Teaching Your Kids About Money Smart Dads Raise Financially Savvy Kids

Teaching Your Kids About Money Smart Dads Raise Financially Savvy Kids

If you’re a Dad who wants his kid to do well in life, then one of the best things you can do is to start teaching your kids about money. The sooner, the better. Children who learn smart earning, saving, and spending habits early on positively impact their financial futures.

Skills to earn income, save, invest, and spend money can be taught at a very young age. Understanding the difference between needs and wants, grasping the concept of how savings grow, and grasping how debt can negatively impact one’s life are all entirely possible for children to learn.

These concepts are not often taught in most schools, and while I think they should be, I think it is more important that dads take the lead in teaching your kids about handling finances. Because frankly, who cares more about your child’s money than you and them anyway?

Ways to Teach Financial Basics

Allowance

I did not give my children an allowance, but in hindsight, I wish I did. Having them ‘earn’ an income is a great way to teach the ins and outs of earning, saving, spending, and even donating. As children are faced with situations such as wanting a toy or piece of clothing that isn’t in the family budget, they can be taught the difference between needs and wants. You can be teaching your child patience as well by showing them how to save for a desired purchase that is not in the family budget.

Shopping

Grocery or back-to-school shopping trips can be great teaching opportunities. Start by preparing a list of needs before hitting the store. Show your child how to compare prices, take advantage of things that are on sale, or buy in bulk to save additional money.

Explain how the brands they may see advertised on television are not always the best value option. If they ask for items that are not on the list explain that those things are not necessary and be willing to say no. Alternatively, you can use those times for teaching your child they can pay for their wants out of their savings.

Banking

Open a savings account with your child and if they are of working age assist them in opening a checking account. Owning and maintaining savings accounts can children learn about interest, how to deposit and withdraw money, and depending on their age, properly use debit cards.

Business

Does your kid show an entrepreneurial spirit? Help them start a small business. A lemonade stand, lawn mowing, snow shoveling, or babysitting services are all reasonably easy options for teaching your kids about money. This is an excellent way for them to learn financial skills. Also, they can learn how to set and achieve goals, what profit and loss are, how pricing effects profits, and more importantly how hard and honest work can be rewarded. A small business can also instill confidence and necessary people skills.

Hacks for Teaching Your Kids About Money

  1. Use clear jars to accumulate money for saving, spending, and donating so that your child can visual see the money. As they earn money or are gifted money, teach them to split the money between the different jars, based on agreed upon designations. Such as 25% for long-term savings they can’t touch, 25% for short-term savings, 10% for donations, and 40% for spending on their wants.
  2. Have them count their money and record in a notebook or on the computer, each time they add money to their jars or take money out. Putting down notes as to where the money came from or how it was spent or donated is a good habit for them to create. You’ll be teaching your kids about money, and about record keeping.
  3. Assist your child in setting goals for their money. If they want a toy that will take four weeks of allowance to pay for or their first car, which may take them four years, help them create a savings chart to track it. This can be done with a simple piece of paper and crayons for young children or an Excel spreadsheet for an older child.
  4. Physically show them how money works. Instead of using your credit card online or at the store teach them how to use cash. Go through the motions with their own money when they want a toy by having them grab a few dollars out of spending jar and taking it to the store to physically purchase an item.
  5. Explain the concept of opportunity cost. If you buy this book with your money, you won’t be able to buy that toy too.
  6. Find opportunities for teaching your child the importance of giving and lead by example. Even with just a little bit of money, they can learn about giving. Have your child pick a charity, a cause, your church, or even someone they know who could use a little help. Eventually, they’ll understand giving doesn’t just positively affect the charitable causes they give to, but also the giver as well.
  7. Describe how compounding interest works – Interest is earned on the original amount of money saved, as well as on any interest already earned. Here’s a fun calculator for them to try.
  8. Educate them about credit and the danger of credit cards. Stress the importance of using credit responsibly and paying off credit cards in full each month. Credit card debt is costly and can quickly ruin one’s life. Don’t let them learn this the hard way.

Financial Technology and Money Apps for Teaching Your Kids

As your child ages, you’ll likely want to introduce them to more technology-based financial education. This may aid you in teaching them necessary to understand concepts mentioned above. Here are a few highly rated fin-tech products you may want to check out when you and your child are ready.

FamZoo

FamZoo, encompasses many areas of teaching kids about money, including spending, saving and giving. Their technology allows you to utilize prepaid cards or a simple IOU system instead, to provide allowances to your kids. It’s entirely customizable, goal-based, simple to use and in addition to allowance tracking, FamZoo also allows you to:

  • Assign payments for chores
  • Set up savings buckets to pay your kids a specified interest rate (compounding interest!)
  • Establish separate logins for your child to give them responsibility for tracking their money.

FamZoo offers lots of features for a variety of ages making it an awesome program that grows with your kids.

Bankaroo

Started in 2011, Bankaroo is the idea of an 11-year old daughter and her father who helped her bring it to life. It is a virtual bank designed for kids, ages 5 to 14. It teaches the value of money in a fun and straightforward way. Create checking, savings, and charity accounts for your kids to track their allowance, gift, or chore money. Kids can also create savings goals and earn cool badges.

Bankaroo has mobile apps in both English and Spanish and offers financial curriculum programs for schools too.

PiggyBot

Aimed at kids, ages 6 to 8, PiggyBot offers an easy way to track allowance spending and saving. Instead of cash, your kids have a virtual balance, like an IOU with you. Each child has a separate Spend-It, Share-It, and Save-It account and you decide how to allocate the allowance.

Kids can set goals, take pictures of things they want and share money. There’s also an option to show off the items they purchased. The system is designed to reinforce principles of saving for wants, needs, and nice-to-haves.

One of the most important things you can do as a parent is to communicate with your child early and often on how to earn, save, and spend. There are many ways, tools, and technology available for teaching your kids about money. Offer several examples to them of how money is earned and provide your child the opportunity to help decide how it is budgeted for saving, spending, and sharing. Also, please educate your children about the dangers of spending above their means, overusing credit cards, being in debt, and paying high-interest loan rates.

Additional Resource:

Money Confident Kids

When Spending On Children Gets Out of Control Divorce Advice for Dads on How to Draw the Line

When Spending On Children Gets Out of Control Divorce Advice for Dads on How to Draw the Line

Kids cost money, an undeniable fact. While it is impossible to know from the start just how much those little bundles of joy will cost you, experts predict a total cost of almost $250,000 on average. In the most recent estimates from the United States Department of Agriculture (USDA), the annual amount of spending on children ranged from $9,330 to $23,380. Costs varied, of course, depending on household income, the age of the child, and family composition.

The USDA’s Expenditures on Children by Families annual report aids family court systems and government agencies in determining child support expenses. It provides estimates for significant budget items in the cost of raising children from birth through age 17. The budgetary components include food, housing, transportation, healthcare, clothing, childcare, and education. The report also provides estimates for miscellaneous goods and services. Included are things such as non-school reading materials, haircuts, entertainment, and personal care items.

Child-Rearing Expenses

Child support and overall spending on children for that matter is an extremely sensitive topic in divorce and parent custodial matters. To begin understanding what is right or fair for child support we should start by looking at what costs typically arise when providing for a child. Listed below are some very common expenses.

Necessities Such as Food, Clothing, Shelter

  • groceries, snacks, beverages, and other food items
  • boots, shoes, jackets, and appropriate clothing
  • housing shelter costs, such as mortgage or rent, utilities, telephone, and water

Medical Care Insurance

  • medical, dental, and vision insurance

Uninsured Medical Expenses

  • out-of-pocket medical costs that exceed the cost of a basic health care insurance plan
    • including co-pays, deductibles
    • accident or emergency services costs
  • dental braces
  • eyeglasses
  • special health care costs

Educational Fees

  • school clothes/uniforms
  • school photos
  • yearbooks
  • tuition fees
  • textbooks
  • lunch money
  • private tutors, if necessary

Childcare

  • daycare services
  • babysitters
  • nannies
  • childcare during summer months, spring break, and some holidays

Transportation/Travel

  • basic transportation and travel cost
    • gas fees
    • car payments
    • registration
    • insurance
  • bus fare or other forms of transportation
  • child’s travel to visit the noncustodial parent

Entertainment

  • access to computers
  • television programs
  • games
  • Internet
  • movie theatre
  • amusement parks
  • camping trips and other outings

Extracurricular Activities

  • after-school programs/classes
  • summer camp
  • sports activities
  • clubs – ex. Girl Scouts or Boy Scouts
  • music, dance, or other private lessons

While this list is not exhaustive, it gives a good indication of what costs might come up over the course of your child’s life. When considering what is enough spending on children, it is important to know basic child support payments may not (and probably won’t) provide your child with more than their minimal needs. If you want them to enjoy an enriched life too, you may end up spending a bit more.

What Am I Paying For?

State laws, which vary from state to state, regulate what expenses are included in direct child support calculations. All 50 states create and utilize child support guidelines to determine amounts one parent may be required to pay to the other for child-related expenses. A variety of factors are taken into consideration to decide what is ultimately the amount of support needed to maintain a child’s standard of living as close to what it was in a two-parent home. Income and the ability to pay support are primary factors in these calculations.

Be sure and check the child support guidelines in your state, as the laws vary greatly.

Once the court factors the essential financial and support needs of a child, a child support order is issued to reflect the determined amount one parent must pay. Should there be a change in the child’s needs, or if a significant difference develops in one parent’s circumstances,, a request for change may be filed.

While childcare, uninsured medical expenses and extracurricular activities are typical expenses in raising a child, they are not always routinely calculated in child support amounts ordered by the courts. These costs may be included in the divorce settlement agreement, however, upon request.

To avoid questions and potential disagreements with your ex-wife in the future, lay out as many of these additional child-rearing expenses as possible in your divorce agreement. If you did not outline these other costs, daycare or uninsured dental care as an example, in your initial child support agreement, you might wish to do so now. 

Don’t underestimate the value an experienced divorce lawyer can provide to help ensure the best outcome for both you and your child.

While courts may not command the parent paying child support to provide additional monies to cover dance recitals and traveling sports, when it’s important to your kid, you might want to go ahead and budget a little extra for upcoming events.

As you evaluate the needs for your lifestyle as a single man and work to determine a budget for your post-divorce life, be realistic about what child support covers and what it does not. There may be times you are asked to pay for things that are not basic needs but will enhance your child’s life. Responding to these money inquiries may require setting aside personal feelings of your ex. This is why detailing what supporting your child after a divorce entails, as precisely as possible, in your initial divorce discussions should help you navigate when these times come.

My Ex Won’t Account for the Money

Courts do not require the parents who receive child support to prove the child support payments go toward specific expenses or activities. It is assumed by the courts that custodial parents of children are spending on children as required to adequately raise the child. Thus, they will not monitor the expenses and spending habits of a custodial parent unless there is compelling evidence to indicate misuse of support payments.

Continually being asked to send additional money or receiving numerous requests to purchase essential items like underwear, socks, and toothpaste may indicate your ex-spouse is not using the support funds correctly.

Before getting too pissed off, see if a change in circumstances is causing these requests. Maybe her car broke down, and she needs extra money for repairs. You can give her some slack, or help her out a little bit, or you can laugh in her face and tell her to ride the damn bus. But don’t shoot yourself in the foot. You never know when circumstances may be reversed, and you may be the one in a financial pinch.

However, if you are convinced your ex-wife is not utilizing the support payments to provide for your kids, start taking notes. Record the requests she makes for extras, as well as any spending you are doing during your parenting time if you end up purchasing necessities for your child. Keep receipts of what you buy and request reimbursement for amounts you think are reasonable.

If your reimbursement requests go ignored, or the pleas for more money from you do not stop, consider consulting an attorney.

Spending on Children, the Bottom Line

It is highly unlikely the amount set for child support by the courts will cover all the needs of your children all through their childhood years to age 18. The more you can prepare yourself (and any future spouse) for covering some additional expenses the better off your child, and all parental parties will be.

Discuss with your child’s mother early on how you will split extra costs for your kids to avoid potentially ugly discussions down the line. It is better to deal with the issues now than to disappoint your child later because you disagree with their mom on who will pay for piano lessons or hockey skates.

Spending on children is something every parent must do, whether married or divorced. While child support payment and money for extras is for the care and benefit of your child, you aren’t a bad dad if you draw the line at excessive spending.

 


(c) Can Stock Photo / nastia1983

Fighting About Parenting After Divorce 5 Smart Ways to Win for Your Kids

Fighting About Parenting After Divorce 5 Smart Ways to Win for Your Kids

Parenting after divorce can rapidly turn into open warfare with your ex.  You’re angry and frustrated, but for the sake of your children and your sanity, it’s best to come up with some basic parenting ground rules for both households, and let the rest go.

The kids need consistency. Your parenting styles don’t have to be the same, in fact, exposure to different styles can help children enhance their decision-making skills. But there are some rules you and your ex should try your best to agree on.

You may have had a good-cop, bad-cop thing going on when you were together, but your kids need more stability and consistency after divorce. If one of you is strict and the other lets them get away with murder, or one of you is always buying them new things while the other is more money conscious, it can lead to conflict with your kids and even more between you and your ex.

The thing is, you can’t make your ex change her parenting style. You can ask her to change her rules, but you can’t expect her to say yes, and she can’t expect you to say yes if you don’t want to modify the rules at your house.  To move forward, parenting after divorce means you and your ex both need to be willing to do what’s best for your kids.

Negotiating Terms for Parenting After Divorce

Even if you and their mother have different parenting styles, establishing ground rules in each home keeps things consistent for your kids. Their routines and schedules should be the same – the same wake-up/bedtime, the same homework routine (only watch TV after their homework’s done), getting to school and after-school activities on time, the same curfew if they’re old enough to go out at night, etc.

Children need routines. Routines bring stability and reassure your children that change is okay and that they have support and love in each household.

1.Protect your Kids from Conflict

Kids suffer from seeing their parents arguing or hearing them bad-mouthing each other. They love both parents and see themselves as half of you and half of your ex. Hearing you bitch about their mother, or the other way around can make them feel like the mean words are meant for them, too.

If you’re not happy with the way your ex is parenting, don’t get into an argument with her about it in front of your kids. Fighting causes your children to feel stressed and anxious at a time that has already been hard on them

2. It’s How You Say It

If you tell your ex to do something, chances are she’s not going to do it. People are much more likely to consider a different point of view if they are educated about it and then asked if they’d consider changing their rules. If you explain why it’s best for your kids to read a book rather than play on their iPads before bed, and give examples where reading helped put them to sleep, she’s more likely to consider modifying her rules than if you straight out tell her to change her stupid ways.

You’re divorced now, and don’t want to put up with any more of her garbage.  But, while you and your ex may not have a marital relationship anymore, you still have a parenting relationship. Instead of fighting with each other about whose parenting is right or wrong and what each should be doing differently, focus on what is and isn’t working for your children and why.

3. Suck It Up for The Kids’ Sake

When push comes to shove, your ex may not be willing to change her ways at all. As long as your kids aren’t in imminent danger, you’ll just have to suck it up to protect them from extra stress and tension. If both parents have the kids’ best interests in mind, it’s okay to have different parenting styles because ultimately your kids are being loved and supported and that’s most important of all.

If your kids are doing their homework, staying healthy, getting exercise, attending their extra-curricular activities and maintaining their responsibilities, then you are not giving in by letting go of how their mother is going about it in her house.  The only thing you have to agree on is the health, well-being, and support of your children.

4. Keep Your Kids in the Loop

While you need to protect your kids from drama, you should also be communicating with your kids. If you and your ex have different rules for each house, explain to them that mom and dad are different and that they have different rules.

You can say “At daddy’s house you can drink juice, and at mommy’s house you can drink milk and water.” Don’t make one sound better or worse, and don’t try to get the kids on your side by saying, “Dad’s rules are better.” Even if they are!

Your kids should not have to choose sides. If you don’t communicate with your kids, they’ll expect the rules to be the same in each place, so make sure they’re aware of the differences. This will help the kids know where they stand in both households.

5. Consult an Expert

Can’t stop fighting? Don’t hesitate to get an expert involved. If you two are at an impasse on a big issue that has to do with your child’s education or health, enlist an expert with an objective view on what’s best for your child.

Sometimes both parents get so carried away with being right, they’re no longer thinking about what’s best for the kids. Or maybe other relatives or new partners are trying to wade in. Use the expert to cut through some of the crap and get down to what’s best for your kids.

Parenting after divorce can be a struggle, especially if you and your ex don’t see eye to eye. When you know your children get support, love, and care in both households, don’t sweat the details. You are still the best Dad they ever had.


(c) Can Stock Photo / georgemuresan

When You’re Missing the Kids Divorced Dad Survival Tools

When You’re Missing the Kids Divorced Dad Survival Tools

As if divorce itself isn’t bad enough, when there are kids involved, it’s even worse. In fact, most newly divorced dads would say the hardest part about divorce is missing the kids when they are with the ex-wife. Going to bed without those bedtime romps and kisses every night or waking up to a lonely, quiet house can be extremely tough.

The good news is that you’ll learn to cope with the children being away. You’ll never stop missing the kids, but you can adjust to your new lifestyle. Here are five tips for coping when you miss your kids.

Stop Beating Yourself Up

As a newly divorced dad, it is really easy to blame yourself when aren’t with the kids. After all, you chose or agreed to this divorce, right? You may catch yourself saying things like “I am a horrible father for choosing my happiness over being with my children” or “I chose to be without my kids. I should have stayed even though I was unhappy.” You may feel guilty and selfish now that the reality of shared custody has set in.

Beating yourself up when you are missing the kids isn’t going to do anyone any good. After all, would you rather have the children growing up in an unhappy home? Two separate and happy parents can be better than two unhappy parents together. Remind yourself that choosing divorce in an unhappy marriage is often best for everyone involved, including the kids. Especially if the divorce wasn’t your idea, then you had no choice and shouldn’t beat yourself up.

Keep Yourself Busy When You Are Missing the Kids

Keeping yourself occupied will not only help you pass the time when you don’t have your kids, but it will help pull you out of a slump and begin the process of rebuilding your new life. You’ll have more alone time now so you might as well start to use it and enjoy it.

Fill your calendar with enjoyable activities when the kids are with your ex. Use this time alone to get back into a long-lost hobby or do something for yourself. Read a book, see a movie, focus on your career or learn a new hobby. Treat yourself to something special. As you move on and begin to date again, plan your dating for when you won’t have the kids. This way you will have something to look forward to and focus on during the times your children are away.

Take Care of Yourself

Divorced parents are a little bit like masochists. They feel guilty for having fun or taking care of themselves when they aren’t with their children. But when it comes down to it, you must take care of yourself following a divorce if you want to be able to take care of your children. Taking care of yourself will make you a better father, and it will set a good example for your children. Divorce can lead to anxiety and depression (especially when you’re desperately missing your children), and if you don’t make an effort to take care of yourself, this can spill over to your kids.  So, take the time to get the help and care that you need to make the transition to single fatherhood. Take care of yourself so that you can take care of your children.

Be Flexible with Schedule Changes

Take advantage of every chance you get to spend with your kids. While it may be tempting to say “no” to your ex’s request for you to take the kids an extra night so she can go on a business trip or a date, take the high road and think about what you want. Is your desire to hurt her or cause her grief larger than your desire to get the kids an extra day? Take advantage of the extra time and thank her for it!

Communicate with Your Children

Divorce is tough on children too. They may have similar feelings of anxiety or guilt with the new lifestyle, and they may worry about you when they go to stay with their mother. So, talk to them about it. Let them know you are going to be okay by telling them about your plans. Tell them about the book you are going to read or the old friend you plan to catch up with. Don’t let them see how sad you are when they leave. Take the burden off of them.

When you are missing the kids, you may spend hours wondering what they are up to and if they are okay. The best way to silence the worry is to ask. When you have your kids, ask about their week. Get curious. Ask about their school and their hobbies. Ask about their feelings and how they are doing. Listen to their answers. Just don’t give in to the temptation to ask too much about their mother or criticize her to the kids. The kids don’t need to be in the middle of your relationship trouble.

Enjoy the Time With the Kids

Focus on the time you will have with the kids and don’t obsess about the times you won’t. When you aren’t with your kids, think about the activities you’ll enjoy together when they come back. It doesn’t matter what you do with your kids when they are with you. You don’t have to plan extravagant outings or spend a lot of money. Just enjoy your time together. Listen to their stories, make them giggle, and soak up every moment.

There are lots of distracted parents who don’t take full advantage of the time they have with their children. They turn on the TV or browse their smartphones while the kids play instead of getting down on the floor with them. They work extra hours at work instead of making it home every night for dinner.

Divorced parents, however, typically have more appreciation of the time with their children because it is limited. Sometimes quality is more important than quantity. Focus on what you do have. Be grateful for it.

You’ll Survive

Divorce is tough, and you can expect a period of adjustment after the final decree is entered. There will be days you don’t see your children at all, and it can be easy to focus on how much you are missing the kids. This can lead to even more unhappiness and loneliness.

Remeber, you have the power to decide what to focus on. You can choose to focus on the time you do have together and make the most of the time you are away from them. Divorce changes everything, and part of that change includes personal growth and improvement in relationships – including your relationships with your kids.

While the amount of time you spend with them may decrease, the quality of the time can actually increase. Focus on the positive. It may not make you miss your kids any less, but it can help you cope and adjust to the divorced lifestyle.


(c) Can Stock Photo / krasyuk

How Divorced Dads Are Saving for College Planning Now for Your Child’s Education

How Divorced Dads Are Saving for College Planning Now for Your Child’s Education

If you’re a divorced dad who hasn’t started saving for college, you’re not alone. Most parents want their child to go to college, but less than 40% have a plan to pay for it. With less than 25% of funds currently spent on college coming from savings, it’s no wonder student loan debt is so high.

Annual college tuition and fees are now averaging nearly $35,000 at a private, four-year institution. They are almost $10,000 at a public four-year college and $3,500 at public two-year schools. As costs continue to increase the struggle to pay for them will too.

Results from the 10th annual study, How America Pays for College 2017, show parents are paying 31% of these costs through savings or loans, with students picking up 30%, family and friends covering 4%, and scholarships funding for the remaining 35% of advanced educations.

As a divorced dad, saving for college on top of child support payments, everyday living expenses, and your future retirement, may seem impossible. Yet, with a bit of planning and perhaps some creativity too, you can start saving today. Thus, making advanced education an affordable option for your children in the future.

It’s Not Too Late to Start Saving for College

Choosing to attend in-state versus out-of-state schools is one way students themselves can reduce the overall cost of college. Earning college credits in high school, or attending community colleges for one or two years before moving on to four-year institutions are others. Living at home instead of at college, or living with one or more roommates, help as well.

Applying for scholarships and working while in high school are additional ways your child can help. This will minimize the impact later on your wallet and theirs too.

Even if your son or daughter is now a sophomore in high school, it’s not too late to start saving for college. Any savings is beneficial but the sooner you start, the better of course. According to Finaid.org, stashing away just $50 per month from your child’s birth to the time they turn 17 would provide $20,000, assuming a 7% return on investment.

Before starting college savings, however, experts suggest:

  • Paying off any credit card debt or other high-interest loans.
  • Establishing an emergency savings account with 3-6 months of expenses accumulated 
  • Regularly contributing to your tax-advantaged retirement savings accounts – 401ks, Traditional IRAs, etc.

Additional College Saving Tips

Cut non-essential expenses to provide more money for savings. Track your spending to see if there are any expenses you can eliminate to increase your savings for college. Think cable TV, gym memberships, subscriptions you don’t use or eating out less. $5, $10, or $25 savings add up over time.

Increase your income. Ask for a raise at work or apply for a promotion. Seek a position at a competing company offering a larger salary and benefits. Turn an interest or a hobby into a side hustle and create an additional income stream or pick-up a part-time job.

Keep substantial savings in your name with your child as beneficiary, to avoid any loss of student aid. For every dollar above $3,000 saved in your child’s name, 20 cents is subtracted.

Make savings automatic. Make it easy on yourself by automatically depositing a portion of your paycheck into your savings.

Where to Stash Your Money

529 College Plans

More than 30 states offer a 529 college savings plan with full or partial tax savings benefits. Also known as Qualified Tuition Programs (QTP), 529’s are funded with after-tax money you’re allowed to withdraw later tax-free, including any gains, for use on qualified education costs, such as tuition, fees, and books. These state plans offer various investment options and expenses, and contribution limits vary. 

A 529 account owner is allowed to withdraw funds at any time for any reason – but the earnings portion of non-qualified withdrawals will incur income tax plus a 10% penalty tax. Should your child not end up going to college, you can typically transfer the account to another beneficiary.

Most plans allow you to change your 529 plan investment options twice per calendar year and allow for a rollover of funds into another 529 plan once per 12-month period.  529 programs have no income, age, or annual contribution limits, but may have lifetime contribution limits – $235,000 to $500,000 depending on the plan.

Roth IRA

Roth IRAs, popular as tax-advantaged retirement savings vehicles, can also be used for college savings. As with a 529 plan, you contribute after-tax money to a Roth IRA, and any investment gains can later be withdrawn tax-free, typically for retirement after age 59-1/2. But a Roth IRA also allows you to remove funds tax- and penalty-free, after five years, when used to pay for qualifying educational expenses. Should your child not attend college, you can use the funds for your retirement.

There are income and contribution limits with the Roth IRA. Single taxpayers earning more than $129,000 per year are not eligible, and contributions are limited to $5,500 per year ($6,500 for those over age 50).

Coverdell Education Savings Account

Coverdell ESA’s may be used to cover not just college costs but also any educational expenses, including private school tuition at K-12 institutions. Like a 529 college savings plan, the Coverdell ESA is typically tax-advantaged when utilizing the savings for education expenses.

You may contribute $2,000 per child per year, although contributions phase out for anyone earning more than $95,000 per year. 

Similar to the 529 and Roth IRA, money in a Coverdell ESA is considered your asset, not your child’s for financial aid purposes. Please note, however, funds not utilized before your child turns 30 may be subject to taxes and penalties.  

Prepaid College Tuition Plans

Prepaid plans allow you to pay for a portion of your child’s college tuition today, locking in current costs and in turn protecting you from future tuition hikes. Like 529 college plans, monetary gains in these programs are typically exempt from federal taxes. A dozen plus states offer prepaid tuition plans but this not the most recommended method of saving for college, as it severely limits educational choices to the state they are purchased.

UGMA / UTMA Custodial Accounts

The Uniform Gift to Minor’s Act (UGMA) and Uniform Transfer to Minor’s Act (UTMA) accounts are custodial accounts to hold and protect assets for minors until they reach adulthood. Because the assets are considered the property of the child, they provide some tax benefits, but less than a 529 plan would. Additionally, unlike other saving plans, they can be considered your child’s asset affecting federal aid amounts your child qualifies for.

A custodian can initiate withdrawals for the child’s benefit provided the expenses are for a legitimate need. Unlike other college savings accounts, payments are not limited to education costs. Once your child becomes a legal adult, they may use the money for any purpose without custodian consent.

Other Ways to Save for College

  • Sign up for Upromise – Register for a free at Upromise.com and earn cash back for college with your shopping, dining, and travel. You earn money by using your registered credit, debit, and loyalty cards at participating businesses. Accumulate savings in a savings account, a 529 plan, or have a check sent to you. 
  • Credit Card Rewards – Find a credit card specifically designed to earn college savings or use any cash back rewards card to amass savings for college. By using your credit card to pay for items such as your utilities, your cell phone bill, groceries, and insurance and paying off the balance in full each month, you’ll accrue some additional savings for college. Of course, utilize any credit card responsibly and don’t go into credit card debt trying to save. 
  • LEAF College Savings Gift Cards – Leaf provides family and friends a way to gift a monetary amount for your child’s education. A gift card is purchased via LeafSavings.com and sent to you via email, Facebook, or postal service. You then redeem the gift card on Leaf’s site and transfer it to your 529 college savings plan.

No matter how or where you decide to save for college, get started as soon as possible to take advantage of time and compounding interest. You and your child will be thankful you did. Remember, every little bit helps. 

Sources and Recommended Resources:

What is a 529 plan?

Choosing the Best 529 College Savings Plan

 


(c) Can Stock Photo / karenr

How to Avoid Escalating Arguments With Your Ex Practical Tips From a Practicing Divorce Coach

How to Avoid Escalating Arguments With Your Ex Practical Tips From a Practicing Divorce Coach

Do you spend a great deal of your time in arguments with your ex? Is it nearly impossible to communicate anything at all that doesn’t lead to an explosion of tempers? Do you often feel you can’t say do anything right and try to avoid communication altogether, even when you sometimes need to talk about the kids? If so, you are not alone. Communication, in all aspects of life, is difficult and causes great strain in divorce. However, there is a way to avoid escalation and help your kids, too.

Start using four simple tools in your email and other communications with your ex. I endorse email as the “go to” for most of your communication. It is less immediate than text, which can be intrusive and easily inflammatory when quick responses are given. It also creates a written record you can rely on later as needed which in person or telephone communications are less likely to provide.

If you follow these simple ideas, the impact will be almost immediate. Remember, though, that your ex may expect tempers to flare now so may not be prepared for what’s next. The single biggest tip you can internalize now is to stay steady and give it time to work. Once you do, you will find the benefits of reducing your escalation pays off in more joy and less stress for you too. This, in turn, helps you feel better because the messages you send to yourself and others are more positive. It’s a win for everyone in your life!

Go Neutral, Not Nasty

Remember a time when arguments with your ex quickly escalated. Perhaps she wanted to get the kids sooner or drop them later or vary the custody schedule. Maybe she asked for money. All of these demands may act as triggers for you having nothing to do with her request, especially if you feel she has always told you what to do or chronically complains about money. However, it’s your job to address only what’s asked, that is, as the expression goes, “Don’t make a mountain out of a molehill.” If you are asked about something, answer the question. That is, answer only that question and do not bring up other matters in your response.

It may or may not be true that your ex has repeatedly asked for varied times or dates, but it doesn’t matter. Just answer her question. For example, if she asks you whether she can drop the kids at 8 pm instead of 6 pm Sunday night, you can answer, “Yes,” or “No.”

There’s no need to remind her she always asks for a later time and that you are tired of it. In fact, it’s better not to even add, at least as a first response, any reason. Just say, “That works,” or “That doesn’t work this time.” If she comes back to ask why, keep it short and sweet. “The kids need a bath and story by 8:30 so they can get enough rest before school tomorrow.” If she reminds you that you never cared about that when you were married, no response is required. If the kids aren’t dropped until 8 pm, just make a note and keep a record of it.

Over time, you can decide if a pattern has been created that makes any action on your part worthwhile. Remember, the goal is to support the kids and not punish you or her.

State What You Want, Not What You Don’t

When you have a request for your ex, ask it. Don’t tell her you are asking because she has previously failed to do whatever you are asking or criticizing her in another way.

For example, if you want to take your child to the zoo on a day you wouldn’t have her because there’s a special exhibit, email, “Can I take our daughter on Saturday because there is a special exhibit of penguins only on that day?” Don’t say, “I want to take our daughter to the zoo Saturday because I know you won’t do it and I don’t want her to miss the penguin exhibit.” The difference may seem obvious now but may not always be to you.

So, after you draft an email, save it. Turn to another task and come back a bit later. Re-read what you have written. Remove anything that suggests your ex has done something wrong. Remember, you are asking for something and want to get it.

Even if you are entitled to it, she can make it difficult so why communicate in a way that makes it harder for you? If you can’t see your own biases, ask one trusted person to review your email until you get the hang of it. Friends and family can be tricky as they are likely “in your corner.” Often, a divorce coach is the perfect neutral to help you with your goal and hold you gently accountable as needed. But, over time, you can certainly do this on your own!

Be Flexible

Make what you are asking as flexible as possible. Allow your ex to feel empowered by what you are asking to allow them some control too. If you want to take your daughter to the zoo on a day you don’t have custody, and there is more than one date or time that can happen for you, ask your ex what she prefers. “I’d love to take our daughter to the zoo and see the exhibit is this Saturday and Sunday. Does one of those days work for you?” This will be much more likely to receive a positive response than, “I want to take our daughter to the zoo and it has to be Saturday because I have other plans Sunday so don’t suggest it.”

This may seem obvious, but you will be surprised by how much you even unintentionally convey if your communication in the past has not been friendly or cooperative. Build in your own flexibility so you can prepare for a response that gets you what you want, going to the zoo, even if it turns out it has to be on Sunday, for example.

Agree to Disagree

You are likely familiar with the Rolling Stones lyrics, “You can’t always get what you want.” Yet, in separation and divorce, we are often loathe letting go any of our ideas when our ex takes another position. We become entrenched in ways we wouldn’t with friends, most family, and even co-workers.

The remedy to avoid escalating arguments with your ex is to recognize that so much of this disagreement is simply noise.

It doesn’t really matter much what she thinks about your ideas anymore.

You need to have some agreement about the kids, but you mostly have authority in your home and she in hers. Of course, it’s better for the kids if you can be consistent across homes on the big issues, but you can let the rest go.

For example, if your ex puts the kids to bed at 7:30 pm and you think it’s too early, that 8:30 pm is just fine; it’s not necessary to tell her that unless you notice the kids aren’t well rested. And, even if they aren’t, there are many other reasons that may occur having nothing to do with your difference in bedtimes. In other words, let it go.

If you can remind yourself of this, in divorce, almost every day, you will likely serve yourself and your kids much better. Naturally, when something happens that has a big impact on your kid’s life, you will state it, with respect and in a neutral way. For example, “I noticed our daughter wakes up at 5:00 am, and I wonder if her bedtime impacts that. I’m trying 8:30 pm now and find she sleeps until 6:30 am. Do you think that might work for you too?” Of course, if your daughter isn’t waking up for you too early, you don’t need to say anything at all and will only tell your ex this suggestion if asked.

Controlling Arguments With Your Ex

After all, we may not always get what we want but it is likely, sometimes, we will get what we need. Reminding yourself, repeatedly, what you can control and what you can’t, and communicating only what you control will help avoid escalating arguments with your ex. And, really, that’s what all of us really need.


(c) Can Stock Photo / 4774344sean

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