You just learned of the passing of a loved one. During this stressful and emotionally taxing time, you also find out that you’re receiving an inheritance. While you’re grateful for the unexpected windfall, knowing what to do with an inheritance can bring its own share of stress.
While the amounts vary greatly, the Federal Reserve Board’s Survey of Consumer Finances reports that an average of roughly 1.7 million households receive an inheritance each year. First words of wisdomâresist the urge to spend it all at once. According to a study funded by the Bureau of Labor Statistics, one-third of people who receive an inheritance spend all of itâand even dip into other savingsâin the first two years.
Not me, you say? Still, you might be asking, “What should I do with my inheritance money?” Follow these four steps to help you make smart decisions with your newfound wealth:
1. Take time to grieve your loss
Deciding what to do with an inheritance can bring with it mixed emotions: a sense of reprieve for this unexpected financial gain and sadness for the loss of a loved one, says Robert Pagliarini, certified financial planner and president of Pacifica Wealth Advisors.
During this time, you might feel confused, upset and overwhelmed. âA large inheritance that pushes you out of your financial comfort zone can create anxiety about how to best manage the money,” Pagliarini says. As an inheritor, Pagliarini adds that you may feel the need to be extra careful with the funds; even though you know it is your money, it could feel borrowed.
The last thing you want to do when deciding what to do with an inheritance is make financial decisions under an emotional haze. Avoid making any drastic moves right away, such as quitting your job or selling your home. Some experts suggest giving yourself a six-month buffer before using any of your inheritance, using the time instead to develop a financial plan. While you are thinking about things to do with an inheritance, you can park any funds in a high-yield savings account or certificate of deposit.
âA large inheritance that pushes you out of your financial comfort zone can create anxiety about how to best manage the money.â
2. Know what you’re inheriting
Before you determine the things to do with an inheritance, you need to know what you’re getting. Certified financial planner and wealth manager Alex Caswell says how you use your inheritance will largely depend on its source. Typically, Caswell says an inheritance will come in the form of assets from one of three places:
Real estate, such as a house or property. As Caswell explains, if you receive assets from real estate, you will transfer them into your name. As the inheritor, you can choose what to do with the assetsâtypically sell, rent or live in them.
A trust account, a legal arrangement through which funds are held by a third party (the trustee) for the benefit of another party (the beneficiary), which may be an individual or a group. The creator of the trust is known as a grantor. âIf someone inherits assets through a trust, the trust documents will stipulate how these assets will be distributed and who ultimately decides how they are to be invested,” Caswell says. In some cases, the assets get distributed outright to you; in other instances, the trust stays intact and you get paid in installments.
A retirement account, such as an IRA, Roth IRA or 401(k). These accounts can be distributed in one lump sum, however, there may be requirements related to the amount of a distribution and the cadence of distributions.
When considering things to do with an inheritance, know that inherited assets can be designated as Transfer on Death (TOD) or beneficiary deeds (in the case of real estate), which means the assets can be transferred to beneficiaries without the often lengthy probate process. An individual may also bequeath cash or valuables, like jewelry or family heirlooms, as well as life insurance or stock certificates.
Caswell says if your inheritance comes in the form of investment assets, such as stocks or mutual funds, you’ll want to think of them as part of your own financial picture. âAll too often, we see individuals end up treating inherited assets as a living extension of their passed relative,” Caswell says. Consider how the investments can be used to support your financial goals when thinking about things to do when you get an inheritance.
An average of roughly 1.7 million households receive an inheritance each year.
3. Plan what to do with your financial gain
Just like doing your household budgeting, it’s important to “assign” your inheritance to specific purposes or goals, says Pacifica Wealth Advisors’ Pagliarini. Depending on your financial situation, the simple concepts of save, spend and give may be a good place to start when deciding on things to do when you get an inheritance:
Bolster your emergency fund: You should have at least three to six months of living expenses saved up to avoid unexpected financial shocks, such as job loss, car repairs or medical expenses. If you don’t and you’re deciding what things to do with an inheritance, consider parking some cash in this bucket.
Save for big goals: Now could be a good time to boost your long-term savings goals and pay it forward. Things to do when you get an inheritance could include putting money toward a child’s college fund or getting your retirement savings on track.
Tackle debt: If you’re evaluating what to do with an inheritance, high-interest debt is something you could consider paying off. Spending on debt repayment can help you save on hefty interest charges.
Reduce or pay off your mortgage: Getting closer to paying off your homeâor paying it off entirelyâcan also save you in interest and significantly lower your monthly expenses. Allocating cash here is a win-win.
Enjoy a little bit of it: It’s okay to use a portion of your inheritance on something you enjoy or find rewarding. Planning a vacation, investing in more education or paying for a big purchase could be good moves.
Donate funds to charity: Thinking about your loved one’s causes or your own can continue legacy goals and provide tax benefits.
4. Don’t get tripped up on taxes
When deciding what to do with an inheritance, taxes will need to be considered. “It is extremely important to be aware of all tax ramifications of any decision around inherited assets,” Caswell says. You could be required to pay a capital gains tax if you sell the gift (like property) that was passed down to you, for example. Also, depending on where you live, your inherited money could be taxed. In addition to federal estate taxes, several U.S. states impose an inheritance tax and/or an estate tax.
Since every situation is unique and tax laws can change, when considering things to do with an inheritance, consult a financial advisor or tax professional for guidance.
Make your windfall count
Receiving an inheritance has the potential to change your financial picture for good. When thinking about the things to do when you get an inheritance, be sure to give yourself ample time to grieve and to understand all of your options. Don’t be afraid to lean on the experts to get up to speed on any tax and legal implications you need to consider.
Planning can go a long way toward making the right decisions concerning your newfound wealth. Being responsible with your inheritance not only helps ensure your financial future, but will also honor your loved one’s legacy.
The post 4 Smart Things to Do When You Get an Inheritance appeared first on Discover Bank – Banking Topics Blog.
Healthcare expenses can take a huge chunk out of any familyâs budget so I want to break down how a family can weigh the pros and cons of a traditional health plan vs a high deductible one.
Health Insurance Getting Too Expensive
If I asked you whatâs are your biggest expenses each month, what would you say? If youâre like most families, youâd probably mention rent (or mortgage), food, or transportation. And yes, those are huge expenses for the typical family.
However, one of the largest can be healthcare. The crazy thing is how much it can drain from your budget even if youâre a relatively healthy family.
We found out firsthand a few years ago when my husbandâs employer had open enrollment. Each year we review the health insurance options and it seemed to us that the costs kept rising. After having kids, we went with the âbasicâ family plan and the monthly premiums still rose pretty fast. Finally, we hit our limit.
With the latest update, our monthly premiums would pretty much be the same as our mortgage. Considering we only visit the doctors for the girlsâ annual well visits, we knew we needed to change things up. We know weâre not the only family dealing with this.
Right now for a family of four, the average monthly premium paid is $833 orÂ $9,996 annually. Add in the costs of the average deductible and you can see what a huge chunk of money health insurance can be.
However, this year when you get ready to review your options during open-enrollment, you may want to look into whether a high deductible health plan is a practical and affordable solution for your family.
How High Deductible Health Plans Work
As the name suggests, a High Deductible Health Plan (HDHP) comes with a larger deductible than a typical health insurance plan. The appeal for employers and insurance companies to offer this is that youâre taking on more financial responsibility for your health care costs.
The upside for you is that you should see a drop in the monthly premiums. For us, we saw a difference of a few hundred dollars for each month for premiums. Using a $300/month in savings, thatâs like an extra $3,600/year that can be used for other financial goals that you may have.
Huge Tax Wins with a Health Savings Accounts
Another reason why a high deductible plan may be appealing for families is the ability to have a Health Savings Account (HSA).Â Itâs an extremely tax-advantaged account that you can use to pay for medical expenses.
If this sounds familiar, it may be because youâve heard of or used a Flexible Spending Account (FSA). Thatâs whatâs typically offered with the âmore standardâ health plans. Basically you put money in there before taxes.
We used an FSA for years and it helped us to pay for regular expenses like my glasses and contacts. The problem was making sure we calculated enough to go into the account because if we didnât use it by the end of the year, weâd lose it.
With a Health Savings Account, however, whatever you donât use you keep. It can then grow in the account over the years. After saving enough to cover things like the deductible, you may decide to invest a portion to improve growth over the long term.
Making it even better is the fact that your HSA contributions are tax-deductible. Depending on your employer, they may also offer contributions to your HSA. Thatâs a fantastic bonus!
What really sweetens the deal is that families can contribute up to $6,900 each year, that money grows tax-free, and if we use the money for qualified medical expenses, what we pull out is tax-free.
Sounds amazing, right?
Itâs enough to make you want to jump in and switch right now, but a high deductible and HSA may not be the best solution for your family.
The Pros and Cons of High Deductible Health Plans
A high deductible plan sounds great, but there are some costs to consider. With the higher deductible, you need to be aware of what your typical annual expenses would be to make sure youâre coming out ahead.
For example, if you have chronic health issues that require regular visits and perhaps medication, then youâd be paying a lot of money upfront before you hit your deductible and have your insurance cover their portion.
One way you can review your expenses is by using Mint to pull the numbers quickly. You can then easily see how much youâve paid out of pocket.
When we looked at a few years of expenses, it confirmed that our visits were pretty much limited to annual well-visits (which are covered by HDHP plans), meaning we can save a significant amount of money.
When I spoke to a certified financial planner about what families need to consider, he pointed out families should also be aware of their out of pocket maximums with the plan they are looking into.
You want to have enough stashed away (either with your general savings or with your HSA) to cover those expenses.
A relative of mine recently had a procedure done. Even with insurance, her portion came out to be $3,000!
Thankfully she has some savings she can tap into, but still, thatâs quite a bit of money.
So please run the numbers to make sure you could absorb a medical problem, especially during that first year of switching plans.
Choose the Best Plan for Your Family
So after weighing the costs and benefits, took the leap and switched over to a high deductible health plan and opened an HSA. Years later, we feel it was the best decision for our situation.
I hope you now have a better understanding of your options when it comes to health insurance. Having that knowledge can assist you in making the best decision for your family and finances.
Iâd love to hear from you – what plan are using now? Do you have any plans on switching?
The post How to Choose the Best Healthcare Plan for Your Budget appeared first on MintLife Blog.
First-time home buyers today face a tough road, shopping for homes during a pandemic, high housing prices, and deep economic uncertainty. For military families deployed overseas, it’s all even trickier to figure out.
In this second story in our new series “First-Time Home Buyer Confessions,” we talked with husband and wife Kyle LaVallee and Natalie Johnson. They were renting an apartment in Fayetteville, NC, when they decided to start shopping for their own home in the area in April.
At the time, LaVallee was stationed in the Middle East as a sergeant in the U.S. Army. Yet even though he was thousands of miles away, he managed to attend every home tour with Johnson via FaceTime. In July, they closed on a brick, ranch-style three-bedroom that LaVallee would not see in person until a long-awaited trip home in October.
Here’s the couple’s home-buying story, the hardest challenges they faced, and what LaVallee thought of his new house once he home managed to lay eyes on it for the first time.
Location: Fayetteville, NC
House specs: 1,166 square feet, 3 bedrooms, 2 bathrooms List price: $111,900 Price paid: $115,000
A pandemic plus deployment seems like a tough time to buy your first house. What convinced you to forge ahead?
Johnson: Kyle was deployed in October 2019 while we were renting a one-bedroom apartment in Fayetteville. Kyle wasnât fond of renewing the apartment leaseâwe had been there for two years and were running out of space. We wanted to get a dog; we wanted a yard, and our own property where we can do anything we wanted.
We started educating ourselves on the process. We knew a mortgage was going to be significantly less than what we were paying in rent. Kyle thought it would be smart to buy because [nearby] Fort Bragg is one of the biggest military bases in the world. If we ever leave or get stationed somewhere else, weâre not going to have a problem finding anyone to rent it. And we could always come back.
LaVallee:Â I was interested in gaining equity and ownership, rather than just paying to rent something I’d never own in the end.
Johnson:Â We started looking at houses back in January. In April, we kept seeing information about lowering interest rates. Thatâs why we got serious about the process in the middle of the pandemic, and when we connected with our real estate agent, Justin Kirk with Century 21.
How much did you put down on the houseâand how’d you save for it?
Johnson: We put 20% down.
LaVallee: I was making a lot of money while I was deployed, and I had no expenses really. I was just saving everything I had, knowing I wanted to invest it in a house.
Johnson: I cut spending. I didnât buy things I wanted, just what I needed. The pandemic helped a lot, honestly because we obviously couldnât go out.
LaVallee:Â We qualified for a VA loan, but we just wound up using a conventional loan. Most people in the military will use a VA loan where you donât put any money down, but [since we had enough saved] we wanted the lowest monthly mortgage payments.
What were you looking for in a house?
LaVallee:Â We knew we might [eventually] be moving, so it wasnât like it had to be a house we would stay in forever, more of an investment property.
Johnson: We were looking for things that would be attractive to future renters. We had a military family in mind because Fayetteville’s got more than 50,000 active-duty. We looked for a location close to a Fort Bragg entrance. We thought three bedrooms was perfect for us because our families are close with each other, so theyâll all come down at the same time so weâll have two extra bedrooms for them. Kyle really wanted a garage, so that was a huge thing.
LaVallee: Garages arenât very common down here, so that limited a lot of options for us. A lot of houses have carports, or they finish the garage and turn it into a bonus room.
Johnson: We wanted something that needed a bit of fixing up, because we like to be handy and put our personal touch on everything, and we ultimately knew that would be a lower-cost house.
How many homes did you see in person, and how did Kyle participate from overseas?
Johnson:Â It was 10 or 12 homes. We were out three to four times a week looking at places with our real estate agent. We wore our masks for the tours, and I used hand sanitizer since I was opening and closing drawers and closets. Most were vacant, but we did tour one house that still had people living in it, although they were gone during the tour, so we avoided touching a lot of things.
During tours we FaceTimed Kyle in. We figured that was probably the most convenient way to do it since he could see every single house and room in detail.
LaVallee:Â Well, I couldnât really see all the details.
Johnson: He got to know our real estate agent really well via FaceTime. Our agent would say, “Let me know if you need me to hold Kyle while you go look in this room.” I felt so bad, though, because I work full time, so I’d tour homes around 5:30 in the evening, which for Kyle was 2:30 in the morning. But he stayed up for every single tour.
LaVallee:Â I was sometimes frustrated not being able to be there. I left it all up to her. I had to trust the feelings and vibes she got from each house.
How many offers did you make before you had one accepted?
Johnson:Â We put three earlier offers in.
LaVallee:Â They would be listed and the next day would be sold. The first three offers we put in were asking price, and Iâm pretty sure everybody else offered more, and ours were never even considered.
Johnson:Â It was ridiculous. It was definitely a sellerâs market, so you had to act really fast and you had to be really competitive. On our fourth offer, we ended up at $3,100 over asking. I felt like we had to fight for this house.
Were you competing with other offers for the house you bought?
LaVallee:Â There were multiple offers.
Johnson: Our real estate agent told us, “You should definitely write a letter and talk about how Kyleâs gone right now and youâre first-time home buyers and this one really clicked with you,â which it did. The second I walked in, itâs this adorable brick house, itâs super homey, it has a great yard. In the letter, we just talked about how all of that was so attractive to us as first-time home buyers, and we were really excited and could see ourselves in this home.
Our real estate agent suggested going in higher than asking, so we just rounded up to $115,000. He also suggested doing a higher due diligence paymentâwe usually did $200, but this time around we did $500. And the earnest fee we put in was $500 or $600.
After our offer was accepted, we knew it was going to be kind of difficult with the home inspection. They were already redoing the roof, which was a huge cost on their part, so asking for more was definitely going to be a challenge. So we didnât ask for much.
What surprised you about the home-buying process?
Johnson:Â How fast it went, for me at least. Our first home tour was in April and then by June, we had found our house and the contracts were written up. I guess I was expecting it maybe to be double the time that it actually was, but houses were just turning over so fast, we had to act fast.
LaVallee:Â From my side, I thought it happened very slowly! I felt like so much was happening in between each step in the process. I had to be patient because I had so little control of the situation, other than just trying to stay involved and be a part of it.
Johnson:Â You never really think that when youâre married, youâre going to buy your first house while your husband is on the other side of the world. But we got through it.
So Natalie, you were living in the house for a few months before Kyle returned from deployment in October to see it. What was that homecoming like?
Johnson:Â He came home a few days shy of the 365-day mark. We were anxious and excited. Several other families and I waited outside of a hangar on base, and soon after hearing their plane landing, we saw the group walking toward us and everyone start cheering and crying.
Because it was dark when we got home, Kyle couldnât see the outside of the house much, or the “Welcome Home” decorations I hung up! But the moment he set foot in the front door, he just stood there and looked around with the biggest smile on his face.
I gave him the grand tour the next morning. He said it looked much bigger than what he saw on FaceTime. We celebrated with a home-cooked meal and the wine our agent gave us when we closed. It was really special.
LaVallee:Â I came home to a nice house. Natalie was worried I would come back to culture shock. But Iâve felt at home ever since Iâve been here.
What’s your advice for aspiring first-time home buyers?
Johnson:Â I would say to go with your gut. Some of the houses youâll tour are really logical to buy, but if they have a bad vibe or theyâre just not really welcoming, then look at others. A healthy balance between logic and feeling is important.
LaVallee:Â We didn’t even know what we wanted until we saw five or six houses, so itâs definitely important to shop around and see what’s out there.
Johnson: We really didnât know much. I told our real estate agent, “Hey, listen, weâre really going to need some guidance. We donât know what things mean, we need you to break it down for us. You have to be patient with us.” I reached out to three different real estate agents, and Justin was the one who not only answered all my questions but was giving a ton of positive feedback. It was nice to have that encouragement, and it definitely made us more confident. You learn a lot by looking at houses, you learn a ton about yourself.
The post What This Military Family Facedâand FoughtâTo Buy Its First House appeared first on Real Estate News & Insights | realtor.comÂ®.
Summer camp is a rite of passage. A place where traditions begin and memories are made. A unique venue with a structured opportunity for kids to grow and learn new skills. As enriching as it may seem, embarking on the process each year can be intense: How do I choose a camp? Should it have a philosophy? How do I know my child will have fun? But often the question at the top of the list is, “How do I budget for summer camp?”
Whether you’re scrambling for camp arrangements for this year or getting a jump-start on next summer, you’re in need of a working budget for summer camp. “As a parent who sent several kids to summer camp for many years, I know how expensive it can be,” says Leslie H. Tayne, author and founder of debt solutions law firm Tayne Law Group.
Read on for expert budgeting tips for summer camp and how to save money on summer camp so you can make the best decisions concerning your wallet and your child’s wish list:
1. Get a handle on camp tuition
According to the American Camp Association, sleep-away camp tuition can range from $630 to more than $2,000 per camper per week. Day camp tuition isn’t too far behind, ranging from $199 to more than $800 per week.
One of the best ways to budget for summer camp and prepare for tuition costs is to understand your needs for the summer as well as your child’s interests. This will help you determine ‘how much’ and ‘what type’ of camp you want: Is day-camp coverage important all summer because of work? Does your child want to experience sleep-away camp for a portion of the time? Is a camp with a specific focus (say a sport or hobby) on the list?
Depending on your circumstances and child’s expectations, it’s not unusual to be looking at a combination of campsâand tuition costsâin one season. If you have multiple kids at different ages, with different interests, creating a budget for summer camp and understanding how much you’ll need to dish out in tuition becomes especially important.
Once your camp plan is in place, assess how much you’ll need to pay in tuition for the summer months with school out of session. The sooner you’ve arrived at this figure, the easier it will be to work the expense into your household budget, says Heather Schisler, money-saving expert and founder of deal site Passion for Savings. “It’s much easier to set aside $30 a month than it is to come up with $300 to $400 at one time,” Schisler says.
Sleep-away camp tuition can range from $630 to more than $2,000 per camper per week. Day camp tuition ranges from $199 to more than $800 per week.
2. Plan for expenses beyond tuition
One of the biggest budgeting tips for summer camp is planning for the many costs outside of tuition. Tayne points out that sleep-away camp usually comes with a longer supply list than day campâsuch as specific clothing or gear and toiletries to cover the length of stay. If your child is heading to a sleep-away camp far from home, your budget for summer camp may also need to factor in the cost of transportation or the cost to ship luggage. Day camps can also have fees for extended hours or transportation if your child rides a camp bus each day.
Once you’ve selected a campâday camp or sleep-awayâcheck its website for camper packing lists and guidelines. Most camps offer checklists that you can print out, which can be good for tracking supplies and costs as you go. After you enroll, your camp may provide access to an online portal that can help you manage tuition and track additional expenses, like canteen money, which is cash your child can use for snacks and additional supplies while away.
3. Create a year-round savings strategy
By calculating the necessary expenses ahead of time for the camps you and your campers have chosen, you’ll be able to determine an overall budget for summer camp. A budgeting tip for summer camp is to save money monthly throughout the year. To determine a monthly savings goal, divide your total summer camp costs by the amount of months you have until camp starts. If camp is quickly approaching and you’re feeling the budget crunch, you may want to start saving for next year’s costs once it’s back-to-school time so you can spread out your costs over a longer period of time.
Once you start saving, you’ll need a place to put it, right? When it comes to budgeting tips for summer camp, consider placing your cash in a dedicated account, which will keep it separate from your regular expenses and help you avoid tapping it for other reasons. “Then you can have your bank set up an auto draft [for the summer camp money] so it automatically goes into your account each month and you will have the money you need when summer rolls around,” Schisler says. If you use a Discover Online Savings Account for this purpose, you’ll also earn interest that can be put toward camp expenses.
âIt’s much easier to set aside $30 a month than it is to come up with $300 to $400 at one time.â
4. Find ways to fund your summer camp account
To boost cash in your summer camp savings account, consider asking relatives and family friends to gift your children cash for camp in lieu of birthday and holiday gifts, says Tracie Fobes of budget blog Penny Pinchin’ Mom. “If your child has his or her heart set on sleep-away camp, they may be willing to forgo a gift or two,” Fobes says.
Another budgeting tip for summer camp is to put your cashback rewards toward your budget for summer camp. For example, if you open a checking account with Discoverâcalled Cashback Debitâyou’ll earn 1% cash back on up to $3,000 in debit card purchases each month.1 You can enroll to have that cashback bonus automatically deposited into your Discover Online Savings Account so it remains designated for camp costs (and can grow with interest).
Say hello to cash back on debit card purchases.
No monthly fees. No balance requirements. No, really.
Discover Bank, Member FDIC
Lastly, if you don’t have your tax refund earmarked for another financial goal, you could use the windfall to kick-start your summer camp savings fund. Depending on the refund amount and your total camp costs, it could reduce your monthly summer camp savings goal significantly.
5. Reduce camp-related costs
Despite having your budget for summer camp in full view and planning in advance, camp can still be expensive. Here are some ways to save money on summer camp by cutting down on camp costs:
Ask about scholarships and grants: “Some camps offer scholarships or discounts for children and families,” Fobes says. Research your camp to see if they have anything similar to help offsetâor even pay forâthe cost of tuition.
Use a Dependent Care Flexible Spending Account (DCFSA): A Dependent Care Flexible Spending Account is a pre-tax benefit account that can be used to pay for eligible dependent care services. You can use this type of account to “cover dependent care [costs], and camp may qualify,” Fobes says.
Negotiate price: “Many people don’t think about negotiating the cost of summer camp, but it is possible,” Tayne says, and more and more camps are open to it.
See if there’s an “honor system”: Some camps have what’s known as an honor system, where the camp offers a range of costs, or tiered pricing, and parents can pay what they can comfortably afford. Every child enjoys the same camp experience, regardless of which price point, and billing is kept private.
Take advantage of discounts: Attention early birds and web surfers: “There are sometimes discounts offered when you sign up early or register online,” Fobes says.
Volunteer: If your summer schedule allows, “offer to work at the camp,” Fobes says. If you lend your servicesâperhaps for the camp blog or cleaning the camp house before the season startsâyour child may be able to attend camp for free or a reduced rate.
Focus on the experienceânot the extras
Don’t let summer camp costs become a family budget-buster. Plan ahead and look for money-saving opportunities and work your budget for summer camp into your annual financial plan.
To save money on summer camp, remember that you only need to focus on camp necessities. “Don’t spend a lot of extra money on new clothing, bedding, trunks or suitcases,” Schisler says. “Remember, summer camp is all about the experience, not the things.”
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as VenmoÂ® and PayPal, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.
The post Your Guide to Budgeting for Summer Camp appeared first on Discover Bank – Banking Topics Blog.
Parents all over the United States have had to make lofty and quick adjustments due to the pandemic erupting the daily routines many of us havenât had to change in quite a while. Feelings of overwhelm, exhaustion, and sheer confusion have consumed many; leaving the evergreen thoughts about how to best accommodate our children while simultaneously completing remote work effectively. If you have been struggling with finding a balance or could use some extra pointers to smooth out this process; see the tips below and breathe a little easier knowing thereâs additional help available.Â
Wake up at least an hour earlierÂ
I know, this is probably the last thing you wanted to hear fresh out of the gate. However, take this into consideration â you can use this uninterrupted time to knock out some tasks, enjoy your cup of coffee or breakfast before the day truly begins. Rushing (especially in the mornings) tends to set a precedence for the day, causing your mind and body to believe that a pace of hurriedness is expected; generating feelings of burnout very easily. Crankiness, low engagement, and minimal productivity doesnât serve you, your work, or your children well. Use this solo time to still your thoughts so you are able to be fully present for all things the day holds. While this may take some time to get used to initially, youâll thank yourself when you have the energy to handle any and everything!Â
Set and abide by a clear routineÂ
Comparing your childâs school schedule in conjunction with your personal work obligations very clearly can showcase what needs to get done and when. Reviewing this every evening beforehand or once a week with your children creates new, positive habits that become easier to follow over time. Not only does this mimic physical in-school setting, but it also generates responsibility and a sense of accomplishment for your little ones. If necessary, communicate with your manager if there are time periods you need to be more present to assist your children with any assignments.Â
Designate âdo not disturbâ time periodsÂ
Depending on your work demands, there are conference calls and online meetings that may have to happen while the kids are completing their individual assignments or classroom time. To make sure everyone fulfills their tasks with minimal interruptions, create time periods that are dedicated to completing the more complex tasks that require a more intense level of focus. To avoid any hiccups, give some leeway before the blocked time to address any questions or concerns. While this doesnât guarantee that nothing else arises, it establishes peace of mind so that your thoughts can be directed to the tasks that lie ahead.Â Â Â
Plan out all meals for the week
If meal prepping wasnât your thing before, it definitely should be now. Having lunch and/or dinner already prepared not only saves you time (which is a necessity) but also helps to normalize the growing grocery bill that seems never-ending. Planning not only avoids confusion and lengthy food conversations, but it also sets a routine the entire family can abide by. Easy food items such as tacos, burrito bowls, sandwiches, and an assortment of fruit provide a healthy balance â while avoiding ordering fast food or takeout multiple times a week.Â Â
Establish a âlessons learnedâ listÂ
Similar to an end of year job evaluation, you and your family can take a personal inventory of the things that have worked effectively â while taking note of the things that didnât. At the end of every week have a very candid conversation with your children. Ask them what worked for their schooling and also self-assess the positives during your remote work. Remember to keep an open mind! Instead of automatically responding with frustration, consider how much of an adjustment this is for kids. Theyâre accustomed to a multitude of settings and environments, which develops their reasoning and comprehension skills. If they identify something was less than satisfactory, ask what can be done (within reason) to improve their new learning environment. These notes can take place on sticky notes, a large whiteboard, or a simple notepad. This doesnât have to be a serious sit-down conversation; it can almost be presented as a game. Keeping track of these items will help you all make tweaks as necessary while finding a solid sweet spot.Â Â
Give yourself (and your children) graceÂ
Life as we knew it switched in the blink of an eye. The busyness of going into the office, dropping the kids off at school, and shuffling them to extracurricular activities stopped more abruptly than any of us could have imagined. As we all know but donât like to admit, every day isnât a good day. There are many nuances that happen throughout the course of time that can derail our plans, leaving us to feel defeated. But before going off to the deep end, remember this â every day serves as a chance to start over. If the food wasnât prepared ahead of time itâs okay. If the workday didnât go as smoothly as expected, itâs quite alright. Take a deep breath and remember we are all doing the best we can with what we currently have. Learning to navigate new waters such as this is only achieved through trial and error.Â Â Â
Celebrate the small winsÂ
Letâs face it â this is new for all of us! While online learning and remote work have been in place for more than a few months, we have to grant ourselves grace. So, if you havenât already â give yourself and your children a pat on the back! Plan safe outings you and your family can enjoy such as picnics, movie nights, or any outdoor activities. Getting some fresh air for at least 30 minutes during the day can help boost productivity and the moods of you and your children! Each week may not be easy, but it is rewarding to know that the effort youâve put forth as a parent is a positive contribution to your family.Â Â
One question that we all need to ask ourselves is-will we ever gain this amount of time with our families again? Letâs embrace this moment with learning and lasting memories.Â Â
The post How to Work from Home While Schooling Your Kids appeared first on MintLife Blog.
Children grow up. Fast. One day you’re buckling them into a car seat, and the next you’re handing them the keys. Like learning to drive or taking on a first job, managing a checking account is a big milestone that teaches responsibility and will help your child learn important financial habits.
Parents often ask: How do I open a checking account for kids? Many checking accounts, including Discover Cashback Debit, are for adults aged 18 and up, so you can help your child set up their own account when they are heading off to college or starting their career. If you’re interested in opening your child’s first checking account when they are younger, you could consider opening a joint checking account that you share with your youngster. Note that for some checking accounts, like Discover Cashback Debit, you have to be at least 18 years old to be added to the account as a joint accountholder.
“Is your teen interested in managing money, saving for different goals and spending on their own?” asks Kimberly Palmer, a banking expert for NerdWallet. If so, a checking account can be a great way to flex those skills and practice money management, she adds.
If you’re interested in setting up a checking account for kidsâwhether it’s a joint account you help manage or a solo account for your older teenâconsider the following four tips:
1. Factor in fees
When opening your child’s first checking account, it’s important to understand all of the fees associated with the account and who is responsible for paying them, says Mia Taylor, an award-winning financial journalist who writes for The Simple Dollar and other finance sites. Your child may think you are covering the fees if you have a joint account, for example, so be clear on the parameters when you open the checking account.
If you’re wondering how to open a checking account for a kid going to college or starting their first job, “look for an account with no minimum balance fees or monthly balance fees,” Palmer says. That way, your child won’t have to worry about being penalized for having a low balance or stress about fees eating into earnings and spending money.
If you’re setting up a checking account for a kid heading off to college or moving to a new city, you’ll also want to consider the fees associated with withdrawing cash from out-of-network ATMs. You can use a bank’s ATM locator to ensure there are no-fee ATMs near their college campus or apartment.
2. Focus on features
Choosing the right checking account for your child’s lifestyle may mean finding an account that has features that support their needs and goals, as well as your preferences.
If you are opening your child’s first checking account and they are younger and sharing the account with you, you may want the ability to set limits on spending and the number of withdrawals. “Parents and teens may have different preferences for each of these features, so it’s important to talk about what you’re looking for ahead of time and compare the different options together,” Palmer says.
If you have a joint account with your child, you could also consider setting up email or text alerts for every transaction or every “large” transaction over a certain dollar amount. This may help you keep better track of your child’s spending habits and could help you have conversations about how to create a budget. Setting up a low balance notification may also be wise when opening your child’s first checking account to help avoid overdraft and insufficient funds fees.
âParents and teens may have different preferences for each of these features, so it’s important to talk about what you’re looking for ahead of time and compare the different options together.â
When choosing a checking account, you may want to find a checking account that offers rewards. Discover Cashback Debit, for example, offers 1% cash back on up to $3,000 in debit card purchases each month.1 If your child is 18 or older, you can let them decide how the cashback should fit into their budget and financial goals.
3. Make mobile a priority
It’s no shock that today’s kids are experts at navigating a smartphone. As you make plans to set up a checking account for kids, be sure to consider whether the checking account has a mobile app for making deposits and tracking funds, Taylor says.
“Mobile deposits are a huge convenience factor for teens” since it allows them to deposit funds with the snap of a photo, Taylor says. Be sure to also research the app’s functionality (the easier, the better) and security, Palmer adds.
Tracking spending with a pen and paper may feel tedious to digital natives, so talk with your child about how they can sync their checking account with other budgeting and spending apps. Exchanging money with friends via digital wallet apps may also be of interest to your child, but you may want to consider providing guidelines when opening your child’s first checking account.
“Only send money to people you know, not to strangers,” Palmer suggests.
Even though digital wallets can be convenient for older teens, Taylor says you may not want to overcomplicate a checking account for a younger child. “Keep it simple in the beginning,” she says. “As teens get older, they can add those features on their own.”
4. Use the account as a teaching tool
Good financial habits are learned early and remembered for decades. That’s why the most important thing parents can do when opening your child’s first checking account is to use the account to have discussions about money, Palmer says.
“Ask them what they want to save for, what kinds of items they hope to buy and whatâif anyâmoney they would like to donate to a cause that is important to them,” Palmer says. “A checking account is a useful way to plan for future expenses and savings goalsâall lessons that carry into adulthood.”
âSit them down and show them what you’re doing with your own checking account so that you can pass on good values early on. The earlier you start with kids, the wiser they will be.”
A great way to pass on money management lessons is to show your children how you manage your own account.
“Sit them down and show them what you’re doing with your own checking account so that you can pass on good values early on,” Taylor says. “The earlier you start with kids, the wiser they will be.”
1 ATM transactions, the purchase of money orders or other cash equivalents, cash over portions of point-of-sale transactions, Peer-to-Peer (P2P) payments (such as Apple Pay Cash), and loan payments or account funding made with your debit card are not eligible for cash back rewards. In addition, purchases made using third-party payment accounts (services such as VenmoÂ® and PayPalÂ®, who also provide P2P payments) may not be eligible for cash back rewards. Apple, the Apple logo and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries. Venmo and PayPal are registered trademarks of PayPal, Inc.
The post 4 Considerations for Opening Your Child’s First Checking Account appeared first on Discover Bank – Banking Topics Blog.
It amazes us how quickly our girls are growing up. Next month when school starts up again, weâll have a fourth-grader and a kindergartener.
Even though we have some time before they are ready to move out of the house, we want to spend time now prepare them for the big transition. As a parent, you probably feel the same way too.Â
One crucial piece of a financial foundation kids and in particular, teens, need to master is learning to budget (and sticking with it),
While theyâre home now, you have a fantastic opportunity to get them comfortable with handling their money.
If youâre not sure where to start, here are some tips from fellow parents and experts in the personal finance space to make teaching this life skill a bit easier less stressful for you and your teen!
Teach Your Teen to Budget for Real Life
Teens or not, whenever most people hear the word budget, they also hear the word ânoâ. To them, budgets feel like a strict diet. Just as fad diets fail, an unrealistic or extreme budget will more than likely discourage your teen and they will quit.
The first step before you even talk about the numbers is to discuss exactly what a successful and sustainable budget should be. When done right, a budget is something that helps you move your money towards your goals. Explain to them that at its root, budget is simply a plan about what theyâd like to do.
You want a budget that can cover:
Â Â Essential bills
Â Â Future goals
Â Â Discretionary expenses
When your teenâs budget covers those goals, theyâre not only putting their finances in a good spot, but theyâre moving closer to their specific long term dreams.
Creating a Doable Budget (Theyâll Actually Enjoy!)
Once your teen(s) understands how a budget works, itâs important for them to create a budget that they can use in the real world. You can honestly budget however you want, but an easy budget to get your teen started is the 50/20/30.
Quite simplify, the 50/20/30 budget puts money into those three main buckets:
Â Â 50%Â goes towards essentials
Â Â 20% towards savings (or investing)
Â Â 30% for fun and discretionary expenses
I appreciate how easy and flexible this budget can be. You can adjust the percentages for your teenâs needs, but it gives them some ballpark idea of how to portion their finances when they are out on their own.
How do you start them out on this budget?
With teens, you may have expenses like clothing or their cellphone bill count as essentials, or you may want to give your child the experience of being responsible for a small, shared family bill while they are still at home.
For older teens, you could even charge them a nominal ârentâ to offset their portion of the bills. In some cases, parents give that money back to their child as a gift to help with moving expenses (like for their security deposit) or use as additional savings.Â
However you decide, talk it over so your teen understands why youâre doing it this way.
Share Your Family Budget
Creating a budget isnât complicated, but it can difficult if your teen has no idea what to expect. Knowledge can be empowering.
While we may take it for granted since have to deal with the numbers, but your teen may not be aware of how much it takes to keep the lights on and roof over their heads. If you havenât already shared your own budget already, now is the time.
Not knowing also puts them at a disadvantage when they start searching for a place or are comparing prices on expenses. Being armed with the numbers makes your teenager a more informed consumer.
When Your Teen Breaks Their Budget
Will there be times where your teenager will mess up with their budget? Probably so. However, thatâs not necessarily a bad thing. As parents, we tend to want to protect our kids, but we also have to prepare them for the real world. As Ron Lieber, author of The Opposite of Spoiled, pointed out we should let our kids make financial mistakes.Â
Wouldnât it be better for your child to break the clothing budget while theyâre still at home allowing you to help guide them through rather than having break their monthly budget while they are on their own and have bills to pay?
Mistakes will happen, theyâre a part of life so giving your teen time to work those them and adjust their budget is a blessing for their future selves.
Essential Accounts for Your TeenÂ to Have
Since weâre talking about budgets, we should also mention some essential accounts youâd want your kid to have so they can practice managing their money.
Opening up student checking and savings accounts (usually free low on fees as well as not having minimum balance requirements) are good foundational accounts for your teen. They can deal with real-world situations pending charges, automatic transfers, and direct deposits.
As Family Balance Sheet founder Kristia Ludwick pointed out, teens should have the skill of balancing a checkbook even if they decide to go all-digital with their banking.
If they work, talk it over together and see if they can open up an IRA and start contributing. It doesnât have to be much. The idea is to get them familiar and comfortable with the basics of investing.
Even if they put in $25 a paycheck, having them practice setting aside money in their budget for both long and short term goals is an invaluable lesson. You can also encourage them to contribute by offering a match for what they put in.
How Teens Can Easily Stay on Top of Their Money
With several accounts to keep tabs on, your teen is going to need an easy system to track their budget and goals.
With Mint, they can link up their accounts in one secure spot. They can also add their budget along with any savings goals they want to hit and make sure they stick with them.
Hopefully, these ideas and tips will make it easier to help your teen transition into a self-sufficient adult.
The post How to Teach Your Teen to Budget Like a Pro appeared first on MintLife Blog.