Kids and Money

Why your Kids should be Included in your Budget Planning

Several of today’s adults grew up in households where financial matters were never discussed with the kids. However, research has shown that kids who were raised in homes where finances were discussed openly went on to become adults who mastered their money from a young age. 

While you may not want to share all aspects of your finances with your kids (unless you think they’re old enough to understand), it is important to give them an idea of how money is earned and how household expenses are covered from month to month. 

  1. Start with a Family Meeting

The first step to getting your kids involved in your family’s finances is to hold a family meeting, and this time should be used to discuss the various expenses that your budget covers each month. During this time, give each child a pen and paper and ask them to write down how much they think each line item in your budget costs, such a groceries, rent or mortgage, insurance, vehicle-related costs, entertainment expenses and any other item you pay for on a monthly basis.

  1. Teach Kids that they will sometimes go without

It’s crucial for kids to learn that they will never be able to have absolutely everything their little hearts desire – and the best way to do this is to be open with them about how much it costs to live from day to day. Show them that money is by no means an infinite resource, so it will be necessary for them to sometimes save up for a specific item they want. 

  1. Provide an Allowance from an Early Age

One of the best ways to teach children how to allocate any money they receive is to set up an allowance system – preferably one that is linked to some form of work having to be done in order to earn these funds. 

For younger children, a simple system of saving a small portion of their money and being allowed to spend the rest is sufficient. However, as your kids get older and obtain a better understanding of money, they can be taught how to have a basic savings account, a little something for investing, a small portion for donating to a charity or cause of their choice and the remainder for spending however they like. 

  1. They will Learn how to become Financially Independent

Once your kids know how money is earned and how to budget appropriately, they will usually go on to become adults who budget efficiently, avoid debt as much as possible and invest wisely over time. However, in order for them to do this successfully, they will need to see you putting these principles into practice as well – it’s no use telling them to budget and save if you aren’t doing so yourself. 

If you would like to learn more about teaching your kids how to manage their finances and make the best investment choices possible, contact our team today. 

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financial advisor

Why a Financial Advisor should Help you Plan for Retirement

Although financial advisors are often thought of as ‘costly money grabbers,’ the truth is that they possess the knowledge needed to help you plan ahead for your long-term financial goals. These specialists can analyze your current financial status and provide the information needed to plan for almost any life event such a buying a home or retiring. Below are some reasons why you should work with a financial advisor when planning for your retirement. 

  1. The Economy will Change

You may decide over time that you’d like to retire with an amount of $200,000 in savings. This is quite a reasonable goal for most individuals to achieve, but it will be necessary to take economic changes into account over time. 

For instance, you may pay $3.50 for a gallon of milk at the moment, but how much will this price have increased by the time you’re ready to retire? The initial amount you had in mind for retirement may not last as long as you’d planned, which is why a financial advisor should be consulted when setting up a savings plan. 

  1. Anything can Happen

You may currently be in your late 20s or early 30s, have a good amount of money saved in a 401(k) and be working your dream job. While everything may be going well at the moment, anything can happen over time – you could get laid off (think COVID19 – no one expected to lose their jobs because of a pandemic during 2020) and end up needing money in a hurry. 

Although it can be tempting to dip into your 401(k) account, this will not only cost you money in the form of early withdrawal penalties; you’ll be robbing yourself of potential retirement savings as well. A qualified financial advisor will be able to help you set up a practical savings plan to help deal with unexpected events like job loss or illness.

  1. Health can Change Unexpectedly

While most individuals set up a concrete savings plan for retirement, it’s important to remember that a health crisis can occur at any time – leaving you in a financial bind. A professional financial advisor will be able to work with you to help allocate money for various needs, such as long-term health conditions. Even in the event of you not being able to work for an extended period of time, a reputable advisor will help you make the most of the money you already have. 

  1. Money Pits may need to be Identified

Several individuals earn enough to save and invest in retirement accounts, but tend to struggle with actually doing so. A financial advisor will be able to help you establish a practical budget to ensure that there’s enough money to invest each month.

For example, you may be eating out twice a week when it’s possible to prepare tastier meals at home. Although everyone deserves a treat once in a while, the bulk of what’s being spent on restaurant dining can be invested instead – even $100 extra that you save per month can make a substantial difference over the course of 20 years. 

If you’re concerned about not having enough money to retire in the near future, get in touch with our advisors today. We look forward to getting your money work for you.

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social security savings

Stretching your Social Security and Pension Funds to make them Last

A large number of retirees are extremely concerned because they feel that their pension funds won’t be sufficient to last them for the rest of their lives – especially if current inflation trends are taken into consideration. However, there are a few steps you can take to ensure that your retirement funds will be able to last for as long as possible. 

  1. Consider Taking on Part-time Employment

If you’re still physically active and healthy, it might be worth considering taking a part-time job when you reach retirement age – instead of stopping work completely. This will not only help to reduce the amount of money that needs to be withdrawn from your retirement funds; it will allow you to keep busy for at least a few days a week as well – several older folk often find themselves becoming bored quickly when they stop working altogether. 

  1. Check Withdrawal Rates at Least Annually

Your withdrawal rates should be checked at least once a year to determine if you’re living off the interest from your retirement accounts or whether you’re dipping into the capital itself. If it’s discovered that you’re dipping into the capital, it’s a good idea to sit down with a financial advisor and see what can be done to preserve your fund. In most cases, it’s recommended that withdrawal rates don’t exceed 4% of the account’s balance over a 12-month period.

  1. Examine your Budget

Unfortunately, not everyone will be able to continue working after reaching retirement age. If you will be one of the individuals who have to stop working, it’s crucial that you start examining your monthly budget and reducing expenses wherever reasonably possible. 

Some of the quickest ways to reduce spending can include downsizing to one vehicle, moving into a smaller home or a property that’s in a more affordable part of town and even asking for senior discounts whenever making purchases – it never hurts to ask. 

  1. Avoid Taking on Debt

If you still have to pay for vehicle financing or cover the cost of credit card installments each month after retiring, your Social Security and pension benefits will not last nearly as long as they should – especially when taking the high interest rates that are charged on these payments into consideration as well. 

Before you can even think about retiring, it’s crucial to ensure that all outstanding debts are repaid in full. This will allow you to free up funds to cover your essential expenses such as taxes, utilities, potential medical expenses, groceries and hopefully a few fun purchases along the way. 

Preserving as much of your pension fund and Social Security benefit as possible by being reasonably frugal will allow you to rest assured that there will be enough money for you to live on once you’ve stopped working. If you would like to obtain a little guidance with regards to stretching your retirement funds as effectively as possible, get in touch with our professional advisors today. 

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phone scams

Expert Tips on Avoiding Common Financial Scams

After working and saving their hard-earned money for many years, many individuals fully expect to be able to retire with a comfortable financial nest egg on hand. If anything unexpected were to happen to their savings, it would be close to impossible for many people to recover their money in time for retirement – especially if they fall prey to a scam of any sort. 

These days, several criminals focus their efforts on scamming the elderly and the best form of protecting your money against them is to ensure that you’re informed and suspicious of any unusual activity. Below are some of the most common financial scams that are aimed at senior citizens. 

  1. Phone Calls from the IRS Scam

When scammers call under the pretense of being IRS representatives, their main intention is to obtain as much of your personal information as possible. In this case, the information they are usually after is your last four digits of your Social Security Number and your debit card information. 

Keep in mind that the IRS will never call you directly – even if you owe money to them. All forms of communication from the IRS will only ever be sent through the US Postal Service, so it’s imperative that you end the call as quickly as possible if a caller claims to be from this agency.

  1. Medicare Scams

Over the past few years, a number of scammers have attempted to go door to door or directly call unsuspecting individuals in order to try and obtain Medicare insurance numbers from them. Once they have this information, it gets used to bill Medicare for services that have never been rendered. 

As with the IRS, a Medicare representative will never arrive at your door or call you. In the event that they need to get in touch with you, it will be done through the mail – unless you need to contact them for any reason. If anyone call you directly or shows up at your door claiming to be from Medicare, end the call immediately or tell them to leave your property immediately.

  1. Offers for Fake Prescription Medications

While you can save a substantial amount of money by purchasing your prescription medications online, always exercise extreme caution if a website claims to offer, ‘cheaper medication alternatives,’ – scams like these will usually operate from a totally fake website. After you’ve sent your payment through, you will most likely receive medications that won’t treat your condition because of fake ingredients. 

It’s crucial to check that any online pharmacy is legitimate before you pay them for any medication. This can be done by verifying whether they are licensed in the state you live in or not and that they have a licensed, experienced and trained pharmacist to dispense medications. 

Although it can seem tedious to verify information before parting with your hard-earned cash or giving out Social Security and banking details, doing so will save you a lot of heartache along the way. If you would like to learn more about making your money work for you, contact us today.

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