "It's a very easy conversation to have ... it's something teenagers want to talk about."

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Picking a bank account for your kid

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| By Debbie Dragon, U.S. News & World Report

If you want your child to learn the value of a dollar, their first bank account is a good place to start.

There have been quite a few complaints from both parents and the personal finance industry concerning the lack of education children receive about basic financial matters throughout elementary school, high school and even in college. Parents are responsible for everything their children learn about money issues. While that is a reasonable and expected part of parenting, financial education can be difficult to teach if parents themselves are unsure of how to manage their finances.

One of the cornerstones of a child's personal financial education is a bank account. A child taught the value of saving rather than spending has a good early foundation in smart money management. As a responsible parent, you should consider what matters in a child’s account just as you would consider which bank provides the best options and most benefits for your family finances.

When looking for the right bank and account type for your child, do a little research before making a decision. It's tempting to just sign up for another account at your present bank, but it may not be the best option. You owe it to your child and to yourself to compare what else is out there.

Here are the factors to think about:

Nearby branches: You may not consider this factor as important in the grand scheme of things, but having a brick-and-mortar location to bring your child can make a world of difference in the lessons you are trying to reinforce. A child may initially have some difficulties parting with their birthday cash or allowance money, but getting to take a special trip to the bank to deposit his or her money can help cement the money principles you are trying to teach and create an excitement about savings that online banks cannot provide.

Account fees: Teaching your child about saving will also involve teaching about the cost of different services people need to pay for, but it is better to find an account that has no or low fees for account maintenance. It’s not fair to have all of your child’s savings wasted on exorbitant fees. With so many changes in the banking industry, a free bank account is getting much harder to find, but it is worth the time to seek out reasonable fees.

Interest earning potential: Child accounts established for savings may offer a higher interest rate than other types of accounts. Consider that even a little bit more in interest can be well worth it in the long run as your child continues to save. Interest should not be the only factor you consider, but it should be one of the priorities.

Encourage the act of saving: Kids may be thrilled with the idea of starting a savings account or they may roll their eyes and complain about losing their cash. No matter what their initial reaction is, it is important for parents to keep reinforcing the value of saving money. Help a child to first realize that all of the money does not have to go into the bank by establishing a percentage that should be saved from each allowance or monetary gift.

Let your child have access to some of their own money for purchases they want. It will help them learn the value of a dollar and gain a better understanding of how the money system actually works. At the same time, you should be reviewing monthly statements with your child to show them how, in addition to the interest they are earning, their money is beginning to add up.

Establishing good financial practices: Young children tend to enjoy the perks of a lollipop or other treat with each visit to the bank, but as a child gets older they can continue to learn age-appropriate lessons concerning personal financial matters. Throughout adulthood, these early lessons will be the foundation for your child’s overall financial life.

As a parent tasked with teaching children about the importance of careful financial management, keep in mind that another key lesson kids will take away is their own parents’ personal financial strategies. It is important for parents to provide the education and real-world experience with financial matters, but it is also important to give your kids a good example to follow. Parents who do not maintain their own finances and who do not make savings and budgeting a priority may be teaching lessons that fall on deaf ears.

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