Money Habits: Can Parents Teach Them?

August 20, 2014

When it comes to managing money, parents want to set a good example for their children. It seems that knowing how to do that is the dilemma.

According to a recent survey by T. Rowe Price, about 3 out of 4 parents are hesitant to talk with their kids about finances, even though two-thirds of parents were concerned about setting a good financial example for them.

Roughly 1 of 4 parents surveyed feel they are not good with money themselves and shouldn’t be the ones to teach their children. Almost 9 in 10 parents said it’s appropriate for kids to learn about financial matters in school. 

And speaking of financial behaviors the survey revealed….almost half the parents admitted to bribing their kids with money to encourage good behaviors, and about one third admitted to borrowing money from their kids’ piggy banks.

Have You Seen Your Credit Score?

July 29, 2014

A recent survey by Western Union reveals that 44% of young Americans – those age 18 to 34 – have never seen their credit score.

Millennials Are Saving

June 24, 2014

Even though many recent grads have a lot of debt, they think about retirement. In fact, about 70% of millennials have started to save for retirement, says a recent study by the Transamerica Center for Retirement Studies.

In comparison, boomers started saving at about 35 years of age.

The millennial group includes those to 25-35 year olds.

What’s Your Take on IRAs?

May 15, 2014

In the past year, only 15% of Americans spent two hours or more in planning for an IRA investment, according to TIAA-CREF’s annual survey on Individual Retirement Accounts (IRAs). Many often spend more time than that to research a one-time purchase or choose a place for a special dinner.

While most of us know that an IRA is a tax-deferred retirement savings plan, only 17% of us actually contribute. Why don’t more save in an IRA?

Roughly 35% of those polled said they don’t understand what an IRA is, and even more Millennials (about 47%) don’t know. About one third said they don’t contribute because they don’t know enough about the account. Another third of those not using an IRA say they have a retirement plan through work and they don’t feel they need both.

Yet, the average American will come up short when it comes to retirement savings and could use both plans. Will you?

Here’s a handy financial calculator

March 31, 2014

Trying to analyze a retirement investment or see which loan is the better deal for that new car? Check out the financial calculators at Dinkytown

This site offers more than 400 financial tools to help you figure taxes, insurance rates, investment returns, loan payments and more. For example, you can calculate how long it will take to recover from a poor investment or how long it will take to pay off a mortgage at varying payment options. Vocabulary and definitions accompany the calculators, so they are easier to understand.

Surprising Money Lessons from Mickey Mouse

February 22, 2014

Money talks….especially in a place like Walt Disney World. Oh, you might assume it’s all about getting vacationers to buy souvenirs and spend lavishly? But hold on there, space rangers! It’s not just about spending money, although you have plenty of opportunities for that.

We just returned from a family trip to Disney World, and as always, it was a magical experience we enjoy. This was the first Mickey Mouse encounter for our 2-year-old granddaughter. She learned a great deal, including some unexpected lessons about saving money and investing.

Here’s what I saw her take in:

1) Learning to wait brings rewards.
It’s hard for a two-year-old to understand waiting in line for the Dumbo ride, but she eventually got the idea. So did other kids. Grandma calls this delayed gratification, just like saving your money to buy something later.

2) Someone else is in control. Deal with it.
Even a two year old knows that mom makes the decisions and runs the schedule. When it comes to your money, it’s your bank, credit card companies, other lenders and your employer who run the schedule. If you don’t comply, you pay for it. Deal with it, by using a budget and a net worth statement.

3) Incentives work.
Prepared parents stay one step ahead of kids, especially tired kids. Promises of more fun after a nap or a sweet treat after a meal make good incentives. A two year old can get that. The same goes for saving and investing—those dividends and interest rewards keep us building that nest egg.

4) Small adds up to big– it’s magical.
There’s nothing like seeing Disney through the eyes of your grandkid. Mickey Mouse and his friends are larger than life, and Disney knows how to give a quality experience—and capitalize on desire. Of course, enamored kids (and grandparents) who get caught up in the magic keep wanting more. Now, transfer that to an investor’s mentality – small amounts add up and the more you get, the more you want.

5) Why can’t I get everything? It seems others do.

It’s hard for two year olds to understand “choose” or “just one,” and even adults have trouble with this concept. They want everything and don’t want to decide on prioritizing by what they can afford. (Think big screen tv, vacation home, new car, boat, etc.) Grandma calls this deciding wants vs. needs.

Can you relate? Email me with your story.

Are You Financially Organized at Year End?

December 5, 2013

It’s almost the end of the year. Are unopened bank statements and receipts piling up on your kitchen counter? It’s time you got financially organized, so you know what to keep and how long to keep it.

1. Collect 2013 receipts, separating those needed to file income taxes.
2. Store the year’s pay stubs, banking statements, and credit card statements.
3. Make a net worth statement- list all assets (including banking and investment accounts) and all liabilities (including credit card balances and loans).
4. Make a copy of all credit cards, passport, licenses (save time if lost or stolen).
5. Rent a safe deposit box to keep important papers (will, birth certificates, passports, real estate deeds/titles)
6. Shred mail with your private information before discarding.

Not sure what to keep or how long to keep it?
Keep these records for the calendar year:
• Bank statements
• Pay stubs (consider autopay direct to your bank account)
• Social Security benefits statements
• Investment/broker statements, including 401(k) plans

Keep these for 7 years:
• Tax returns and supporting documents
• Bank statements needed to prove a deduction on a tax return

Keep these forever:
• Employer-defined benefit plan communications
• IRA contributions
• Brokerage statements (document gains/losses until sale)
• Life insurance policies (most recent copy)
• Loan documents (until paid and you have title)
• Home improvement records/receipts (keep 7 years after you sell)
• Savings bonds (you can convert paper bonds to electronic)
• Safe deposit box inventory

Keep until you’ve reconciled your statement:
• Bank deposit slips
• Credit card receipts
• Monthly bills and credit card statements
• Keep statements and receipts you may need to prove tax deductions


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