Free The Money Class by Suze Orman Page A

from foreign markets, it’s also smart to have a small portion of your stock portfolio directly invested in an international fund.
    For the portion of your portfolio not invested in stock funds, I recommend you stick with the cash or CD option within your 529. As I explain in the Retirement Classes, I have never liked bond funds. And with my expectation that in the coming years interest rates will rise from their current historic lows, bond funds will face especially rough headwinds.
    THE COLLEGE TALK EVERY PARENT MUST HAVE WITH A HIGH SCHOOL FRESHMAN
    As a family you need to start talking about college finances no later than freshman year in high school and begin to map out a strategy that will make college affordable.
    Explain what you expect to be able to contribute to annual costs . Your child deserves to understand exactly what, if anything, you will be able to contribute to his four years of college costs. Waiting until senior year to spring the news that you have little or nothing is unfair. By having the conversation earlier you give your child the opportunity to plan.
    Put a financial safety school on your list . Guidance counselors are quick to talk about applying to at least one school your child will easily be accepted into. I would take this strategy one step further and make sure you have a financial safety school: Plan on applying to a public in-state school that you know will be affordable. A public four-year school can cost one-half to one-third what it costs to attend a private four-year college. If your child qualifies for a generous financial aid package at a private school, that’s great. But the idea here is that in the event the aid package at an expensive school isn’t generous enough, you will have an affordable option to fall back on.
    Strive to make the most of high school . Once you explain your financial situation to a high school freshman or sophomore you give them even more incentive to do well in school. Every A they receive now can help them qualify for financial aid. Advanced Placement classes can also help all of you save on college costs: Many colleges will waive some basic required courses for students who score well on the AP test.
    TIP: Mark Kantrowitz, the wizard behind FinAid.org , also has the inside scoop on winning scholarships to offset tuition costs. If you have a child in high school, I would recommend you take a look at his new book, Secrets to Winning a Scholarship . The price is under $10 because Mark wants it to be available to everyone, including low-income families who could benefit the most. I approve!
    Start the loan conversation . In the next lesson I will explain the best ways to borrow for college. One of the hardest steps in this process is for you and your child to limit what you borrow for school. Just because someone will loan you $40,000 a year—and yes, you can borrow that much or more—does not mean you should. As a family you must stand in the truth that the goal is for your child to emerge from college without anyone in the family being saddled with so much debt that they will not be able to reach their other financial dreams.
    BORROWING RULES FOR COLLEGE LOANS
    As I stated at the beginning of this lesson, college is a smart investment. And I absolutely believe that college loans are “good debt.” But too much of a good thing can become a bad thing. You and your children need to borrow wisely. One of the problems with the college loan system is that there are not any checks and balances to prevent you from borrowing more than you can afford. That just makes it all the more important for your entire family to stand in the truth—together—and create a borrowing plan that will allow both student and parent to easily handle the eventual payback of the loans. You need to understand that college debt, whether it is taken out by the student or the parent, is currently not eligible to be discharged in the event you file for bankruptcy. It literally stays