May 29, 2017

Teaching Your Kids About Money – Teenagers

piggy-bank-1429582_1920Sometimes your teenage children think they know everything. Do they know that if they saved the $6 they spend each day on a super antioxidant smoothie (or caramel macchiato), in 8 years they could buy a 4-door sedan in soul red or titanium flash (1)? Below are 3 lessons you should teach them about the long-term financial impact of decisions that they will soon be making for themselves.

Lesson #1: Over time, compound interest can make a little bit of savings grow to a very big amount
One of the regrets many of us has, is that we did not start saving soon enough. The idea of compound interest is something that your kids will understand by the time they are in middle school. There are numerous online calculators you can use to show them how deciding to save their money and forego that daily splurge can turn into better investments (like a new car).

Lesson #2: College is a very expensive but financially important decision
As your high schooler starts to contemplate where they want to go to college, don’t leave them out of the financing discussion. Even parents who expect to cover the entire cost of college need to make their child understand that it is a significant investment in their future, and not a nonstop party. Let them know that by completing college, they will likely earn $1 – $3 million more over their lifetime than their classmates who didn’t (2).

Lesson #3: Credit cards are a tool and not a new source of money
Credit card debt is rampant among people of all ages, but studies have shown that outstanding balances ramp up quickly after college. Before, during and after college, make sure your child understands that credit cards are not free money. Talk to them about using credit cards only to the extent that the balance can be paid off each month. Revisit Lesson #1 and show them how fast the balance on a 20% credit card can grow out of control.

The best way to drive these lessons home is to set a good example. Demonstrate good use of credit by paying off your credit cards monthly. Develop a budget and then communicate how sticking to it serves larger financial goals. It’s very likely that you have made some big financial mistakes in your life. Wouldn’t it make sense to share what you have learned so they don’t make them too?

(1) Assuming $6/day, saved for 8 years, earning 6% after fees, the total is $22,403. This exceeds the base MSRP of a 185 horsepower 2016 Mazda 6 4-door sedan with 6-speed manual transmission in Titanium Flash Mica ($21,330). The same model in Soul Red Metallic is $21,630.
(2) The Economic Value of College Majors 2015, Georgetown University Center on Education and the Workforce.

Amy WolffABOUT THE AUTHOR
Amy Wolff
AJW Financial, Inc.

Amy Wolff’s clients describe her as a financial educator and coach. She listens to their diverse concerns and guides them through life’s most stressful transitions toward confident financial literacy and independence. By remaining accessible and open to any question, Amy helps clients avoid pitfalls and make decisions today that align well with their plans long-term. Her approach to personalized financial guidance has given countless clients a non-judgmental place to make well-reasoned financial decisions for their futures and their loved ones.

Amy is a CERTIFIED FINANCIAL PLANNER™ professional (CFP®) and a Certified Divorce Financial Analyst™ (CDFA®). Feel free to learn more at www.ajwfinancial.com

Amy Jensen Wolff, CFP®, CDFA®
3300 Edinborough Way, Suite 550
Edina, MN 55435
Phone: 952-405-2000
www.ajwfinancial.com

Registered Representative offering securities and advisory services through Cetera Advisor Networks LLC, member FINRA/SIPC. Investment Advisory Services also offered through AdvisorNet Wealth Management. Cetera is under separate ownership from any other named entity.

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May 22, 2017

So, You Are Getting Divorced: Part II

Categories: Divorce

Considerations on the Cost of Legal and Professional Services In this article I address positive things you can do to minimize your costs and expenses, and maximize quality of services. The Good News There are many things that can be Continue reading…

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May 15, 2017

Family Specialist: Co-Parenting after Divorce

Categories: Divorce

I once heard that parenting books are one of the largest segments in non-fiction publishing.  Everyone apparently thinks they have tips and ideas to help others parent.  As a collaborative divorce attorney, clients often seek guidance and support in co-parenting Continue reading…

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May 8, 2017

Stick and Stones May Break My Bones, But Names Will Never Hurt Me

Remember hearing that as a child?  I do.  I said it.  I believed it.  And then I didn’t.  Names DO hurt, even if they aren’t “really bad, mean names.”  They can burn a memory into your brain that can haunt Continue reading…

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May 1, 2017

When Families are Unsupportive Part 2

Categories: Divorce

This is the second of our two part blog series on unsupportive families during divorce. The first dealt with the challenges of when family is having a difficult time letting an ex go, which can be read here. Here we Continue reading…

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April 24, 2017

When Families are Unsupportive Part 1

Categories: Divorce

Families can be particular unsupportive in one of two ways – the first when they truly care for your spouse and are having a difficult time letting them go as part of their family, and second they may not be Continue reading…

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April 17, 2017

The High Road to Recovery

Categories: Divorce

My principle livelihood has been as a divorce lawyer. Many people consider this to be a dirty job, either because the people we work with have dirty lives, or because the way attorneys who work with them are themselves dirty. Continue reading…

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October 4, 2016

Leaving Litigation Behind

A collaborative law colleague recently wrote a lovely piece in the Boston Globe describing his reasons for leaving his litigation practice behind and representing clients only in alternative dispute resolution processes. His article resonated greatly with me. I too left Continue reading…

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October 3, 2016

Teaching Your Kids About Money – The Early Years

What are you teaching your children that will best prepare them for a successful adulthood? To be polite and say thank you? To believe in themselves? How about that if they save 15% of every check they ever earn, they Continue reading…

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September 30, 2016

We Are More Alike, Than We Are Unalike – Maya Angelou

My family is going through Olympic withdrawal.  Well, O.K., not really.  But we watched the events we were interested in and rooted for Team U.S.A.  Of course, Michael Phelps stole the show, and Ryan Lochte stole the…well, let’s not go Continue reading…

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