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Back-to-School 101 - Parents    

Children learn financial behaviors from their parents, and often grow up to exhibit the same level of financial responsibility.  It is important that you have a strong money management plan that your child can learn from.  Here are some tips that will assist you in getting your financial life in order as your child grows.

New Parents

According to the U.S.D.A., the cost for raising a child for the average American family is $222,360 from birth to eighteen.  That cost does not reflect sending them to college.  The sheer size of that number would cause any parent to have a panic attack, but with a plan, it will be possible.   Having a monthly spending plan in place is essential for allocating all of your expenses and saving for your financial goals.  Visit our Quick Tips to learn how to establish a money management plan and other ways to build a strong financial foundation.

Starting early is the key for planning for your child’s education.  All states offer a 529 plan that will allow you to have small amounts taken from your check and deposited into a managed plan for your child.  Another option might be a pre-paid tuition program.  Many colleges allow you to purchase tuition at today’s costs.  Talk with your financial advisor to receive the pros and cons for these and other college education options.  But don’t delay.  Saving a little bit over time really adds up.

Elementary School Parents

The financial challenges continue to grow when your child enters elementary school.  Many school districts have registration fees, and then there are school supplies, extracurricular activities and the list goes on and on.  It is imperative that you have planned for these extra expenses and have established a savings account so the money will be there when you need it. Download our Periodic Expense Worksheet (PDF) to learn how to plan for occasional expenses.

Hopefully, you have set some financial goals and are saving for them.  This is a great opportunity to get your children involved.  Establish a family financial goal, going to the amusement park for example, and decorate a jar with pictures of the park.  Then start saving.  Place your change in the jar, or if you saved money by using coupons, place that money in the jar.  There are endless possibilities in getting that jar filled.   By engaging your children in this activity, they will learn to work and be creative in achieving their financial goals.       

It is natural for parents to want to give more to their children than what they had as a child.  However, it is important to realize that giving them everything they want and making things easy for them can be detrimental to their future.  This is the time when letting natural consequences for their financial decisions become a powerful learning tool.  For example, when a child goes to the store and forgets his wallet, a common scenario would be for the parent to pay for the item with the expectation that the child would pay them back later.  But, what if you went to the store and forgot your wallet, would you have someone there to pay for it for you?  Or, a child uses his money to buy something he doesn’t like and he starts crying.  Many parents want to see their child happy and would buy that other something for them.  Again, would somebody do that for you?  Let them experience the natural consequences for their decisions now, it will make it easier for them in the future.

Teen Parents

This stage of financial responsibility is the most challenging for you and your teen.  Teens clothes, “toys”, and activities seem to be getting more expensive.  If you haven’t been saving all along to cover these expenses, you might be using credit to cover the costs.  With the average credit card interest rate at 14.88%, it could be years before you are able to pay off the balances unless you establish a plan.  One way would be to pay a little bit extra on each bill, or start with one and pay it off before moving to the next.  Because of the Credit Card Act that was passed last year, all of your credit card statements have a section that will tell you how long it will take to pay that bill off by making the minimum payment.  It will also tell you if you add an additional amount, how much you will save in time and interest.   Another option would be to make an appointment with a certified financial counselor to sit down and review your financial situation.  This appointment is free and you will leave with an action plan outlining your options.  Visit our Get Started page to complete an Online Application or request an appointment.

As you are juggling the financial challenges of getting your teen through high school and then, perhaps, college, you cannot forget to continue to plan for your retirement.  Remember, you can borrow money to send your child to college, but you cannot borrow for your retirement.  You can view our Steps for Planning for Retirement to help you stay on track with your goals for your later years.  

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Back-to-School 101 - School Age

Back-to-School 101 - Teens

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