Your child going off to college is an exciting and life-changing milestone for you both. It’s also a time that can be marked by big feelings. Though it’s easy to get caught up in the practical matters of preparing your child for school, it’s important that you take the time to speak with them and set some guidelines for this new chapter. Talking with your newly minted undergraduate can help you make a plan for communication, set expectations around schoolwork and grades, and create a dialogue around mental health and finances.
Let’s look at some guidelines and jumping-off points to make sure you’re both prepared to navigate these new waters.
If your daughter or son has just started receiving money, it's time to focus on financial literacy. Just like clothing, food, and shelter, financial literacy is paramount to your child. Educating your child about money helps her make smart decisions when she gets a job or starts living independently.
Train your child to manage her paycheck in the right way. If you made severe financial mistakes when you were young, you should strive to make sure your child does not make the same blunder.
Here are tips to help your child manage money wisely
Put Them in Charge
Instead of buying clothing, food, gas, and other essential commodities for your children, give them a certain amount of money and let them budget for the money until a specific date. This technique will teach your children to live within their budget. The golden rule is to teach them to only spend on what they can afford. Having a budget will help your child resist impulse purchases. The joy of every parent is to have a child who understands priorities. Letting your kid budget at a young age will pay off big later in life.
Open a Checking Account
A free checking account at a local credit union will motivate your child to save. Whenever you give your child money, encourage him to save half of it. It is easier to save money at a young age since children don't have many financial responsibilities. A checking account for a minor will give you joint account access so that you can monitor the account while still letting your child be in charge. If possible, give your child a debit card linked to the account. Besides keeping a record of where the money is spent, a debit card minimizes the need to handle cash.
Promote a Saving Mindset
Teach your children about saving money now, and they’ll do it for life. Whenever they receive money, encourage them to put a portion of it in a savings account for future use. If they have a goal to own something in the future, help them to realize the dream. Start by letting them know the amount of money they need and show them how frequently they need to save to hit their target. Also, teach them how to let money work for them.
Teach 'Credit Smarts'
Numerous twenty-somethings are tempted to make impulse purchases. Because they don't have enough money to cater for their lavish lifestyles, they tend to rely heavily on credit. According to financial experts, financial mistakes made in a person's twenties are difficult to correct. If a young adult borrows heavily to the extent of being unable to settle the debts, chances are their credit score will get damaged. It is unfortunate to have a damaged credit score at a young age since one can't qualify for auto loans, apartment leases, mortgages, or lower insurance rates.
Explain to your child how credit works and the disadvantages of massive borrowing. You can share your mortgage or auto loan statement to help demonstrate the fundamentals of credit.
Teach Insurance Fundamentals
If your children drive, teach them car insurance basics. Teach them how to review policies and pay attention to deductibles. This concept is important when dealing with coverage like homeowners, renters, and health insurance. Let your children know that they will be responsible for covering the deductibles when they are at fault. When they understand these things, they will be more careful behind the wheel.
Talk About the Economics of Higher Education
As a teenager, the college decision is quickly approaching. Parents should strive to assist their children in balancing costs and benefits. The main lesson is to let them know that they should borrow what they can afford to repay after graduation.
Discuss Retirement
It might seem too early, but helping your children understand the impact of regular savings can't be understated. The earlier they know that the choices they make today will affect their retirement, the better. According to the power of compound earning, the earlier they start saving, the more they will have in the future.
Jobs can teach kids about responsibility, hard work, and the concept that work equals money. But what legal and financial considerations do you need to analyze when your minor child begins employment? How do child labor laws work? What about tax reporting? Check out this article to get started!
Divorce, though sometimes inevitable, comes with many consequences. Divorce often leaves both parties financially devastated. So, what divorce financial preparations can you do if you’re in the midst of divorce proceedings or if you’re considering divorce?
As parents, we want the best for our kids. We want them to avoid the mistakes we made in our own lives. Whether you have a toddler or a 17-year old, there are a number of things you can do to set the stage for your child to make smart money decisions in adulthood...
Do you and your spouse fight about money? You've no doubt heard of traditional therapy – from psychologists or psychiatrists. Therapy typically involves talking one on one to a trained professional to explore issues you are having and attempting to find resolution for them. During the past decade, a new type of counseling has blossomed – it is called Financial Therapy. Find out more about this new option and if it’s right for you in this post.
The following post is by MPFJ staff writer, Marie. You can read more of Marie’s articles over at her own blog, Family Money Values. Enjoy!
After 9/11/2001, I started sharing a written record of our finances, with our children – who are our trustees. Each year, I try to update it to make sure it somewhat matches reality. It is meant to be a help if both my spouse and I die together and the kids have to pick up the pieces.
This year, as I was doing my updating, I realized that was not enough. I am the primarily financial person in our marriage at this point. I make the investment decisions, update the financial records and file the papers. I usually do the prep work for our taxes to send to the accountant. My husband and I do freely discuss our finances and do split some of the financial duties. For example, he usually pays the bills and subtracts out the check register, while I do most of the other planning and reconciling work. I also run both of our two limited liability corporations, since he is interested in neither.
Lately I’ve come to realize that my spouse may not know what to do if I die first, and my family history is of early death while his is of longevity.
He has never had to deal with the minutiae of death, and I have minimal experience. There is a lot to do when one of a couple dies and if no discussion has happened the decisions involved can be heart rending.
Immediate decisions as to life support withdrawal, organ donation, preferences on how the body is handled, and things like what kind of wake to hold, where the service should be, and how much to spend on a funeral are just a few of many the surviving spouse will have to handle quickly.
Becoming single after our 45 plus years of being a couple will be a dramatic change for the survivor. While documenting financial activities and accounts is important and needed, knowing ahead of time what your partner might prefer you to do can help the surviving spouse handle those immediate and imminent decisions during a grief filled, busy and stressful period.
Have that death talk.
Suggested questions for discussion/decision could be as follows.
Do you want to donate any organs?
How does each spouse feel about it? What do you think the relative’s reactions will be – will they make it hard on the survivor?
Do you want to prepare a living will and/or a medical power of attorney?
What are your wishes if you can’t speak for yourself.
When my Dad’s cancer was determined to be terminal, he and Mom had this discussion and their decision was to do everything possible to save Dad. He was after all only 65.
What do you want done with your body?
Do you want to be cremated, embalmed, buried naturally? Do you want an open casket or a closed casket? Do you want your body preserved within concrete vaults so it doesn’t decompose or do you want your earthly remains to decompose? Does your religion approve of your wishes and if not, how will your family handle it when the survivor implements your decision. For instance, my husband was raised Roman Catholic. According to Church doctrine, having an intact body at the funeral is of high importance. Does that mean cremation is out?
Where do you want to be interred?
Do you want a particular cemetery or type of cemetery (religious, green, local, family and etc). Should there be a head stone, or flat to the ground grave marker? How do you want it engraved? If cremated, what should be done with your ashes, your urn? Would you prefer they be placed in a mausoleum/Columbarium, scattered, kept in the family home, etc?.
How much do you think should be spent on your funeral?
Just discuss to get an idea of what price levels you each think are appropriate? Do you want to go with bare bones arrangements or something more elegant (and can you afford it)?
What should be considered for your memorial service?
Do you have certain songs, music, passages or speakers you want to involve in the funeral service?
Do you want others to stand up and give eulogies? Should that be done at the funeral service, during the visitation, online or some other way.
Are there any documents or pictures you want to make sure get distributed?
I am planning on writing my autobiography. I’ve asked my spouse to make sure that whatever I have done at the time of my death gets distributed to my heirs. On a similar note, it is important to me to have my side of the family genealogy and history (which I spent considerable time gathering) preserved and passed along to future generations.
What do you want to leave as your legacy?
Is it important to you to leave assets to the kids or grand kids? Do you want to fund certain charities or organizations (either with your assets or via donations in lieu of flowers at your service). Are there certain accomplishments you wish to have memorialized – such as Thomas Jefferson did when he instructed that of all his many accomplishments only 3 were to be memorialized – being the author of the Declaration of American Independence and of the statute of Virginia for religious freedom and being the father of the University of Virginia.
What income and expense levels can the survivor expect?
Now is the time to do some planning to make sure your partner will not be driven into the poor house when you die.
Our good friend Bill was diagnosed with terminal cancer. He was a funny, hardworking carpenter, but he had no pension, no savings and his wife there fore would have no income. She was handicapped and was suddenly left, not only without her life partner, but also without any economic support.
What tasks are done substantially by one person or the other?
Discuss how you have divided up the chores of life. Make sure the other person is aware of all you do, how to do it, when to do it and why to do it.
Bring the other party up to speed, especially on critical and financial tasks. Make sure each one is aware of how to find things, who to call, and etc. Make sure there is a common list available to both of doctors, mechanics, dentists, lawyers, accountants and etc.
How do you picture your life changing when I’m gone?
Help each other envision what life might be like when left behind. By all accounts widows and widowers have a long, hard, somewhat lonely road ahead the first few years after the death of a partner.
But thinking (and talking) through possible scenarios can be helpful. Will you keep the house? How do you feel about being single? Do you think you might marry again some day (and how does the other person feel about that)? Are there things you might want to explore that perhaps you didn’t have a chance to pursue so far?
What kinds of things are you going to do to get past the first couple of years alone?
Some experts say that keeping busy and socially involved can help. Others say you should grieve however you want. Some say don’t make any big changes, as you are not in your best mental state while grieving. How will you handle day to day activities that require more than one person? Who will you call when you want or need to talk.
What do you want done with your ‘stuff’?
My spouse is a collector. He fears that all of his wonderful collections will be sold off, because the heirs don’t want them.
Should there be a museum? Is there a charity you should donate it to? Are there certain things with special meaning you would like passed along to certain people? My Mom requested that her jewelry be passed down the female side of the family. I’m doing the same with all of her jewelry and with mine.
Life can and does end suddenly at times, totally unexpected. Although not a fun topic, the above death talk is worth talking through.
How about you all? What difficulties do you foresee in initiating such a discussion with your life partner?
Share your experiences by commenting below!
***Photo courtesy of https://www.flickr.com/photos/halfchinese/235051813/sizes/l
The following post is by MPFJ staff writer, Laurie Blank. Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.
Studies show that the average cost of raising a child from birth to age eighteen is nearly $250,000, and a recent study reveals that a decent chunk of that cash is spent on extracurricular activities. In the case of elementary-aged children, it’s an average of $463 this year, and in the case of secondary-aged children, it’s a whopping $1,124 this year.
If you’re “average”, that means you could be spending nearly $10,000 on each of your children’s extracurricular activities over the 13-year period that they’re in school. And that’s simply the national average, which takes into account all school-aged kids – even those not participating in after-school activities. If you’ve got a kid involved in a serious sport such as baseball, hockey, gymnastics or dance, you’re likely spending a lot more than $1,100 a year, even for elementary-aged kids.
If that seems like an astronomical amount of money to spend on kids’ activities to you, you’re not alone. The fact of the matter is that the days when the education system picked up a large amount of the financial burden for extracurricular activities such as sports is long gone, and parents are left to foot the bill.
How can you as a parent keep kids’ activity costs reasonable but still make sure your kids can have the sport or other extracurricular experiences that help make for a fulfilling life? Here are some tips.
Limit Activities to One or Two per Year
Many parents these days feel as if their kids need to be involved in some type of extracurricular activity all year around. The truth is that even one or two activities a year for your child will benefit them and help them to grow in teamwork skills, discipline and obedience.
When considering which activities to sign your child up for, ask them to decide which activity or activities they like best, and narrow the list down to their top one or two. Not only will this save you money, it’ll save time and lower stress levels as well.
Pick Activities That Will Benefit Them as Adults
The reality is that the majority of kids won’t grow up to be professional athletes or world-class Olympians, no matter how much promise they show at a younger age. If your goal as a parent is to raise up a professional athlete, you may want to reconsider your motives and instead choose an activity that will hold life-long benefits.
Activities such as self-defense classes that will show them how to handle themselves should they get trapped in an attacker situation or school sports such as cross country that will help them develop a life-long habit of self-care through exercise are some examples of activities that will benefit your kids long after they’ve graduated from high school.
Do Activities as a Family or With an Organized Group of Friends
Many families choose to do activities together instead of being involved in school-sponsored sports. Some families train for marathons, triathlons and obstacle courses together, or bike together in charity or other events.
Planning regular activities with family members or groups of friends allows those same benefits of teamwork and training for a fraction of the cost.
If you’re set on providing extracurricular activities that do cost more than you’d like, there are a few ways to help make the financial burden less impactful.
Work the Costs into Your Budget
Just like you would with a regular bill such as your utility bill, it helps to figure out the annual amount you’re spending on activities and adding that monthly “bill” into your regular budget, saving the money in a separate savings account or envelope. This way when fees are due you won’t be scrambling to come up with the cash.
Ask if the Studio Will Do a Work-for-Pay Trade
Some sports centers will allow you to volunteer or work there in exchange for lowering your child’s participation fees. Just remember if you do participate in some type of a barter situation to check and follow the bartering tax laws for your state.
Kids reap many benefits from being involved in extracurricular activities. With a little planning, choosing and creativity, those activities can be affordable for almost any family.
How about you all? How do you keep kids’ activity costs affordable?
The following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, My Debt Epiphany. Enjoy!
The average cost of a wedding in the U.S. is $26,444 but some couples have spent way more on their special day. I personally couldn’t imagine spending $50,000, $30,000 or even $12,000 on just one day even if it was a special life changing event.
When I got engaged last year, my fiancé and I decided to have a semi-big wedding to celebrate our marriage with our family and friends, but we didn’t want it to put us in the poor house. We both have debt and little savings, but wanted to live in the moment when it came to our wedding and enjoy the present instead of delaying our gratification like we usually do.
The wedding is now just two short months away and we are still within our budget. If you’re in the process of planning a wedding or believe you will be planning one in the future, here are some tips to help you stick to your budget no matter what.
Be Honest with Yourself
This is the first and most crucial step when planning your wedding. You need to determine how much you can spend realistically right off the bat so you can plan your big day around that amount.
For us, we decided a budget of $7,000 for the ceremony and reception would be ideal. We would split that amount so we’d each be responsible for coming up with $3,500. That amount doesn’t include any extra gifts or funding from our parents who only pitched in on the venue.
Yes, that $7,000 could have been used to put toward our debt, or in a savings account for a down payment on a home, but we chose to share this special event in our lives with our friends and family and were comfortable with spending that amount and still being able to work toward our other financial goals.
When you sit down with your partner and assess your goals, expectations, and budget constraints for the wedding, it will provide you with an honest idea of what you can and can’t afford so you don’t end up broke or get into debt.
Commit to Having a Small Event
If you want your wedding to be an intimate event, then you’re already on the right track to save money. The less people you invite, the more money you can save. The cost of a wedding rises as you add people to the guest list because you often have to pay for their seating, food, cake, favors, a big enough space and so on.
If you only invite close friends and family and keep the guest list under 25 people, you can probably find some great deals on venues that will be less than $1,000 and you can always reserve a private room at your favorite restaurant for the dinner and dessert portion. You may even be able to have a backyard wedding or utilize a free space with a smaller wedding.
Having a smaller wedding just wasn’t an option for us since we come from larger families and have lots of long-time friends, but it is a great option if you want to share your special day with others and stick to your budget.
Choose a Time and Location that Saves your Money
When and where you have your wedding is very important. One of the highest wedding expenses is the venue. If you plan on having lots of guests like we do, you can try choosing an all-inclusive venue so your reception hall rental and dinner will all be covered in one price. It’s much cheaper with this solution and you won’t have to worry about dealing with a caterer and other vendors to coordinate everything.
Another option you should consider is having your wedding during an off-season like the fall, winter, or early spring and choosing a less popular day like a Sunday. Basically, as long as you don’t choose a Saturday for your wedding date, you will save quite a bit of money.
Also, choose the time of your wedding wisely since food is another big expense and you might be able to get away with serving lighter foods and appetizers if you have a morning wedding.
Skip the Traditions
Traditions are great to cherish, but when it comes to weddings, if something isn’t going to offer value to you and your partner, it’s best to skip it despite what anyone else is doing or what they say. If having something old, something new, something borrowed, and something blue doesn’t really matter to you, you need to voice your opinion to your friends and family and let them know that you are skipping certain traditions.
For example, since my fiancé and I have a short engagement, we opted out of sending out save-the-dates to save money and just sent out regular invitations. I figured anyone who was really close to me and interested in coming to my wedding would make the effort to attend without a fancy heads up arriving in the mail. Plus, I think people just throw that stuff in the trash after a while anyway.
Some couples opt out of having a wedding cake – which can be $3 to $4 per slice on most occasions – and do something different like serving pies or cookies instead. More recently, brides are finding unique ways to replace their traditional bouquet of flowers to save money on expensive and short-lived flower arrangements.
Planning a wedding while adhering to your budget can seem stressful at first. But when you become honest about how much you can afford and determine what factors are truly important to you and what isn’t, you’ll be able to prioritize expenses and cut the ones you can do without.
How about you all? How did you save for your wedding? What tips do you have for someone trying to save money on their wedding day?
The following post is by MPFJ staff writer, Marie. You can read more of Marie’s articles over at her own blog, Family Money Values. Enjoy!
For much of my adult life, I didn’t have a will. Even after I had children, my spouse and I neglected to make a will. Only after dealing with my Mom’s estate did we decide to get one. We were lucky that we didn’t die without a will.
Here is why:
If we died at the same time, our children would have gone to child services until a guardian could be appointed by the courts. The government in our state would not let anyone watch the kids unless they had a legal right to do so, even just for awhile after (for instance) the car wreck that killed us. Not only would our two sons have been dealing with the trauma of their parents deaths, but they would also have possibly been subjected to care by strangers or care in an institution.
Repeat that about 20 times. To me, the main purpose in having a will is to influence who will care for your children on your death.
Of course, there are other reasons to draw up a will. For instance, to distribute your assets (if you have any that would pass through probate and if you want them distributed differently than your state would) or to shorten up probate time.
But, you can distribute assets the way you want without a will. You can avoid probate altogether. You just have to know how.
To distribute your assets without a will you can (choose one or more):
Put them in a joint account,
Put them in a trust,
Title them as ‘transfer on death’ or ‘pay on death’ or
Designate a beneficiary.
To avoid you can having a will and going through probate if you have a really small estate (in some states) or if you have all assets titled so they flow directly to someone else.
But there is no other way to legally state your wishes as to who will raise your children if both parents are dead.
When I say ‘state your wishes’, in many of the US states, I mean just that. State law governs guardianship rules. Many states do not automatically grant the wish you state in your will. Some states retain the right to appoint whoever they feel is best for the minor, others vary in degrees of automatically abiding by your wishes – but still retain the right to appoint someone else if there are issues with the person you chose.
Still, your wishes have weight and will at least be considered by most courts in most states. Typically the judge will allow for providing letters of guardianship to those you designated.
If someone does try to raise your child without letters of guardianship, she will struggle – even with something as simple as getting medical care.
How to draft a will
Writing and recording a will doesn’t have to be expensive or time consuming. In many states, you can simply write out what you wish done, sign it in front of a notary and you are done. BUT, since you won’t be around to make sure things go as you wish, you should spend some time and at least a bit of money to make sure your will is legal in your state.
Step 1 – Figure out what you want done.
Coming up with a name for a guardian for your children is never easy. You and your spouse may differ on which person should do so, making things even harder.
You may want one person to be the one who raises them, lives with them and etc and another to be the custodian of the finances you may be leaving to help your guardian with the costs of raising your kids.
Include some kind of language to let the guardian know how you want your kids raised (religion, education, and etc).
You will revisit this as you go through life, needs change as might your idea of the best guardian may.
Writing down what you want done with your assets is somewhat easier.
Step 2 – Make sure what you want is within the laws of your state.
We consulted a lawyer for this step, but you could use one of the software packages available now on sites such as Nolo.com. A compromise would be to draft up the will using software but have a lawyer give it a look before you make it final. That way, you use fewer lawyer hours but still have some additional assurance that you are within the bounds of law.
Step 3 – Draft the language.
A lawyer will do this for you, or as stated above you could use one of the many software packages available for this purpose. Legal Zoom for instance, has one for around $70 which includes a review of the document (not a legal review, more like an editor review).
If both of those are out of your reach, visit your local library and checkout books like Kiplinger’s estate planning : the complete guide to wills, trusts, and maximizing your legacy or Estate planning basics.
Some of these have forms you can fill in – one for each state.
Step 4 – Sign it so it is legal.
Most all states require that a witness also sign the document. A notary public signature is best and can be obtained for a small fee at most banks.
Step 5 – Let your guardian and heirs know you have a will.
After you have gone through all four steps above, it would be a shame if you died and no one even knew you had a will, let alone what was in it or where it was.
Asking someone to care for and raise your kids is a very big deal. They deserve the right to decline the honor. Let them know in Step 1 – right after you settle on that person.
Don’t squirrel your will away in some unknown or unreachable (in the event of your death) spot.
We have ours in a drawer at home, with copies to both of our sons. Some folks leave theirs with their lawyer.
Step 6 – Explain what you want done.
Let your heirs know (if they are old enough to understand) what you have set out. If you are dividing your assets unequally, get it out in the open, along with your rationale. Otherwise, there are likely to be fights on your death – including lengthy and costly court battles.
Step 7 – Review periodically.
Change is constant. What you had and wanted when you first drafted your will could change. Laws can also change. Review your will periodically to make sure it still satisfies your wishes and is still legal.
Our solution
My spouse and I have combined multiple estate planning techniques. We do each have a will (but since our children are grown, they do not have words about guardians). We also each have a living, revocable trust. In addition, certain of our assets, such as our IRA’s will pass directly to one or more beneficiaries.
Our wills both have “pour over” language in them. At our death, any assets titled solely in the deceased’s name will pour over into the trust. The trust becomes irrevocable at death and dictates how our assets will be distributed. Any assets titled in the name of the trust will be distributed by our successor trustee. My spouse and are are currently each trustees of our own and of each others trust, so that we can operate just as we would if the assets were held in a joint account. When the first of us dies, the other continues as trustee. If both of us die, the successor trustee (one of our son’s) becomes trustee. In addition, should one or both of us become unable to manage our affairs, the trustee or successor trustee can step in to do so.
As long as we keep assets titled to the trust, our heirs should be able to avoid having to use probate court to distribute our estate.
We also meet as an extended family at least once a year to provide an opportunity to share information with our adult heirs about our plans and our assets.
How about you all? Have you started your estate plan? What is your estate planning strategy?
The following post is by MPFJ staff writer, Laurie Blank. Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at 
The following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, 
The following post is by MPFJ staff writer, Marie. You can read more of Marie’s articles over at her own blog, Family Money Values. Enjoy! 
