MONEY MONDAY 7/9/18
TOPIC A: Budgeting / kids and money
Raising a child costs on average $245,000, and oh yeah, that doesn't even include the cost of college!
One of your biggest problems is that you have trouble sticking to the answer "no." Over half of you have been convinced to buy something, by the kids, that you originally said "no" to.
And we promise, we're not trying to be the "fun police," but there needs to be a hard line in your budget for splurging on your children.
For instance, nearly 1 out of 4 parents said they spent $300 or more on a birthday party for their kids in the past year. Really? What happened to going bowling and buying a sheet cake from Kroger?
You also have trouble saying "no" to your kids extra curricular activities. 35% of you spend $500 or more on them! GUILT drives this.
Sports, camps, horseback riding… these are all expenses and not investments.
Be willing to say no to the out-of-state universities and the $3,000 select travel soccer program.
Almost half of you have such a difficult time saying "no" that you view debt as an option for getting your kid that Xbox One that they "ABSOLUTELY" NEED.
Actionable: Set aside an allowance and make them start paying for things early. It’s much easier to spend other's money than your own.
Allowances/chores teach kids how to save and help them become financially literate, which is something their school probably will not help them with.
HERE'S THE SM STRAIGHT TALK ADVICE
Here's the Simply Money's Straight Talk Advice: Teach your kids the value of a dollar early, and then it's easier to put your financial future first.
Every Sunday, Simply Money is answering your money questions in the Cincinnati Enquirer.
Daniel and Amy in Cincinnati: Do you see the stock market crashing anytime soon? Because we’re due at some point, right?
#3: Personal Finance
Marriage can be hard and disagreements over money can make it harder. In fact, disagreements over finances is one of the leading causes of divorce. Here are Simply Money's Financial Habits of Happy Couples.
1) They sync up financial goals - You want to buy a house and your partner wants to get started on a college fund. Both are good goals, but if you are not on the same page, you have a recipe for conflict. Different priorities are okay, but discussing them allow both of you to distribute money equitably.
2) They stick to spending limits - Simply Money Advisors discovered that most purchases over $400 need to be discussed. Your limit could be different-- it's having one that is important.
3) They have joint bank accounts - It's also okay to have a separate bank account than your spouse as long as you are transparent about it. As long as you're open about it, haviing a small amount of cash for personal indulgences, gifts, and luxuries should not be an issue.
4) They are both decision makers in retirement planning and investing - If you walk into a Simply Money Advisors office without your spouse, we will say "thank you very much for coming, but this is a team process." Have an open dialogue about when you expect to retire, how much you need to save, and how much risk you are willing to tolerate with your investments-- you might be surprised by what you discover!
Sitting down with a Certified Financial Planner or a Chartered Financial Consultant is critically important for this part because they act as an impartial third party looking out for both of your best interests.
40% of couples who describe themeselves as "not on the same page" financially say that an advisor helped them negotiate money issues that would have caused tensuon othewise.
HERE'S THE SIMPLY MONEY POINT
Clear communication and having a plan can mitigate money issues before they start.