I was surprised when I asked parents to tell me the life skills they wish their kids knew, and there was a resounding request for a few topics:
How to open a bank account
How to budget & balance accounts
How to write checks and pay bills
And how to start saving for retirement
It seems some of the things we take for granted are, as a result, missing from what we teach kids.
In the last article, we focused on opening a bank account. This article is the second article in the four-part series and will look at how to teach kids to budget and balance their accounts.
It’s not shock that budgeting can be boring and tedious. I’ve personally never been excited to sit down and create my budgets, but it’s something that creates wealth and pays off down the road.
So how do you get kids excited about it? How can you add a little glamour to something so dull and boring? Easy – make it a game with payoffs.
Firstly, it’s important to know how to create a budget, then to adhere to the budget.
Creating a Budget
You may have your own way to create a budget, and that’s fine. In my experience, the easiest way to make a budget is as follows:
On a piece of paper, draw a line down the middle:
Spending BudgetCalculate your average monthly gross income and put that at the top of the page, then multiply it by.80 (for example, if you earned $1,000, you would end up with $800)
Fixed ExpensesWrite down all of your FIXED expense categories (i.e. phone bill, insurance, mortgage etc… ) and put them in one column on the left side of the page
Variable ExpensesNext write in the variable expense categories (i.e. food, gas, leisure, etc… ) and put them in another column on the right side of the page
Fill in all of your expenses
Net Budget after Fixed Expenses – Subtract fixed expenses from your spending budget If it’s a positive number, you don’t need to change anything If it’s zero or a negative number, you should look for expenses that you can cut or lower
Budget variable expenses – Using your Net Budget after fixed expenses, determine what you can spend on variable expenses without overspending each month
Set a budget for each variable expense so you know what you can spend on each category in a given month
Making it Fun
OK, now that you have a budget outline, it’s time to get the kids excited.
I know what you’re thinking: “My kids will never be excited for this.”
They will if you give them some prizes or payoffs. Here’s how:
First, tell them what a budget is and show them the paper. Next, tell them that you’re going to do a contest (if you have more than one kid, this works even better).
Contest 1: Anticipating Spending
The first contest is to see how close they can budget their money to reach a break-even or $0 over the course of a month. In other words, the goal is to predict your spending as close to the penny as possible.
If you have more than one kid person that gets the closest to break-even without going negative wins a prize. With just one kid, tell them that they get $5 or $10 if they reach break-even, and every penny they are off, you deduct 10È¼
Contest 2 – Saving After Spending
The second contest is to see how well they can budget their money over the next 30 days. If they can save money, tell them you will give them whatever they save. That means if they save $5, you’ll give them another $5 (just like companies matching a person’s 401K contribution).
If you have more than one kid, tell them whoever is able to save the most will win and get a special prize. You will obviously choose the prize since you know your kids best.
When discussing marketing, think of it as a contact sport. Marketing should be seen as a game for every attorney. Consider it to be a game in which you are seeking to obtain the most points of contact, meaning how many individuals can be seen per week, month and year. This game should also consider the individuals that are on your marketing team who are amenable to refer your business? Below are some of the many influential tactics that can be used in order to win this so called “game” of marketing.
Obtaining the correct targets
When playing a contact sport the correct material is necessary, you wouldn’t be playing soccer while using a basketball would you? When marketing you also need to find the correct targets. If you want to win this so called marketing game it is crucial for you to market the correct individuals. These individuals are those who want and need your services. Take the time in coordinating the ideal targets with your experience in order to meet the “points of contact.”
Formulating the right type of friends
Although the process of meeting other bankruptcy attorneys and legal specialists is important, it is crucial to become friends with the more dominant and the most influential players in the market you are in. For instance, if you are in the market that deals with construction companies that are seeking bankruptcy, then it is important to accompany the trade associations and attend their conferences. At these conferences is where the correct network connections will be made.
Become a scholar
Although you may not recognize it, there are many individuals that are interested in the knowledge that you have. It is important to take time aside in order to share this knowledge through a blog, articles and trade publications by sharing it throughout social media. There are many industry event coordinators that are seeking to obtain speakers and workshop leaders. When speaking or leading a workshop this puts you in the front of the room, which gives you all of the attention more than the average propaganda could ever do.
Build a list
There are times where the individual may be interested in your legal services, however may not be apt in purchasing. You can obtain these individuals through grabbing their attention by adding them to a mailing list in order to first get their approval. The mailing list that you create can administer a beneficial source of potential revenue and clients. However, it is crucial to keep the information that is given fresh with valuable information such as what is trending, events and news on bankruptcy.
You work throughout your life, invest and save wisely. You are enough careful of risks that threaten your savings and you would definitely like to pass work on to your dear ones after investing so much time, sacrifice and effort. However, you should be pretty careful about the least amount of government interference and tax while passing on your work. There are some well-established ways to make sure that the intended recipients get your financial legacy properly. Family limited partnerships, private foundations, wills, irrevocable trusts, revocable trusts and an alphabet soup of strategies are some of the indispensable parts in order to secure a financial plan.
Here is a list of some recommendations to minimize inheritance conflicts.
Address personal property separately
Make a separate list of your personal properties with proper instructions that who should inherit what item. The family members often start conflict among themselves regarding the inheritance of property. You can prepare a Personal Property Memorandum, i.e. a separate personal property list as a part of the will. You must put the date and signature while preparing a handwritten or typed list.
Update estate plan regularly
Make changes in estate planning as per changing circumstances, especially after a divorce. Under matrimonial laws, most of the states favour former spouses. You should immediately disinherit your former spouses, in order to avoid bizarre and unwanted results. Other changes in life like death or divorce of a child or incapacitation, illness or addiction of any beneficiary should also be considered while updating your estate plan.
Hold an open discussion on special assets
Family input is advisable in some situations. Conditions like the succession of a family business, care for a handicapped child, home require children and parents for continued enjoyment of a vacation should be listed on the same page.
Consider a prenuptial agreement
Inheritance conflict is mostly the reason for a second marriage. Conflict can be minimized at death with the help of a post-nuptial or prenuptial agreement. It clearly states the distribution of property among the spouses and other beneficiaries.
Clearly identify gifts and loans
Children with financial incapability are often helped by their parents. Parents generally offer help either as gifts or loans. Conflict can be generated due to the issue of unpaid loans from parents. Parents should clearly state about everything in their estate plan.
Property Fund Trust
In order to avoid conflict, you should properly retitle and fund all your assets. All the life insurance policies will name the trust as beneficiary if the will indicates equal distribution among testator’s children.
Estate planning is something no one really wants to deal with if only because you have to take on the subject of your mortality. Given the rather morose and unhealthy mindset we’ve developed regarding the end of life, it’s safe to say that most people try to avoid talking about death like, well, death. It isn’t an easy topic to bring up, and it certainly doesn’t get any easier when discussing how your belongings will be disseminated after your passing. What’s more, when it comes to your finances, the topic of estate planning is all the more difficult because it involves actually coming face to face with some serious numbers.
It’s too bad that so many people tend to face their final financial planning as a way of showing how little they’ve accomplished over their lifetime. People need to focus on the fact that they are making a plan the benefits their family after you are gone. They should be allowed to grieve, and proper estate planning accomplishes this task.
Here are five secrets (truth be told, it’s just common sense) to successful estate planning:
1. Draft A Will – Mocking up a simple version of your will doesn’t cost much and at least starts the process of where things may stand when you pass.
2. Name the Executor – As the title suggests, this is the person who will handle all aspects of your estate. You want someone you can trust, but you also want someone who you know will do a proper job.
3. A Living will – A living will scares a lot of people because it makes you face the possibility that you’ve either suffered a serious accident or are completely unable to communicate with those around you near the end of your life. Major court cases & drawn-out family dramas have come from a living will not being available & everyone scrambling to perhaps know what you might think would be possibly OK to do for you. It can get messy.
4. Update Your Will – Not only do you need to start the process of planning your estate, but you need to review the documentation at least once a year. Any changes that may come your way such as major life events (i.e., deaths, marriages, etc.) may change the contents of your will, so it pays to look it over regularly.
5. Communication – Before you pass & a final reading of your will takes place, and certainly before you are unable to communicate with your loved ones, you need to keep the lines of communication open so that you can tell everyone what plans you’re making. Yes, your will is the legal document of record, but should an issue arise regarding your intentions, you’ve at least been keeping everyone abreast to your wants.
Estate planning is not a fun time. Rather than approach the matter as a dreary “to-do”, though, think of it as just another note in your day planner. It is a rather defining moment in adulthood and one that everyone must understand is perhaps the most important thing they’ll do to help their family out when you’ve passed on. But it isn’t a way to signify an end to life; it’s more a symbol of you firmly having your sights set on the future.
Don’t let your personal estate planning fall through the cracks. Be sure to address this important documentation as soon as possible for sake of you & your loved ones’ peace of mind today.