Budgeting

Americans today are feeling more financial pressure than ever. In mid-2024, credit card debt reached $1.142 trillion—a record high since 1999. Why is this happening? The cost of living keeps going up, and it’s outpacing many people’s incomes. Groceries, rent, healthcare, and other essentials are becoming more expensive. To keep up, more people are turning to credit cards. But relying on credit to cover everyday needs has serious risks. It’s a form of borrowing from future income, and it can quickly lead to overwhelming debt. Rising Expenses are Creating Financial Pressure The rising cost of living affects almost every area of life. Prices for housing, food, and transportation have all climbed. One of the reasons housing prices keep rising is due to increased demand. Over recent years, millions more people have moved to the U.S., adding to the population and increasing demand for homes. But the housing supply hasn’t kept up with this rapid growth, which drives up rents and home prices. These rising housing costs hit middle- and lower-income families especially hard. Many don’t have enough savings to handle these higher bills. When prices increase, they often rely on credit cards to bridge the gap. This means they’re borrowing against future income, making it harder to manage new expenses as they come. How Energy Costs Drive Up Other Expenses Energy prices are also a big part of this problem. They’re quietly driving up the cost of many things. Here’s how rising energy costs affect us: The Risks of Borrowing Against Future Income As expenses keep rising, more people turn to credit cards to cover daily costs. But relying on credit creates future debt. The more you use credit now, the less income you’ll have left for other things later. High interest rates on credit cards—often above 22%—mean debt can grow fast. Paying down this debt becomes a struggle, especially when people have fixed costs like rent or car payments. Without extra income, the risk of falling behind and defaulting grows. Steps to Avoid the Debt Trap To avoid borrowing too much from your future income, try these steps: Protecting Your Financial Future When the cost of living rises faster than wages, it’s tempting to rely on credit cards. But borrowing from future income can lead to serious financial problems. Understanding how rising costs, energy prices, and housing demand affect your budget helps you plan ahead. Small steps now can reduce debt, save more, and protect your financial future.

CREDIT BUILDER BLUEPRINT® What is missing in the credit credit service organization industry? Communication… And not the standard communication concerning an update on a file and the dispute process. I am talking about REAL communication, consulting, advising, coaching, however you want to describe it.  You need communication. Communication that is inspiring… cultivating accountability. There are responsibilities that we all must take on to be successful with our money, our friendships, our lives, and our future. There is a lot of information that can be integral to supporting your journey, information relating to how to handle collection calls, debt settlement strategies, money management and budgeting concepts. What might you expect to see in the ways of settlement options on collections, judgments, and charged off accounts. When should you make contact, how much should you be budgeting each month to prepare yourself financially for the opportunity to make amends toward outstanding debt obligations There is so much more to what it takes to not only succeed in your short term credit related goals, but to maintain a healthy relationship with money that helps you to avoid the stresses and pains of living paycheck to paycheck with no room to breath. With all this said, and so much more, really all I wanted to do is introduce to you, the Credit Builder Blueprint®, a personalized book prepared and created from a professional credit assessment of your current credit profile in correlation with your credit related goals. It helps to lay out the foundation of the Credilife® Credit Improvement Program, along with information, education, and credit related tips to support the recommendations. The blueprint includes a summary of your current credit status and what you can expect over the course of your immediate journey.   From the information that will be investigated through our factual technical investigation process, to a detailed breakdown of what needs to be done on a rebuilding and management path based on your goals, the any timeline surrounding them with respect to the status of your current credit profile. There may be instructions related to specific secured or unsecured credit card options, specialized lines of credit depended on the current or forecasted credit status, and installment accounts specific to the process of building positive payment history! Our vision and mission is to always provide you with a realistic path to success. Once again everything is based on your financial situation, personal goals and aspirations, and timeline around their goal! If you are looking for more information on how to improve the strength of your credit profile or have someone you would like to refer, please do not hesitate to contact us today! [vcv_sidebar key=\”\”]

A strategically minded individual with a keen sense of competitive intelligence and market analysis. Highly experienced in driving sales initiatives to boost sales in order to meet objectives. Proven ability to work independently and in a team setting with equal ease. My mission is to help people. I found my passion surrounds a holistic approach to helping people improve and better understand their credit, and the satisfaction in this work is directly related to helping these same people to achieve their specific credit-related goals, like mortgage approval. In this process, however, I also work closely with my clients by providing education and motivation to better their financial position through budgeting, strategic planning, and the restructuring of debt. I take the time to push my clients to become their best! It\’s truly inspiring to be a part of helping someone better themselves and achieve their financial and credit-related goals!

Educate yourself now and enjoy a more secure financial future. As a young adult, in most cases, the initial step to building credit will be to obtain a credit card that reports to all three national credit bureaus, Equifax, TransUnion, and Experian. This can be a major step for your financial future because it is a valuable tool that creates many benefits for you later on. Meaning better FICO credit scores, lending power, and having a more established credit profile early on. Why is credit important? You begin to establish a credit profile through reporting information that builds credit history. By doing this and managing these specific accounts correctly, it will lead to a higher, positive credit score. How to be credit-wise! Responsible use with your credit card can help build a good credit score as well as achieve independence and financial freedom. It also will make it easier to reach your short-term and long-term goals like renting a place to live, being approved for an auto loan and buying a vehicle, or better yet, being approved for a mortgage and buying a home! What is a FICO credit score? FICO is a widely used calculation based on multiple factors concerning your credit history and current reporting accounts. Essentially a mathematical algorithm to evaluate risk based on the information reporting within our credit report by each separate reporting agency. A low score indicates poor credit history which equates to a higher risk. A high score indicates a good credit history which can easily offer many advantages, like better interest rates on loans or credit cards, higher credit limits, and approval for higher valued loan options like auto and mortgage, as well as business lending opportunities! Also when looking to be approved for renting, having a high score indicates the landlord can trust you to pay your rent on time each month. Stay on top of your credit! It is your legal right to pull a credit report once a year for no cost. www.annualcreditreport.com is a great resource and I would recommend pulling a report once every 4 months, essentially pulling one report from each credit bureau at the 4-month mark, so you are able to monitor your credit more frequently at no cost.

There are few of us out there who would attempt to build a house without following a blueprint. And for good reason: one poorly placed beam and your home could come crashing down. Yet when it comes to our finances, so many of us choose to forgo that all-important money blueprint: a budget. A 2013 Gallup poll found that a whopping two-thirds of Americans don’t have a detailed household budget. But without a budget, it\’s hard to know how much money you have coming in and going out, much less whether you\’re able to reach any money goals you have for yourself. So we put together an easy-to-follow insider’s guide to setting and sticking to a successful budget — all in a month\’s time. Week 1: Categorize Your Expenses First things first: Where does your money actually go? Take the week to add up all your expenses in black and white. We like to categorize our expenses using the guidelines found in our handy One-Number Budgeting Strategy: Fixed costs: This bucket is for steady, predictable bills that are pretty much the same every month. Think utility bills, your rent or mortgage payment, a cellphone plan, your car loan, and so on. Also include the minimum payments you have to pay on any credit cards or loans you have. Include bill due dates and interest rates, if applicable. Financial goals: What big-picture money goals are you putting away for right now? Everything from the extra money you put toward eliminating debt to saving for a dream vacation to shoring up your rainy-day fund goes under this umbrella. Non-monthly expenses: This category often gets overlooked, but we’re talking about bills that pop up at random times of the year — car registration fees, annual insurance premiums, kids’ summer camp, and the like. “Those are typically the expenses that throw your budget off on a monthly basis,” says Dominick Deangelis, CFP®, a financial planner with LearnVest. “To get ahead of the curve, add up all those expenses for the year and divide it by 12, then treat that as a monthly bill.” Then put that \”bill\” into a separate savings account, so that the money will be at the ready when those non-monthly costs come due. Flexible spending: This one’s reserved for day-to-day expenses that tend to go up and down each month, including things like entertainment, shopping, groceries, and gas. To pinpoint what your spending limit should be here, take your monthly take-home pay and subtract your fixed costs, financial goals, and that monthly amount you\’re putting away for non-monthly expenses. Then divide what’s left by 4.3 — that’s how much you can spend each week in this category without busting your budget. Week 2: Identify Any Additional Financial Goals You Want to Save For Big-picture financial goals rightfully play a vital role in any solid budget. Similar to non-monthly expenses, they’re best-approached bit by bit, says John Smith, a financial planner with LearnVest. Whether you’re out to pay off your highest-interest student loan or up your monthly retirement contributions, identify what your larger-scale goals are. Then break them down into month-sized increments (e.g., saving $100 a month for a vacation next summer, an extra $50 into an IRA). Add these to your monthly budget. Deangelis also suggests keeping your list to two or three goals at a time to increase your odds of success. Can you comfortably account for these goals in your budget, along with what you\’re spending day-to-day? If your numbers need some finessing, here\’s how to put a new-and-improved budget into action. Week 3: Prioritize Where Your Money Goes Here\’s where you may need to do some reallocating of your money, belt-tightening, or both. Now that you see where you spend your money and compared it with what your goals are, it\’s time to get serious. “You might find that there isn’t enough money left over to do everything you want, and that’s a real ‘rubber hitting the road’ moment,” says Marie McNabb, a Seattle-based CPA, and financial therapist. To start, it\’s always important to be saving for retirement, even if it\’s just a small percentage of your salary, as well as working toward at least one month of take-home pay in an emergency fund. So keep those goals as part of your budget, if you\’re not including them already. After that, figure out what you need to tackle next (hint: getting rid of high-interest debt is always a good thing). Then think about other things you want to save for, like a starter home, a college fund for your kids, or a vacation. Ultimately, you\’ll find creating and sticking to a budget is a matter of trade-offs. Can you still work toward your priority goals with the amount you\’re spending now? “Think about what you want long-term for yourself and face any temporary limitations,” McNabb says. “Maybe that means you eat out twice a week instead of three. If your goal is to own a house in three years, that may have to be the choice you make.” It’s worth reasonably scaling back on flexible spending or cutting out larger recurring expenses if that ultimately gets you over the finish line of a big-picture goal. And here\’s a pro tip: Keep savings in a separate high-yield account so you\’re not tempted to tap into it. Week 4: Monitor Your Progress “For a lot of us, ‘falling off the wagon’ and overspending can be so discouraging that we don’t want to look at our budget and see the damage,\” Smith says. \”Checking in on a routine basis stops that cycle, giving you time to get back on track if you go off course.” Tracking your spending on a weekly basis is ideal — hence why we suggest dividing your flex spending by 4.3, so you always know how much you\’re working with each week. But you can check more frequently if it helps. “Everybody has online banking, so what you can do is go through your transaction history, once a week or even daily, and gauge how you’re doing,” Deangelis says. It\’s also important

Originally posted by Vickie An at LearnVe$t There are few numbers that can make you feel prouder about your money-management skills than a strong credit score. And for good reason: Lenders use credit scores to determine everything from the interest rate on your mortgage to whether you qualify for the juiciest credit card rewards. So if you’ve worked hard to reach a score of 700 or higher (generally considered entering the “good” range), that means you’ve been doing something right—and are likely to be rewarded for your financial diligence. Want More? “Your credit score is a number that is representing you to the world,” says April Lewis-Parks, director of education and public relations at credit counseling organization Consolidated Credit. “So the impact, financially, of having a good credit score is huge.” It means you’re attractive to lenders, who may then offer you loan terms that those with a lower score wouldn’t qualify for. That said, it’s important to remember that your credit score isn’t the be-all and end-all of your financial health. It’s entirely possible to have a decent score and still struggle with debt—or at the very least, make decisions that aren’t necessarily good for your money in the long run. To understand how this could happen, we asked credit and financial pros to share some scenarios that illustrate how it’s possible to have a strong score but still be making some less-than-stellar money moves. You’re never late on your payments … but only pay the minimum each month. Meeting that payment-due deadline on time is one of the most important ways to keep your credit score strong—after all, payment history makes up a hefty 35% of your FICO score (one of the most common credit scores used by lenders, and the one we’ll be focusing on here). However, if you’re just paying the minimum amount due and carrying a balance every month, you’re digging yourself into a debt hole that could take years to dig out from—especially if your interest rates are high, explains Katie Ross, manager of education and development at American Consumer Credit Counseling, a nonprofit credit counseling agency. Ross offers up this hypothetical example: Some credit card issuers set their minimum payments at just 2% of the total balance. So if you owe $5,000 on an account with an 18% APR and only pay the minimum of 2% each month, it will take more than 44 years to pay off your account. Plus, you’ll have paid more than $12,400 in interest—money you could be allocating toward goals like your emergency or retirement fund. On top of that, even if you’re not getting dinged for late payments, paying only the minimum means you’re potentially increasing your credit utilization rate—a separate factor in calculating your credit score (more on that below). You have a low credit utilization rate … but it’s because you keep applying for new credit. The amount you owe on your credit accounts makes up 30% of your FICO score, and a key factor in this calculation is your credit utilization rate—that is, the total amount of debt you owe divided by the overall credit limit available to you. “If your utilization ratio is higher than the recommended 30% to 35%, it may not reflect well on your financial stability,” says Ross. One way people may try to improve their credit utilization rate is to increase the total amount of credit they have to their name. That strategy, however, has the potential to backfire because it could 1) discourage you from being more aggressive about paying down what you owe; and 2) tempt you to keep spending, because you have more credit to spend against. “Just because a credit card company wants to lend you more money or increases your credit limit does not mean you can afford to [spend more],” says Lauren Zangardi Haynes, CFP®, of Evolution Advisers in Midlothian, Virginia. “If you already have a credit card and you ask [the company] to increase your limit, and they do, great—as long as you’re not going to max it out.” Indeed, one instance in which it might be tempting to open a new credit card is if you’re already close to maxing out one that you have. Lewis-Parks illustrates this scenario: Say you have a credit card with a $4,000 balance, and that card has a $5,000 credit limit; your credit utilization rate on that account is a whopping 80%. Then you receive an offer in the mail for a new card with a $12,000 limit, which will let you transfer your balances for a limited-time 0% APR. Once you transfer that $4,000 over, your credit utilization ratio is a much more favorable 33%. But here’s the rub: “People consolidate their debt and still have the other line of credit open, so they end up charging up both cards,” Lewis-Parks says. Plus, once your 0% teaser rate expires, the APR on any debt you have will likely shoot up—potentially putting you in worse shape than when you started, she adds. Increasing your available credit boils down to this: “If you know that credit cards are going to be very tempting to you, then you should not open a bunch of credit cards,” Haynes says. Plus, remember that every time you apply for new credit or a loan, it triggers a hard inquiry on your account, which could ding your score by a few points—particularly if you apply for multiple lines of credit in a short amount of time. Your strong credit score qualifies you for a large loan amount … and you borrow to the max. As we mentioned earlier, the better your credit score, the more likely you’ll be to receive favorable terms from lenders, like lower interest rates and higher borrowing limits. But it’s important to reiterate: Just because you can borrow a large amount of money doesn’t mean that you actually should. Haynes says she sees this spring up often when it comes to getting qualified for a mortgage. Homebuyers will often borrow the largest amount

Whether from some unexpected, big-ticket costs or just a steady lifestyle creep, it’s easy to turn to a credit card (or two, or three) to bail you out in your time of financial need. But while this seems like a quick and painless fix at the moment, paying off those balances may not be so simple when the bill finally comes. And once you have multiple card balances competing for your attention, things can get even trickier. If you find yourself in this credit card debt spiral, know that you’re not alone. Among U.S. households with debt, an average of $15,675 is from credit cards, found a 2015 NerdWallet study. And with just 35% of consumers paying off their bill in full each month, according to the Federal Reserve Bank of Boston, the majority of people are often paying more than they bargained for … in interest. Ready to break free from the cycle and pay off those balances once and for all? We tapped LearnVest’s own Natalie Taylor, CFP®, for some tips on the best way to pay down your credit card debt. Before You Get Started To make sure you’re in a good place to start tackling your credit card debt in earnest, you should first look at your bigger financial picture. “Your emergency fund is the first focus before putting extra payments toward any credit card debt,” says Taylor, who recommends stashing away at least one month’s worth of your take-home pay to start. That way, should any unexpected expenses come up, you won’t have to resort to using a credit card to foot the bill (again). Once that initial cushion is in place, you’re free to turn your attention toward your credit card debt, but be sure to keep adding to your emergency fund until you’ve reached your final goal, whether that’s three, six, or nine months of your take-home pay. Next, Taylor advises taking a look at your credit report (you can pull a free report from each of the three major credit bureaus—Experian, TransUnion, and Equifax—once a year throughannualcreditreport.com) to ensure there are no errors and also to take stock of all your debts. You don’t want any forgotten balances slipping through the cracks when devising your payoff plan. Finally, one of the most important preliminary steps, according to Taylor, is to stop using your credit cards altogether. Before we lose you completely, this doesn’t have to be a forever decision, but it is a necessary step to making actual progress on your debt. By pressing pause on the plastic, “it’ll make progress more clear to see,” explains Taylor. “It’ll ensure you’re not overspending, which really means that as you pay off your credit card, you can actually stay out of debt moving forward.” Which Balance Should You Tackle First?* If you’re like most people, you have more than one credit card, each with its own balance, minimum payment, and interest rate. Once you’ve confirmed all of your debts are accurate and accounted for, note the stats for each card to determine the order in which you’ll pay them off. “In general, it makes sense to focus on one card at a time,” says Taylor. “And typically, the one with the highest interest rate is the first place to focus, just because it’s costing the most to keep a balance on it.” Think interest rates don’t matter? The average consumer spends more than $2,500 a year paying off the interest alone, according to NerdWallet. Focusing on one card at a time allows you to make the most progress in the least amount of time, since all of the funds you’ve set aside to pay down your debt can go toward one balance, instead of being split up among many. One exception to this rule, Taylor explains, is if you have one or two cards with balances so small they can be knocked out in a month or two. If that’s the case, you may choose to prioritize those cards instead, in order to cross some debt off your list quickly and help motivate you to keep going. And if your cards have identical interest rates, Taylor advises tackling the card with the lower balance first, for the same reason. “You’ll hit a progress milestone more quickly, and it’ll feel better.” It’s also important to keep in mind which cards (if any) have introductory offers and when they’re set to expire, as this could potentially move those cards up on the payoff priority list over time. Set calendar reminders for when the APR is going to change, so you won’t be hit with any unwelcome surprises and can readjust your plan accordingly. Time to Take Action Now that you know which card to tackle first, it’s time to start paying off that balance. “A budget is key to a lot of this,” says Taylor. “We can put credit card debt into two categories: One is overspending over time, and the other is large expenditures. An emergency fund will help with [the latter], and a budget will help with the [former], making sure you’re not continuing to overspend.” Once you’ve reviewed your budget, decide on a reasonable amount you can dedicate to your credit card debt, and then apply any extra amount to your top-priority card, making payments larger than the minimum until that card is completely paid off. (In the meantime, you’ll be paying the minimum amount due on the cards lower on the priority list.) Once your top-priority card has been paid off, you can set your sights on the next one. Not sure where the extra cash can come from? Taylor recommends allocating funds from a specific source, like a side gig, solely for your debt payoff. “It can really give a purpose for that extra work and allow you to see progress really quickly.” And even though your other cards may not be a priority at the moment, it’s important not to fall behind on them. Taylor suggests setting them to auto-pay for the minimum amount each month, so you can avoid dreaded late fees and your credit won’t be negatively affected.

A lot of traditional budgeting advice tends to focus on eliminating the little luxuries in life that can add up over time, like that morning latte or weekly happy hour. It’s true that you can save more by cutting out these types of costs, but there’s another factor you have to keep in mind: your own motivation. If you constantly feel deprived by your budget, chances are you won’t be motivated to stick with it long-term. (Plus, no one should judge you for needing a daily java kick.) If this sounds like you, it may be time to re-think your spending strategy. “We call it ‘savor what you spend,’” says David Blaylock, CFP®, a financial planner with LearnVest Planning Services. “Spend on the things that you savor, that you enjoy, and don’t spend on the things you don’t enjoy.” In other words, it is possible to cut expenses without nixing everything that you love. How? Start with these six pieces of advice below. 1. Rethink Your Total Food Spending Take a look at your past credit card statements to see how much you’re spending in total on food (yes, that includes your Seamless orders). If it comes close to what you spend on your rent or mortgage, then you’re likely spending too much of your take-home pay on feeding yourself (consider that the average American spends about 12.5% of their total budget on food, according to the Bureau of Labor Statistics). Before you balk, we’re not saying you have to put your social life on hold or cut the takeout completely. It’s more about trying to set a realistic weekly food spending amount that you can allocate however you’d like, whether that’s in a restaurant, a grocery store or on your delivery guy, Blaylock says. Finding the perfect number for you depends on the size of your family and food prices in your area, but you can refer to your past spending as a guide and pare it down from there. You’ll likely find that there are small things you can do to scale back, little by little, that won’t require too much extra effort. The real benefit to having a weekly spending amount to wrap your head around is that it’ll make you more mindful of where your money is going. It may, for instance, make you realize that your salad-bar creations are triple the price of one you can make at home that’s equally delicious. You can then use those insights to make better food-buying choices. How much you’ll save really depends on how strict you want to be with yourself. “You can save as much or as little as you want,” Blaylock says. “But either way, you’re probably better off than you were before just by being aware of it.” 2. Trim Energy Costs to Go (and Save) Green You’ve heard it a million times, but adopting energy-saving practices can significantly reduce your utility bills, Blaylock says. Even if you already practice the obvious, like turning the lights off when you leave the house, chances are there’s room for improvement. First, get in the habit of unplugging devices that aren’t being used. The Department of Energy says appliances such as TVs and computer chargers that stay plugged in when you’re not using them can add 10% to your utility bill. Want an effortless fix? Set up a few advanced power strips, which cut back on wasted energy. All in all, the switch could save you $200 a year. It also pays to find out if your electrical company offers lower rates at off-peak hours. If it does, take advantage of this perk and do your laundry or run your dishwasher during those times, Blaylock says. 3. Nix Subscriptions You Barely UseThe ease of auto-pay and today’s subscription-crazed world has made it all too likely that you’re paying for services that you no longer need, or even use. Assess your current lineup by printing your last few credit card statements and reviewing any recurring payments. Spot any obvious places to cut? (For instance, do you really need Pandora and Spotify?) Going on an unsubscribing spree might not seem like it’ll have a big impact, but these cuts could add up to a good chunk of change. “Forty dollars here, $10 here or $50 here, next thing you know we’re adding $400 to $500 a month back into your savings account or retirement account — and that’s real progress,” Blaylock says. 4. Shop Around for Better Insurance Rates Between health, homeowner’s, auto, etc., paying for insurance can take up a huge portion of your monthly budget. The key to keeping your premiums in check is to be a smart consumer. Do your due diligence and shop around to make sure you’re getting the best rates or best deals for your money, Blaylock says. Health insurance is in a category of its own that makes it tough to negotiate. But things like auto insurance that can creep up over time, sometimes after only two or three years, are worth revisiting periodically. “It makes sense to go check that premium against another competitor just to see what that rate would be,” Blaylock says, adding that he’s reduced his auto insurance premium by more than 25% by switching to a new company. “It doesn’t take more than your time to get a quote.” 5. Pare Down Your Phone Plan You may not be able to live without your phone, but you still don’t want it to be the thing that drives your budget into the ground. To get the best deal, make sure you’re on a family plan. No family of your own yet? Recruit your parents, siblings or significant other — it’s a good move even if it means Venmoing your brother directly for your portion of the bill, Blaylock says. For example, a family of four can access unlimited data for $45 each through Verizon, which is a much better deal than the $80 you’d need to spend when flying solo. Speaking of data, take a look at your recent

If you’re a parent, you very likely want to give the world to your children. If money really did grow on trees, you’d be out there in your backyard on a daily basis, ensuring your child could experience all the things that life affords—a fully-funded college education included. However, the reality is that we have multiple financial goals at any given time and only a finite amount of money. So when it comes to taking care of your financial future versus funding a college savings account so your children aren’t burdened with loans, how do you decide which comes first? Round one: The fight for putting retirement first According to this survey, 47% of parents believe it’s more important to save for their kids’ college than their own retirement. While it’s commendable to want to put your kids first financially, the fact is, you have to put your retirement savings first. Ultimately, you’re responsible for providing for your own future, and self-directed savings accounts such as 401(k)s, IRAs, and Roth IRAs are there for you to take the reins in maintaining financial stability throughout your retirement. The bottom line: while your children can earn scholarships and take out loans for college, you won’t be able to take out a loan to fund your retirement. Considering playing catch-up? If you plan on putting college savings first and then focusing on retirement savings, keep in mind that you can’t control the stock market and you’re losing out on precious time that your money could be working for you by delaying saving. Not to mention, there’s the possibility of extended unemployment, sickness, disability, or more that could leave you strained to even reach college funding and would result in a really painful situation for retirement. This could result in you having to depend on your children to support you during your retirement years, which would defeat the purpose of you stashing money away for them on the front end. Round two: Fund your retirement When it comes to saving for your retirement, start by contributing to a tax-advantaged retirement account. Depending on your employer, this may be a 401(k), 403(b), or some other type of tax-deferred retirement plan. There’s also the option of a Spousal IRA for stay-at-home spouses, SEP IRAs, and Solo 401(k)s for the self-employed or a Roth IRA for those who believe tax rates will be higher during retirement and are looking to pay the taxes today to save in the future. Round three: Plan for college savings Let’s face it—college can be expensive. However, planning ahead and getting the whole family involved can ensure you all land on solid financial ground. Consider options for applying for financial aid by submitting the Free Application for Federal Student Aid (FAFSA). Also look into grants and scholarships that could cover portions of tuition, books, and fees. There’s also the option of working part-time while in school to help cover expenses. If you do decide to open educational savings account for your children, the 529 plan is a popular option. This account offers federal tax advantages similar to a Roth IRA. Taxes are paid on the money before you deposit it. It grows over time and all of that money (principal, earnings, and gains) can be withdrawn without any additional taxes when used toward qualified education expenses. Depending on which plan you choose to go with, some states also offer tax breaks on state income taxes. These accounts allow you to choose mutual funds or other similar investments and allocate them based upon the time frame until your child will begin school. It is possible to plan for both retirement and college; however, the focus must be on fully maximizing retirement savings to start and then stashing away what you can into a college savings account. Plan for yourself first and then get creative to fund education expenses. Author: By Mary Beth Storjohann | WorkableWealth.com

Scroll through any parenting site and you’re bound to find lessons on teaching your kids about the A-B-C-s, 1-2-3-s, or maybe even the birds and the bees. But money? Not so much — even though it’s just as important to their well-being. Teaching kids about money not only enhances their financial savvy, it also imparts other valuable life skills, such as being responsible, learning to prioritize, and delaying gratification. But it is possible to steer your children the wrong way, too — and likely without you even realizing it. Below, we’ve rounded up some common mistakes parents may make when it comes to kids and finances, as well as some advice from the pros on how to make sure your little ones are learning the right kinds of money lessons. Money Mistakes to Avoid With Kids 5 and Under Not talking about money at all. Your little one picks up on the concept of money starting when he’s just 3 or 4 years old, says parent educator Vicki Hoefle. So if you don’t openly talk about it, your child may end up making his or her own (often inaccurate) conclusions, according to researchers from North Carolina State University and the University of Texas. In other words, your reticence doesn’t mean that you’re not sending a message. “A core mistake is not realizing that, whether or not you’re choosing to consciously and intentionally teach children about money, you’re still teaching them about money,” says Elisabeth Donati, owner of Creative Wealth International, who runs a financial literacy camp for kids called Camp Millionaire. Giving allowance based on behavior, grades, or chores. This is considered a mistake because it teaches your toddlers that they will be rewarded with money for behavior that they should be doing anyway, such as being nice to their siblings or putting their toys away. Instead, Hoefle suggests giving each child a flat amount each week that’s equal to his or her age. Your 3-year-old, for example, would get $3 a week that she can spend on whatever she’d like, such as a treat at the grocery store or a toy, after she’s saved a few weeks’ earnings. This introduces them to tasks like saving, spending, and budgeting. Money Mistakes to Avoid With Kids 6–10 Openly disagreeing with your partner on finances. Couples enter relationships with their own financial habits, and oftentimes those are at odds. Arguments between a spender and a saver, for example, could leave kids wondering which parent is right, Donati says, adding that kids generally start picking up on tense money talks around age 6. That association can negatively impact a child’s financial future. One study in the Journal of Family and Economic Issues found college kids whose parents frequently fought about money were more likely to have $500 or more in credit card debt. Thinking kids are too young to understand investing. Nine- and 10-year-olds can generally grasp the concept of investing, Donati says. At Camp Millionaire, kids play a game where once they’ve saved enough, they can buy an asset — real estate or stocks, for example — and collect passive income. “This light bulb goes off for the kids and they go, ‘Oh, I didn’t have to work for that $100!’ ” she says. Lesson learned. Judging the way your child spends money. While you can maintain veto power over certain things like buying violent video games or tickets to R-rated movies, it’s best not to give hard rules for what your kid can or can’t do with his allowance, Hoefle says. If you constantly disapprove of their junk-food spending habits, for example, “they’re going to start sneaking, and now you’ve attached something negative to money,” she explains. So if your 7-year-old wants to spend his entire allowance on candy, let him. But tell him for every cent he spends on Skittles, he has to put a penny in the health jar to cover potential cavities. “They begin to develop self-control and self-regulation, and it’s taught around having a few dollars a week,” Hoefle says. Don’t worry that the allowance money will go to waste. Hoefle says kids usually start to make more thoughtful choices within six weeks, and they’ll have picked up valuable money lessons along the way. As a bonus, having access to money helps kids develop and pursue their own interests. They may surprise you by buying a chemistry set you never would have thought to buy for them, for instance. Money Mistakes to Avoid With Kids 11–17 Thinking an allowance is enough to teach kids about earning. Once your child reaches 12, reevaluate the allowance-based-on-age strategy. At that point, cut the allowance in half to $6 a week, Hoefle says. By that age, “Kids will be able to go out and get jobs around the neighborhood — stacking wood, walking dogs, mowing lawns,” she adds. Then, by 14, the allowance could go away entirely because in many states they’ll be old enough to work part-time. Again, allow your kids to spend their hard-earned money on what’s on their wish list, whether that’s popcorn for a family movie outing or a pair of designer sneakers. “Over time, you’ve expanded their awareness about money,” Hoefle says. “They’ll have to realize what’s important to them.” Bailing your child out of a jam over and over again. So your teenager got into a fender bender — for the third time this year. Do you rush to the rescue and write a check for the damage, or do you leave it up to him to clean up the mess? The latter, as tough as it seems, could have a more positive long-term effect. Of course, you might have to foot the repair bill upfront, but it’s important to set up a plan for how your child will repay you, rather than simply lecturing them — and then letting them walk away, Hoefle says. “Bailing them out really sets them up for some hard knocks when they get out of the house,” Hoefle says. Consciously or not, you’re teaching them you’ll be there for them whenever they