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The Best Time To Book The Cheapest Flights

May 22nd, 2014 | No Comments | Posted in Lifestyle

The best time to book the cheapest flights

Booking a flight is often confusing, annoying and frustrating. Prices fluctuate so frequently that most vacationers can’t tell if they are getting a good deal.

We check multiple websites, often several times a day. Then, a few days after we finally do book that non-refundable ticket, there’s a sale, confirming that we overpaid.

So when is the best time to book a flight? One travel site dug through the data and has an answer for us: 54 days in advance. Well, except there are plenty of caveats.

We’ll get back to that number in a minute, but first a little bit about how the process works.

Airlines use sophisticated computer programs to analyze booking trends and constantly change prices to get the most money out of each flight. That’s why two passengers in the same row might have paid vastly different fares, depending on when they booked. Complicating matters is a bevy of fees added to help the airlines offset higher jet fuel prices.

That’s why booking at the right time is so much more important today. The average cost of a roundtrip domestic ticket — including baggage and reservation change fees — grew to $378.62 from $351.48 in the last five years, when adjusted for inflation.

That brings us to 54 days.

For a study published in February, booking site CheapAir.com looked at millions of trip combinations, searching as far as 320 days in advance to one day prior to departure and every possible day between. That’s 1.3 billion airfares. The result: 54 days in advance was the best time, on average, to buy domestic tickets. This is not a hard-and-fast rule, however.

Airfares to popular vacation destinations tend to go up sooner. So flights to Phoenix, San Diego, Orange County, Calif., as well as Ft. Lauderdale, West Palm Beach, Pensacola, and Orlando in Florida were actually cheapest 75 days in advance, according to CheapAir’s study. For Las Vegas, it was 81 days and for airports in Hawaii it was 87 days.

Confused yet? That’s why CheapAir tried to simply things and come up with a more-general rule: The prime booking window is 29 to 104 days before departure.

That fits with a report that the Airlines Reporting Corp, which processes ticket transactions for airlines and more than 9,400 travel agencies, including websites such as Expedia and Orbitz. That 2012 study found that the optimal time to book is about six weeks in advance. Fliers booking then paid about 5.8 percent less than the average domestic fare.

Now, here’s some bad news: The formula is completely different for those peak travel periods when everybody wants to fly. So, if you still haven’t booked your flights to Europe for this summer, forget about it. The best time to buy those, according to ChaeapAir, was a whopping 319 days in advance.

But at least you can start thinking now about Thanksgiving and Christmas travel. The cheapest day to book those flight last year was June 4 — roughly five and six months prior to the respective holidays.

Here are some other tips to saving:

Look for connecting flights.

Flying nonstop is ideal, but that convenience isn’t free. Adding one stop could save $100 round-trip. Just leave plenty of time to connect.

Be flexible with your dates.

Use a flexible date search to find the cheapest days in a month to fly.

Consider the 24-hour rule.

U.S. airlines are required to let you cancel most tickets booked directly though their websites. (There are exceptions for those within a week of travel.) After you book, check the next morning and see whether the price fell. If so, call to cancel and rebook.

After 24 hours, still watch for price declines.

Any savings is typically wiped out by fees to change your reservation, ranging from $75 to $200. However, Southwest Airlines doesn’t impose change fees and Alaska Airlines waives them up to 60 days before a trip. If fares on those carriers drop, you can get a credit for the difference.

Book intra-Europe flights through overseas websites.

The flights are often cheaper on the airline’s home country website. Google’s Chrome browser will translate it for you. If that doesn’t work, try the country specific site of Expedia.

Pick two different airlines.

Most airlines now sell one-way flights at reasonable prices. One airline might be cheaper for the outbound flight and another for the return.

Search multiple sites.

The cheapest flight doesn’t always show up on every website. Expedia, Orbitz and Travelocity are the biggest online ticket-sellers. Sometimes better deals can be found on Kayak, Hipmunk, AirfareWatchdog, Yapta, FareCompare, CheapOair, Mobissimo and Fly.com. Some airlines, like Southwest, aren’t included on many sites. Look at airport websites to make sure you aren’t missing a carrier.

Fly, then drive.

Some airlines have a virtual monopoly at certain airports, allowing them to charge more. Most search sites can check fares at airports 50, 75 or even 100 miles from your destination.

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Be Proactive About Your Credit After Breaches

May 22nd, 2014 | No Comments | Posted in Financial News

Be proactive about your credit after breachesMike Rosinski, 51, doesn’t really know how a string of fraudulent charges ranging from as little as $3.19 for some odd outfit in Missouri to $434.10 at a Fry’s Electronics in another state ended up hitting his Visa credit card in mid-April.

Maybe, he speculated that it was when a parking lot attendant took his credit card, claimed it wasn’t going through and then said he could park for free? Maybe it was somehow related to getting hacked in the Target incident late in 2013 but that seems doubtful as he was already issued a new card after that one.

Either way, Rosinski, who lives in Hartland, Mich., said he thinks consumers really need to pay attention to their statements and charges. He checks his balances regularly but his wife got an automated call from the card issuer about the suspect activity. He followed up directly with the card issuer, who yes, is going to send him yet another new credit card number.

Like many consumers who just don’t want to deal with any more of the hassles of getting a new card number, Rosinski just wishes more could be done to stop the crooks before they make those charges. Sure, he’s pleased that the issuer had a system to spot the fraud quickly but what about some added security to put a stop to the hacking?

Are we seeing more fraud charges or are we simply more aware that fraudsters are working overtime to get our credit card or debit card information? It could be a little bit of both, experts say. Fraud might be on the rise in part lately because there have been so many significant security breaches, said Adam Levin, chairman and cofounder of Identity Theft 911.

A security breach took place at Michaels Stores and its subsidiary Aaron Brothers. The breach occurred between May 8, 2013, and Jan. 27 at Michaels Stores and may have hit 2.6 million consumers or 7% of transactions during that time. At Aaron Brothers, the breach took place between June 26, 2013 and Feb. 27, 2014, and may have hit 400,000 consumers.

Industry experts say there are many ways someone’s card information can be compromised — ranging from a rogue employee using a skimming device to a consumer responding to phishing e-mails to malware installed at a point-of-sale system at a store. Cyber-attacks can be very sophisticated and criminals often are out of the country.

Some other scams involve what’s known as “micropayment fraud schemes” that charge your card repeatedly for small amounts for rogue Internet pharmacies, fake anti-virus software, jewelry or handbag buying clubs, and online gambling.

The breaches have spurred a push for anti-fraud technology and expanded use of microchip cards that offer more security than magnetic stripes. Target said that next year it will issue chip-and-pin cards for its Redcard branded credit and debit cards.

Right now, though, the flurry of breaches and anecdotal information on fraudulent charges should make everyone more cautious and more willing to spend time going online daily or weekly to track charges on an account.

“The most important action a consumer can do is monitor their account closely,” said Teresa Thornton, senior vice president and director of fraud services for Comerica Bank.

One relative, who does read his bills, told me about a $49.77 charge that was made on his account in Mexico in April. Was it connected, perhaps, to another scam a month earlier when he spotted an fraudulent $11.18 charge from a so-called “BLS WebLearn” on his credit card statement?

My husband’s uncle immediately alerted his credit card issuer about the $11.18 charge and he was told not to pay it. But a new card wasn’t issued right then. Maybe one should have been to prevent the later fraud charges. Sometimes the fraudsters start out with small charges to check if a number is “live” and can be used to make bigger purchases. Or the con artists keep making more fake small charges just to keep the scam going.

The watchdog site called “Krebs on Security” reported on the BLS scam in late March. A new rash of bogus charges for odd amounts, such as $10.37 or $12.96, were being reported by consumers. The charge could also reference PLI Weblearn.

Brain Krebs, author of “Krebs on Security,” has advised consumers to report such fraud immediately to the card issuer. He said it’s also a good idea to request a new card even if the bank doesn’t suggest a new card on the spot. After all, if someone has your card number, odds are good that more fraud charges, big or small, could continue.

Beverly Harzog, a credit card expert and author of “Confessions of a Credit Junkie,” said consumers should not just wait for statements. They should also track their card activity online or through mobile banking as often as they can. By law, credit card victims can only be responsible for up to $50 but many card issuers have zero liability in the event of fraud.

Banks also offer mobile alerts that consumers can set up to alert them to specific types of account activity, including debit card transactions.

Granted, it can be a hassle to actually switch credit card numbers, especially if you have the electric bill or the gym membership automatically deducted from your credit card account. When the number changes, you must alert the company that’s taking an automatic payment so you aren’t hit with extra late fees or charges for missed payments.

Even so, Levin said some consumers might want to request a card number change if they spot more than one or two fraud charges.

“It never hurts to be proactive and even a little paranoid,” Levin said.

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Do Your Investments Match Your Risk Tolerance?

May 20th, 2014 | No Comments | Posted in Financial News

When was the last time you looked at the content of your portfolio?

bepreparedWhen turbulence hits Wall Street, are you stressed out? If you have taken on too much risk in your portfolio – which can happen through intention or inattention – stock market volatility may make you anxious. So from time to time, it is a good idea to review how your assets are invested. Your asset allocation should correspond to your tolerance for risk, and if it doesn’t, it should be adjusted.

A balanced portfolio may help you come out of stock market dips in better shape. Stocks and stock funds aren’t the only investment classes you can choose from, and you won’t be alone if you decide to examine other investment options.

Treasuries, bonds and bond funds become attractive to investors when Wall Street turns especially volatile. Certain forms of alternative investments gain attention as well, particularly those with low or no correlation to the equities markets. Bonds tend to maintain their strength when stocks perform poorly. Some cautious investors maintain a cash position in all stock market climates, even raging bull markets.

Downside risk can particularly sting investors who have devoted too much of their portfolios to momentum/expensive stocks. A stock with a price-earnings ratio above 20 may be particularly susceptible to downside risk.1

Underdiversification risk can also prove to be an Achilles heel. Some portfolios contain just a few stocks – in the classic example, someone has invested too heavily in company stock and a few perceived “winners.” If a large chunk of the portfolio’s assets are devoted to five or six stocks, the portfolio’s value may be impacted if shares of even one of those companies plummet. This is why it is wise to own a variety of stocks across different sectors. The same principle applies to stock funds. If the S&P 500 corrects (that is, drops 10% or more in a short interval), the possibility grows that an aggressive growth mutual fund may dive.1

Are you retired, or retiring? If you are, this is all the more reason to review and possibly even revise your portfolio. Frequently, people approach or enter retirement with portfolios that haven’t been reviewed in years. The asset allocation that seemed wise ten years ago may be foolhardy today.

Many people in their fifties and sixties do need to accumulate more money for retirement; you may be one of them. That sentiment should not lead you to accept extreme risk in your portfolio. You’ll likely want consistent income and growth in the absence of a salary, however, and therein lies the appeal of a balanced investment approach designed to manage risk while encouraging an adequate return.

Why not take a look into your portfolio? Ask a financial advisor to assist you. You may find that you have a mix of investments that matches your risk tolerance. Or, your portfolio may need minor or major adjustments. The right balance may help you insulate your assets to a greater degree when stock market turbulence occurs.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – fc.standardandpoors.com/sites/client/wfs2/wfs/article.vm?topic=6064&siteContent=8339 [5/5/14]

Coping With College Loans

May 20th, 2014 | No Comments | Posted in Financial News

Paying them down, managing their financial impact.

shutterstock_157494935Are student loans holding our economy back? Certainly America has recovered from the last recession, but this is an interesting question nonetheless.

In a November 2013 address before the Federal Reserve Bank of St. Louis, Consumer Financial Protection Bureau Assistant Director Rohit Chopra expressed that college loan debt “may prove to be one of the more painful aftershocks of the Great Recession.” In fact, outstanding education debt in America doubled from 2007 to 2013, topping $1 trillion.1

More than 60% of this debt is held by people over the age of 30 and about 15% is carried by people older than 50. The housing sector feels the strain: in a November National Association of Realtors survey, 54% of the first-time homebuyers who had difficulty saving up a down payment cited their college loan expenses as the main obstacle. The ProgressNow think tank believes that education debt siphons $6 billion of new car purchasing power out of the economy per year.2,3

As the Detroit Free Press notes, the average 2012 college graduate is burdened with $29,400 in education loans. If you carry five-figure (or greater) education debt, what do you do to pay it down faster?4

How can you overcome student loans to move forward financially? If you are young (or not so young), budgeting is key. Even if you get a second job, a promotion, or an inheritance, you won’t be able to erase any debt if your expenses consistently exceed your income. Smartphone apps and other online budget tools can help you live within your budget day to day, or even at the point of purchase for goods and services.

After that first step, you can use a few different strategies to whittle away at college loans.

*The local economy permitting, a couple can live on one salary and use the wages of the other earner to pay off the loan balance(s).
*You could use your tax refund to attack the debt.
*You can hold off on a major purchase or two. (Yes, this is a sad effect of college debt, but backhandedly it could also help you reduce it by freeing up more cash to apply to the loan.)
*You can sell something of significant value – a car or truck, a motorbike, jewelry, collectibles – and turn the cash on the debt.

Now in the big picture of your budget, you could try the “snowball method” where you focus on paying off your smallest debt first, then the next smallest, etc. on to the largest. Or, you could try the “debt ladder” tactic, where you attack the debt(s) with the highest interest rate(s) to start. That will permit you to gradually devote more and more money toward the goal of wiping out that existing student loan balance.

Even just paying more than the minimum each month on your loan will help. Making payments every two weeks rather than every month can also have a big impact.

If the lender presents you with a choice of repayment plans, weigh the one you currently use against the others; the others might be better. Signing up for automatic payments can help, too. You avoid the risk of penalty for late payment, and student loan issuers commonly reward the move: many will lower the interest rate on a loan by a quarter-point or so in thanks.5

What if you have multiple outstanding college loans? Should one of those loans have a variable interest rate (about 15% of education loans do), try addressing that debt first. Why? Think about what could happen with interest rates as this decade progresses. They are already rising.5

Also, how about combining multiple federal student loan balances into one? If you graduated college before July 1, 2006, the interest rate you’ll lock in on the single balance will be lower than that paid on each separate federal education loan.5

Maybe your boss could pay down the loan. Don’t laugh: there are college grads who manage to negotiate just such agreements. In fact, there are small and mid-sized businesses that offer them simply to be competitive today. They can’t offer a young hire what the Fortune 500 can when it comes to salary, so they pitch another perk: a lump sum that the new employee can use to reduce a college loan.5

To reduce your student debt, live within your means and use your financial creativity. It may disappear faster than you think.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – consumerfinance.gov/newsroom/student-loan-ombudsman-rohit-chopra-before-the-federal-reserve-bank-of-st-louis/ [11/18/13]
2 – forbes.com/sites/halahtouryalai/2013/06/26/backlash-student-loans-keep-borrowers-from-buying-homes-cars/ [6/26/13]
3 – realtor.org/news-releases/2013/11/home-buyers-and-sellers-survey-shows-lingering-impact-of-tight-credit [11/13]
4 – tinyurl.com/nouty3k [4/19/14]
5 – tinyurl.com/k29m48y [5/1/14]

Swimming Pool Safety

May 20th, 2014 | No Comments | Posted in Lifestyle

shutterstock_120295276Summer is finally here and we are all ready to spend time outdoors and enjoy the sunny weather. Swimming is a great summer activity but owners of a swimming pool have to remember that there are several responsibilities they must undertake. From poolside party tips to supervision, there are several safety precautions you can take to make sure your friends and family enjoy your pool safely.

General Recommendations

  • A self-locking fence is a great way to isolate your pool from your house and the areas around it. Make sure that the fence is at least 5 feet high so that people who are not allowed to be swimming do not have access without your permission or supervision.
  • As the homeowner, you are responsible for the safety of others in your pool. Do not leave children or guests alone in the event they would need assistance.
  • When toys and inflatables are not being used, remember to remove them from the pool.
  • Do not swim alone in case you suffer a health problem and cannot get out of the pool safely.
  • Post pool rules for all to see in a highly visible area.
  • Cover the pool when it is not in use.
  • Wait at least 30 minutes to swim if you hear thunder or see lightening.

Safety Training

  • Homeowners with a pool should take lifeguard, first aid and CPR courses in case anyone needs assistance while on your property.
  • Enroll children in swimming classes to minimize the chance that they will have trouble at a home pool.
  • Keep a telephone and rescue equipment, emergency numbers and CPR instructions close to the pool.

If you own a swimming pool, make sure you have the proper insurance coverage necessary to avoid any claims and to keep all swimmers safe. Stay safe this summer and have fun!

 

8 Life Lessons From TV Dads

May 20th, 2014 | No Comments | Posted in Lifestyle

Distracted Walking: Cell Phone Use Not Just Dangerous for Drivers, Study Finds

May 20th, 2014 | No Comments | Posted in Lifestyle

cell phone infographic

More than 1,500 pedestrians were estimated to be treated in emergency rooms in 2010 for injuries related to using a cell phone while walking, according to a new nationwide study.

The number of such injuries has more than doubled since 2005, even though the total number of pedestrian injuries dropped during that time. Researchers believe that the actual number of injured pedestrians is actually much higher than these results suggest.

“If current trends continue, I wouldn’t be surprised if the number of injuries to pedestrians caused by cell phones doubles again between 2010 and 2015,” said Jack Nasar, co-author of the study and professor of city and regional planning at Ohio State University. Nasar conducted the study with Derek Troyer, a former graduate student at Ohio State. It appears in the August 2013 issue of the journal Accident Analysis and Prevention.

The researchers used data from the National Electronic Injury Surveillance System, a database maintained by the U.S. Consumer Products Safety Commission (CPSC), which samples injury reports from 100 hospitals around the country. They examined data for seven years (from 2004 to 2010) involving injuries related to cell phone use for pedestrians in public areas.

walkingA wide variety of injuries were reported. One 14-year-old boy walking down a road while talking on a cell phone fell 6 to 8 feet off a bridge into a rock-strewn ditch, suffering chest and shoulder injuries. A 23-year-old man was struck by a car while walking on the middle line of a road and talking on a cell phone, injuring his hip.

Nasar said a more accurate count of injuries to walkers might come from comparing distracted walking to distracted driving, which has been much more heavily studied. If the pedestrian numbers are similar to those for drivers, then there may have been about 2 million pedestrian injuries related to mobile phone use in 2010.

“It is impossible to say whether 2 million distracted pedestrians are really injured each year. But I think it is safe to say that the numbers we have are much lower than what is really happening,” Nasar said.

As might be expected, young people are the most likely to be injured by distracted walking. The 21- to 25-year-old age group led the way, with 1,003 total injuries during the seven years covered by this study. The 16- to 20-year-olds were not far behind, with 985 total injuries.

“As more people get cell phones and spend more time using them, the number of injuries is likely to increase as well. Now people are playing games and using social media on their phones too,” he said.

Nasar said he believes the best way to reverse these numbers is to start changing norms for cell phone use in our society. And that starts with parents. “Parents already teach their children to look both ways when crossing the street. They should also teach them to put away their cell phone when walking, particularly when crossing a street.”

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Would An Inheritance Ruin Your Kids’ Ambition?

May 20th, 2014 | No Comments | Posted in Lifestyle

shutterstock_178461182

An inheritance can give your children just the financial boost they need. They could use it to pay off lingering debt, for a house down payment, to contribute to a kid’s education or just to provide extra peace of mind. But if you’re concerned about some of the undesirable effects an inheritance can have on your children, you aren’t alone.

Many of my clients want to leave money to their kids, but they’re concerned that their children are ill-equipped to handle sudden wealth. Some worry that providing too much money will rob their children of the very ambition and work ethic that it took to amass the wealth they want to pass down.

What’s your view of inherited money? Is it an “initiative sucker,” as CNN’s Anderson Cooper (who’s the son of Gloria Vanderbilt) recently called it, or can it be used to create a better and more fulfilled life?

In my sudden wealth management firm, I’ve found the answer is a resounding yes to both. Yes, it can cause some beneficiaries to lose their drive and ambition. But also, with the proper work and structure, those who inherit can use the money as a tool to create meaningful lives of their own.

However, many parents who aren’t convinced their children are ready to handle wealth aren’t idly sitting by hoping their children have a sudden flash of financial acumen. Instead, these parents are taking matters into their own hands.

If you’re also concerned about gifting or leaving your children an inheritance, consider these popular strategies:

1. Give your kids a financial test. Each person can gift up to $14,000 (in 2014) per year to as many people as they wish without any federal gift-tax consequence. If you’re married, both you and your spouse can give $28,000 per person. Some parents are gifting their children money without any restrictions or rules, and then sitting back and watching what happens. But how would your children handle a $5 million inheritance? Instead, why don’t you see what they do with $20,000 first? Do they save it? Do they ask for help? Do they pay off debt? Do they blow it in Vegas?

2. Use incentive trusts. The fear of many parents (and apparently Anderson Cooper) is that too much money can squash ambition and drive. The image that keeps many affluent up at night is the idea that their kids will be robbed of zeal to make an impact — this same zeal and inner drive that pushed them to make their own mark on the world.

The solution for many parents is to use incentives within a trust rather than leaving a large inheritance outright. The incentives can be as creative as you can imagine. For example, a common incentive — euphemistically called an “investment banker clause” — calls for trust distributions that match the child’s income. If Susie makes $75,000 from her job, the trust will distribute $75,000 to her each year. If her younger brother Johnny spends too much time playing Xbox and makes only $22,000 a year, the trust will distribute just $22,000 to him.

The built-in incentive with this clause is, of course, to make money. But what if Susie wants to join the Peace Corps? You can add language that will ensure distributions if your child is involved in a nonprofit. Again, the sky is the limit when it comes to drafting who gets what and when.

3. Tie distributions to ages and events. Think back to when you were 20 years old. Would you have been emotionally and intellectually mature enough to handle a large inheritance? Many parents create their trust so that their kids get a small amount of money each year and larger amounts when they reach certain ages (e.g., 30, 35, 40). They will also allow for trust distributions to pay for college expenses, weddings or house down payments.

A popular strategy is to distribute income from the trust assets when the kids are young and then to distribute principal when they’re older and, ideally, have a career and greater financial sophistication. Estate planning attorney Mark Ziebold sees many trusts set up to distribute at certain ages, but under the laws of most states, this destroys the possible protection that parents can provide for their kids in trust. He says:

“Instead of distributing assets at certain ages outright and free of trust, consider having your estate attorney draft provisions into your trust that keep the assets in trust for your child for life, but that if certain ages or triggering events occur, the child will be able to become their own trustee over their lifetime trust. Instead of outright distributions at 30, 35 and 40, consider allowing them to be trustee of one-third of their trust at 30, trustee over one-half of the remaining at 35 and trustee over the entire trust at 40. Alternatively, they can at a certain age be a co-trustee with an independent trustee and be involved in the entire process of the trust administration. These ideas allow the child to either be their own trustee or involved as a co-trustee, manage their assets inside of the trust and keep the protection of the trust structure in place for their lifetime.”

4. Get your kids involved in a personal foundation. If you have children still living with you, creating a personal foundation can be a wonderful opportunity to support causes you believe in, get a nice tax deduction and more important to our point, teach kids about money. One of my clients sold his business and overnight was worth more than $25 million. He and his wife had three young kids, and they were worried that the dad’s strong work ethic would be lost on the kids now that they could have anything they wanted.

So, we created a personal foundation, and because it was required to disburse 5% of the foundation’s balance each year, we gave each family member the responsibility of researching a cause and donating 1%. This got each of the kids excited about their own cause and seeing how their money could have an impact. It was a great learning experience for the whole family.

5. Give without giving cash. Here’s another win-win alternative to outright gifting. Clients can use their annual federal gift exclusion (that $14,000 or $28,000) to directly pay down either an adult child’s mortgage principal or school loans. This can make a significant financial difference to the child’s future while not putting cash in their hands today. Many parents realize that mortgages and school loans are substantially larger now than in their time, so helping reduce that huge burden is a rewarding proposition for both generations.

6. Teach them early. If you still have young children, now is a great time to begin their financial training. Los Angeles estate attorney Bruce Sires suggests that you “start early to avoid the worry.”

He goes on to recommend:

“Give them an allowance, and discuss with them how they’re going to spend it. Maybe give them some ‘ideas’ like saving part of it or giving part of it to a charity that’s important to them. If you start early and they see the value of saving, when they get to middle school they can start investing. They will learn the value of money, and you will be a better guide by watching what they do, or don’t do, and encourage and reinforce the positive. Don’t fall into the trap of showing them what a great investor you are. It’s all about their future.”

As a parent, you want what’s best for your kids. It’s natural and reasonable to worry how a large inheritance will affect their drive and choices for life. However, with some planning, money can be a tool that enriches their lives rather than an anchor that drags them down. Consider these strategies and talk to your financial advisor and estate attorney for more ideas.

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