Today's Ypulse Interview is with Beth Kobliner, a financial expert and one of the forces behind "Your Life, Your Money," a documentary airing tonight on PBS that takes a timely look at financial literacy among young people today. To give readers a sneak preview of the real-life stories and insights from Beth and others (including hip-hop icon Russell Simmons!), we caught up with Beth and asked her a few questions.

Ypulse: What was the inspiration behind creating this special? How did you become involved?

Beth Kobliner: There was a strong feeling that young people didn’t know enough about basic personal finance. They weren’t taught how to manage their money in school—let alone how to apply it to their own lives. I became involved when I was approached by the director, Tom Simon. I thought it was a great project. I've been writing and speaking about personal finance for 20 years, and I feel like this was the first show that captured the important information but also did it in a lively, entertaining way.

YP What were some of the realizations about young adults and finance made over the course of the documentary?

BK: Times have proven that young people can't ignore their financial lives, and today the resources are available to help them take charge. But in the end, it's up to them to get on track, take control, and prepare for their future. Another revelation of “Your Life, Your Money” is that even though it seems impossible—you can dig yourself out of immense debt. There’s a woman in the show, Rochelle James, a single mother who completely overcame financial missteps of her twenties while raising two children in New York City. She’s the first to tell you it’s not going to be easy, but it’s possible if you put your mind to it and are willing to make some sacrifices.

YP: Could you describe some of the basic financial guidelines you hope young adults will take away?

BK: The most important thing is for young people to have health insurance. That’s the number one reason why people go bankrupt—it’s not because of frivolous spending, it’s because of racking up medical bills that they can’t cover because they don’t have insurance. If you're one of the 20 million uninsured young people in this country, you need to find a way to get some coverage.

After that the best thing you can do is to avoid racking up credit card debt. Only use plastic to buy things you can afford to pay in full every month. If you do have credit card debt, take steps to reduce the interest you pay, or see if you can qualify for a lower-rate card. Another basic guideline is: Pay your bills on-time. That's the number one factor that determines your credit scores, which determines the interest rates you'll get on everything from a credit card to a home loan.

YP: What do you think is the most common financial mistake graduates make in their first year out of college?

BK: It's not taking their financial lives seriously. Young people don't realize that little mistakes—the kinds you make because you just don’t understand, say, how credit scoring works—can have huge effects on your life down the road. For example, one missed payment becomes part of your “credit record,” and can set off a very Kafka-esque chain of events. Absurd as it is, that one missed payment could end up costing you tens of thousands of dollars down the road on a home loan.

Another example: If you can't afford to move into your own apartment right out of college, it's OK to move back home with your parents. You're better off saving money (and sacrificing some lifestyle choices) for a few months than you are racking up thousands of dollars in credit card debt to fund a lifestyle you can't afford—and that you'll be paying off for years.

YP: Are there any particular resources you would suggest young people seek out?

BK: If you’re overwhelmed by your debt, there’s a lot you can do, and the sooner you start, the sooner you’ll have a healthy financial life and be able to put your money toward your priorities. The PBS website has some great calculators, tips, and resources.

Study up on student loan repayment plans: The number one way to free up cash if you’re a recent grad is most likely going to be to stretch out your student loans. A new repayment program called INCOME BASED REPAYMENT went into effect July 1 this year. It calculates monthly payments based on each person's income—or lack thereof. The new rules also make it easier for someone in a public service job to have student loans **completely** forgiven after 10 years. You can find out more about this program at www.ibrinfo.org or www.finaid.org.

For more campus coverage, visit the Ypulse Campus Channel, sponsored by Campus Media Group.

Categorized under: Collegians

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