Monday …A few little credit card hacks

credit cards

Credit Cards are a dangerous business.  Some of us use them to finance things they should not purchase…some don’t.  Sometimes they are the only answer when you need to pay for an emergency.  Bottom line is we ALL need to be careful of credit cards.  With all that said I have some hacks to get the most out of responsible credit management.

  • Stack your benefits – I use my Chase Southwest Card as much as I can.  It has an annual fee of $99 but that is balanced with free points for air travel.  I pay for EVERYTHING that I can on that card, then I pay it off at the end of the month.  I use the points to buy air travel for vacations…winner me.  The reason this works so well is that I travel for a living and the points add up quickly.  Also, there are some additional benefits like car insurance when you rent a car.
  • Use cash back – if you have a Discover Card you can use your cash back to pay your bill and/or to pay for items on Amazon.  The interest rate is 20% which is VERY high.  You MUST pay off the balance at the end of the month to make it worthwhile.  Also, don’t forget to sign up for the quarterly 5% bonuses.
  • If you have a Visa or Master Card from a gas station please make sure that it is ‘no annual fee’.  Usually those cards offer extra points on gas station purchases and sometimes even a discount per gallon at the pump…read the terms carefully.
  • The last on my list is American Express.  The AmEx Blue Cash Preferred (review on nerd wallet) with a high rewards rate (6%) on a max of $6k on groceries (per year) with unlimited 3% on department stores and gas, and 1% everywhere else.

Enjoy…responsibly…Nancy Ann

College Fund$

TCU

Well…now what do you do?  Your almost adult has been accepted to a college or university.  The tuition $$$, room and board $$ and meals $…but, but…what about spending money, the cost of transportation…STARBUCKS!!!

While you are calculating the cost of college don’t forget about all of the extras.  If you had the forethought and means to save for college for your children then you are ahead of the game.  If not you will, most likely, have to come up with a variety of grants, scholarships and loans to pay tuition. This is not the end of the world, you can still send your child to college; it may just wind up being a little more difficult or stressful. I am not a professional scholarship coordinator so I will take a pass on dispensing advice here. Check with the college or university and they will have a list of deadlines and information dates…follow those closely and hopefully sports, grades or community service will help your child get some scholarship money.

The subject I can offer some insight on is the ‘extras’ associated with college. Help your child learn to plan by starting with a wish list of things they ‘have’ to have to function in their almost adult life. A Keurig, microwave, new sheet set, LCD TV and a new computer seem to be have to haves for a lot of college. Whittle that list down to what they actually need and start allocating money to pay for it. Also, before you buy an appliance or TV make sure they check with their soon to be room mate(s) to see if the burden can be shared, it only make sense that one person bring the coffee pot and someone else picks up a cube fridge, you certainly do not want duplicates of expensive items. Also, some of the necessities can be put on a gift list for those relatives that want to purchase a graduation gift.

Most colleges will send you an estimate of first year costs. My daughter’s school came in about $9,000 above tuition, which, of course, made me throw up in my mouth a little. This number was derived from student input, meal plan costa and transportation estimates.  I gave her a goal for the amount of money to be saved by the end of her senior summer ($3,500), which should get her through books and fees. I decided that one third of the tuition (the first third) would be her responsibility but that the scholarships would go towards her third first and both parents would split the other two thirds. More full disclosure, I have been divorced for a decade so I have decided some of this on my own because I had no input from her other parent. I decided that she would also have to work out spending money. I am of the opinion that there is no allowance for college, I am pro care package and anti cash…feel free to disagree…we are in America after all!

Get ready to run over these hurdles, hundred of thousands of people attend college every year…most of them seem just fine.

Enjoy…Nancy Ann

Sweet! 16 or 17…now money is real!

moneyEvery kid can get a job when they are 16.  The definition of ‘job’ varies by your child’s responsibilities, abilities and work load.  For some kids, earning might only occur in the off season from their sport or activity.  For my daughter, it meant getting a job at the local ice cream (custard) place.

When your kid starts earning an actual paycheck, it is important to monitor their spending and make sure they are saving.  As a result of school and activity circumstances it was necessary for me to get my daughter her own car.  I made her fill out all of the grade paperwork and driving log that helped with the insurance premium discount and she pays about half of her insurance every month.  It is truly my opinion that kids have to have some financial ‘skin’ in the game so that they understand the value.  If yout circumstances don’t require a car there are plenty of other ways to teach your child to budget their earnings.

It is important that the money is kept separate from yours.  My daughter and I opened an account at the local credit union.  I liked that there were no fees at all and the savings account earned interest.  I was also able to watch her transactions from my account.  We made a deal that she had to text me in order to spend more than $5 so that she had to think before she spent.  Also, some banks and credit unions have a text or email features that will automatically send a message when a transaction is made, some are very customizable.  Spend the time to discuss that spending with your kid and make sure that they don’t overdo it.  I was OK with my daughter having a Visa Debit Card from her account, that is an individual decision and you really need to think about what having that plastic card means in your situation.  If you are not ready for your child to have a credit card that is linked to an actual account you can try a pre-paid card.  I would suggest doing research and comparing benefits and costs to see which would work best for your situation.  I found a great article here.

The main message to get to your teens is save, save, save and to have them think before they swipe.

Enjoy…Nancy Ann

Goal Setting for 14 – 15 Year Olds

first car

Believe it or not 14 – 15 year olds want to learn to drive.  Some of them have been dreaming of their first car since they were about 10!  Over the years, I have found that the car that kids want is not usually the one they usually are able to afford.  No only does a teenager have no idea about the cost of a car they usually do not think beyond gas, they completely gloss over oil changes, tires and insurance.

One good way to teach them about how things cost is to have them get a fake job and paycheck.  You can have them deposit their paycheck into their checking account and keep a check register to track spending.  I calculated a minimum wage job and then remembered about Uncle Sam.  Deposit 92% every two weeks and let your teen take withdrawals to pay for gas for trips to their friends houses and sports or clubs.

Some of your kids do not want to drive a car or live in an area where it wouldn’t be necessary to drive.  An alternate activity could be to play the market.  The stock market is a difficult concept to master…games should help.  Explore any one of the many kids investment sites or make it your own by choosing a few stocks and tracking them.

Either way, this transition from chips and small bills to a realistic way of handling money like an ‘adult’ is not easy…try to make it fun!

Enjoy…Nancy Ann

This week…ways to get kids to understand money!

poker chipsPoker chips are cheap…I mean cheap…buy a couple of sleeves at the dollar store. That is all this project should cost.

Today is the first of five days of money handling for kids.  I am going to work from youngest to oldest.  This idea is aimed at 3 – 5 year olds, adjust as necessary, you know your kids.  I know some of you think three might be a little young to start teaching about money, I respectfully disagree.  Some of the monetary issues in our society are driven by a lack of value attached to the ‘things’ we ‘have to have’.

Kids are inundated by advertisers telling them what they have to have.  If you really think about it, how many of your parenting ‘Nos’ are in response to your child asking for something they saw on TV?  Today’s hack helps you put together a plan for rewarding your kids while teaching them that things need to be earned.

If your kids are small, have them collect chips for putting toys in a basket.  Four chips = whatever they find that is super fun!  As an example:  If your little girl wants you to dress up and play ‘Frozen’ with her that may equal two chips.  The smaller the kid, the easier the tasks should be to complete.

As your kids get older, you can change the chores and rewards change.  A kindergartner may want to go the Jump Zone and that may equal making his or her bed for a week in a row and putting the napkins on the table for the dinner place settings.  You know your kids so adjust as you see fit.  It all starts with showing them how earning makes the reward so much more valuable.

Enjoy…Nancy Ann