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Borrowing to pay for your education isn't appealing to everyone – especially when 30-year repayment plans are par for the course. If scholarships don't cover all or part of the bill, most schools offer university payment plans that divide tuition payments into more manageable amounts.

How University Payment Plans Works

Payment plans are programs to allow students to pay tuition in installments rather than all at once. Let's say your tuition and fees total $3,500 per semester or $7,000 for the year. You have the option of setting up an annual, semester, or monthly-based payment plan. A monthly plan would divide $7,000 among the number of months you select, based on the options provided by the institution. For example, if you select 10 monthly payments, your payments would be $700 at the beginning of each month. In some situations, your payments could start a couple of months before the fall semester starts or at enrollment. The final payment would conclude before the spring semester ends. Usually, there is no interest charged; instead, an enrollment fee of $25 to $45 is charged on each installment. Before considering university payment plans, start by getting full details on when payments are due, when (and if) interest is charged, if there are any startup charges and if there are late fees.

How Much Emergency Savings Will You Need?

Outside of college, six to eight months is considered an adequate amount of savings. One semester of expenses is the minimum needed if you are planning to get through college without borrowing money.

You can calculate expenses for one semester with a cost of attendance calculator. University websites should provide a cost of attendance calculator or generic college budgeting calculator. A good calculator will estimate total costs to attend school and should include room and board, tuition, books, fees, student health care or wellness fees and transportation. Generic college budget calculators aren't university specific and are especially helpful when you are in the planning stage of where you want to attend school. A bonus to generic college budget calculators is you can include specific expenses you are concerned about, such as spring break and other social expenses.

Once you have a number for your expenses, you need to have this amount saved before you reject any federal student loans you are eligible to receive. If you are going to rely on unguaranteed income such as tips or a job you haven't started yet, put aside an extra half-semester of cash reserves.

Use Private Loans as Last Resort

If you reject federal student loans at the beginning of the year, but experience a budget shortfall, you can still borrow private loans. However, you will forgo the fixed-interest rates.

For example, let's say you lost your job midway through the semester and could no longer afford your payments. You borrow a private loan with interest rate terms of prime plus 4%. Your interest rate and future payment schedule could rise or fall with the economy. However, you could have secured a federal student loan at the beginning of the semester that you could have paid back if you didn't have the money.

Alternative and Supplements

Choosing not to use a university payment plan doesn't mean you have to have huge student loan payments after graduation. Try these tips instead of, or in cooperation with, university payment plans.

* Base your borrowing on future income. Borrowing for education is not a bad idea if you are confident you can pay it back. You can estimate your future income by looking at entry-level positions in your field at certain job-income websites or during an appointment with your career counselor.

* Base second-year borrowing on first-year spending. Don't reject student loans if you don't have enough emergency savings to cover tuition and other expenses. You can always leave this money in an account to accumulate interest throughout your four years. If you never need it, you'll earn back the loan origination fees and then some in interest over the course of a four-year bachelor's degree.

* If you qualify for subsidized loans, you're out the loan origination fee, but the government pays your interest while you're in school. If you are unsure of how much you'll be able to pay for with a university payment plan, a good option is to exhaust subsidized student loan borrowing first.

* Reject part of your loan award. If your student-aid report comes back and says you are eligible to borrow $6,000 per semester, you don't have to borrow the full amount. Many creditors are willing to lend more than you can easily afford to repay, so be sure to borrow only as much as you need.

* Dedicate time for your scholarship search. Scholarships are always a better option than student loans or university payment plans. Whether you are attending college for the first time or you're a graduate student, make an appointment with your high school or college financial aid officer to discuss scholarships.

* If college bills are hard to handle, look for a cheaper college with similar programs. This isn't always the best option, but it's one you should consider – especially if future income doesn't match well with what you would need to borrow.

The Bottom Line

University payment plans are a terrific option for reducing student loan borrowing, but only if you can afford your payments. Tread carefully. Get full details about your university's payment plan options, calculate cost of attendance, have at least a semester in savings before you begin, and borrow federal student loans if your money is tight. You can always begin a university payment plan next year when you know you're ready.

Gold has been the stock market's darling for quite sometime now. Investors watch gold's movement with bated breath to assess the possibility of future inflation and weakness in global economies. While investors can learn a lot by watching the performance of precious metals, they should not overlook what can be learned by watching the price movements in base metals.

The performance of base metals is an excellent way to gauge economic activity around the world. While precious metals are stored up and held for investment, base metals bear watching because these are the actual inputs used in manufacturing, construction and production. Companies cannot build their products or expand their facilities without relying on these natural resources.

Types of Base Metals

So, what is a base metal anyway? Base metals are common metals that can typically be found in plentiful supply. Copper, zinc, aluminum, steel, tin and lead are examples of some of the more popular types of base metals. Since base metals are more readily available, they often do not have the hefty prices of precious metals. For example, while gold traded at a whopping $1,400 an ounce in 2010, copper traded for just $4 a pound. That's a pretty drastic difference!

The base metals have a variety of applications in almost every industry. Steel is used for building houses, automobiles, plants, factories and equipment. Copper is used for just about anything including wires, pipes, construction projects, heating and cooling systems. Zinc is used to produce batteries, fuel cells, die castings and making brass. Aluminum is useful in creating planes, cans, utensils, brakes and transmission lines. Tin is used to coat a number of products, including cans, containers and packages. Lead is used in construction projects and batteries. These are just a few of the uses for these well-known base metals - there are thousands more. (For more, check out The Copper King: An Empire Built On Manipulation.)

Base Metals and Price Movement

Metal prices are largely controlled by consumer demand for the products that they are inputs for. Take the price of steel as an example. Hot-rolled coiled steel peaked before the financial crisis of 2008, reaching its apex in 2004 when global economies were booming. New buildings, cars and many other products were driving up the price up until 2004, and then demand leveled off or began to decline slowly. Steel fell off of a cliff in early 2009, as demand for the products and the metal itself waned. Iron ore, copper and aluminum took similar plunges in the face of dropping production and, therefore, dropping demand. The flat-lined or declining steel prices from 2004 to 2009, when prices plummeted, can now be interpreted as an early sign of economic problems to come.

Not everyone was selling out at the low, however. China went on a metals buying spree in 2009 and 2010, and the metals market surged once again. China stockpiled steel, iron ore and copper while prices were low because they knew that a base-metals rebound was coming. The country's government predicted the trend correctly and base metals recovered nicely. The steel industry saw hot-rolled coil prices surge to $700 during the global recovery of early 2010. Prices pulled back somewhat during the summer of 2010 as stimulus packages stopped – slowing government funded construction projects - and global economies also slowed down. The lead time on base metal prices as an indicator can be short, but there is a pattern that has held up in modern times.

Base Metals and Global Economies

Investors who want to know where global economies are headed should keep an eye on base metals. Base metals are a great precursor for signaling economic growth. They are used by many professional traders as a leading economic indicator. Famed trader Dennis Gartman has been known to watch copper, steel and aluminum indexes to judge the appetite of consumers around the world. Gartman stated that many base metals "moved downwards long before the data signaled weakness in the global economy."

Base Metals and Demand

The demand for base metals during times of economic uncertainty can tell you a lot about the economy as a whole. High demand during tough economic times shows that both business and consumer confidence remains high. Low demand leads to falling prices and is a sign of fear in the marketplace. Investor appetite for these hard metals decreases during economic slowdowns, just as it does for producers. However, this decline has a limit, as dwindling supplies and/or shortage fears, however temporary, help to buoy the prices of base metals as stockpiling drives up demand.

Base metal production and demand nearly have a perfectly symmetrical relationship. As demand for base metals increases, metal producers ratchet up production. Consequently, the flood of supply on the open market eventually leads to a decline in metals prices as supply outpaces demand. Metals prices reach their highest point when three factors align to distort the balance between supply and demand. This is when the supplies of metals are tight, demand is strong and production is already at or near full capacity.

Other Factors

As with any other asset, base metal prices can also rise and fall on speculation by investors and traders. For example, the mere hint that a major investor like Jim Rogers is buying metals can move the whole market on a given day. Moreover, reports about the Federal Reserve easing monetary policy often drives up metal prices, as the issuance of more governmental debt strengthens the demand for precious and base metals because of their perceived hedge against inflation. Currency moves also affect the metals market. A weak dollar or Japanese yen can send investors running for the safety of hard assets just like inflation fears do. As a result, using base metal prices as an economic indicator requires that an investor look at who is driving the demand. Is it the producers using the metals to make more products or is it investors looking to escape inflation or weak currencies?

Bottom Line

As you can clearly see, base metals are a major factor in driving economic growth, but their message to investors can be hard to read. These metals are used for building homes, automobiles, plants, equipment, pipes, wires and just about any other product that you can find. If you want to know which way the economy is moving, looking at the trend in base metal prices is a good place to start.

What is microfinance?

The term "microfinance" describes the range of financial products (such as microloans, microsavings and micro-insurance products) that microfinance institutions (MFIs) offer to their clients. Microfinance began in the 1970s when social entrepreneurs began lending money on a large scale to the working poor. One individual who gained worldwide recognition for his work in microfinance is professor Muhammad Yunus who, with Grameen Bank, won the 2006 Nobel Peace Prize. Yunas and Grameen Bank demonstrated that the poor have the ability to pull themselves out of poverty. Yunus also demonstrated that loans made to the working poor, if properly structured, had very high repayment rates. His work caught the attention of both social engineers and profit-seeking investors.

Historically, the goal of microfinance was the alleviation of poverty. For many years, microfinance had this primary social objective and so traditional MFIs consisted only of non-governmental organizations (NGO), specialized microfinance banks and public sector banks. More recently, the marketplace has been evolving. For example, some non-profit MFIs are transforming themselves into profit-seeking institutions to achieve greater strength, sustainability and market reach. They are being joined in the microfinance marketplace by consumer finance companies, like GE Finance and Citi Finance. "Big-box" consumer retailers, like Wal-Mart, Elektra and Tesco are beginning to emerge as consumer lenders and a few are venturing into microfinance. Although most MFIs still consider poverty alleviation the primary goal, selling more products to more consumers is the primary motivation of many new entrants.

Microfinance Products and Services

The following products and services are currently being offered by MFIs:

* Microloans: Microloans (also known as microcredit) are loans that have a small value; most loans are less than $100 in size. These loans are generally issued to finance entrepreneurs who run micro-enterprises in developing countries. Examples of micro-enterprises include basket-making, sewing, street vending and raising poultry. The average global interest rate charged on micro-loans is about 35%. Although this may sound high, it is much lower than other available alternatives (such as informal local money lenders). Moreover, MFIs must charge interest rates that cover the higher costs associated with processing the labor-intensive micro-loan transactions.

* Microsavings: Microsavings accounts allow individuals to store small amounts of money for future use without minimum balance requirements. Like traditional savings accounts in developed nations, micro-savings accounts are tapped by the saver for life needs such as weddings, funerals and old-age supplementary income.

* Micro-Insurance: Individuals living in developing nations have more risks and uncertainties in their lives. For example, there is more direct exposure to natural disasters, such as mudslides, and more health-related risks, such as communicable diseases. Micro-insurance, like its non-micro counterpart, pools risks and helps provide risk management. But unlike its traditional counterpart, micro-insurance allows for insurance policies that have very small premiums and policy amounts. Examples of micro-insurance policies include crop insurance and policies that cover outstanding balances of micro-loans in the event a borrower dies. Due to the high administrative expense ratios, micro-insurance is most efficient for MFIs when premiums are collected together with microloan repayments.

What does microfinance mean for you?

The development and growth of the microfinance market affects more than just those who are engaging in or contemplating microfinance services. Here's how it may affect you:

* As an investor: Return-focused institutional investors are now making microfinance-related investments. In addition, major ratings agencies are rating microfinance transactions. For example, Morgan Stanley issued a microfinance backed bond, which contained tranches and was rated "AA" by S&P.

This shows that microfinance is beginning to provide investment opportunities for all investors. The Micro Banking Bulletin reports that 63 of the world's top MFIs have an average return (after adjusting for inflation and after taking out subsidies programs received) of about 2.5% of total assets. Local and regional banks are generally the first to integrate microfinance investments into their portfolios, while large international banks currently prefer to provide financing to other banks, MFIs or NGOs. As mentioned earlier, even consumer finance companies may have exposure to microfinance activities. As an investor, you may wish to look to see whether the companies you are investing in have exposure to microfinance and if so, whether the risk-return characteristics of those activities appeal to you. Visit the MIX market for current information on the supply, demand and facilitation of capital within the microfinance market.

* As a finance professional: Microfinance requires highly specialized financial knowledge as well as a unique combination of skills, such as knowledge of social science, local languages and customs. New careers are emerging to fit these unique demands. For finance professionals, this means that new careers are opening up for those who have this unique combinations of skills and experiences. Moreover, traditional career roles are blurring as microfinance brings together professionals with varied backgrounds to work in collaborative teams. For example, development professionals (such as people who have worked for the Asian Development Bank or other development agencies) can now be found working side by side with venture capitalists. A wide range of microfinance career opportunities can be found at Microfinance Gateway.

* As an individual: Some believe that we are living in a time when poverty may be eradicated. Studies support that belief. According to the Virtual Library on Microcredit, during an eight-year period, among the poorest in Bangladesh with no credit service of any type, only 4% pulled themselves above the poverty line. But with individuals and families with microcredit from an MFI, more than 48% rose above the poverty line. What poverty eradication means to you as an individual depends largely upon your personal philosophy. You might welcome it as a key achievement in the history of humanity. You also might celebrate the possibility that we each can all buy and sell to one another. Individuals who seek to be a part of this poverty eradication phenomenon may now loan money to a micro-entrepreneur in another part of the world through the non-profit online service Kiva.

Investment Scams: Bulletin Boards

There are literally hundreds of investment boards where anyone can rant, rave, or post BS. Online bulletin boards (BBs) come in various forms, including newsgroups, usenet, or web-based boards. Some of the larger BBs, like those found on sites such as Raging Bull, Boards on Yahoo! Finance, and Silicon Investor, see thousands of messages posted on an hourly basis.

While there are many valid and useful posts on these boards, a large number of tips turn out to be bogus. Fraudsters most often use a pump and dump scheme on BBs by pretending to reveal inside information about big upcoming announcements, great new products, or lucrative contracts. The opposite can be done too. If fraudsters hold a short position in a company, they will try to spread negative rumors in the hope that investors will panic and push prices down.

Here's the tricky part about BBs: anonymity. You don't know for sure who you're dealing with and how credible they are. People claiming to be unbiased observers who've carefully researched a company may actually be company insiders, large shareholders, or paid promoters. A single person can easily create the illusion of widespread interest in a small, thinly-traded stock by posting a series of messages under various aliases.

In the aftermath of the dotcom bubble, bulletin boards experienced a dramatic drop in traffic. Thankfully, many investors realized they couldn't believe everything they read online. But that's not to say there is no valuable information on BBs. Before Enron went bankrupt, posts were made online that revealed many of the fraudulent practices taking place at the energy giant. Regrettably, at the same time, there were countless posts that were bullish on Enron. It's nearly impossible to sort out the valuable posts from the fake ones.

Investment Scams: Newsletters

Almost every stock pick site offers a newsletter that is supposedly full of useful insights and great stocks. There are many good newsletters out there, but some are just promoting stocks under the guise of presenting investors with "free unbiased information."

In fact, many companies hire employees or pay people to write online newsletters to promote their stock. In theory, this practice is not illegal. But federal securities laws require newsletters to disclose who paid them, the amount paid, and the type of payment. Most fraudulent newsletters fail to provide this information. Instead, they lie about the income they receive, their independence, their research, and their historical results. They stand to profit handsomely if they convince investors to buy or sell particular stocks. Newsletters also use the pump and dump technique discussed earlier. With enough people on the list, it is possible to create movement in the price of small stocks.

Even worse is junk e-mail or "spam." As spam costs next to nothing to create, it has become the tool of choice for many fraudsters. Often these messages consist of “get-rich-quick” schemes and offer "guaranteed results." If the sender is unfamiliar to you or the message is addressed generally (great investment tip) it is likely a scam. Brokers and traders don't give away good tips to random people for free. Besides, no reputable company would spam to get their name out. The smartest thing you can do is hit your delete button.

Identifying these shady e-mails isn't tough. Besides promising huge results with no risk, look for CAPITALIZED LETTERS WITH MANY EXCLAMATION MARKS!!! FOR SOME REASON SCAM ARTISTS THINK YOU'LL LISTEN IF THEY WRITE LIKE THEY ARE SCREAMING AT YOU!!! Another clue is when the e-mail comes from free e-mail providers such as yahoo.com or hotmail.com. Spammers use these addresses to hide where the original message comes from.

Very few of the scams on the Internet are new. Most of the swindling techniques we see today originated long ago as telemarketing, direct mail, or even door-to-door selling schemes. But the Internet adds another troubling dimension to these old tricks. For example, a fancy Web site can create the illusion of a large and reputable company, especially if it provides links to legitimate sites.

Here are some of the largest and most successful investment scams:

* Ponzi Scheme - A type of pyramid scheme, this is where money from new investors is used to provide a return to previous investors. The scheme collapses when money owed to previous investors is greater than the money that can be raised from new ones. Ponzi schemes always collapse eventually.

* Pump and Dump - A highly illegal practice where a small group of informed people buy a stock before they recommend it to thousands of investors. The result is a quick spike in stock price followed by an equally fast downfall. The perpetrators who bought the stock early sell off when the price peaks at a huge profit. Most pump and dump schemes recommend companies that are over-the-counter bulletin board (OTCBB) and have a small float. Small companies are more volatile and it's easier to manipulate a stock when there's little or no information available about the company. There is also a variation of this scam called the "short and distort." Instead of spreading positive news, fraudsters use a smear campaign and attempt to drive the stock price down. Profit is then made by short selling.

* Off Shore Investing - These are becoming one of the more popular scams to trap U.S. and Canadian investors. Conflicting time zones, differing currencies, and the high costs of international telephone calls made it difficult for fraudsters to prey on North American residents. The Internet has eroded these barriers. Be all the more cautious when considering an investment opportunity originating in another country. It's extremely difficult for your local law enforcement agencies to investigate and prosecute foreign criminals.

* Prime Bank - This term usually describes the top 50 banks (or thereabouts) in the world. Prime banks trade high quality and low risk instruments such as world paper, International Monetary Fund bonds, and Federal Reserve notes. You should be very wary when you hear this term--it is often used by fraudsters looking to lend legitimacy to their cause. Prime bank programs often claim investors' funds will be used to purchase and trade "prime bank" financial instruments for huge gains. Unfortunately these "prime bank" instruments often never exist and people lose all of their money.