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Financial advice for graduating high schoolers

In our June cover story, Making the Most of Your College-Savings Program (subscribers' link), we note that "the average student-debt burden [for graduating college seniors is] an estimated $24,000, according to the Project on Student Debt." That's a heavy load to carry into the "real world." So it's good to alert new high school grads about debt's dangers before they ever start getting college loans.

That's what college senior Zac Bissonnette (University of Massachusetts at Amherst) does in "Money Lessons for Every High-School Graduate," a column that appeared over the weekend in The Wall Street Journal. Bissonnette lists five things those planning to go to college need to be aware of — all of which SMI readers have heard before, but they bear repeating:

1. Debt is slavery: "The borrower is slave to the lender," says the Bible. When you have monthly payments to make, your life choices are greatly reduced. You can end up chained to a job you don't like — unable to take the low-paying, entry-level job in your dream field or pursue further education to gain the qualifications for the career you really want....

2. College debt takes its toll: Going deeply into debt to pay for a prestigious college degree rarely pays off in the long run. Not only does it saddle you with a large, pressing debt that limits your options upon graduation, you're not likely to be any more successful either.

A recent study by economists Stacy Dale and Alan Krueger found that, once you control for aptitude, career earnings don't vary based on the college attended: if you're smart enough to get into a brand-name private university, you'll do just fine going to a state college. What will determine your success will be your aptitude and your work ethic, not the name on your diploma....

3. Rich friends may be broke: When I was in high school, I hung out with a girl whose parents lived modestly and drove a beat-up station wagon that you could hear coming from a mile away. Our other friend drove a BMW Z3 — and made fun of the junky cars we drove....

[F]our years, a real-estate crisis and a few foreclosures later, the Z3's gone. My friend's parents who drove the station wagon sidestepped the crisis; they owned their home outright....

4. Materialism is misery: Lives of thrift and conscientiousness lead to less stress....

Recognize the real benefits of wealth — freedom and flexibility — and don't let the pursuit of its illusory trappings interfere with your ability to reap those rewards.

5. TV makes you feel poor:.... A 1997 study by researchers Thomas O'Guinn and L.J. Shrum found that people who watch more TV believe that a higher percentage of Americans have tennis courts, luxury cars, maids and swimming pools.

And that perception can lead to feelings of inadequacy when you don't have those goodies — and a willingness to stretch beyond your means.

Bissonnette, the writer of the WSJ column, is the author of the 2010 book, Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships or Mooching Off My Parents (Portfolio).

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