College Savings & Family Finance
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Tuesday, 30 September 2008 10:52 |
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Our financial system and economy have entered unchartered territory. Many of us are scrambling to understand it, let alone explain what is occurring to our kids. Laurie Petersen of Minyanville has some thoughts on the subject as does Sue Shellenbarger of the WSJ in an article titled, "When Tough Times Weight On Kids." Shellenbarger does a nice job of breaking down strategies based on the age of your kids. From her article, Amid fallout from the nation's worsening financial picture, many
parents are trying to protect their children from worries about layoffs
and financial hardship. But children are actually silent carriers of
family financial stress, research shows. They're not only keenly aware
of it, but it makes them more likely to behave badly or develop
emotional problems. To help kids cope, psychologists and researchers
say, parents need to communicate in ways they can understand, keep
family relationships on track, and give children a role in helping
solve family problems. A parent's instinct is often to protect children from budget
problems; after all, kids don't pay the bills. But the impact on
children is indirect, arising from a cascading series of reactions by
family members. A Finnish study of 527 families shows fathers under
heavy financial strain tend to become anxious and isolated, and mothers
anxious and depressed. Marital problems often ensue, in turn hurting
the quality of parenting, says the study, published in 2002 in the
International Journal of Behavioral Development.
Kept in the dark, kids tend to exaggerate family problems. Rosemary
Baxter Baker remembers how her parents tried to protect her as a child.
"I remember things being tough, and my mom trying to make it OK. That
didn't fool anybody," she says. Frightened, Ms. Baker overcompensated,
telling her mother, " 'No, I don't need shoes. These shoes are just
fine,' when my toe was pushing out the top."
How you speak with your kids on this issues depends on each kids age and maturity level, but it is clear from the author's mentioned above that ignoring the issues can have negative effects on your kids. We know how perceptive our kids are and that trying to hide things from them doesn't always work. Lets be proactive here.
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Tuesday, 23 September 2008 16:02 |
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"Parents are saving less for their children's college education this
year than last year and more people have saved nothing at all,
according to a survey of 800 parents released Tuesday by the Washington
D.C.-based College Savings Foundation.
On the brighter side, the survey identified some solutions, which
include asking grandparents to help their grandchildren reach their
college savings goals by trading toys for tuition help or starting
college saving plans." Read the really interesting and important article that Chicago Tribune posted today. Some insights into trends on costs (over 13K a year for public schools and nearly 33K a year at private institutions) and other important issues to those facing higher education expenses. An interesting point made in the article is that those who know what they need to save are doing a better job of saving. So please, read up on this topic and educate yourself and your family (including kids, grandparents, and spouses). This is important stuff, ignoring it will only make it worse. We at FamilyFantasySports.com are awarding funds for 529 savings plans during this NFL season. It is not to late to get in on the fun and compete for our great family oriented prizes -- including money for college. Sign Up Now. There is lots of good information from the College Savings Foundation about tuition, tax treatment of 529 plans, and other topics of interest for families that want the best for their kids. Go check it out. |
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Friday, 05 September 2008 00:27 |
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College tuition seems to just keep going up and up. A new law signed by the President in August requires to Dept. of Ed to post online the colleges and universities with the highest percentage increases each year and also list the 5% of schools with the highest overall prices. The website isn't required to be into place until 2011 (don't ask why its gonna take 3 years?), but maybe it'll launch earlier.  According to an article in the USA Today, "The new law goes into effect as college costs nationally continue to
trend upward. Forty-three states received a grade of "F" for
affordability of public higher education from the independent National
Center for Public Policy and Higher Education in a 2006 report, up from
36 in 2004." Have you looked into opening a 529 account for your child or niece or grandchild (or yourself, if you are in college or thinking about higher education)? They are a great tool to help saving funds for the never ending, ever increasing costs of higher education. Here is some basic information on 529 accounts.
BTW, sign up to play in our free fantasy football league before Sept. 28 and compete to win our Grand Prize: a $25,000 contribution to a qualified 529 plan. |
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Tuesday, 19 August 2008 08:24 |
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There are many 529 plans out there. One of the common questions in choosing is deciding whether your home state offers tax benefits that make it worth choosing. Kiplinger.com writer Kimberly Lankford answers a question regarding in-state vs. out-of-state plans and provides a map highlighting each state's plan. Sign up for our free fantasy football leagues and play for the $25,000 529 contribution grand prize. |
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Tuesday, 12 August 2008 13:37 |
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 Reading through the most recent issue of Kiplinger, we came across a great article about teaching kids about money issues. This article takes the usual lessons one step further by advising parents
to start talking to kids as young as 3-5 years old. You may think such a young age is a bit extreme, but the author or this article, Janet Bodnar, seems to know exactly what she is talking about. Here is a quick synopsis of what she had to say
about each age group:
3-5 Years Old
Think “big picture”, encourage the use of fun piggy-banks, teach
them to put the right-sized coins in vending machines, don’t discuss
long-term anything because time doesn’t mean much to a 4 year old!
6-7 Years Old
Start encouraging saving, provide a weekly allowance (they suggest
an amount equal to half the age of your child), don’t necessarily tie
the allowance to doing chores, but rather to
becoming financially responsible for little things they want, and give
them opportunities to make extra money by doing/helping out with bigger
tasks around the house.
8-10 Years Old
Help them open a savings account and encourage them to save, but
allow them to spend a percentage of that money on anything they want.
11-13 Years Old
Remember that you are the parent and are still in control, stick to
your message about money and responsibility, make them chip in for their everyday expenses (movies, video
games), introduce them to the stock market.
14-15 Years Old
Stick with cash and stay away from credit cards (really, do we need
to encourage credit at 14 years old? Don’t think so…), encourage your
kid to get a job.
16-18 Years Old Basically, this article argues that teens do not need credit cards and
they are not mature enough to handle them. Open a checking account for
them and teach them about balancing it.
21+ Years Old
The author says kids should wait until they are seniors in college
to have their own credit cards. This advice makes sense as too many young adults go into college thinking they will be able to pay off credit cards the day they got a job. In most cases, this simply isn't the case. Other
than assisting them in getting a credit card, you should also discuss
retirement plans, mutual funds, health insurance, etc - all that grown-up stuff.
Do you think the author missed anything? Those of you with
kids, what do you disagree on? Let us know, as we are curious what the
readers think about articles like this one! Email us at
This e-mail address is being protected from spambots, you need JavaScript enabled to view it
. Photo credit: www.payjunior.com
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