Have you had the talk with your daughter? Just 4 Questions can save her life.

by D. Bryant Simmons

datingDating abuse is a reality not often discussed when the topic turns to domestic violence. Adults tend to dismiss the social interactions of pre-teens and teens as puppy love—immature and unequal to the romantic relationships between adults. Well, did you know that one out of three adolescent girls has been a victim of verbal, physical, or emotional abuse from someone they dated?i And nearly half of teenage girls know someone that is dealing with dating abuse.ii What you don’t know about your kid’s relationship with their boyfriend or girlfriend could be the makings of a life or death situation.

Before dating becomes a possibility, before the “first kiss, there are four questions every mother and father should ask their daughter.

1. Do you know what makes you special?
Ignore her awkwardness and wait patiently for a real answer. The goal is not for her to state the obvious, that she’s tall or athletic or has a decent head of hair. The answer has to be more than skin-deep. Affirm the qualities that she’s recognized and add a few of your own. Give her examples. Remember the time that you….I was so proud because….

2. When you start dating what rights do you have?
She has the right to end the relationship at any time. She has the right to withhold consent for anything at anytime. If she doesn’t think of these rights describe situations where she would want to enact these rights to help her understand each one. Then restate the rights in a concise manner like above.

3. When dating what responsibilities do you have? To yourself, to the other person, and to your family?
This is your opportunity to lay out any rules you may have and dispel any dating myths. For instance, if a date spends a lot of money on you, then you owe him….

4. How do you set boundaries and how do you respond when someone disrespects those boundaries?
State clearly and explicitly what you expect and why at the beginning of a relationship. Have a no-tolerance policy regarding your physical and mental safety. No-tolerance means no second chances. If someone crosses the line tell your best friend, your parents, someone who cares about you. Ask for their support. Then report the person to the authorities. Do not let them get away without legal consequences and a permanent record. End all contact with the person.

You may have doubts about bringing law enforcement into this. We are talking about adolescents and teenagers here, right? They’re young. They can still change. Well, people do not change their behavior when the behavior doesn’t result in significant consequences. Here’s some more food for thought. If it happens again, this time to a different girl, and this time he goes even further the police will have to take it seriously. His parents will have to take it seriously because now we’ve established a pattern.

Encouraging a no-tolerance policy is the only way to say unequivocally to our girls, “That is unacceptable. You deserve better.” And have them believe it.

7 Critical College Savings Questions Parents Should Ask

By Pamela Yellen

Paying for college without spending your life’s savings is one of the biggest challenges families face today. Many folks feel they must choose between saving for their children’s education and saving for retirement.

But what if there were a strategy that allowed you to do both? This is one of the advantages of the savings method I call Bank On Yourself. It uses specially designed, super-charged dividend-paying whole life insurance policies that grow by a guaranteed and pre-set amount every year. More than 500,000 Americans are using this method, many to simultaneously save for college and retirement.

In researching hundreds of savings strategies, I found this method be superior to traditional college savings plans, such as 529 college savings plans, UGMAs, UTMAs and student loans, for a number of reasons. Here are seven questions to ask when considering the best way to pay for college:

1. Do you have full control over how and when the money is used? With limited exceptions, you can only withdraw money that you invest in a 529 plan for eligible college expenses without incurring taxes and penalties. With UGMAs and UTMAs you lose all control the day your child legally becomes an adult. Student loan proceeds are paid directly to the college, so you have no control. The Bank On Yourself method gives you complete control.

2. Can you avoid having the funds count against your kids when they apply for federal student aid? Student loans and the cash value in a Bank On Yourself plan are not considered as assets. But the money in your 529 plan is counted as your asset, and UGMAs and UTMAs will be treated as your child’s assets. Having these assets will likely penalize your child when they apply for need-based financial aid.

3. If my child earns a full scholarship or decides to be an entrepreneur instead of going to college, can the money be used for non-educational purposes? The answer is “no” with traditional college savings plans; “yes” with the Bank On Yourself method.

4. Can I use the plan beyond college? The Bank on Yourself method allows you to use your savings however you choose. With 529 Plans, there’s the “Gotcha” of taxes and penalties. With UGMAs and UTMAs the money is not yours – it’s your children’s, and they can use it for whatever they want. Student loans can extend beyond college, but in a bad way – these loans can haunt the student for decades.

5. Are there tax benefits? With 529 Plans you may be able to get a state income tax deduction for your contribution, depending on where you live and the plan you choose. If the money is used exclusively for college, the gains in your plan, if there are any, can be tax-free. Gains in UGMAs and UTMAs can be taxed at the minor’s tax rate instead of yours, so that may save you some money. With student loans, there may be a state income tax interest deduction, depending on your income. With the Bank On Yourself method, you can take money at any time, and for any reason, and it’s possible under current tax law to do so with no taxes due.

6. What happens with my plan if I die prematurely? This is an important question, and unfortunately it’s one most families fail to ask. Among these college savings plans, only the Bank On Yourself method comes with a death benefit that allows your savings plan to “self-complete.”

7. Is growth of money in the plan guaranteed? In a 529 Plan, absolutely not.

With UGMAs and UTMAs, probably not, since most families put the money at risk in the stock or bonds markets. With student loans, the only thing guaranteed to grow is the debt, if interest payments are deferred. With the Bank On Yourself method, growth of principal is predictable and guaranteed.

This method also offers a great way for grandparents to contribute. My husband and I have done this for our two grandchildren, who are now 10 and 12. The plan we set up for our grandson is projected to provide about $90,000 for his college education expenses by the time he graduates, based on current dividends. Our granddaughter’s plan is projected to have a value of about $125,000. And if either of them decides to become an internet entrepreneur, rather than go to college, the money could be used to help fund their dream.

About the Author: Financial security expert Pamela Yellen is author of the New York Times best-selling book, The Bank On Yourself Revolution: Fire Your Banker, Bypass Wall Street, and Take Control of Your Own Financial Future. Pamela investigated more than 450 financial strategies seeking an alternative to the risk and volatility of stocks and other investments, which led her to a time-tested, predictable method of growing wealth now used by more than 500,000 Americans. For more information, visit www.BankOnYourself.com.

Frugality – Teach Your Children Well

by Claire K. Levison

saleMy dad is a master of frugality.  His brother often remarks that it’s “the family way.”  As a kid, I thought my dad was cheap but as it turns out, he’s just smart.  He knows what’s important to him and what isn’t.  Those priorities are reflected in the way he spends his money.  The car he had when I was in high school was the base model.  It didn’t even have a radio.  When I would ask him why, he would say, “I don’t need a radio in my car.”  When Dad would take me to a fast food restaurant (a fairly rare occasion), he was never willing to buy drinks.  “Those drinks are so over-priced.  We can get a drink at home,” he would tell me.  As a child, I didn’t understand it.  It drove me nuts.  Now as an adult, I can see that where it drove me was down a path of financial success.

As a mother, I’ve vowed to teach my children to be frugal too.  My fourteen-year-old hasn’t fully embraced the concept yet.  She does enjoy seeing her money go further when she buys things that are on sale, but she’s still fairly enamored with high dollar items.  And I’m not always as good as my dad was when it comes to holding firm.  I can’t remember my dad ever giving in to those fast food sodas.  Although I’m sure he must have at some point during my eighteen years of childhood.

And yes, as time goes on in our society, it seems that ante is continually being upped.  Instead of a soda, my daughter wants UGGs. When I bought her first pair, I remember thinking, “I can never tell my dad how much I just paid for these boots.  He will think I have completely lost my mind.”  Although I was buying an expensive pair of shoes for my daughter, frugality was still churning inside me.  When I looked at the price tag of those boots, it set off an alarm in my head.  Even as a grown woman, I was asking myself what my dad would think of that purchase.  It made me feel uncomfortable.  It made me think, “This should be a rare occasion.  This should be a special treat.”

I could tell you that you should never buy your kids a pair of UGGs or some similar name brand item, but I’m not going to. I think as parents we can find a balance between providing a lifestyle that allows our children some flexibility in a world that puts such a high value on material things and providing a lifestyle that shows our children that frugality will ultimately be a roadmap for financial success.

I expect, like it is with so many other lessons we try to teach our children when they’re growing up, that it may not be until my daughter is out on her own that the light bulb will really go off in her head.  I picture her being debt-free, having a solid savings account, and investing for retirement and other future needs she’ll have.  I picture her standing in the midst of her firm financial foundation thinking to herself, “Wow, I guess Mom really did know what she was talking about when it came to all that frugal stuff.  She taught me well.”  I don’t think this is too much to hope for.

But for now, my sweet daughter just rolls her eyes when I drag her to the clearance section at the back of a store.  I don’t go shopping that often but when I do, I always hit the clearance racks first.  Maybe it’s my version of a radio-less car or a soda-less trip to McDonald’s.  Dad taught me well.  Teach your children well too.

Clare K. Levison is a certified public accountant and author of Frugal Isn’t Cheap:  Spend, Less, Save More, and Live Better.  She is a national financial literacy spokesperson for the American Institute of Certified Public Accountants (AICPA) and has appeared on major radio and television networks across the country discussing various personal finance topics.   She has served as a member of the Virginia Society of Certified Public Accountants (VSCPA) Board of Directors and was named one of the 2010 Top Five CPAs Under Thirty-Five by the VSCPA. Levison has more than a decade of corporate accounting experience and is also an active volunteer, serving as PTA president, Girl Scout leader, and Sunday school teacher.  She lives in Blacksburg, Virginia with her husband and two daughters.

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Planning Your Kids’ Retirement

Should You Start Planning Your Kids’ Retirement?

kids savings/retirementWhen our generation was growing up, we were taught about Social Security, and many of us had grandparents who were reasonably comfortable with a combination of their investment income and their government checks.

Today, not so much.

Over the last few years, we have seen the market crash and burn, and Social Security is on its way toward doing the same. So, if we’re scrambling to salvage our retirement income, imagine what it will be like for your kids. If you haven’t done that already, one expert has some good news for you.

That’s why Rick Rodgers, a retirement counselor and author of the new book The New Three-Legged Stool: A Tax Efficient Approach To Retirement Planning (www.TheNewThreeLeggedStool.com), believes that parents can help their kids safeguard their retirement by starting now.

“When we were just starting out in life, our parents told us to start saving money right out of the gate, but we didn’t listen,” he said. “Instead, we ran up our credit card debt, spent more than we earned and bought more house than we could afford. But our kids can and should learn from our mistakes and helping them to start saving now could give them a nest egg or millions instead of thousands.”

Rodgers advice includes:

  • Start at 16 – Just $5,000 contributed to a Roth IRA each year for 5 years starting at age 16 could be worth more than a million by the time the reach age 65.  In a Roth IRA all that growth would be tax-free when withdrawn.
  • 10 Percent Rule – Everyone should save a minimum of 10 percent of their take home pay.
  • Shelter Early – Ideally, you should save in a Roth IRA account at the beginning of your career.  When you reach your peak earnings (usually around age 40), switch to a tax-deferred account like a 401(k).
  • Fun or Fund? – Take half of what you have been spending on gifts (toys, games, etc.) and invest it in a mutual fund for your child.
  • Birthday Booster – Encourage friends and relatives to contribute to the mutual fund account you’ve started instead of buying gifts for birthdays and holidays.
  • Every Little Bit Helps – Contributing small amounts on a regular basis is a better strategy than waiting to accumulate a larger sum.  Get in the habit of saving something regularly.
  • Use the Refund – Let the government help.  Currently the child tax credit is $1,000 per child until they reach age 17.  Discipline yourself to save the credit when it is returned to you as a refund.

“It doesn’t take a lot to give your kids long term security,” Rodgers said. “The magic of compounded interest can do more of the heavy lifting as long as you start early and contribute often.”

About Rick Rodgers

Rick Rodgers, Certified Financial Planner, Chartered Retirement Planner Counselor, Certified Retirement Counselor, and member of the National Association of Personal Financial Advisers, is Founder and CEO of Rodgers & Associates.

Rick’s expertise in the investment and financial advisory profession began with one of the big Wall Street firms in 1984. Twelve years later, he founded Rodgers & Associates as a way to concentrate on financial planning. His vision was to help families prepare for a worry-free retirement through the creation and conservation of their wealth. Today, as a leading retirement expert and personal wealth adviser to high net worth individuals, Rick provides integrated financial, tax, and investment strategies, retirement planning, executive compensation, estate and charitable planning.