Money Talk: Consider costs before career change
Q: I am 48 and planning on a career change. I was looking at a culinary school website and it looks pretty exciting. It is a
2-year, full-time program and the cost is about $65,000, which doesn’t cover the dorm or apartment expenses for living nearby. Of course, the institute’s counselor told me they have financial aid and asked, “How can you put a price on your future?” Right.
What would be the payback on something like that compared with an average salary of a chef?
I will be 50 or so when I complete the program, and I’m not sure I want the big payment plan on my back. Can you help?
A: The counselor’s question is ridiculous. How can you not put a price on your future, particularly when it involves such a huge expense? Smart students consider the price not only of their educations but the incomes that education will bring them.Many students sign up for these for-profit schools with visions of being the next Gordon Ramsay dancing in their heads. A little research would show them that this field is not exactly lucrative or booming.According to the Bureau of Labor Statistics, the median pay for a chef or head cook was $42,480 in 2012. Employment is expected to grow 5 percent in the next decade, which is “slower than average for all occupations.”So the payback isn’t great, especially if you have to borrow money to foot the bill – and most of the financial aid you get at these schools is loans rather than grants or scholarships. Even for someone with a 40-year working career ahead, taking on that level of debt isn’t smart.You would have much less time to make an investment in a second career pay off – 15 years or so, and that’s if you can tough it out in a hot, hectic environment into your 60s.If you really want to take this chance, at least minimize your investment by getting trained at a community college. Even better, get a part-time job in a restaurant and see how you like the work first before you commit to the field.A more thoughtful approach to a career change would involve meeting with a career counselor to consider your strengths and experience, then looking into jobs in which those are an asset.Any training you would need should be reasonably priced and preferably something you could do while hanging on to your day job. Just think about that culinary expression “Out of the frying pan and into the fire,” and try to avoid getting burned.
Q: In February 2015, it will be seven years since my bankruptcy. I have worked hard to rebuild my credit, and my credit score is 735. What do I need to do to make sure my bankruptcy drops off at the seven-year mark?
A: By federal law, most negative marks must be removed from credit reports after seven years – but bankruptcy is one of the exceptions. A Chapter 7 bankruptcy, which is the most common, can stay on your reports for up to10 years from the date you filed. Chapter 13 bankruptcies are typically dropped after seven years. In either case, you shouldn’t need to do anything. Credit bureaus should delete the information automatically. If they don’t, contact the bureaus and request the deletion, but that usually isn’t necessary.If you have to live with bankruptcy on your reports for a few more years, you shouldn’t be discouraged. It seems you’ve done a good job rebuilding your credit, and your scores should continue to rise as long as you handle your credit responsibly.
Q: I got my credit reports from www.annualcreditreport.com as you recommended in a recent column, but had to go through some hoops to get my actual credit score, which is the main thing I wanted. One of the bureaus required me to subscribe to its newsletter, which cost $29.95 a month after a seven-day free trial. I guess they hope people won’t cancel within seven days, but I did, without any trouble.
A: Confusion about the difference between credit reports and credit scores often leads people to sign up for unnecessary, costly products. (You were signing up for credit monitoring, by the way, not a newsletter.) You can get free credit scores from a variety of sites, including Credit.com, Credit Karma and Quizzle, without having to buy a product. The scores you get from these sites aren’t the scores that lenders typically use, but neither is the score the credit bureau provided you. If you want to see scores lenders usually use, you’ll need to buy those for $20 apiece from MyFico.com.