Posts Tagged 'financial'

Allowances: First step to financial wisdom

 Piggy bank, wearing tiara, standing on dollar and coins

We hear a lot about reading literacy, but what about financial literacy? Money isn’t everything, but we all need to learn how to manage it and use it wisely. So much has changed in the financial landscape since we were kids, and technology makes things like paper money, coins, and checks seem old-fashioned to some.

Yet when we can order all kinds of goodies just by pushing a few buttons on our mobile devices, do we really have as close an eye on our financial health as we would if we were counting out bills or mailing checks? I’m guessing not. Better to learn about buyer’s remorse when you’re 12 than when you are 25! So, how to teach our kids to be financially literate?

One way to make money more “real” is to use an allowance system. Our family uses one inspired by Neale Godfrey’s book “Money Doesn’t Grow on Trees: A Parent’s Guide to Raising Financially Responsible Children.” I also liked Dave Ramsey’s ideas about teaching kids about money.

What works for your family may be a little different, but essentially Godfrey’s is a four-jar program (with actual cash in the jars):

  • Charity: Godfrey’s program takes 10 percent off the top for charity, letting kids pick recipients.
  • The remaining 90 percent is split evenly between:
    • Long-term savings: Usually for things like college or a car — big-ticket items that will take a long time to purchase
    • Short-term savings: Items that cost a few weeks’ worth of the short-term portion
    • Quick cash: This is the discretionary spending amount. Kids can spend it on anything they choose, provided it’s something you allow them to buy in the first place.

We chose to divide the four jars equally, renaming the charity jar “cash for others,” which includes charitable giving and gifts for friends or family.

Amount

Godfrey recommends one dollar per year of age, from 3 to about 15, when, she says, the teenager should have a job of his or her own. Regardless, you will have to decide what is reasonable and what expenses you are going to expect the teenager to take over with either allowance or paycheck.

Timing

Pick one day a week that you’ll pay allowances. We picked Friday afternoon because that is a common payday. I get a couple months’ worth of small-denomination bills and then paper-clip together the weekly amounts. I also get larger bills so I can change out some of the ones and reuse them.

Chores

Godfrey argues that some chores are “citizen of the household” chores: things everyone needs to do to keep the house running smoothly. These are things like clearing the table, putting your laundry in your bedroom hamper, or picking up toys from the family room floor. Other chores can be assigned, with allowance contingent on completing all the chores, by a certain time, to an agreed-upon standard. Ramsey also recommends that allowances be earned, not given. However other experts disagree with payment for chores. We decided not to pay for chores unless they are special/unusual, with the understanding that any time we ask the kids to do something or assign a chore, they do it. See what feels right for your family; you can even try out different systems for a month or so.

Yes, teaching your kids the value of money is going to take some effort and energy. Deciding where their financial responsibilities begin and end is an individual decision for each family. But starting early will help your kids be financially wiser, and also learn the enjoyment of saving up for something special, or giving of their own money to causes they support.

– Lori Warner, Ph.D., LP, BCBA-D, Director, HOPE Center at Beaumont Children’s Hospital

Tips and Tools for Financial Literacy

2 girls and 1 boy holding dollar bills

Cropped image. Carissa Rogers, Flickr / CC License

Learning good money habits as a child can help prevent money mistakes later in life. Believe it or not, you can start teaching healthy habits as early as 3 years old — think as simple as explaining that you need money to buy things. April is Financial Literacy Awareness month, so why not start the conversation today?

For Young Children

  • PNC’s For Me, For You, For Later Series features:

For Elementary-age Kids

  • OUR Credit Union’s Money Fact Sheet shows how to write money and also gives examples of how the same money looks in different combinations, like four quarters equal $1.
  • Try coin-counting apps, like Jungle Coins (iPad) and Freefall Money (iPhone, iPod, iPad), which help kids ages 6 and up learn coin math.
  • Open a child’s saving account. Many financial institutions offer a kids’ club as a fun and educational way to learn about money. Check with your bank or credit union to see what’s available.
  • Consider a piggy bank or envelope system divided into 4 options for allowances and monetary gifts:
    • Spend. Think bagel day at school or small toy at the store.
    • Save. Perfect for a larger purchase, like that $50 LEGO set.
    • Invest. This money goes into the savings account. Have your child make the deposit so he/she learns the process and gets comfortable with interacting with a teller.
    • Donate. This teaches the importance of giving back to the community. Although you can help guide, let your child choose where the donation should go, which will often be to something she finds interesting. For example, my son planted a tree in Borneo through the Indianapolis Zoo and donated to our local animal shelter.
    • Read about how one family is using this with their 4-year-old.

For High Schoolers and College Students

  • Credit Card Simulator is a fun tool that teaches credit card management skills. Choose a platinum, gold, or plus card (each with a different APR), then “purchase” items. The “bill” shows the minimum payment and then how much you’ll really pay over time when making only the minimum payment.
  • Financial Football is a trivia-type game covering topics like bankruptcy, stocks and scholarships.
  • Looking for budget basics? Wondering how to buy a car? Confused about where to save your money? Creditunionsrock.com offers lots of great tips for all of those questions and more. Topics include earning, budgeting, saving, spending, borrowing and planning.
  • Bizkids includes resources for starting your own business as a teen.

For All Ages

Estate Planning for Young Families: What Parents Need to Know

Having children affects life in many interesting ways and requires new parents to not only focus on the present but to make plans for the future. While estate planning isn’t a pleasant thought, parents need to understand that something may happen to them while their children are minors. Parents with younger children should develop an estate plan to ensure that their estates are administered according to their wishes, that their children will be cared for financially, and that their minor children will be raised by an appropriate guardian. Every estate plan is different. However, if you have younger children then there are certain elements that are essential—in the eyes of the law—for your children to be taken care of per your direction. These are the Last Will and Testament, the Durable Power of Attorney for Financial Management, and the Durable Power of Attorney for Medical Care and Patient Advocate Designation. An experienced estate-planning attorney will help ensure you have the proper documents. This person will also make sure your estate plan documents are kept up-to-date with Michigan law. The Will

  • Guardianship: For most parents, writing a Will is less about directing the disposition of their assets and more about naming guardians for their children. The guardian named in your Will is the person who will care for your minor children in the event both you and your spouse die simultaneously. While this is very unlikely, it’s worth addressing. Naming a guardian in your Will provides the best evidence of who you, as parents, would like to make decisions for your children.
  • Either You Name a Guardian or the Court Does: If you don’t state your wishes in your Will, the court will appoint a guardian without any guidance from you. For example, you may have specific reasons for not wanting certain family members to be appointed as your child’s guardian or you may have a closer relationship and more aligned values with a friend than with family members. These are all reasons why you should name a guardian for your minor children in your Will.
  • Assets: The Will also designates how you would like your assets distributed after your death. You will need to decide how your assets will be transferred to your children and who will administer the estate in the event both you and your spouse die simultaneously. Consider at what ages you want your children to receive your assets and if a Testamentary Trust is appropriate; without a Trust in place, your children will receive their entire share at 18 years old.

Medical Power of Attorney

  • Durable Powers of Attorney for Medical and Mental Health Decisions and Patient Advocate Designations are specifically authorized under Michigan law. In this document, you specify your wishes for medical and mental health treatment in the event of your incapacity, your end-of-life care decisions, and who you appoint an individual to carry out these wishes as your agent. This document can be as detailed or as general as you wish. For example, you might simply say that you want everything necessary to relieve pain (called palliative care or comfort care) but don’t want to receive extraordinary measures in certain circumstances. This is very important as it provides the person speaking on your behalf with your wishes.

Financial/Property Power of Attorney

  • Durable Powers of Attorney (DPOA) for Financial Management are specifically authorized under Michigan law. This document permits you to appoint an agent, typically your spouse, to act on your behalf for financial matters. A successor agent may also be named in the event that your spouse isn’t able to act in that role. This document generally only becomes effective on your incapacity, which must be established by two doctors. The DPOA for finances can be a big benefit to family members because without it, a court order could be necessary to access and manage your assets.

Summary Each of these documents is important to have even if you are young and healthy. It’s very unlikely they will ever be used while you are young; however, if you are seriously injured or die, these documents will make things much easier for your family and will let them know what you want, sparing them very difficult decisions and costly court proceedings. Although it’s extremely unlikely that a parent will not live to see their children reach adulthood, it always remains a possibility. Careful planning can give you, as parents, the peace of mind that if something happens then your spouse and children would be well cared for. Alycia Wesley– Alycia Wesley is an attorney and a mother of three young children. She’s an estate planning specialist with a particular expertise in developing estate plans for families with young children. You can email her at APW@Colombopc.com.

Autism Awareness Doesn’t End in May

Image credit: @lisamariemcbride via Instagram

Image credit: @lisamariemcbride via Instagram

As April draws to a close, some of the heightened attention autism awareness has gained this month may fade. But autism doesn’t take a break when Autism Awareness Month ends.

If you’ve read our posts for the month of April, you know we’ve highlighted families’ stories, tips for improving skills, links to local programs, and some newer research findings.

Now the challenge is to stay connected and keep learning. One great resource is the Autism Alliance of Michigan (AAoM) – a new organization formed in 2010, who has been working with families, treatment providers, educators, and insurers to help with the transition into the private insurance autism benefit, as well as the new Medicaid benefit.

There are new providers and clinics popping up all over the state, and it can be hard to keep track of who provides what and where. AAoM is working hard to compile all the information from different programs, so check in on their site often.

The Association for Science in Autism Treatment also is a wonderful way to get the basics on all the scientific findings regarding autism and autism treatment. They have a free newsletter you can have delivered to your inbox.

As always, the HOPE Center Facebook page will help you stay on top of all the latest happenings here at Beaumont, and we share events from our colleagues and partners in the community. “Like” our page and you’ll stay in the know!

Remember, please help spread autism awareness this month, and throughout the year! The more you know, the more you can help.

—Lori J. Warner, Ph.D., LP, BCBA-D, Director, HOPE Center

7 Autism Resources in Oakland County

There are many local resources and support groups for those with autism and their families. Some are free, some can be covered through health care insurance and others provide assistance. Explore them all to find the one — or many — that suit you and your family’s needs.

  1. Friendship Circle provides programs and support for children with special needs and their families. Teens can volunteer to be paired with a special needs child. They also have an anti-bullying program.
  2. Judson Center Autism Connections provides Applied Behavior Analysis, Therapy, Counseling and Social Skills Training as well as Family Support.
  3. Jack’s Place  For Autism holds events throughout the community, offers counseling and support, plus provides scholarships to help families afford programs.
  4. OUCARES (through Oakland University) prepares students for work in this field by offering hand-on work in the community, performing faculty and student-based research and more.
  5. Autism Society of Oakland County is a place for individuals with Autism Spectrum Disorders to connect, share stories, support each other and build lasting friendships. They have expanded their program to focus on the often overlooked teens and young adults.
  6. Autism Alliance of Michigan has specific programs for families, young adults, insurance coverage and state initiatives.
  7. Beaumont has the HOPE Center provides immersive parent education. They have a number of clinics such as behavioral intervention for preschooler to toilet training specific to those with autism. Families are also encouraged to come together for informal gatherings to offer each other support and guidance.

Mythbusting: Insurance Coverage for Autism Treatment

Dr. Lori Warner, Dr. Ruth Anan of Beaumont's HOPE Center, and Lynn Weimeister from Beaumont's Legislative Affairs department presented Lieutenant Governor Brian Calley with a handmade painting created by children in Beaumont's autism treatment programs.

It’s still Autism Awareness month, and it has been a whirlwind! On March 30th, the Michigan legislature passed a set of bills that will require insurance companies to cover evidence-based treatments for children with autism spectrum disorders. We were thrilled to be invited to attend the official bill-signing ceremony last Wednesday when Lieutenant Governor Brian Calley signed the bills into law. There have been so many families and legislators who worked tirelessly over many years to get where we are today. Michigan is now the 30th state to pass autism reform legislation!

These bills passed, and they passed by a strong majority. This was amazing because there was plenty of opposition to the bills. Please understand that this opposition was NOT because other people do not care about children with autism! It was more from the perspective of those who do not want government mandates at all, or worried that the bills would be too costly, or from the perspective of those who worried that autism was receiving “special treatment” and that children with mental illnesses were not included in the bills. Continue reading ‘Mythbusting: Insurance Coverage for Autism Treatment’

Financial Clean-Up: Add It to Your Cleaning List

Summer is known as the clean-up season in our house of five. We rearrange the garage and try to get in every opportunity to enjoy the Michigan outdoors. It’s also a good time for an annual review or clean-up of your finances. Consider the following areas in your own financial clean up:

  • Cash flow management: Review budget, determine emergency cash reserves, address debt management.
  • Risk management: Review health, life, disability, property and liability coverages.
  • Income tax: Are you taking advantage of all strategies to keep your income tax burden to the lowest level legally possible?
  • Education: Have you begun a systematic investment plan? Are you using a tax-advantaged vehicle such as a 529 or Coverdell Education account?
  • Retirement: Evaluate your current plans to accumulate the resources necessary.
  • Estate planning: Have you named a guardian for your children? Have you made arrangements to pass your assets to your children at appropriate ages?

– Timothy Wyman, CFP®, JD


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