Prepping Children

Allowances, Chores & Money Jars: How to Teach Kids to Manage Money

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This past Sunday on the MomShow one of the topics we discussed was starting to teach kids how to manage money. One of the ways we talked about helping kids understand finances is to make money jars for their allowance and other money they receive. When they divide their money into separate jars they are learning responsibility and setting goals from the very beginning. After the show my daughter, Isla and I, gathered the supplies necessary to make money jars for our house.

I didn’t want to make this a complicated or involved process. We went to Michaels and purchased small glass jars and chalkboard stickers. I realized once we got home that we didn’t have chalk but we had a gold marker so we used that to write on the stickers. We made eight jars, four for each child. All the supplies totaled $12.43.

We decided to make four different jars: Save, Spend, Give and College. We assigned a percentage to each jar: Save 10%, Spend 70%, Give 10% and College 10%. At the beginning of summer, we started a points system at home for doing chores or being helpful around the house. Points are assigned to tasks and tallied over the course of the week. Every 5 points = $1. Money is paid on Friday. Now that we have the kid's money jars, the money will be divided between the jars based on the percentages above. This system has worked for our family. We have tried charts and more complicated things in the past that have not worked. As you can see from the pictures, we are sticking with simple; and simple is what we are all able to commit to so far.

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My kids are 9 and 11 years old. I decided to include a fourth jar for College to introduce the expectation of some sort of schooling after high school. I think this jar can be optional. Save, Spend and Give would be a great place to start, especially if you have younger children.

Check out Dr. Amy's recent talk on the MomShow here!

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What Parents Can Do While Raising Kids to Set Them Up Financially

written by: Cassandra Brashier

“Being a parent and raising a family is easy” - said No Parent Ever. Let’s try to break it down in some bite size pieces. Here are some things to consider financially while you’re raising those little darlings…

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Life Insurance: There are as many opinions about life insurance as there are Taxis in New York. This topic for most people is right up there with having a root canal. However, death is never timely. Try to look at life insurance as an act of love rather than a burden to bear. If you have a family and you provide for that family, either with a paycheck or by running the house (or both), then you provide an economic value and one that should be protected. What would happen if your paycheck stopped coming into the bank account every month? Let alone you not being there for the day to day tasks. Today there are so many different kinds of insurance at many different price points.  The amount appropriate will largely depend on your specific situation.  If you don’t have any now – anything you get will be better than nothing.  For example having 1X your income would keep the family going for about a year. Although, it is not uncommon to have 10 years or more factored in as well as things such as college costs, funeral expenses, etc. The right amount can’t be determined by a ‘strict rule of thumb’.  

Funding College: There are many questions people have about how to save for their children’s future education costs.  One of the most common ways is to start a 529 plan. This type of account allows you to put money in and others can contribute as well. So when Grandma Charity says she wants to help fund Wisdom’s college fund, she can do that.  A 529 plan can now also be used for elementary and high school. There are other strategies available like Coverdell ESA’s and if set up a certain way, life insurance policies can also be used as a strategy to fund college. Which one is right for you depends on your goals, income and situation. 

UTMA & UGMA Accounts: Don’t know that your kids will be college bound?  The sky’s the limit with these accounts.  It can be utilized for school or to fund that Tech start-up they’ve been dreaming about and any number of other options. The pros is that it’s more flexible then the 529 plan and there are no contribution limits.  The cons are that it is taxed along the way and upon the child reaching the age of majority, the funds transfer to them and the adult no longer has any say or control over the money. But thankfully most 18 year old’s are responsible money managers, right?! 

Having a Will or Trust: Once kids are in the picture you have a lot of decisions to make. Daily. This is an important one though: What would you want to happen to your kids if both parents weren’t there to raise them?  If you don’t have a Will or Trust in place then the state is going to step in and make the decision who will raise your kids. So not having a Will doesn’t mean you don’t have a plan, it’s just going to be the State’s plan. Do your kids a favor and put one in place and be sure to name a guardian who would be responsible for the assets on their behalf.  

Kids Life Insurance: With this topic most people assume the worst.  When in reality this could provide some long-term benefits to your child. Most people will become uninsurable at some point in their life.  For many it will be later in life but for some of us things happen or we are diagnosed with something before adulthood and that could prevent us from ever qualifying for life insurance (or make the cost extremely high).  This is one of the main reasons to at last have something for a child.  Either way having it and not needing is every parents hope. 

Beneficiaries: As parents we work hard to build up our assets and have life insurance for protection and it’s usually intended to be passed down to our children.  It can seem logical to have them listed then as our beneficiaries but if they are minors it’s not recommended.  A minor cannot take control of assets so they wouldn’t be able to access the funds as easily (a guardian will have to be appointed if there isn’t one already) in the event of a tragedy. If the child/children are special needs and have assistance this can also affect the funds they receive and could impact if they continue to qualify.  The best way to pass your assets along will depend on your situation. 

If you’re still reading and haven’t poked your eyes out, congratulations! (no offense to any pirates in the audience)

Allowance:  If kids can understand at an early age they have to do something to have money, they will have learned a valuable life lessonHelp them start good money habits by saving a portion of everything and watching that accumulate. Set financial goals with them for things they want to buy.  These can all be great tools to teaching kids good financial habits for their life! 

There isn’t a ones size fits all and so much of raising kids and finances is sensitive to each family. To answer questions about your unique situation talk to your tax professional, attorney and financial advisor. A little planning can go a long way and may even impact multi generations to come. 

Cassandra Brashier is a wife, mother of 3 and has been a Financial Advisor for 15 years. For questions go to www.momstalkmoney.com

Securities and advisory services offered through Harbour Investments, Inc.

Preparing Your Child For a New Baby

Health Foundations Family with Child

Welcoming a new baby to your home is an exciting and sometimes overwhelming event for a family. Your family is growing and will be forever changed to a new “normal” the moment your baby arrives. Sometimes welcoming your second, third or even fourth child may be even more intimidating than your first as you have the added task of preparing older siblings for the big change. Here are 5 tips to lovingly helping your child adjust to the idea of a new baby before he arrives.

  1. Consider your child’s age and understanding level when deciding when to share the news: While older children will be able to conceptualize waiting 9 months for baby’s arrival, a toddler has a hard time understanding tomorrow versus one week from now. If your child is on the younger side, try telling him what season the baby will arrive in rather than how many months from now. For instance, “Next summer, when we can go to the pool again, the baby will arrive!”
  2. Find age appropriate books to share with your tot about welcoming a new sibling: There are a wide variety of children’s books (and programs) that are available and cover the topic of becoming a big brother or sister. Reading books about having a new baby can help your older child get excited about his or her new role as a sibling and aid in answering any questions they have about what it will be like. Reading books about being a sibling and new babies can also help your child learn ways that they can participate once the baby arrives which will help them realize that they play an important role in the family and as an older sibling. Depending on their age, your child may also want to know where the baby will come from and how he/she will get here. You should be able to find a variety of age appropriate books on this topic as well. 
  3. Involve your little one in the preparations: Whether it’s helping you to choose decorations for the nursery, brainstorming favorite names or picking out some special toys for the new baby, letting your child participate in the preparation will help them to feel involved in this very important family event. If your child is old enough to understand, they may even enjoy coming to one of your check-ups and hearing the baby’s heartbeat on the fetal Doppler or feeling your tummy when the baby kicks.
  4. Encourage your child to share their feelings: You may think that your little one is too young to understand that the family dynamic will be changing with the arrival of a new baby but they are probably a lot more aware than you realize. Even toddlers can sense when something is different and their parents are anxiously preparing for something big to happen. Allow your child to have any and all feelings he or she might have about the impending changes and validate their feelings as best you can. For younger children who are not yet verbal, this may mean spending some extra uninterrupted time with them if they are acting out or simply allowing them to “be the baby” when they need to be.
  5. Make preparations for your child for when you go into labor well in advance: If you do not plan to have your child present for the birth of your baby, it is important that you make plans in advance for who will care for him while you and your partner are away. For many moms, this may even be the first time you’ve been away from your kiddo for an extended period of time which can be anxiety provoking for both of you. Talk to your child about the plans for when it’s time for you to have the baby and consider even doing a dry run. If they will be spending the night with a friend or relative, have them do a practice night where you can go and help them get acquainted with what the visit will be like. Similarly, if you plan to have a friend or relative stay in your home, make sure your child is well acquainted with them and that they understand how the night or nights with them will go. Your child may express feeling scared or upset about you being away either in advance or at the time that you are leaving. Lovingly acknowledge their feelings and remind them that you will be back in no time and that they will be able to visit you as soon as their new brother or sister arrives.

Welcoming a new baby to your family can be a scary prospect for everyone, especially when you’re going from one to two. However, with some thoughtful preparation for you and your child or children, everyone will have a better idea of what to expect and feel like they are an important part of the change. For questions about prenatal care, natural birth, postpartum care and all other women’s services, contact Health Foundations for a free consultation with a midwife and for a tour of our Birth Center.