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Show Page 10 The Ogden Valley news Volume XXIII Issue X June 15, 2016 Teach Money Skills to Your Middle Schooler This Summer By Nathaniel Sillin According to a 2014 University of Michigan Study, the average high school senior—who may already be juggling a parttime job in addition to their schoolwork– knows little about saving or proper money management. In fact, they spend most of what they earn on entertainment and clothing—a pretty bad precedent for young adults heading off to college and the working world. At that age, the money young teens earn in the summer usually comes from parents for household chores like mowing the lawn. Most parents never have a discussion with their kids about how to spend or save that money. Young teens generally don’t think about whether something is a “want” or a “need”—it is typically a want, which would be spent on a game, candy, or comics. If you’re the parent of a 12 to 14-yearold, that might give you pause—or provide a great opportunity to make a difference. Consider using this summer to stop your child’s bad money habits before they kick in. After all, even though most middle schoolers are shy of legal working age, many begin to work at odd jobs that are starting to put money in their pockets you don’t see. Consider these steps for an informal summer money curriculum. Introduce—or reinforce—the “Needs vs. Wants” talk - Maybe your child has a spending goal for the summer—new clothes, maybe a smartphone. It’s all about intelligent money management, even if the goal is somewhat short-term. The “needs vs. wants” talk is all about delayed gratification, the foundational behavior of healthy money management. Link it to smart shopping, encouraging the teen to price-compare purchases, gather coupons and come up with other ways to save in print and online. It’s also not a bad idea to let your child start suggesting thoughtful purchases when grocery shopping for your family. Before he or she can drive, you’ll have a chance to discuss choices and spending while you’re both in the store. If they’re not working, give them an opportunity to earn If your middle schooler isn’t picking up a few dollars babysitting or doing chores, come up with an earning opportunity for the summer. It could mean cleaning out the basement or garage or a project around the house that they can handle. It will provide you both with an opportunity to talk about what he or she will do with that extra income. If your child has an entrepreneurial spirit, encourage converting a hobby into a summer business. If they show empathy to help others, suggest they donate their time to help elderly neighbors with simple yard work. Introduce the ‘bucket” system - It’s hard to know what to save, spend, give, or invest without a system. That’s as true for adults as it is for kids. The “50-25-25” rule refers to setting aside 50 percent for every day, non-discretionary expenses like school lunches or transportation, another 25 percent for savings and the remainder for discretionary purchases, better known as the latest smartphone your young teen says she or he can’t live without. If your middle schooler still doesn’t have a banking relationship, it’s a good time to get started. A custodial checking account will allow you to see how your child is handling money and debit cards are a reliable means of tracking every cent. Also, for savings, you’ll have the opportunity to introduce him or her to pricecomparing accounts for features, savings rates and usage fees. Banking relationships should be treated like any smart purchase. Discuss making a budget - Remind your children that if they want to maximize any part of the 50-25-25 system, they need to learn how to find value and stick to a budget. Most importantly, they need to know how to track their spending so they can stay within a budget. The number of mobile apps that allow people young and old to track their spending grows each year. Whether it’s pen and paper or technology, let the teen find a budgeting solution they like. They’ll be more inclined to use it and stick to a budget. Consider being more transparent about your finances - There’s no single right answer to the question of how much you should tell your children about your own finances, but keep in mind that they learn by both good and bad examples. It’s important for young teens to know that anyone—even the most important adults in their lives – can make a great financial decision or a mistake. Speak openly about money, with the appropriate safeguards for personal and family privacy. Find a way to make your personal experiences part of the summer money conversation. Bottom line - Middle schoolers may grumble they don’t have access to the car keys or the cool clothes and technology that the older kids do. But they do have something more valuable—time to learn critical lessons about money. Use this summer to build their financial knowledge for a lifetime. Note: Nathaniel Sillin directs Visa’s financial education programs. To follow Practical Money Skills on Twitter: <www. twitter.com/PracticalMoney> Estate Planning: Basic documents every adult should consider Every adult, regardless of age or wealth, should have an estate plan. Good estate planning allows you to control the transfer of your wealth to your loved ones and the charities that are important to you while reducing estate taxes that may be owed by your estate. Here are some basic estate plan documents you might consider: Last Will & Testament - A will allows you to direct how assets owned in your name at death are distributed. If you do not have a will, those assets could be distributed according to the laws of the state in which you live. A will also is used to appoint an executor to manage your estate as well as a guardian for your minor children. Revocable Trust - A revocable living trust allows the assets held in trust to pass directly to beneficiaries without going through a probate estate. A revocable trust can reduce the time and cost associated with estate administration and keep the details of your estate private. Credit Shelter/Bypass Trust - A married couple can use a bypass trust (often called a credit shelter trust) to transfer the applicable exclusion amount at your death to someone other than a spouse without paying federal estate tax on that amount. A family trust or an individual revocable trust document creates a bypass trust at the first death that is funded with the maximum applicable exclusion amount. Family members are named as beneficiaries, and the surviving spouse can be given the trust’s income and principal if needed. After the survivor dies, the trust principal passes to family beneficiaries free of federal estate tax. Power of Attorney - A power of attorney appoints a person to be your attorney-in-fact to act as your agent to manage your financial and legal affairs in the event you become incapacitated. The power of attorney can be made durable, which would allow your agent to act on your behalf even if you are mentally incapacitated. Health Care Directives - Advanced health care directives state your wishes about your medical treatment in the event you are unable to make these decisions. A health care power of attorney appoints an attorney-in-fact to give medical personnel directions on what procedures they should undertake on your behalf. It is important that you review your estate plan at least every three years as well as upon a major life change, such as a birth, death, marriage or divorce. Your financial advisor, as well as your legal and tax advisors, can help keep your estate plan documents up-to-date and working for you and your family. Note: Article provided by Robert W. Baird & Co. for Tim Ludlum. Tim is a Liberty resident and Financial Advisor at the Salt Lake office of Robert W. Baird & Co., member SIPC. He has two years of financial services industry experience, and can be reached at 801-869-3875 or <tludlum@rwbaird.com> Snowberry Inn Hosts Open House Snowberry Inn’s recent open house held April 30 was a success! According to Andrea Southwick Burk, owner of Eden’s Snowberry Inn Bed and Breakfast, over a 100 people stopped by throughout the day. “A lot of locals stopped by, saying, ‘I drive past the inn every day, and I have always wondered what it is like inside….’ The live music was a new element and I really loved it! Vendors included Simply Eden, Black Feather Roasters, RAH Honey Farms, Jim’s Rock Art, Sheep Creek Metal Art, Into Fruition, O-town Kitchen, New World Distillery, and Tres Amigos Gourmet Tacos. See more photos on The Ogden Valley news Facebook page. |
