6 Tips to Help Your Child Become Wealthy

Do you remember when the hospital staff put that little bundle of new baby into your arms? Perhaps you met your child in an office somewhere or maybe it was a park. Regardless of how your child came into your life, I bet you promised yourself that you would make the best life you could for your child. A big part of making a good life for your child, means educating them about personal finance and setting their feet on the path to wealth. Here are six things you can do while your child is still young to help them do well.

#1 Open a savings account at a credit union

Credit unions have great customer service, lower loan rates, and are smaller than many banks. Opening an account a credit union allows the child to start developing a relationship with a financial institution and helps the child understand that money go into an account before one can swipe a card. Many credit unions also make an effort to reach out to youth, so they may offer incentives to open an account and yearly incentives to contribute more during Financial Literacy Month (April).

#2 Buy individual stocks for birthdays holidays

There are multiple sites where adults can buy individual stocks, complete with attractive stock certificates, for children. If the child is old enough, have them help by thinking about what products they use every day and why certain stocks might be a better investment than others. Place the stock certificates where they can view them often and bring it up in conversation.

#3 Encourage friends and family to contribute to a 529 plan

Most friends and family love to purchase new clothes or new toys for children. While any gift is certainly appreciated, a gift of $10 that could triple its value is much more helpful. Most 529 plans have a way for friends and family to put a few dollars in for milestones.

#4 Let the kid grocery shop with a spending plan and coupons

Kids see adults buying things all the time, but rarely do they understand why we choose one item over another. Including the child in grocery shopping helps the child to understand value over cost, that things do cost money, money is not infinite, and how money moves from a checking account to a vendor (through cash, check, debit card or credit card).

#5 Set limits at  amusement parks

When you arrive at an amusement park, hand each child a specific amount and tell them that once they spend it, there will be no more money. As they spend, try to guide them by explaining the rationale behind each choice but do not force them to spend the way you want. If they run out of money and become upset, it’s a tough lesson to learn but would you rather have them learn this lesson at nine years old or twenty-nine year old?

#6 Sock the college fund in a Roth IRA

Investing for your child’s college education is good, but depending on where you put the money, the funds could count against the child with the financial aid office. A Roth IRA is a great place to park the money because it’s counted differently than other college investment plans, you can take out the principle with no fees whenever you want, and if there is money left over, that money can grow tax deferred until retirement. Talk with your fee-only financial advisor about this option.

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Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com.

 

 

Graduating? A few financial tips.

Shay Olivarria, financial education speaker and the author of 10 Things College Students Need to Know About Money 2nd edition, was included in the an article geared towards sharing a few tips for students that graduating this year. Nine women were included. Shay’s tips:

“Keep your credit scores high by taking a look at your credit reports for free at AnnualCreditReport.com (the only place you can get them for free). [Also] learn about the five parts of a credit score and leverage your scores to save money (and deposit fees on utilities) on car loans and home loans in the upcoming years.”

“You created a plan to graduate from college and you worked that plan to bring graduation to fruition. You can do the exact same thing with personal finances. Make a plan and execute that plan. Welcome to adulthood.”

Read the rest of the advice by visiting Student Loan Hero.

 

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com. 

 

 

31% of Americans Have No Retirement Investments – Tips for Starting

“Nearly a third, or 31% of U.S. adults said they had no savings or pension to help them afford retirement, according to the Federal Reserve Board.”  – CNN Money

I want to say that I’m surprised, but after working with students, employees and retired folks for the last seven years ….  this is what I already know. If you’re part of this group, you’re going to be in for a HORRIBLE surprise come “retirement age”. Either you won’t be able to retire at all or the money from Social Security will only be enough for you to afford a room in your kid’s house and no fun, but it’s not too late. Here are my tips for creating a retirement plan and sticking to it … at any age.

0 – 16

Think it’s too early to start thinking about your child retiring? Not so. Though you can’t take advantage of tax-deferred plans like IRAs (you’re kid probably has no earned income) you CAN put a few dollars away every month in a regular investment account, buy individual shares of stock or purchase savings bonds. Let’s assume that you contribute $50 per month (or $600 per year ….  birthday … Christmas …  ) to any one of these strategies and that the investment earns 2% per year on average (some years more, some years less). By the time that child is 67 years old, that investment would be worth $84,584.31. Imagine how much money it would be worth once your child started contributing too.

16 – 24

By this time you are probably working, but not making much money. You might think that $50 per month won’t amount to much anyway so why bother? Because that $50 per month, or more, could end up being $432,992.84! Once you’re working you have earned income and can take part in wonderful retirement investing plans like 401k/403b, if your job offers them, or Individual Retirement Accounts (IRAs), if your job doesn’t. You put in $30,600 over your working years (16 to 67) and you’ll end up with a half-million dollars … easy! Read more about this in my book 10 Things College Students Need to Know About Money.

25 – 40

Yes! Now, we are in the prime earning years! Not only do you have a job, you probably have a half-way decent job. No more ramen for you! It’s time to take it up a notch. If you have been investing (since you have that good job) increase that contribution. If you haven’t begun contributing yet, it’s time to start.

You might think that you don’t have any spare money to invest or you might not know how to invest (read Money Matters: The Get It Done in 1 Minute Workbook), but it’s easier than you think, especially if your company offers a retirement plan with a company match. On your own, the average American can find $50 worth of spare change every month. PLUS, think about the ways that you waste a few dollars here and a few dollars there every month. Assuming a monthly $50 investment, starting at 30 years old, into a tax-deferred retirement account could still net you $136,725.48. Bump that up to $75 per month and you’ll be looking at $205,088.22. Not too shabby!

40 – 67

If you’re here then you are squarely looking at retirement …. perhaps. In Money Matters: The Get It Done in 1 Minute Workbook I have a worksheet that asks you to take a look at where you are and where you’d like to be. If you’re path is not heading in the direction you’d like it’s not too late to change.

You’ll need to do a little more to catch up, but it’s not impossible. A monthly $200 investment with an 8% return could turn into $229,797.95. Use the Social Security Administration’s estimator to find out how much you’ll get per month once you’re retired. You may find out that you need to work a few extra years. You may find out that you’re fine. Ether way, knowing is better.

If you haven’t begun investing for retirement yet, don’t be downhearted. The time is now. Don’t wait another day. Contact Human Resources at your job and find out how to start investing. Find a fee-only planner and take a comprehensive look at your financial situation. Buy a book to learn the basics and get started.

Working hard won’t get you what you want. Working smart will.

It begins now.

 

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com

Shay on Multicultural Familia Radio

NBC Latino

Shay Olivarria was interviewed by NBC Latino! Whoo hoo!

 

We’re so proud that Shay Olivarria was interviewed by Kristina Puga of NBC Latino for this article with tips about dealing with the possible doubling of the student loan interest rate that’s coming July 1. Read it and share it!

 

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com

Colleges Withholding Transcripts

The Nation just did an article on colleges withholding transcripts from graduates that are in default with their student loans. Re-read that last sentence. You take out loans to pay for your college education banking on the hope that a person with a college degree will have a better chance of getting a decent paying job and firmly settling into middle-class-hood. Then you graduate and you start looking for a job. The loan folks give you six months to find a job before they start requiring repayment.

The Problem

Imagine you’ve graduated, find a low-paying job, move back in with your parents, and start working. You can’t put gas in your car, give a few dollars to your parents for bills, and pay your student loan. You’re trudging along and then one day to see a job posting for the job of your dreams! You’re a perfect fit and it’ll pay you enough to repay your student loans and maybe move out to a small roommate situation. The company requires a copy of your transcripts so you call your alma mater only to find out that you can’t get a copy of them because you’re in default on your student loans. This could become a huge problem.

Documentaries such as Default: The Student Loan Documentary are showing the problems that students are facing repaying student loans.

Debt bomb?

Yahoo! explains the problem perfectly:

A year ago, the Institute for Higher Education Policy published a study tracking the dismayingly high delinquency and default rates of the class of 2005. But as the sum of outstanding student loans has climbed towards the $1 trillion mark, passing total credit card debt along the way, the fact that America’s students are essentially putting themselves into hock for an education has more than a few people panicking. As William Brewer, head of the National Association of Consumer Bankruptcy Attorneys, told the WaPo, “This could very well be the next debt bomb for the U.S. economy.”

Suggestions

I have no answers other than the traditionally held:

#1 Attend a community college to complete your lower division classes.

#2 Choose a college with good return on investment (ROI).

#3 Get as many grants and scholarships as you can.

#4 If you have to take out loans, only take what you need. You can deny portions of your loan package.

#5 Start paying the loan off while you’re in school. Interest is a beast.

What suggestions do you have for dealing with paying for college?

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com.

Tips for Parents with Adult Children at Home

FOR IMMEDIATE RELEASE
Date: September 12, 2011
Contact: Paul Golden 303-224-3514, pdg@nefe.org

WOULD-BE EMPTY NESTERS GRAPPLE WITH ADULT CHILD AT HOME
Tips for Parents with Adult Children at Home

DENVER—As parents of college-age children across the country settle into the reality of their empty nests, many other Americans are waiting for the day when their kids will fly the coop. According to an online poll commissioned by the National Endowment for Financial Education® (NEFE®) and conducted by Harris Interactive in May 2011, 40 percent of U.S. adults ages 18 to 39 who are not students live at home with their parents, or have in the recent past. Although this provides a welcome reprieve for adult children facing heightened financial pressures, it can be detrimental to their parents’ personal and financial lives.
The NEFE poll found that among parents with adult children living at home:

* 30 percent have given up privacy
*
26 percent have taken on debt
*
13 percent have delayed plans for a major life event, such as getting married, taking a vacation or buying a home
*
7 percent have delayed retirement

“What’s worrisome is that many parents are sacrificing their long-term financial health to help their adult kids,” says Patricia Seaman, senior director with NEFE. “We encourage parents to find ways to help their children become financially independent without threatening their own financial stability or putting strain on the family dynamic,” says Seaman.
Down Economy Makes It Tough to Say “No”
Parents have a natural instinct to take care of their children, and this tendency increasingly has been tapped during the lingering recession. The NEFE poll found that among parents who have provided financial assistance to their adult children, 37 percent say they have struggled in the past and do not want their children to struggle in the same way. This is especially true given the current economic climate, in which 32 percent of parents think the financial pressures faced by their children are more difficult than the pressures they faced when they left home.

Yvonne Schlueter of Centennial, Colo., agrees. “People who are getting laid off, with five or six years experience, are willing to take the entry-level jobs,” says Schlueter, whose son, Brett, has been living at home for the past two years while looking for a job in his field. “Even if you get a job, it doesn’t mean it’s there to stay. My husband and I used to worry about doing a good job, but we didn’t have to wonder whether our company would be downsized or merged with another.”

While the national unemployment rate lingered at 9.1 percent in August, it hovered at a much higher level for young people—24.7 percent for Americans ages 16 to 19; 14.5 percent for those ages 20 to 24; and 10.2 percent for those ages 25 to 29, according to the Bureau of Labor Statistics. This has left many job-seeking children returning to homes in which parents already are struggling with their own financial responsibilities, such as Schlueter and her recently disabled husband, who also support Brett’s two siblings in college.

“This is when parents need to walk the line between the obligations they feel toward their child and their own financial needs,” says Seaman. “Regardless of whether your adult child is unemployed, taking a semester off college or struggling through a significant life event, it’s important to think logically about the situation.”
Establish a Plan (and Stick to It)

1.
Understand where your child is coming from. Ask your child why he or she thinks living at home will help him or her toward specific financial goals. Discuss how long he or she plans to live with you, and whether he or she can contribute financially.

2. Assess your current financial situation. If moving your adult child back home means cutting into retirement savings or delaying other financial goals, reconsider how you might help. Offer to watch grandchildren or pets while your child interviews for jobs or works extra shifts. Introduce your son or daughter to professional connections that could lead to job prospects.

3. Establish ground rules for living under the same roof. Before your child moves in, decide on a move-out date and set guidelines for maintaining privacy and mutual respect. You might consider drawing up a contract, which will show your child you’re serious.

4. Require your child to contribute, financially or otherwise. Consider charging a small amount of rent or at least having your child help around the house. The Schlueters don’t charge Brett for rent or food, but they expect him to fix things around the house, which has saved them money during the past couple years.

5. Help your child toward financial independence. Discuss steps your child will take toward getting out on his or her own. Make them specific, and attach deadlines. For example, Brett applies for three to five career-related positions a week, but if he isn’t hired by January 2012, he plans to enroll in graduate school.

6. Regularly discuss your child’s progress. Celebrate your child’s accomplishments but hold him or her to his or her end of the deal, whether that includes job-seeking goals, responsibilities around the house or a move-out date.

7. Once your child has left the house, remember the big picture. Evaluate what you and your son or daughter have learned from the experience, and review your child’s plans for maintaining his or her financial independence.

For more tips, visit http://www.smartaboutmoney.org.

About the National Endowment for Financial Education (NEFE)
NEFE is an independent nonprofit organization committed to inspiring empowered financial decision making for individuals and families through every stage of life. For more information, visit http://www.nefe.org.

Survey Methodology
This survey was conducted online within the U.S. by Harris Interactive on behalf of NEFE from May 10-12, 2011, among 683 adults ages 18-39 who are not students, and 391 parents of children ages 18-39 who are not students. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology (including weighting variables) click here.

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Make Today Your Financial Independence Day

This week’s personal finance column at Black Voice News gives steps to become wealthy:

With so many people celebrating our country’s Independence Day, it seems only appropriate that we should take a moment to consider how to create personal, financial independence. There are five simple steps that can help you create, and manage, generational wealth. Remember, it’s not how much you bring in that determines your net worth. How to use your money is what separates the wealthy from the mediocre.

Step 1: Know your net worth
have to know where you stand financially if you want to grow. Take a moment to make a list of all your assets (things that you own) and subtract all your liabilities (debt you owe) to find your net worth. My first book Money Matters: The Get It Done in 1 Minute Workbook ($12) has a really simple worksheet to help you understand where you’re starting from.

Step 2: Create a spending plan
Once you understand what you have (assets), what you owe (liabilities), and what your financial value is you can start to plan where and how you spend your money. Most of us waste more money than we realize on small purchases. We have to find opportunities to make small changes that make a big difference. For example, once you notice that you spend $20 a month on sodas at work (that’s $240 a year) you can choose to bring sodas from home or better yet start drinking water and start investing the money you were wasting.

Step 3: Invest and plan for generational wealth
Now that you’ve found a few places where you can save a few dollars, you’re going to start investing that money for your retirement with the goal of leaving an inheritance for your loved ones. Differences between retirement accounts are explained in my book 10 Things College Students Need to Know About Money ($15). If you’re wondering why planning to leave generational wealth to your loved ones is important, download my free eBook “You Shouldn’t Take It With You”.

Step 4: Talk openly
Realizing that your net worth is negative or that you’re spending way too much money on things that are not helping you build wealth …. Click here to read the full article.

Invest in Yourself

Read Shay's new weekly personal finance column on Black Voice News.

Starting this week the most dynamic financial education speaker working today has a weekly column on personal finance at Black Voice News! You can read her pithy insights and personal views on all things money in the physical paper and online. Check out this excerpt from her first article “Invest in Yourself” and leave a comment on BlackVoiceNews.com:

Every day we make decisions about how we will spend our money. Most of the time we spend our money investing in things that will not increase the value of ourselves, our families, and our communities. In 2010 African-American buying power was valued at $836 Billion by the U.S. Census. How much of that money went into purchasing things that increases the net worth of African-American households?

There is an idea that you’ve had for a while now about generating more income. It could be starting a business. It could be furthering your education. It could be cutting unnecessary costs to create, or add to, your emergency account or retirement account.

What’s stopping you from investing in yourself? I bet you invest ….

Read the entire article here.

Authors in Focus

Yesterday, I had the wonderful opportunity to be interviewed by Chandra Adams and Charles Chatmon on Authors in Focus. We talked about my financial education work speaking to students across the country, 3 things every college student needs to know about money, why credit unions are so awesome, my trip Cross Country in a Ford last year and my new book All My Mistakes: Money tips for kids in care.

My segmented included an interview with mystery novelist Gary Phillips who has written more than 12 novels. Everyone was really nice. I loved meeting the other authors and learning a bit more about the Hosanna Broadcasting Network where the show will air.

Authors N Focus will now been seen on the Hosanna Broadcasting Network (Channel 20 on the Disk network and Direct TV channel 20). Check it out when you get a chance.

WomenWorking.com

I’m pleased that WomenWorking.com has included an excerpt from my second book on personal finance, 10 Things College Students Need to Know About Money on their site.

Thanks WomenWorking.com!

There are 6 simple steps to getting what you want from your money:

Have you ever pulled $20 out of the ATM and two hours later you had no idea how you spent the money? Having a spending plan is a way to help you recognize what you’ve been spending your money on and what changes you may want to make. Use these simple steps:

Read the whole excerpt here.

Buy your copy of 10 Things College Students Need to Know About Money here.

Loans

I had the pleasure of closing out my Cross Country In A Ford adventure in San Diego. I delivered a free workshop entitled, “10 Money Tips for Students” based on my new book 10 Things College Students Need to Know About Money. We laughed, we cried, we …. well… we didn’t cry, but you know what I mean. You can view more of the workshop, see what vendors were there, and hear what participants had to say by visiting the Cross Country In A Ford site.

Here’s a clip from the workshop about finding a loan:

5 Things to Do Before You Commit

Before you decide to marry or live with someone else there are a few things you need to do:

Talk about how you feel about money
As much as we want to believe that the way we handle our money is solely based on logic, that’s just not true. What we have experienced leads us to have beliefs about money, and the way we use it, that may or may not be logical at all. Don’t assume that you know how your partner feels.

Pull up all 3 credit reports
It’s a dirty job, but it’s got to be done. Both of you need to pull up your credit reports and talk about what you owe to whom. Some of us don’t even have a clear idea of how much money we owe in student loans, credit cards, store cards, mortgages, car loans, cell bills, etc. so it’s difficult to let someone else know what kind of situation they are getting into. Pull the reports. Make a plan.

Decide how you’re going to split the bills
As I stated in Money Matters, you can’t just think that each of you will pay 50% of the bills and everything will be okay. Does one of you make more than the other? Does one of you spend more than the other? I’m a firm believer that bills should be paid according to percentage of income instead of 50/50. If one of you makes $1,500 a month, one of you makes $2,500 a month, and the total bills are $2,000 a month then the one making less money will only have $500 of discretionary cash while the other will have $1,500 discretionary cash. Don’t less resentment break up a good thing.

Choose 1 person to responsible
All of your bills will, more than likely, have different due dates. Though both of you should be actively involved in paying bills, saving for retirement, creating an emergency fund, etc. one of you needs to be responsible for making sure the bills are paid on time every month. You can choose to rotate on a monthly basis, have each person be responsible for specific bills, or assign one person that overall task, but don’t try to juggle each due date. Late payments create extra fines and lower credit scores.

Have an emergency plan
The only constant is change. I’m not sure who originally said it, but I say it all the time. If you’re together long enough one of you will lose a job, both of you will lose friends and family members, and there may be kids involved at some point. If you start talking about the “what-if”s now, you’ll be more prepared to deal with them when they occur.

Relationships are great, but you also have to be realistic. Money is #1 reason couples break up in America. Don’t let your wonderful partner become your hated ex over a few dollars.

5 Most Common Mistakes College Students Make

As students get ready to go back for the fall semester of college, I thought it would be a great time to take a moment and share some tips for saving a few dollars and getting started on the right financial foot. This is an article that I wrote for HBCU Digest.

Read the full article here.

Love my articles? Don’t forget to come out and see me as I drive cross country to spread simple financial literacy tips in a 1994 Ford Aspire.

Teens Want It

According a study conducted by Charles Schwab, “nearly 9 in 10 say they want to learn how to make their money grow (89 percent). Two-thirds (65 percent) believe learning about money management is ‘interesting,’ and 60 percent say that learning about money management is one of their top priorities.” Do you know what that means? Young people want to learn about spending plans, acquiring appreciating assets, and creating emergency funds.

Order 10 Things College Students Need to Know About Money on Amazon. Click the photo for more information.

The key to guiding students is making all the tried and true information about personal finance apply to every day life. It’s not that there are any new ideas about money management under the sun. Oh, there are folks that will try to tell you there are. Those folks are liars. The same old strategies work the best:

Don’t spend more than you earn.
Put your money into appreciating assets.
Invest for retirement as early as you can.
Etc.
Etc.

The challenge is getting these stogy old ideas to the younger generations in a fresh way. You’ve told your students/children/relatives to set goals for themselves, right? Have you every put it in the context of rapper 50 Cent’s career? You’ve talked to them about creating a budget, but you explained the merits of spending plans? Sometimes it’s not what you say, it’s the way you say it. You think they’re not listening, but they are. You think they don’t see your behaviors, but they do. Teens want to know more about financial literacy. Meet them half way.