PT Money » Kids and Money

Kidworth is Teaching Kids to Save Money

Sandra Parker — Wed, 23 Nov 2011 14:37:39 +0000

As a veteran of the banking industry, I’ve often wondered why our public school system doesn’t spend more time teaching our kids the financial life skills they need in order to be successful in the real world.

I mean, there is no doubt that my thirteen year old daughter will understand the ins and outs of algebra and how to apply the Pythagorean Theorem, but will she be able to balance a checkbook?

Will she understand how to budget her money and save for the things she’ll want or need?

Well, thanks to KidWorth, I no longer have to worry about her learning those things in school or trying to teach them myself. Kidworth makes it easy for me to help my daughter set sound financial goals and create pathways for her to reach those goals.

The goal of the site is to promote long term financial planning strategies and create a generation of people who are better able to handle their finances through saving, investing and smart consumption. Here’s how Kidworth explains what they do:

The Kidworth process explained.

How Kidworth Worked for Me

I set up a free account for my daughter and then sat down and counted her life savings: a grand total of fourteen dollars and seventy-three cents.

We decided to set a savings goal for her so that she could open her own savings account at the bank where I work, or possibly at an online savings account. After this goal was set, we entered her $14.73 into the “kid contribution” section, which automatically populated some really neat graphs. We also factored in events (e.g. her birthday and Christmas) in which she was likely to receive money.

Three goal options at Kidworth: share, spend, save.

But, while savings goals are great, they are only one piece of the whole financial pie. Kidworth recognizes this and has created goal categories for spending and giving as well. Having spending goals helped my daughter understand the value of making and sticking to a budget while the giving, or sharing, goals help her to set aside money for charitable giving to causes she values. Currently, she is on target to give the ASPCA $10 by the end of the year!

Until now, I haven’t seen a more comprehensive or effective tool for helping my children learn the basics of money management. Not only has my daughter already reaped the benefits of using Kidworth, I’ve introduced my nine year old son to financial goal setting. In my opinion, you can never start teaching your children about fiscal responsibility too early.

PT Money is a Kidworth Ambassador and is compensated for involvement in the program.

Kidworth is Teaching Kids to Save Money is a post from: PT Money: Personal Finance by PT.
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10 Fantastic Financial Christmas Gifts Ideas for Children

Miranda Marquit — Wed, 09 Nov 2011 16:00:49 +0000

Let’s be honest. Your child doesn’t need yet another toy. Sure, they’re fun, but after a couple of weeks, toys are forgotten or broken (or both). Plus, what long-term benefit does a toy offer? None. In these economic times, you might try something a little bit different. If there are kids in your life, you might consider providing them with a financial gift. There are any number of useful financial gifts that can keep on giving — while providing children with a solid financial foundation for the future.

Piggy Bank

Young children get a thrill out of opening presents, and you can provide this thrill while giving something practical. There are any number of piggy banks out there designed to help children begin learning money management. These banks often have divisions so that children can see that some money is for saving, some is for spending, and some is for other purposes. Include a roll of coins with the gift, and the child can immediately begin learning valuable financial planning lessons. Check out the Laugh and Learn Piggy Bank, just $14.79 on Amazon.

Math and Counting Games

Voted the 2011 Educational Toy of the Year by the Toy Industry Association, the LeapFrog Leapster Explorer Learning Game System has several games that can help your child learn math, the foundation for a good financial education. This toy is made by one of my favorite companies, LeapFrog. I tend to like the traditional LeapFrog games and movies with little Tad, so I’d go for Math Circus. The system itself is currently selling for $59.97 on Amazon.

College Savings Accounts

Consider opening a 529 plan for a child on your list. In many cases, you can do this with as little as $25. Then, for every gift-giving occasion, you can add a little more money to the 529 plan. It will encourage the child to make his or her own contributions — and maybe even spur the child’s parents into action. This is a gift that offers tax advantages to the recipient, teaches the power of compound interest, and encourages sound financial habits. Plus, in some states, you can receive a state tax advantage for your contribution. Make sure that you check the restrictions of the plan before you invest. CollegeAdvantage.com is offering a $50 bonus to get started with a 529 College Savings for your child.

Toy Cash Register

Another great money lesson comes from watching what happens at the cash register. Will you use cash or plastic? Debit or credit? Bring the cash register home from the store and let your child pretend to shop. Or let your child run the register while you shop. This Teaching Cash Register from Learning Resources runs $34.99 on Amazon.

Coins

My grandmother gave me a silver dollar as a gift once. That silver dollar, minted in the 1800s, is worth about $22 today if melted down, according to coinflation.com. Coins can be fun gifts for children to receive. Consider giving gold coins or silver coins. These are small, shiny gifts that light up the eyes, and are likely to appreciate in value over time. At the very least, they are unlikely to decline in value. Make sure you get these coins from a reputable source.

Editor’s Note: Find several coin options at the U.S. Mint. I really like these Chinese Silver Panda coins from APMEX. I have no idea if they are priced correctly at $35, but I would have treasured one of these as a kid.

The Old School Abacus

An Abacus is a great way for kids to visualize counting and perform simple math. The abacus, as you know, is the oldest form of calculator. Ancient societies used these to facilitate commerce. You can use one to help your kids learn to count. This Classic Wooden Abacus by Melissa and Doug will run you only $12.73 on Amazon. While it’s not a traditional Chinese or Japanese abacus, it will help you count to 10 billion if you use each row as a x10. For instance, the first row of beads counts as 1 each, and the second row count as 10 each.

Roth IRA

This one is a little trickier. The child in question will need to have earned income. If you are thinking of a gift for a teenager with an after school job, a Roth IRA might be the way to go. You can contribute the amount of the child’s earned income — up to the Roth IRA contribution limits — to a retirement account that can benefit the child for years. Plus, withdrawals are tax-free for the recipient once he or she reaches a certain age. On top of that, there are certain conditions (such as education) that allow for penalty-free withdrawals for the recipient. This is another gift that teaches the value of compound interest while it keeps on giving.

Toy Wallet

My daughter loves playing with my wallet. She pulls all the cards out, looks at them, and then places them back in the wallet perfectly. It’s quite impressive actually. She needs her own wallet. I found this Cash N’ Carry Wallet, also from Learning Resources for $7.04 on Amazon.

Savings Bonds

My husband’s grandmother gave him a savings bond one year for Christmas when he was younger. It actually came in quite handy just after we were married, both in school, out of work, and in need of groceries. Savings bonds may not offer huge returns, but they do provide a gift that appreciates over time, and it provides a powerful example. You can even print out a gift certificate from the Treasury’s web site so that the recipient can have something tangible. Bonus: In most cases, the earnings from savings bonds are exempt from federal taxes if the child uses the money to pay for college.

Fun Book About Money Management

One of the more notable, yet simple money management books for kids is the short story, Alexander, Who Used to Be Rich Last Sunday, by Judith Viorst. You can find it on Amazon for $9.99.

There is no reason to give children useless toys for Christmas. You can offer something much more valuable: A good financial start and solid financial advice. What are some of the best money-related gifts you have given or received over the years?

10 Fantastic Financial Christmas Gifts Ideas for Children is a post from: PT Money: Personal Finance by PT.
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Common Questions About 529 Plans and College Savings

Philip Taylor — Thu, 18 Aug 2011 10:30:45 +0000

With the school year right around the corner, now is a good time to start thinking about college savings.

Have you heard about the 529 college savings plan? Are you curious if you should get started with one?

I’ve had some questions come in lately regarding saving for education expenses using a 529 Plan. I thought I’d take today to attempt to answer a few. Hopefully this will get you more comfortable with the account so you can start funding one for your kid’s college education.

What is a 529 Plan?

A 529 Plan is a savings plan for educational expenses (named after the Federal tax code) set up by individual States or institutions. They’re designed so that you are encouraged to help save for your child’s education (college or trade school). The encouragement comes in two forms: the ability to save money free from Federal taxes and the ability to receive a deduction on State taxes.

The 529 Plan is really the Roth IRA of the college savings world. Meaning, your savings grows tax-deferred and the withdrawals are tax-free as long as you use them for qualifying educational expenses. 529′s are a really good deal.

What About Prepaid vs. Savings Type Plans?

529 Plans usually come in two types: prepaid and savings. It’s important to know the difference. Some States offer one or the other, both, or a plan that combines the features.

Prepaid 529 Plans usually give you more tax benefits and college discount for schools in that particular State. The prepaid plans are considered inflation-busting, since they allow you to save for college at today’s prices.

But they also come with more restrictions. For instance, if you decide to use a prepaid plan in your State and then later send your child to a college out-of-state you’re going to forfeit some of the savings you were able to get by being in an in-state prepaid plan. This varies greatly by State plan.

529 Savings Plans are more flexible. You can usually use these types of plans at any accredited college or university in the Country. I’m a resident of Texas and have a 529 Savings Plan with Ohio’s CollegeAdvantage Program. Since it’s a savings-type plan, I can use the funds where ever I want, as long as it’s for qualifying education expenses.

What if my child doesn’t end up going to college?

The savings and earnings from the savings are always your money. The donor (you) always maintains control over the funds. The beneficiary (your child) has no control. You can switch beneficiaries at any time (typically once a year).

So, if your first kid doesn’t go to a qualifying institution, then you can switch the plan beneficiary to another child, yourself, or whoever. Or, you can withdraw the funds. There is generally no limit to how long keep the funds in the 529 plan account.

The only thing that you may forfeit for not using the funds for educational spending is the tax savings on the funds, and a 10% penalty on the earnings from the savings.

As an example, let’s say:

You deposit $50,000 now into a 529 Plan.
Fast forward 18 years and your funds are now worth $60,000. You’ve earned $10,000!
Let’s assume your child decides to skip college.
If you withdraw those funds and use them for yourself on Twinkies, the $10,000 would be subject to the tax and the penalty.
You’d roughly owe the Federal Government $3,000 to $4,000. You’d walk away with around $56,0000 of your $60,000.

But, the 10% penalty can be waived if your child becomes disabled, dies, or gets a scholarship.

What if my child gets a scholarship to college, then what happens to the 529 Plan funds?

Like I said above, you generally have a few options: transfer to another beneficiary and give it to them, sit on the funds until another option becomes available, or withdraw the funds penalty-free (you just have to pay the taxes). The penalty is waived if your child gets a scholarship though.

Should I open a separate 529 account for each child or should I have just one account?

Yes, open an account for each child. To my knowledge you can only have one beneficiary of the funds from an account.

Do I have to use my State’s 529 Plan?

No. But there may be a good reason for you to. Typically the savings in State taxes is the biggest factor. The best guide I’ve found for helping me determine this is Kiplinger’s Best 529 Savings Plans. They will tell you if there’s a reason to stick to your State’s 529 Plan or go with a top 5 plan from another state.

Can you withdraw 529 Plan funds for an emergency with or without pentalty?

Generally, you have complete control over the funds in the plan. You can withdraw your funds at anytime, for any reason. As I mentioned above though, you’d be subject to a tax and penalty on the earning from the savings. There is no hardship rule that I know of that would exempt you from the penalty.

What age or when do you HAVE to withdraw the 529 Plan funds?

There generally is no age or time limit for withdrawals.

Could the 529 Plan act as a nest egg fund for my children?

Using the 529 Plan for anything other than educational expenses would be an inefficient use of the plan. If you’re looking for a place to stash some emergency savings, consider an FDIC insured high-interest savings account.

Should I consult a CPA, CFP, and understand the plan I’m getting into?

This is advised, but it’s not absolutely necessary. If you’re unsure about opening up a 529 plan, please visit a fee only financial professional to understand your full range of college savings options. There are other options like Coverdell ESAs that might be a better for your situation.

Another reason to consider working with a pro is that each State plan and tax implications have an impact on your decision. Lastly, take time to research the plan you’re getting into. Read the guidelines of the plan. Call up your State’s plan administrator and have them explain it to you.

Good luck getting started with your college savings!

Photo by cogdogblog

Common Questions About 529 Plans and College Savings is a post from: PT Money: Personal Finance by PT.
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The Boomerang Generation: College Graduates Moving Back Home

Emily Guy Birken — Mon, 08 Aug 2011 22:52:14 +0000

Should college graduates be allowed back home?

Parents, while you may have looked forward to being an empty nester, if your child has recently graduated from college, you’re more likely to have your adult child as a new roommate.

Graduates, while you may have looked forward to finishing school, your chances of ending up back at home with mom and dad are pretty high.

According to Twentysomething Consulting and Research, a poll of 2011 college graduates indicates that approximately 85% of this year’s new grads will be moving back home. Between the lackluster job market (and the fact that unemployment tends to be higher in the under 25 demographic), the amount of student debt most college graduates face, and the cost of housing, it’s no wonder that college is turning into more of a hiatus from home, rather than as a launch into independence.

Parents, while it’s natural for parents to want to help their children, no matter their age, it is important to make sure what you do during this (often trying) time will help, rather than hinder your child’s chances for success. Here are some tips for making sure that your boomerang kid can successfully navigate this tough economy. Graduates, we’ve also included some tips for you to navigate this phase of life as well.

1. Make a Plan Together

While family should always be welcome, it is also important that you and your child sit down together and decide ground rules for living at home—including a tentative end date. These ground rules will be different depending on circumstances, but it is important that you make it clear that as an adult, your child is expected to contribute like an adult.

That might mean paying rent, helping around the house, applying for jobs within her field while working a McJob, or making some sort of job or career progress (like finding investors for a business or starting to send out freelance articles). It’s also good to let her know that eventually you expect her to find her own place.

This might be an uncomfortable discussion, but it will be part of helping your child to feel like an adult. It will be much easier for him to put on his big boy pants and take on the challenges the world throws at him if he knows everyone—including his parents—thinks of him as a grownup.

Graduates: Even if you don’t have a plan, communicate with your parents. Respect their boundaries and desire for structure to the post-college relationship. This is a healthy approach and one that will serve you well as you make your way out of the house. As soon as you are able, take steps to get out of the house. Consider alternatives like moving in with a friend who’s also struggling to find steady work, or doing volunteer work that comes with room and board.

2. Think Twice Before Giving Money

While it can certainly be tough to watch your child struggle financially, swooping in with your checkbook might not be the best strategy. Helping her put together a financial plan to get her feet under her will give her better sense of how she can stay afloat on her own. You are giving your boomerang child a place to stay, but you should not be financing a lifestyle she can’t afford.

You also want to make sure that your retirement funds are sacrosanct. As tempting as it might be to dip into your retirement savings in order to help your child, you can’t sacrifice your future security. Your child has years of earning potential ahead of him, while you are nearing retirement.

Graduates: Continue living like you’re in college. Keep the expenses low and stay resourceful with your methods for bringing in extra cash and making those dollars go further. Think twice before asking for financial assistance. Only use it as a last resort.

3. Expect Some Bumps

This is a tough emotional time for everyone. Your child is in a twilight in-between stage where she isn’t quite a child and isn’t quite an adult, and you have no doubt gotten used to a different dynamic in the house while she was away at college.

It’s inevitable that you will have some conflict, and it’s good to anticipate these issues. Treating your child like the adult she has become will do a lot to help ease the situation—and it will help her to take the steps necessary to become independent.

Graduates: It’s reasonable to expect your parents to wish this to only be a temporary engagement. You are now way past the age of accountability. Go find that job, even if it’s a part-time job, and get out of that house as soon as you can to avoid any future conflict with your parents. Don’t put them in the position of having to kick you out.

Readers, did you live with your parents post college? Do you have any advice to give to help navigate these waters?

Photo by jdn

The Boomerang Generation: College Graduates Moving Back Home is a post from: PT Money: Personal Finance by PT.
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30 Free Things to Do in the Summer

Philip Taylor — Wed, 22 Jun 2011 21:42:07 +0000

It’s official. Summer is here.

Let’s have some fun!

Here are 30 fun and free (minus the fuel costs) things you can do while it’s warm outside.

I have a little two year old so some of these may be slanted for folks with kids.

Free Things to Do in the Summer

1. Go to the park. Explore what your city has to offer. Plan a frugal family outing. Make a goal to see all the parks in your area and swing on every swing set.

2. Swim at your community pool or spray park. Slather on the sunscreen and head out to the pool for a few hours. This is my favorite kind of summer fun.

3. Visit the library. This place is awesome. The library can save you money. It is the perfect place to grab some free air conditioner in the summer months.

4. Play in the sprinklers. Throw on your bathing suit and run through the sprinklers. You know you want to.

5. Go for a hike. Scout out a nearby State Park for good hiking trails. Bring some water, a compass, and your map.

6. Play a board game. Enjoy the cool air conditioner and gather around the kitchen table for a fun family board game.

7. Learn a new skill. Learn to play an instrument, knit, etc. At the end of the summer, you’ll have “mad skillz”.

8. Take pictures. Find a few subjects and go to town. Better yet, why not organize the pictures you already have.

9. Make popsicles. Poor some of that cool-aid in the ice trays, or in some small cups. Add a spoon for a holder.

10. Watch a movie. You can rent one from the library, watch it on an over-the-air channel, or go to a movie in the park event. h/t @JayFleischman

11. Read a book. They have these things for free at your local library. Curl up next to the air conditioning vent and read to your heart’s content.

12. Play some online games. Look up some free games on your computer, tablet, or smart phone. There are plenty of fun, free games. Angry Birds, anyone?

13. Visit a free zoo/museum. Find out if there are any free zoos or museums (or at least free days) in your area. Show up.

14. Learn to cook something. Try out a new recipe. Fire up the grill to cook a rare meat (i.e. ostrich burgers).

15. Start a blog. WordPress.com is free. So is Blogger.com. Starting a blog is a blast. Use your creativity and build a following.

16. Write a book. Don’t stop with a blog. Write your own book. Self-publishing is easy these days. You could have your book on Amazon in a few days.

17. Play a sport. I like basketball. What about you?

18. Attend a free workout class. Many gyms, bootcamps, etc. will let you try their facility or program at least once for free to help you get fit this summer.

19. Blow bubbles. Make some bubbles using dish washing soap, water, and sugar (for consistency).

20. Have a garage sale. Have fun (and make money) getting rid of all of your stuff. A successful garage sale helps you meet your neighbors too.

21. Visit a Vacation Bible school. There’s one going on each week in your town, I just know it. These are free and they teach your kids awesome life (and eternal) lessons.

22. Start a garden. Find some scrap lumber to make a square foot garden in your back yard. Seeds are cheap.

23. Watch the sun rise. Get up early. Find a good spot. Look East.

24. Go to the beach. Bring a towel and take a dip. Watch out for sharks.

25. Ride your bike. Take off from your house or find a nice trail in the region. Always wear a helmet.

26. Build a fort. Pillow and blanket forts are awesome. Or go big with a fort made of scraps of lumber.

27. Write with sidewalk chalk. Unleash your inner artists and show the neighbors what you got. After it rains, do it again.

28. Have a picnic. Instead of eating lunch at your kitchen table for the umpteenth time, breakout the pic-a-nic basket and blanket. Get some sun while you eat.

29. Go to a festival or county fair. Check out your community calendar and find free events in your area. h/t @2MinuteFinance

30. Volunteer. Find a local person or organization in need (it could be your older neighbor). Offer to help out for an afternoon.

Your turn! What are your favorite free things to do in the summer? Add to the list by leaving your comment below.

Photo by Todd Baker << technowannabe

30 Free Things to Do in the Summer is a post from: PT Money: Personal Finance by PT.
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How Can I Convince Them to Save More Money?

Philip Taylor — Mon, 20 Jun 2011 20:48:01 +0000

Don't force me to use Lego Darth to get you to save more!

I see this question a lot:

“How can I convince my spouse/kids/parents/friends to save more money?”

Here are my thoughts on this subject…

Convincing Your Kids

When it comes to your kids, do all the convincing you want. In fact, you should be making your kids handle their money properly. Be heavy-handed and knowledgeable about where every dollar goes. They are your responsibility until they are 18, so stay on top of things there.

At the same time, you want your kids to learn to make decisions and face the consequences of those decisions. Therefore, if we’re talking about “extra money“, let them take the reigns and be there to explain things to them when things go bad. Don’t bail them out.

More importantly, show them how you’re saving. Open up the banking account details and show them your emergency fund. Show them your retirement accounts. If they see you preparing for the future (they certainly aren’t going to get this message from American Idol), they will believe in the concept more and see it as an option for their extra funds.

Convincing a Spouse

When we’re talking spouses, it gets a bit more tricky. You can’t force another adult to do something. If they want to act like an idiot, they will. However, if that person took a vow to marry someone then they should be open to working towards the same financial goals as their spouse.

Obviously two people aren’t going to see eye to eye on every issue (especially when it comes to marriage and money), but you should work towards a middle ground and respect each other’s goals. If your spouse isn’t doing that, then try to open up a dialog about finding middle ground. If you can’t, then seek financial marriage counseling.

The Zealous Often Break Boundaries

For everyone else in your life, you pretty much need to stay hands off. No convincing should be done. Encouragement when the window of opportunity is there? Yes. But convincing? No.

When you’re on a journey to improve yourself, whether for the spiritual, financial, or physical, it’s not uncommon to become a zealot somewhere along the way. You know what I’m talking about.

Let’s say you’ve seen some progress with your efforts. All of a sudden you’re an expert on the subject, right? It usually comes with good intentions (hey, I want everyone to experience this), but we often unleash our passion on the lives of others. I’m no stranger to this zeal and the boundary-breaking results.

It’s simply not your responsibility to convince others to save more. You are over-stepping healthy boundaries when you do that.

Unless it’s your kids or spouse, stay away from the topic. Let others make their own mistakes, and wait for an open door to provide encouragement. Be careful not to pounce like a lion with your encouraging though.

With that, I want to hear from you: how do you encourage others in your life to save more?

Photo by E.Herrera|Photography

How Can I Convince Them to Save More Money? is a post from: PT Money: Personal Finance by PT.
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5 Tips for Great Financial Fathers

Philip Taylor — Thu, 16 Jun 2011 16:46:21 +0000

With Father’s Day coming up, I thought it would be nice to reflect on what it means to be a great financial father.

I’m still a young father. I have 2 little girls (a 2 year old and a 3 month old) but I’ve learned a thing or two about what’s important, and I had a great example in my Father.

Please help add to the list by leaving your comment below with your awesome tip for how to be a great financial father.

Protect Your Kids Financially

Your kids are currently able to live their stress-free life because of your paycheck, business income, etc. If you aren’t there to earn that money, then their world isn’t as stress-free. Not only will they not have a Dad, they’ll now have a Mom who’s left with the burden of your debts, and forced to work to get by.

For this reason, life insurance is key for any new (or older) Dad. Term life insurance is likely all you need. It’s cheap and simple to set up. Go get it, Dads.

If you have assets, you want to make sure you have a last will so that those assets can be properly allocated if something were to happen to you. But a will also help direct for the care of your children. Take some time to have a will set up. Write your own will free if you have to.

Avoid too much debt. Debt puts you and your kids at risk.

Finally, make sure you have a financial cushion, an emergency fund, in place. This helps to ensure that when you lose your job, or when you have a huge financial burden, you don’t have to make radical changes to your financial situation (bankruptcy, foreclosure, etc.) just to get by.

Don’t “Check Out” Financially

One of your main priorities as a father should be setting financial goals with mom so that you are both on the same page and working together. If you don’t know your families financial goals, that’s a problem. Grow up. Plan a meeting with your wife and create accountability for your finances.

Also, mom may be better at “paying the bills”, but that’s no excuse to not be aware of your current financial situtation. At a minimum you should know what’s in your accounts and where the money is coming and going on a monthly basis. Check out the easy to use Mint.com to see all of your accounts in one place.

Teach Your Kids the Importance of Giving and Saving

Giving isn’t necessarily easy (I’ll be the first to admit that), but it’s easy to teach giving. Simply let your kids see you give. Take them with you on a volunteer mission. Let them help you prepare the weekly Church offering. Let them put it in the offering plate.

Tell them what the money will be used for. Next time you give online to your favorite cause, bring them over to the computer and show them what you are doing. Again, reinforce what the money (or your time) is going to do. If you are giving, your kids will see it and will be more prone to live a life full of giving.

Saving is harder to teach because it’s harder to show them your automatic savings deposits (you do have those set up, right?). This makes the piggy bank, or the three jar system important. Get your kids a piggy bank and teach them to use the bank to save for a goal. Being able to delay gratification is a valuable skill they will use the rest of their life.

Bonus tip: instead of saying, “we can’t afford it”, say, “we’re using our money for something else in the future.”

Teach Your Kids to Respect their Stuff

A kid’s world is full of stuff: stuff they have, and stuff they want. When you talk to them about their things, they naturally understand. Expect them to take care of their things, to put them back in their place, and keep them clean.

Having a respect for their things will help them to spend their money wisely in the future.

Love Your Kids

Hug your kids. Tell them you love them. Show them you love them by spending time with them, playing with them, teaching them things, and my favorite, wrestling with them. Show them that you love their mom by hugging her and treating her with honor and respect.

Kids who get loved will have a great opportunity to thrive financially in life, no matter what their financial situation is now.

What are your tips for great financial fathers?

5 Tips for Great Financial Fathers is a post from: PT Money: Personal Finance by PT.
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Find the Perfect Mix of College Funding Options

Miranda Marquit — Mon, 13 Jun 2011 16:19:14 +0000

Can you afford this?

When it comes to college, chances are that you will need to look for some sort of funding.

Whether you expect your children to pay for their own college costs, or whether you plan to help them, understanding the options is important.

Because college has become so expensive, it is a good idea to plan for college as soon as possible.

Don’t rely on any one college funding source; cultivate multiple options for college, including:

Tax Advantaged College Accounts

There are two main types of accounts that people generally think of when saving up for college: 529 Plan and Coverdell. Both of these accounts come with tax advantages, and can help your child grow his or her money faster.

Investment options should be studied out carefully, and you should be on the look out for funds that charge high fees. It is also possible in some cases to use an IRA to help fund a college education.

Scholarships and Grants

There are few things in life better than free money. You can help pay for college with the help of scholarships and grants. Scholarships are offered by schools and other organizations, recognizing some sort of achievement.

You can also apply for obscure scholarships, and scholarships with smaller pay outs. If you can get a few scholarships of between $500 and $1,500, it can start to really add up.

Grants are another options. The government offers need-based grants to students with low incomes. Other organizations might also offer grants to students who show academic promise, or meet some other requirement.

Find out now what is needed to qualify for certain scholarships and grants, and you can work toward earning them.

Work Study Programs

Federal work study is an opportunity for you to be guaranteed a job that can help you cover some of the costs related to going to school. You work 10 to 20 hours a week, and you receive pay.

When you qualify for work study, you are promised something on campus to help you earn the money you need for books, living quarters, food and other expenses. This can be a good way to help cover some of the additional costs of attending college.

Student Loans

There are a number of student loan options available these days. You can, of course, apply for Federal student loans. If you qualify, it is even possible to receive subsidized student loans. This means that while you are in school, the government pays the interest on the loans (you start paying interest when you begin repaying the loan).

If you need more money, there are private student lenders who can help. There are even student loan social lending web sites set up allowing you access to peer-to-peer loans to help you pay for college.

You should be careful about borrowing money for college, though. Start with Federal loans, since they usually have the lowest interest rates. After you have exhausted those options, then you can begin looking at private student loans from banks and individuals.

Bottom Line

You will probably need to seek multiple sources of college funding. Do what you can to save up on your own, and to get scholarships and grants. Student loans should be the college funding source of last resort. Only borrow if you need to.

Photo by pjohnkeane

Find the Perfect Mix of College Funding Options is a post from: PT Money: Personal Finance by PT.
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Transferring One of Our CollegeAdvantage 529 Savings Plans to a New Beneficiary

Philip Taylor — Mon, 02 May 2011 11:30:46 +0000

As you may have heard, we recently welcomed a new baby girl into the world. You may also remember that we had previously opened up a 529 college savings plan for her through CollegeAdvantage. At the time she wasn’t born, so we needed an alternate beneficiary.

We chose my wife, Mrs. PT, as the temporary beneficiary. We’ve since funded the account with bonuses from both opening the account and creating an EFT to save money in the account. It’s been a good ride for this account without a real beneficiary.

But now it’s time to transfer the account to its rightful owner, our new girl. Here’s how that process works:

You can’t just simply change the name on the account. First you have to open up an entirely new account (using the same account holder) with CollegeAdvantage and transfer the assets from the first account to the second.

You can’t complete this transfer using your online account access. You have to download a pdf form from this CollegeAdvantage forms page, complete it, and mail it to CollegeAdvantage at PO Box 692196 Cincinnati, OH 45269. Instructions on how to use this form can be found at this CollegeAdvantage account changes informational page.

To complete the form, you will need the account holder and current beneficiary information. You will also need the new beneficiary’s info (including SSN…which is what we were waiting on in this case). Next, you will have the option to transfer only a partial amount, change the investments, and change the EFT information.

Finally, you will need to sign the form in front of someone who can provide a signature guarantee. This is different from a notary. But it looks like you can get one of these guarantees at a bank.

A 529 college savings plan is an excellent way to save for college expenses. The money grows tax free as long as you use it for education expenses. College savings plans (vs prepaid plans) are very flexible and you can even open one up in a different state. CollegeAdvantage is in Ohio. My girls won’t have to go to Ohio schools though. They can go anywhere in the U.S. and use those funds tax free.

Transferring One of Our CollegeAdvantage 529 Savings Plans to a New Beneficiary is a post from: PT Money: Personal Finance by PT.
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How to Decide Which College to Attend

Miranda Marquit — Wed, 27 Apr 2011 11:30:40 +0000

Thinking about college? Consider these factors when making your decision.

One of the bigger decisions you will make, if you decide to attend college, is which school to go to.

Which college you attend can impact your future earnings, as well as play a role in how much student loan debt you end up with upon graduation.

It also contributes to the kind of experiences you have, including resume building experiences. As you consider which college might be best for you, here are some things to keep in mind:

Cost

One of the most important considerations is affordability. You want to be able to handle the cost of going to college. A fancy degree from a top tier school might seem attractive, but is it really worth it?

There are a number of state schools that offer a decent quality education for a reasonable price.

You should also consider scholarships. If one school offers you a better deal, it might be worth it to consider attending there, since you will have less to borrow.

Also consider the costs associated with living. Some areas have a higher cost of living than others. How much are the estimated costs for housing, food and books.

Are there alternatives for inexpensive entertainment? Take this into consideration as you prepare for college.

Programs Available

Does the school have the program you want? My husband isn’t attending the most prestigious school overall, but his department ranks in the top 25, and his program is also highly ranked.

When looking for a job upon completion, his program will have good recognition. The value for the money we are paying is much better than if he went to a big name school with a mediocre program.

This is especially true since my husband is working on an advanced degree.

You might also want to consider the variety of programs offered. If you are unsure of what you want to do, a university with a number of offerings might be the way to go.

Even though I had n idea of what I wanted to do, I changed my tune after attending college. Indeed, I went through three different majors.

Consider that your interests might change — or that you might discover a new interest once you have access to other options.

What’s Your Personal Style?

In many cases, college is more about what you make of it. I went to a small university in Southern Utah. However, I enjoyed my time there, involving myself in student government, getting a good internship, and winning an award for a research paper.

It’s small size allowed me to grow confidence in myself, enjoy personal attention from the Ph.D. professors that taught all of my classes, and become involved in a way that would have been impossible at a large university. All of these things helped me build my resume.

Others, though, thrive in an environment with more people and more excitement. Think about your own personal style, and what fits you.

Find out what is nearby. My school was located in an outdoorperson’s paradise, but was within three hours of Salt Lake City, Utah, and Las Vegas, Nevada.

I love a good day trip, and I love the outdoors. The entertainment options suited me fine. If I had wanted a happening night life, though, I would have been out of luck.

Getting (Some of) What You Want

In the end, it’s about finding something that offers you the experience you want, at a price you can afford. Sometimes you have to compromise, though.

I ended up turning down a full ride scholarship at one school to take “only” full tuition at the school I went to. After consider the pros and cons, I decided that working part-time and getting limited student loans, was worth it to go to a school that better suited my style, and offered me a little more flexibility.

What do you look for in a college?

Photo by Schlüsselbein2007

How to Decide Which College to Attend is a post from: PT Money: Personal Finance by PT.
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