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Monday, December 23, 2013

What Should My Children Pay For?

What should my children pay for? There are many different opinions out there and reading this article from the Wall Street Journal on November 23, 2013 got me thinking about my own parenting habits. Obviously, the strategy used to determine what my children should pay for will depend on their age, but we have started to create some accountability in the Smith household. My 4 kids are all under age 10 and are at various levels of the “understanding money” spectrum. The little income they do earn comes from gifts and household chores. The current requirement is that a portion of everything they earn gets put in the collection at church on Sunday. Maybe it’s 50 cents for the youngest and a dollar or two for the oldest, but either way, a gift of some level is made. The other requirement is that when buying a gift for one of their siblings, they are required to spend some of their own money. We want them to truly appreciate the feeling of giving and are finding that using their own funds seems to enhance the gift giving spirit even more. As they continue to age we will continue to add more responsibilities that the kids fund from their own earnings. We have discussed having a status quo (e.g. pair of shoes) that mom and dad will pay for but anything beyond that, the child will be on the hook for.

As with all things parenting, teaching kids about the importance of money is a work in progress. We don’t claim to have all of the answers, but through trial and error hopefully we can create some sense of fiscal responsibility among our kids.

Monday, December 9, 2013

Insurance the Ignored Component in Financial Planning

In our planning process we always discuss someone’s current insurance coverage, or make a planning recommendation to get the proper coverage. I found a very interesting article on CNBC.com that spoke to this exact situation. Over the last year I have had a number of folks come to me to review their existing life insurance. Many times I get the question “Which type of insurance should I buy?” They are referencing term, whole life, etc. The most profound answer to that question is in this article: http://www.cnbc.com/id/101136517.

It is important to remember when a death benefit check is delivered, a beneficiary isn't concerned about the type of insurance it is; rather he/she is concerned with the amount of the check. Therefore, worry less about the type of insurance you are buying and focus more on getting the proper amount of coverage. If you have questions about insurance, please reach out and let us guide you.