Summer is a great time for kids to catch fireflies, perfect their backstrokes, daydream, and learn some great lessons about money and financial literacy. Sound like a hard idea to sell to kids in vacation mode? Not if you make it a rewarding part of summer fun. Here are some tips to incorporate smart money lessons for kids from K-12 that will add to their summer fun and set a great foundation for making smart money choices later on.
Ask your kids to set aside part their allowance for a special summer savings goal then sweeten the pot by telling them you’ll match whatever they save. For the little ones it could be as simple as setting up 2 jars, one for their summer goal (like a super-soaker, hula hoop, or the ingredients for s’mores) and one for the rest of their allowance. They’ll love seeing the jars fill up with coins and counting and re-counting their money. For older kids who are saving for a concert ticket, an app or a website that keeps track of their savings and your matching funds is a great way of getting them interested.
Nothing like learning the satisfaction of having your “own” money! Even if your older children have an actual summer job, consider “hiring” them for extra chores like organizing your photo files, digitizing old cassettes and CDs, or washing the windows. For the little ones, watering plants, pulling up 20 weeds (counting skills!) or helping you rinse the car can help add their allowance jars.
There are fun games to teach kids of all ages about the stock market, investing, and the power of compound interest. The best way of course, though, is to follow the real stock market. Why not have every family member invest a virtual $1000 in 2 companies whose products they know at the beginning of the summer (Lego and Disney for the younger kids, for instance) and see who ends up with the most virtual profit by the end of the summer. Or, if you have the resources, open accounts for the kids with real investments, however small, so they can watch them go up and down, while earning interest, over the months and years ahead. The SEC’s site Investor.gov has a great compound interest generator to show kids how their money could grow.
Summer is also a great time to teach kids about comparison shopping, supply and demand, and the power of buying things when they are on sale. Keeping track of what you save each time you buy a sale-priced item this summer can be an eye-opening for your kids. As you enjoy vacation trips, or even day trips to waterparks, let your kids know about the value you are getting (rather than complaining about high prices.) Give the kids a choice when possible, telling them how much you have to spend for the day and ask their input about how to spend it. When they know that buying cotton candy means they are giving up two rides they learn a valuable lesson about resource allocation!
Find great books to read or listen to in the car about entrepreneurs’ success stories. Young children will enjoy books about Thomas Edison, for instance, or Alexander Who Used to Be Rich Last Sunday. Try a biography of Steve Jobs for the teens, or check out finance videos from Khan Academy.
Take a moment to explain what you’re paying for when you’re paying bills: show your kids how the electric bills soar in the summer if you’re use air conditioning or your water bill if you’re watering the lawn. Calculate – or Google – how much it costs when they leave lights on. Not exactly entertaining but an empowering eye-opener for kids.
Nothing like a great game of Monopoly to while away summer nights while teaching kids about saving up for those houses and hotels (including our favorite trick: hiding money under the board so no one sees how much you are accumulating!)
In short, if you treat money matter-of-factly – and build in some challenges, competition, and entertainment – summer can be a great time to sneak in a little fun “schooling” that will help prepare kids for an empowered future.
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The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.
Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by Sherman Wealth unless a client service agreement is in place.
Finances can be overwhelming, especially when you feel lost or uneducated on the “right” decisions to make. Over the last few years, we have found that women are contributing more and more to their family’s finances and are making strides towards further financial independence.
Despite women playing a larger role in their family finances, they still feel a lesser sense of confidence than they should as it relates to larger financial tasks. A 2022 Bank of America survey revealed that a “majority of women feel comfortable managing their day-to-day finances, but struggle with longer-term actions like paying down debt, saving for emergencies or retirement, and building wealth.” This data reinforces the importance for women to ask questions, seek advice and education surrounding their finances, and not take the back seat when making big financial decisions.
As we just hosted our Women, Wine and Financial Fitness event and are wrapping up financial literacy month, we want to use this new data as an opportunity to encourage and motivate women to take control of their finances and better educate themselves to become financially independent. We know that a lack of financial education in schooling systems impacts the confidence level of financial literacy for both men and women and we are here to advocate for change.
As a financial advisor who works to empower women to become confident to make their own financial decisions, we have found that many women are often met with anxiety when it comes to having to make financial decisions on their own. For that reason, it is extremely important to start educating yourself about financial concepts from a young age, along with passing that on to the next generation, such as your children or grandchildren. Take it upon yourself to set up a budget, understand your cash flows, your benefits at work, and your whole financial picture. Leaving the big decisions to another family member or spouse can impact your understanding and confidence level down the road. In the event your spouse or family member passes away, you want to ensure you are financially equipped to handle your finances on your own.
At Sherman Wealth, we strive to educate all of our clients, no matter gender, age, or background, to become financially independent and feel confident to make their own decisions. If you have any questions or would like to talk to us about ways to educate others about financial concepts, please reach out to us at email@example.com or schedule a 30-minute complimentary introductory call here.
Do you want to earn more money without taking on more risk? If so, keep reading! With the Federal Reserve raising interest rates to combat inflation over the last few months, and set to raise them about .25% in a few weeks at the February meeting, we have been seeing a huge spike in short-term rates, CD’s, and money market accounts. At the same time, many clients and prospects we’ve been talking with are actually holding onto a ton of cash at large institutional money center banks that are paying close to 0%, so there’s a large opportunity for those of you in this position to better manage your cash in this type of increased savings rate environment. Let’s take a look.
Many of you might be weary right now about your financial picture given extreme market volatility we saw last year, 4-decade high inflation, and rising rates from the Federal Reserve. The interest rate market has sky rocketed over the last year with the Federal Reserve projecting and telegraphing future hikes in the coming months. With recent inflation data slowing, the Federal Reserve may be slowing the rate in which they increase future hikes, but interest rates are still quite high from the lows we saw in 2020 and beyond. Because of this uncertainty, a lot of people might want to hold on to extra cash in the case of a potential recession or future large purchases. However, because of these rising rates, there’s an opportunity to earn more money risk-free on cash sitting in your savings or checking accounts.
You can now get FDIC insured savings above 3%, with some even in the 3.25% range now, so make sure you are looking at high-yield savings accounts instead of your traditional ones and are shopping around for the highest rates. If you feel like taking on further time risk, we have also been seeing individuals purchase CDs and Treasury Bills in the 4% range, which was unheard of just a year back. Additionally, for those of you looking for other higher interest rate vehicles, check out our blog on I-bonds as well which have been increasingly popular for many looking to take advantage of higher rates.
With this changing economic environment, it’s super important to stay on top of your financial plan and make sure you are updating/altering it accordingly. As we kick start 2023, it’s important you are making sure you are taking advantage of all the interest you can earn and that you money is in the right places. If you are interested in re-visiting your financial plan or have questions about your cash management needs, email us at firstname.lastname@example.org or schedule a complimentary intro call here.
You always hear people talking about saving for the future and for retirement. But you may be wondering why is it so important? Well, saving for your future and building your wealth can be quite simple if you go about it in the right way. One of these “right ways” includes STARTING EARLY.
Starting early is a great savings philosophy and strategy when it comes to building your wealth. When you’re just starting your career, it’s very important to save as much as you can as early as you can. When you’re young, you might not have as many expenses or financial burdens than you will later on as your life becomes more complicated.
However, with sky-high inflation data and the Federal Reserve continually rising interest rates to combat this inflation, many individuals, especially millennials and Gen Zers are finding it more difficult to save money given the high cost of living. In fact, The Deloitte Global 2022 Gen Z & Millennial Survey found that over 23,000 millennials and Gen Zers internationally are living paycheck to paycheck and that cost of living is listed as one of their top concerns. This statistic reinforces the urgency of financial planning as a whole, utilizing financial strategies such as budgeting to save more, and the importance of saving early. Despite inflation and a higher cost of living, starting to save sooner will allow your money more time to grow, which brings us to the importance of compound interest.
As mentioned above, another reason to start saving early is because of the power of compound interest. Compound interest is when you earn interest on both the money you’ve saved and the interest you earn. Increasing the compounding frequency or your interest rate, or adding to your principal, can all help your money grow faster. Also, money invested earlier in time will grow faster than money invested later in time. So if you save as much as you can as early as you can, you will be better off as you near retirement.
The graph above from JP Morgan shows account growth of $200 invested/saved monthly among 4 individuals starting at different times. As you can see, with the same rate of return of 5.75%, Consistent Chloe, who consistently invested her money starting at age 25 to age 65, ended up with the greatest ending portfolio.
Finding a balance between saving, investing, and also enjoying your life is not an easy task, but it tends to be easiest when you start early. Starting when your career is jumpstarting is a great way to get yourself consistently saving and investing and will benefit you in the long run. If you have any questions on how to work this strategy into your financial plan and life, email us at email@example.com or schedule a 30-minute complimentary consultation here.
Do you have financial goals? If so, are they short-term or long-term, or both? Maybe you don’t know the difference. That’s okay because we are going to discuss the difference between short and long-term goals and how to strategize for them.
So, what is the difference between a short and long-term goal? We like to think a short term goal is something that you need liquid cash for in the foreseeable future, maybe within around 12-18 months. A longer term goal is something that you want to save for over a duration of time, maybe achievable within 3+ years or so.
Now that you know the differences between the two, you may ask yourself, how do I create these goals I have for myself? First and foremost, you want to think about your priorities in life. Do you have upcoming expenses, do you need to save for retirement, do you have enough money in your emergency fund and checking account for your monthly expenses?
When thinking about your goals, it’s also important to think about your risk tolerance. For example, are you willing to risk your money on investments? Or do you want it to be safe in a FDIC insured account? These are all questions you should ask yourself when designing your goals and thinking about how you want to use your money.
Setting goals can oftentimes get tricky because it’s hard to find a balance between wants vs. needs. Is your goal a necessity? Or a Want? Ask yourself some questions about the importance of your goals and think about how reasonable each one is given your financial situation and lifestyle. Deciphering wants vs. needs is a great starting point when creating goals. When creating shorter-term goals, be sure to ask yourself when you will need the money you are reaching for so you know exactly how to strategize and save.
Once you’ve clearly identified a realistic goal and determined the amount, timeline, and urgency of the goal, it’s time to start working towards it. Be slow and steady and stick to your plan once you make it. Goals and the methods of savings will be different for every individual, so it’s important to drown out the noise and do what is best for your personal situation. With the help of a financial advisor, you can easily put your priorities and strategies in place to reach your goals. If you find yourself needing clarity on goal-setting and achieving your milestones, email us at firstname.lastname@example.org or schedule a 30-minute consultation here.
Are you utilizing a high-yields savings account? If not, let’s explore why you should. With much higher interest rates, high-yield savings account can help you build your wealth much faster than a regular savings account would. Here’s why you should open a high-yields savings account.
You can make more money
The average yield on a traditional savings account is just around 0.09% or less per year. However, high-yield accounts have much higher interest rates, closer to 1%.
There are options with no fees and minimum balance requirements
We know everyone hates accounts with fees and minimum balance requirements, so we want to let you know that there are accounts out there where this is not the case.
Monthly fees, minimum balance requirements, and interest rates can all vary widely from one bank to another, so make sure to do your research before picking one that is best for you. Below you will find some of CNBC’s top picks for high-yield savings accounts.
Your money will be better protected
Most major banks and credit unions are insured by the FDIC or National Credit Union, meaning your money is protected and will still be there if something happens.
Many people don’t think twice before putting their money into a savings account. But when doing so, it’s crucial to consider and find a high yield savings account to maximize your savings and build your wealth. The big banks pay close to zero, so there’s no point in keeping your money at that type of institution. If you have any questions about opening a high yield savings account, reach out to us at email@example.com or schedule a complimentary 30-minute intro-call here.
Combining asset allocation and early regular savings today helps to prevent playing the catch up game tomorrow. Contact Sherman Wealth Management for an investment strategy that, with periodic review, will potentially maximize your savings in the long-run with respect to your individual tolerance for risk. We can show you the benefit of saving early for retirement.
Trying to time the market can prove detrimental for optimizing your portfolio’s growth. Sherman Wealth Management’s skills will help guide you through volatility. An individually tailored portfolio will try to deliver comfort in downturns, and help you maximize potential benefit from the market’s gains. Contact Sherman Wealth Management now so your portfolio doesn’t miss any more opportunities to maximize potential returns.
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On Wednesday March 10th, Congress approved the American Rescue Plan, the third stimulus relief package since the pandemic started a year ago. The $1.9 trillion American Rescue Plan Act includes measures ranging from stimulus checks to child tax credits, jobless benefits to vaccine-distribution funds, healthcare subsidies to restaurant aid. The legislation is the largest aid package to pass since widespread restrictions tied to the coronavirus pandemic began in March 2020.
Here’s what to know:
- Federal unemployment benefits of $300 per week have been extended until early September.
- If you collected unemployment in 2020 or do so in 2021, you do not owe taxes on the first $10,200 in assistance.
- Lots of people will receive $1,400 stimulus checks in the coming weeks. Individuals with an adjusted gross income of $75,000 or less and married couples earning $150,000 or less qualify.
- Most Americans with kids will qualify for a new child tax credit: $3,600 per year for every child under 6 and $3,000 for each kid ages 6-17.
Aside from these stimulus bill changes, tax day, April 15th, remains the same. Make sure to file your return on or before that date to avoid penalties. Check out our definitive guide to your 2021 tax return with detailed information on this year’s tax season. In addition, make sure to fund your retirement accounts by this year’s deadline. We will continue to monitor any changes to 2021 filing dates, but we recommend to check with your CPA with any questions on your situation.
Staying on top of your finances and tracking your expenses can seem like a daunting task. When your life continues to get busier, it’s often easier to push aside your finances. However, due to the great technological advances in society, you now have access to simpler and immediate tools that will help you manage your overall finances.
Luckily, there are various ways you can track your own expenses, depending on what works best for your lifestyle. Some consumers like a more hands-on approach in which you log each transaction as it happens, while others prefer creating a spreadsheet to capture a big-picture look at their monthly expenses overall. There are even budgeting apps that automate the process, making it easy to keep tabs on your cash. In one of our previous blogs, we touched on the technologies we provide our clients with that help them see their overall net worth and all the pieces in between in one snapshot.
Our biggest recommendation in managing your expenses and finances is automation. As mentioned earlier, our world today has made it so simple to have access to your finances at the click of a button. Using software and automating your bank statements and payment schedule, credit cards, and more can not only save you time, but help keep you more organized and on top of your spending. It’s easy to swipe your credit card without thinking twice, but with new features such as purchase notifications, you can see in real time how much you are spending and where your credit card balance lies at all times.
How you manage your money is a personal decision that only you can make. While some may prefer logging each of their transactions manually, others may like an app that syncs to their accounts and tracks expenses for them. No matter what route you choose, make sure you are setting aside routine time to check on your spending and evaluate your financial progress as you go. If you have any questions on how to better manage and automate your finances or would like a free trial to our technological software, please reach out to us at firstname.lastname@example.org or schedule a complimentary 30-minute consultation on our site.