photo credit: 401(K) / flickr.com

From $20,000 to $65,000 a year – that’s the tuition cost for one year of college, says John McDonough, a money expert who helps retirees and parents plan for their families’ futures.

“For the 2012–2013 academic year, the average cost for an in-state public college is $22,261. A moderate budget for a private college averaged $43,289,” says McDonough, CEO of Studemont Group College Funding Solutions. “But for elite schools, we’re talking about three times the cost of your local state school. Either way, your kid’s higher education can easily shoot into six figures after four years.”

Along with worrying about rising tuition prices, parents also fear for their own futures if their retirement savings are drained by children’s college costs, McDonough says. Only 14 percent, for example, are very confident they’ll have the money to live comfortably in retirement, he says, citing a 2012 survey by the Employee Benefit Research Institute.

“Families feel they’re faced with conflicting goals, but there are numerous ways to pay for college while investing in your future retirement,” says McDonough, who offers insights for parents to keep in mind while planning for their child’s education:

• The ROI of a college education: At a time when so many American families are financially strapped, college is an especially stressful topic because parents know higher learning will help their kids succeed. College graduates earn 84 percent than those with only a high school diploma, according to Georgetown’s Center on Education and the Workforce. Here is how earning breaks down over one’s life time, based on education: a doctoral degree-holder will earn $3.3 million over a lifetime; $2.3 million is estimated for a college graduate; those with only a high school diploma can expect $1.3 million.
• Move retirement assets to qualify for grants: Most parents know about the 529 savings account, but that’s not necessarily the best or only option. Reallocating your retirement assets, such as 401(k)s, can better position a child to qualify for grants and scholarships. This legal and ethical maneuvering may be the single most important factor when considering how to pay for college.
• Know your student’s strengths and weaknesses: Consider independent and objective analysis of your future college student. Assessment might include a personality profile and a detailed search for a future career. Also think about a more nuts-and-bolts approach, including scholarship eligibility, SAT and ACT prep courses, review of admissions essays and an in-depth analysis of chances for enrollment in a student’s top four choices of colleges.
• Make a checklist of financial aid forms: In order to maximize a fair price of higher education, remember there is plenty of data to review. McDonough recommends a checklist with a timeline and notable deadlines. Be ready to troubleshoot the “alphabet soup” of data forms: FAFSA – Free Application For Federal Student Aid; CSS profile – College Scholarship Service; SAR – Student Aid Report; and more. Think about this process as a second job, or find professional help you can trust.

Article provided by News & Experts of Wesley Chapel, FL.

Photo credit: nusrin / sxc.hu

College loan debt has topped $1 trillion and that debt load is threatening parents’ ability to retire as well as students’ financial future.

For college graduates, repaying student loans often means postponing buying homes or cars, getting married, and saving for retirement. With few options available, students often turn to their parents to bail them out. A recent Pew study found that “39 percent of all adults ages 18 to 34 say they either live with their parents now or moved back in temporarily in recent years,” including 53 percent of those age 18 to 24.

About half of all parents who make funding their kids’ college education a priority have little left for their own retirement, according to a MassMutual study. The study found that only three in 10 parents believe they are adequately funding their own retirement.

Most conventional methods of paying for college come with hidden drawbacks and many strings attached. Traditional college savings plans, like 529 college savings plans, UGMAs (Uniform Gifts to Minors Act) and UTMAs (Uniform Transfers to Minors Act), are typically invested in the stock market and provide no guarantee on growth rate — or even on the return of the principal amount invested. So what’s the solution?

Not all college savings plans come with these kinds of restrictions or drawbacks. Many families have discovered a safe and time-tested savings method called Bank On Yourself. This strategy uses specially designed dividend-paying whole life policies that grow by a guaranteed and pre-set amount ever year. Riders can be added to the policies that supercharge their growth.

This method allows you to know with absolute certainty how much your plan will be worth on the day college starts, plus it holds other advantages too. Because funds are sitting in the cash value account of a whole life insurance policy, they do not count against you in calculations for financial aid. This means that your chances for scholarships and financial aid are greatly increased. Because of the unique features of the Bank on Yourself concept, you may even be able to start funding a college plan when college is only 2-6 years away and still have enough to help pay college tuition.

My husband and I are using this strategy to help save for our two grandchildren’s college education. We started policies designed to maximize the power of the Bank On Yourself concept for each when Jake was 6 and Halle was 3. The plan we set up for Jake will provide about $90,000 for his college education expenses by the time he graduates, based on the current dividends. And Halle’s plan is predicted to provide about $125,000.

Both plans grow by a guaranteed and predictable amount each year and are from a top-rated life insurance company that has paid dividends every year for more than 100 years. If you start early, relatively small monthly contributions can ensure you’ll have a substantial, guaranteed sum of money when it’s time for college.

The recent tragedy in Aurora, Colorado, in which a young man, dressed in full protective gear, wrought havoc, death, and mayhem on an innocent movie crowd is no accident. He was a lover of The Joker, the “star” of the second Dark Knight movie, portrayed by the late Heath Ledger. He was a lover of violent role-playing video games. He chose the new Batman movie crowd as his target; he didn’t choose the latest Pixar movie.

I worked in the entertainment business for a quarter century. My forte was the now largely defunct “Movie of the Week.” We suffered our own run of poor taste when so many of the television movies were ripped-from-the-headlines true murder films. The first writing I ever did was my effort to put a halt to that shameful period of television with “Murders of the Week.” It was later reprinted in the Daily Variety, and I like to think it led to the considerable lessening of production of those movies.

The Hollywood my parents grew up with and that I grew up with was quite different than today’s movie world. My parents lived through World War II, when not only did Hollywood contribute wonderful movies glorifying the sacrifices of our men and women in the armed forces but also made films about sacrifices on the home front. These films helped bolster a scared nation. After the war, Hollywood continued making such moves, with The Best Years of Our Lives deservedly earning a Best Picture Oscar in 1946.

I grew up with adventure films that starred such late greats as Charles Bronson, Steve McQueen, Lee Marvin, Gregory Peck, and so many others. The Great Escape was truly awesome to me, though the more likely word we used then was either “cool” or “groovy.” The Guns of Navarone, The Dirty Dozen, and so many other films of that era informed my idea of heroes and villains.

Many years later, Quentin Tarantino came along and wrote and/or directed movies with unmitigated violence and any lack of honor, at least the honor I learned in my life. I’ve only seen one film of his, so I can only judge from afar, and the one I did see -Inglourious Basterds – had some value, in my opinion. Oliver Stone came along and tried to change history with his movies, starting with his anti-war depictions in Platoon, continuing with his totally fictional JFK, and others. Ironically, he made a truly good movie about 9/11 – World Trade Center in 2006 – but much damage to the soul of America had already been done by his prior work.

When the original Psycho came out in 1960, it was hailed as the scariest movie ever. And it was pretty darn scary. The infamous shower scene, however, was in black and white and did not show a single explicit shot of violence. It was brilliantly directed by the late Alfred Hitchcock and masterfully scored by Bernard Herrman to a chilling effect.

Today’s horror films try to out-do each other with extreme gore. The Saw series is just one example. The excesses portrayed in these films induce nightmares, desensitize feelings, and create a culture in which violence seems okay to portray and even to laugh at. Sorry, I don’t think it’s funny.

Does Hollywood care? Some say Hollywood only cares about money. But, if that were true why do they still make so many R-rated movies when their box office performance is invariably less than the moderately rated films? This is a contradiction in reality that Hollywood chooses to ignore to pacify the stars, filmmakers, and studio execs that like the R-rated films and think that they are expanding “their art.” Read Michael Medved’s Hollywood Vs. America for ample evidence of the fiscal failure of R-rated movies!

Now, let’s look at the video games. I’m old enough to remember Atari’s first video game, Pong. It was a simple competition of “hitting” a virtual ball back and forth. Nobody had to die, and it was a lot of fun. Today’s video games often try to out-do one another with gore, blood, and violence. The very successful “Grand Theft Auto” video game series took this even further by demonizing the police and giving the player more points when they killed police and innocents. Hooray for Hollywood. Hooray for the Gaming Industry.

Where do we parents come into this discussion? How many parents give in to their children’s pleas to go to the latest PG-13 or R-rated movie before their children are anywhere close to mature enough to see them? What about the games and Internet access allowed to many kids?

Do you think the Colorado shooter was watching the Discovery Channel, renting Pixar movies, and playing Mario Brothers video games? I’m sure he avoided all those excessively violent horror movies, so many of which had sequel after sequel. The same goes for the Columbine killers. Their favorite music was The Four Seasons, wasn’t it? No, I think it was Patti Page.

I haven’t even touched on the lack of responsibility within the music industry, which completely shares Hollywood’s and the gaming industry’s lack of soul.

To paint these industries as the bad guys with one brush stroke is too simple. This is a complicated societal problem that has grown over time during my generation – the boomers. The solution isn’t simple either. But, maybe if these industries thought about their five-year-old boys and girls a little more, they might choose to make a Batman movie with slightly less gore, skip the horror movies altogether, and maybe strive to create stories that enrich, educate, and inspire.

Photo credit: 401(K)2012 / flickr.com

Human nature is such that when something doesn’t directly affect you, it’s easy to not pay attention. Such has been the case for this dad regarding the escalating costs of college, the incredible competition to get in, and all the bizarre and increasingly complex options to try and pay for it all. Maybe it’s a scam on us parents? Maybe it’s another bubble about to burst as some say about the over 1 trillion in student debt? All I know is we are paying a ridiculous fortune to send our first-born to a private college in Boston.

Part of my outrage has become a sort of ongoing rant that I’ve done on my radio show, to anyone who will listen, and now in writing. It seems that I completely messed up as a dad. Instead of abandoning the family when my marriage ended, I stuck around… even when mom disappeared altogether. Instead of going delinquent on my rent or mortgage and credit card bills, I paid them – on time. Instead of spending all my savings on new cars, vacations, and toys, I towed the line in anticipation of future needs. Instead of developing a bad addiction that landed me in re-hap or jail, I kept a relatively healthy lifestyle. WHAT WAS I THINKING?

All of that behavior disallowed my boys from eligibility for ANY aid. If I’d been more irresponsible, the government and/or colleges would’ve helped out. We don’t even qualify for a loan of any sort, except exorbitant private loans. When Jodi Okun (CollegeFinancialAidAdvisors.com) graciously offered to take me through the finances and loan possibilities, after my son was accepted at The Berklee College of Music in Boston, we began with a quick Q&A.

After I answered a couple basic questions about my finances, Jodi started to laugh. Now, to be clear, we are friends so it was a laugh of friendship. What was she laughing at: the fact that my savings and good credit made my boys and me totally ineligible for anything. And, the amount one has that disqualifies a family are shockingly small!

This is where the whole “scam” notion comes to bear. Our family therapist has paid for and sent his two daughters through college, completely on his dime. He, too, was totally irresponsible by paying off debt, investing wisely, and saving money. He told my wife and me the story of a patient who was a struggling legal immigrant – a single mom. Her son excelled at school and was accepted to a fine state college with a full ride, aka for free. The college – U.C. Santa Cruz – is one of those where the local community lives off the students and their parents. This mom could NOT afford to attend her son’s graduation because of the cost of getting and staying there.

The scam is that colleges have upped their tuition by nearly 400% in the past decade. It is the number one inflation category. What is number two? Health care at “just” 250%! Plus, our government has basically encouraged those outrageous tuition hikes in the same manner they “encouraged” banks to make home mortgage loans to people that truly didn’t qualify. The bubble burst then. When will it burst with college and the huge abundance of loans that most graduates cannot afford to re-pay?

The whys of this are complicated. But, like the mortgage crises it involves too much government intervention, greedy institutions (the colleges and universities), and parents and students that have bought into the whole thing. C’mon, what is wrong with spending the first two years at a local community college? Is every kid really suited for college? What happened to trade schools? Do you know any poor plumbers or electricians?

Then we have my generation of parents, the boomers and those that helicopter their kids. We raised our kids to think they could do anything they wanted. We expected every one of our kids to go to college. We spoiled our kids in untold ways. Most of us aren’t even that aware of how much college has changed since most of us attended them! That is another article altogether, but it is significantly different today since the sixties generation are now the leaders, professors, and administrators at our colleges and universities.

The traffic jam at many schools has caused students to fight and struggle to complete their necessary coursework in four years, given that many requisites are “sold out.” Much more proselytizing goes on IN the classroom and around the campuses than even the Vietnam era protesting that my generation forced upon America.

At many schools – as crass as this sounds – we are spending tens of thousands of dollars to let our kids go binge drinking, experiment with sex, and be brainwashed in class. Heck, they can do that all at a local community college and we don’t have to pay $60,000 a year for them to come back and hate everything that we stand for!

Okay, I’m not too heated on this subject.

• Take a “daycation”: Take a “daycation” to a destination close to home. Hop in the car, drive a few hours and let the family fun begin.
• Grab some cheap deals last minute: Booking tickets in advance might not always give the best deal.  Waiting until the last minute to book a flight could end up saving a bundle. Many airlines offer special fares and discounts during the week for weekend flights. United’s E-fares offer incredibly cheap flights to almost every major city in the United States. Head over to their website every Wednesday to see which deals are available for a last-minute weekend trip.
• Leave the plastic at home: What’s a $2 ice cream cone, really? Those little purchases add up, especially if they are being made on a credit card. Pick one or two days each week and spend only cash.
• Buy local: A great way to spend cash only is by shopping locally for groceries. Surf the web for a local farmers market and buy essential produce items there instead of the grocery store. Everything from fruits and vegetables to homemade nut butters and even some breads and pastries can be found at the farmers markets. If it’s in walking distance, leave the car at home and make it a fun morning activity for the whole family. Plus, farmers markets are typically cash only so no impulse credit card charges can be made!

Grill gourmet at home: Foods taste better when cooked over an open flame. Grilling your vegetables, cooking seafood and baking cakes all taste delicious when cooked outdoors. Why is cooking outside cheaper than using the oven? The oven creates heat; when the house gets hotter, the air conditioning blasts longer resulting in a higher electricity bill. The Internet can be great for finding some creative and delicious recipes so spend one or two days a week cooking outside on the grill.

Article provided by ChicagoHealers.com.

Updated on 19 June 2012 to correct the spelling of Julie Casserly’s name.

Photo credit: Michael 1952, flickr.com

It seems to me that while Mother’s Day is akin to the Super Bowl, Father’s Day is more like a junior high scrimmage. If you’re skeptical, just look at the statistics. Last year Americans spent $5.2 billion more celebrating mom than dad. Money talks, right?

I’ve got no beef with Mother’s Day. Being a mom is a tough job. Mothers deserve their  “Hallmark holiday” replete with a family brunch and a non-household appliance gift. Expensive jewelry or a bouquet of a dozen red long-stemmed roses will do.  But, whatever you do, you’d better not forget mom on Mother’s Day. Even if she might otherwise excuse the oversight, as soon as her girlfriends ask her what she got for Mother’s Day, you’re in deep trouble.

Compare this to Father’s Day. According to Wikipedia (the source of all history these days), dads did not get their own day until 1972, some 58 years after Mother’s Day was enshrined. What’s the most noteworthy stat about Father’s Day? Historically, it’s been the busiest day of the year for collect calls.  In 2012, Father’s Day will likely set the record for the most text messages sent to dads from smartphone accounts paid for by dad.

In my view, dads get short shrift, while moms have been elevated to a status just below sainthood. In the interests of full disclosure, I never had any children, preferring to keep my lawyer nose to the grindstone. While some may view my childless status as a disqualifier, perhaps my non-mom hood gives me a unique ability to offer an objective perspective.

In the “Father Knows Best” era, the role expectations were clear. Dad was to bring home the bacon while mom was to raise three well-adjusted, adorable children. With the advent of “The Feminine Mystique,” traditional marital roles were upended. Mom was free to enter the workplace and dad rolled his sleeves up, cleaned toilets and ran the vacuum cleaner.

As a partner in a law firm for many years, I observed my male colleagues put in their 80-hour workweeks while trying to meet their wives’ expectations that they be home in time for dinner every night and turn down most, if not all, business trips.

It’s now understood that if son Jake is on the soccer team, dad is the team coach. When little Susie takes to the stage as the lead elf in the school play, dad must be in the audience. Is this work life balance?

Supporting kids is a very expensive proposition and, although many women now work outside the home, the primary burden of bringing home the paycheck typically falls on dad. My dad struggled valiantly to support five kids, including one born with severe brain damage. He became an expert at juggling dozens of credit cards and writing post-dated checks to cover the bills.

I’m sure many moms will take offense at my perspective. But consider this—dads are easy to please. All they really want on Father’s Day is to be excused from the honey-do list and be permitted to go to the golf course with their buddies where he can misbehave a little. Is that really too much to ask?

Photo credit: Steven DePolo, flickr.com

As children blossom into young men and women, most insist on planning and running their own lives. Parents worry about all the basic essentials for their kids’ independent living, like housing, eating properly, staying warm, being careful at night and more. But most parents forget to teach their youngsters one of the most important lessons of all – financial responsibility. The resulting turmoil can spell disaster for a child’s future.

Consider this: The average young adult amasses $45,000 in debt by the time they turn 29, according to a recent PNC Bank report.

“This generation of 20-somethings was raised during an economically-thriving period,” says financial expert Mark Hansen, author of Success 101 for Teens. “Undisciplined spending habits, student and car loans, and a tough job market have stymied their financial growth. Perhaps the worst culprit is financial ignorance, but we can count this as a lesson for future 20-somethings.”

For young people, organizing finances can be intimidating to the point of prohibitive, he says.

“We need to have a curriculum in schools, from kindergarten through 12th grade, that ensures our kids graduate with financially literacy,” he says. “From balancing a checkbook to understanding what it means to pay – and earn – interest, kids need basic money management skills to survive in the world, and most aren’t getting them.”

Hansen says all teens should know and practice these five tips so they can control their financial destinies:

1. Saving for dreams – the three-envelope method: Use the first envelope for your day-to-day expenses: gas or lunch money. Pause before blowing this money at the movie theater or a fast-food restaurant! Envelope No. 2 is for short-term goals, which might be clothing or a new laptop. The third envelope is for long-term goals such as a car, college or a “future millionaire club” fund.
2. How to create a budget: A budget lets us know what’s possible, and not possible, with money. There are six steps to creating a budget. 1. List all of your expenses. 2. List all income. 3. List monthly expenses. 4. Add up these lists separately. 5. Tweak your budget so you can meet your expenses with money left over for savings. 6. Review your budget every week.
3. How to set and follow through on goals: First, figure out what your current finances are, then determine what they will be in the future — one year out, then two years out, then four years later, etc. How will you get to your one- or two-year goal? You need a plan, and most of the time that means either earning more money, spending less, or a combination of the two. Finally, you have to stick to your plan in order for it to work.
4. Understanding interest rates, such as credit cards: Interest is a fee paid for using someone else’s money. Simple interest is straightforward: 5 percent accrued in your bank account with $100 yields $5 in interest at the end of the year. Compound interest, however, means ever-increasing amounts. This is crucial to understanding debt you may take on from lenders. Know what you are borrowing, and the terms thereof. Just as your money can work for you in a bank account, money borrowed can work against you if it is not paid back in a timely manner.
5. How to write checks and balance a checkbook: These days, it’s easier than ever to review accounts online, which automatically tracks exchanges. HOWEVER, banks do make mistakes, which is why it’s wise to track your accounts independently. Ask. Don’t be embarrassed. Banks are putting a premium on service and want to establish a positive relationship with young customers. If you have a question, speak to someone at the bank. As you take control of your money, you’ll also take control of your life.

The above article was provided by News and Experts of Wesley Chapel, FL.

Photo Credit: 401K, flickr.com

Saving is at the core of a solid financial eduction.  Learning to save is not something that is easy to do in our consumer-oriented culture, however.  Leading by example — and talking about how saving is helping you reach your family’s financial goals — is important.  Creating an environment where kids participate in and ask questions about the saving process is even better.  In honor of Financial Literacy Month, here are some “building blocks” to keep in mind when teaching your kid to S.A.V.E., courtesy TD Bank.

Show them ways to earn money.  Talk to your child about your job and what you do to earn your paycheck.  Discuss what they can do to start earning money on their own.  Consider offering an allowance for household chores.  In your neighborhood, there may be opportunities for them to earn money doing yard work or shoveling.  As they get older, encourage them to research babysitting positions or to look for a part time job after school and on the weekends.

Advise them about earning interest on savings.  Let them know that the bank will actually PAY them to keep their money in a savings account by depositing interest every month.  They may want to keep their money close, but knowing that their balance will get bigger in a savings account, without too much effort from them, may change their mind.  While interest rates may change, it’s always zero percent for their piggy banks!

Verify their understanding of Needs vs. Wants.  This may be the toughest part of the discussion.  They may feel that they need that toy to play with or have to have those new jeans to wear to school.  In order to help them recognize when to spend and when to save, it is vital to teach them the difference between needs and wants.  Consider sitting down with them to make a list of items they want to buy and discuss which category each item would fall under.  This is also a good time to talk to them about helping others and donating some of their money to charity.  Encourage them to designate their funds into separate categories: saving, spending and donating.

Explain the cost of borrowing money.  With the growing number of advertisements focused on the ease of applying for home and auto loans, your child may get the impression that borrowing money is an easy solution when they want something.  Discuss responsible borrowing and make sure they understand the cost of borrowing money.  Use an example from your own borrowing history to show them how much an item cost and how much you actually paid for it.  Talk to them about why you made that decision to borrow and if it was worth it.  These are decisions they will have to make at some point and, as we know, children are likely to copy the financial habits of their parents.

Photo Credit: theritters, flickr.com

As parents, one of the most important lessons for us to teach our children is how to spend and save wisely. By sharing financial lessons with our kids starting at an early age, we can help them understand the importance of being financially responsible and self-sufficient for life.

This is important today when young people experience pressures like never before to buy, consume and run up debt. Kids are bombarded with advertisements for the latest gadgets and pressured to “keep up with the Joneses” by having the latest fashions and toys.

Technology has elevated buying-on-a-whim to an art form. Sitting at their computers or thumbing the keys on their smart phones, kids and teens can download or order a world of music, entertainment, games, books and services that didn’t exist a decade ago.

The need to drive – or be driven – to a retail store sometimes created a sufficient buffer to quell kids’ impulse to spend, or at least presented the prospect of giving mom and dad an opportunity to intervene. But no longer. Direct deposit, debit cards and online banking have each accelerated the pace of money – and accordingly, the speed at which our children must make the right or wrong financial choices.

Kids need to be given a clear, alternative vision to the “spend, spend, spend” mentality that surrounds them. Fortunately there are many things parents can do to teach their kids sound money management. Here are some tips:

• Teach children the difference between needs and wants – A great way to do this is to share your full family financial picture, including what you earn, what you spend, what you borrow, and how you invest and save. Hold regular “family night” discussions with the whole family during which you go over the family budget and review where the money is going. You can even have kids participate by writing checks, reconciling accounts and helping to set and monitor your family budget.
• Teach by example – If you tell your kids one thing, but do another, they will catch on very quickly. Explain how there are things you’d like to buy that you decided to forego and why. And don’t be afraid to openly discuss the mistakes you’ve made and what you’ve learned from them.
• Allowances are a great idea, as long as they are tied into chores – The earlier children learn basic financial principles, such as the exchange of goods and services for money, the better. Nothing builds a child’s self-esteem faster than self-reliance. Children as young as age 4 can benefit.
• Use the “40/30/20/10 Savings Rule” – 40% of kids’ earnings can be used for spending, 30% should be set aside for short-term savings, 20% for long-term savings and 10% for donating. If children sort their money into these categories every week, they will develop responsible lifelong money-management skills at an early age. The amount the child receives for chores should be based on their age as well as what you expect them to use the money for.

Remember also to paint a vibrant picture of your child’s fiscal future. Help kids formulate their own vision of what a life of financial self-reliance and freedom will mean for them. Nothing builds a young person’s self-esteem faster than learning the lessons that can help them become financially independent for life.

Photo Credit: Joshua Davis, flickr.com

It’s no secret that the United States lags well behind the rest of the West in the number of vacation days taken each year.  For some, it may even be considered a mark of pride, proof that a dedicated American work ethic is still alive and well.  For those of us with growing families, even when we have vacation time available to us from an employer, finding time and money for a vacation can still prevent us from getting away.

Consider this alternative perspective: taking a vacation may be the best way to set you apart from the rest of the pack, allowing your leadership and management skills to shine.  Need some more convincing?  Check out “Be a Leader: Take a Vacation,” an article from our friends at the Third Path Institute.

PDF: “Be a Leader: Take a Vacation“