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4 Early College Savings Plans

May 28, 2014

By Nikki Cecala

A pink piggy bank with a graduation cap sits on a pile of $20 bills.

It is never too early to start a college fund for your child’s future. Many parents do not start saving money until their children have started school, but you can start saving as soon as they are born.

Think about your child’s first birthday: he or she won’t remember any gifts, but savings bonds or checks deposited into a college fund can grow into a gift that your child will be grateful for 17 years later.

Here are four options to help set your child up for schooling, living expenses, and other miscellaneous events that may come their way as they enter adulthood.

Gerber Life College Plan
This plan provides life insurance as well as a school fund. You can set up affordable fixed payments and your money will continue to grow, even in the event of an economic downturn. Your child will receive a guaranteed payout of $10,000 to $150,000, depending on what you put in, and can use the money for anything, from college expenses to electric bills.

529 Plan
There are two types of 529 plans, which are also known as qualified tuition plans: prepaid plans and college savings plans. Prepaid plans allow you to purchase tuition credits at today's rates to be used in the future. They may be administered by states or higher education institutions. Currently, all states offer a college savings plan or a prepaid tuition plan or both. College savings plans are different because they are based on market performance of investments, which typically consist of mutual funds.

TrustEgg
TrustEgg is another fund that allows the child to use the money toward other things besides school. An account with TrustEgg is a UTMA (Universal Transfer To Minors Act) custodial account. You can make contributions and share the account with friends and families who might want to contribute. There are no minimums, no upfront fees, or maximum contribution limits, but there is an annual maintenance charge of less than one percent of the amount in the account. When the child turns 18, he or she will receive the funds whether or not it’s for school.

Savings Account
A simple savings account with your bank also works just fine. Contact your bank to see what plans they can provide. Most banks also pay you interest based on how much you save a month. It may not be much, but every little bit added counts!

You can always keep money stashed away in your home, but it is safer and smarter to invest it in a bank or school fund. Tuition is always rising, the economy is unpredictable, and no parent wants his or her child to struggle because of a financial situation.

Tags :  academicfinancialcollegeeducation
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Teen Pregnancy: Prevention and Support

April 17, 2014

By Nely Bergsma

A pregnant teen holds her baby belly.

All stages of a child’s development have its challenges and the teen years are, by all means, no exception. By now, you have introduced life to your children, guided them as they explored and tried new things, and stood in support through the challenging times they faced. All in hopes that they will make good choices, be successful, and reach their life potential: Plan A. That is all a parent wants for his or her child.

Now that your child is a teenager, you continue to introduce, guide and support his or her growth. You talk about the importance of making good decisions. You’ve discussed topics such as drugs, alcohol, and sex. What about the topic of teen pregnancy?

How do you help prevent your teenager from becoming pregnant or getting someone pregnant? In my personal quest for direction, both as a mentor to teenage girls and a parent, I went straight to the source with these questions: teenagers themselves. The main theme in all of their responses was honesty. They want their parents to be honest with them. They don’t want to be lectured or threatened. They want realistic information. They welcome parents having ongoing conversations (examples below) with them about the challenges of parenting:

  • Becoming a teenage parent means you will be responsible for another human being for the rest of your life, even before yourself.
  • It means you may need to leave school, perhaps not go or hold off on going to college. You may have to delay or give up on the career you chose
  • You will need to find the means to financially support your child. What job can you get as a teenager that will allow you to do this?
  • You will need to decide where you want to live. Is the expectation to marry? Is the expectation to live with your parents?

So you’ve done everything you feel you could have to prepare your teenager. How will you, as a parent, address this issue, should it occur? Again, I asked. The overwhelming answer was again that they wouldn’t want to be lectured or threatened. They would want love, support, and understanding. They know they have disappointed you. They again welcome parents having conversations with them about Plan B:

  • Show him or her what a supportive parent you can be.
  • Help him or her to stay in school. Education is key to your child’s success.
  • Help your child create a budget to manage the care of his or her child. Can you help?
  • Help him or her determine where is the best place to live and where is the best place to raise a child. Can she or he remain at home until graduation?

While U.S. teen pregnancy rates are decreasing, teen pregnancy is a reality that parents need to consider. Just because you speak to your child about pregnancy does not mean that you are encouraging sexual activity. Your teenager may appear not to want to hear your perspective, but having ongoing conversations may prove successful in getting him or her to the finish line.

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After College: Moving Back In

March 25, 2014

By Jessica Vician

A young 20s son sits on the couch at his parents' house eating chips and watching television.

Millennials are moving back in with their parents in record numbers. In 2012, 36 percent of Millennials (those between the ages of 18 and 31) lived with their parents, a statistic up four percent since 2007. If you have a child graduating from college this May or June, it’s time to consider whether moving back in is an option.

Before making any decisions, ask your graduating student what his or her plans are after graduation. Find out if he or she has already started the job hunt. If not, ask your child to meet with the career development department within his or her college to begin preparing for and scheduling interviews.

If it looks like your child may not have a job immediately following graduation, discuss with your parenting partner whether you both are comfortable letting your child move back in with you. If so, set expectations and goals with your child. After all, allowing your child to move back in with you can cost you between $8,000 to $18,000 a year, depending on how much of his or her expenses you are willing to cover, so it’s important that the family agrees and honors these expectations.

Here are a few parameters you should consider for your child:

  • Rent. Will you ask your child to pay you rent? If so, how much?
  • Job applications. Set a goal for the number of job applications your child must complete and send each week. 
  • Networking. If your child is interested in staying in his or her hometown or neighboring area, require him or her to attend relevant networking events. If you or your friends can connect your child to contacts in his or her industry, arrange informational interviews.
  • Timeline. If your child will not be working, give him or her a deadline to get a job. If he or she has followed your other rules and has not found a job by that date, your child must get another job or move out. Even if the job is at a coffee shop or an entry-level sales job, your child will learn valuable life and business skills that are marketable to future employers.

Setting goals for your child to find a job and move out of your home benefits both you and your child. These goals will help your child find a job by providing structure and deadlines in a competitive job market. The parameters also help establish skills that your child will need throughout his or her career: setting and meeting deadlines, networking, and responsibility.

Tags :  collegesocialparentingfinancial
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Finish Your Degree for You and Your Child

March 24, 2014

By Jessica Vician

A father poses for a photo with his children at commencement.

Parental support, along with quality teachers, homework completion, and study time can increase your child’s educational success. But did you know that modeling positive behavior and completing your own education could also help your child succeed in school?

According to a 2012 study through the U.S. Department of Education, students with parents who graduated from college are more likely to succeed in school than students whose parents did not finish high school. Those same students are over 5 percent more likely to be at an advanced level in school than those whose parents did not finish high school.

If you have always wanted to finish your high school or college degree, but decided to put your child’s education before your own, consider these facts:

Look into furthering your education to set a strong example for your child and help him or her perform better in the classroom. Contact your state’s Department of Education to find out how to earn your high school diploma. Take classes toward a certificate or undergraduate degree at a community college. There are many scholarships available for adults looking to finish a degree.

You are already doing a great job for your kids by supporting them. Take the next step to support yourself by finishing your education. You will be more confident and knowledgeable and can pass those qualities on to your child to help him or her succeed in school and later in life.

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My Story: Choosing a Daycare

March 18, 2014

By Ana Vela

Ana's sonogram

My husband and I live 1200 miles away from our families, work full-time jobs, and are expecting our first child. I never imagined that I wouldn’t have family nearby to help us raise our child. Growing up, my mother raised my siblings and I herself. As a grandmother, she has helped raise my two nieces. Naturally, I had planned for her to help raise our child as well.

I thought this was only common where I grew up, but I was surprised to discover that the U.S. Census Bureau indicates 49 percent of children ages 0–4 with employed mothers were still cared for by a relative. Only 24 percent were in a center-based care facility. It is nice seeing how common it still is to have relatives help with childcare. Since that is not an option for us, we really didn’t know where to begin our search. Here’s what I learned from trying to figure this out.

Discuss what you’re looking for.
Before we started searching, my husband and I decided that we needed to be on the same page about what we want in childcare. We came up with a list of what we are looking for:

  • Budget-friendly childcare
  • English and Spanish language accommodations during care (it’s important for us to promote bilingualism with our child)
  • Convenience and flexibility (hours, location, emergency plan)
  • A welcoming, diverse, friendly, and safe environment

Start researching ASAP. 
I quickly discovered that some childcare facilities have waiting lists now for care that starts in July! Start your search six months prior to needing the care. Ask other parents for recommendations either in person or in online forums, read online reviews, and drive around to find nearby locations.

Look at available resources. 
I discovered that many states have nonprofit organizations that provide online lists of quality childcare resources and referrals in your area. Many of the lists include information such as accreditations, ratings, and years of service. If your employer offers any kind of benefits for childcare, talk to them for information. My husband’s company hosted a childcare fair where he met with several daycare centers to ask questions and get rates.

Understand care options. 
Through research, we discovered there were several options for childcare (listed in order from least to most expensive):

  • At-home daycare
  • Off-site daycare facilities
  • Au pair or nanny services (an au pair is a foreign visitor who lives with you and provides childcare)

Know your budget and stick to it. 
Some employers offer benefits such as flexible spending accounts for childcare, matching contributions, discounts, and priority placement on waitlists at certain daycares. This information helped my husband and I set a budget for childcare. We want to choose care that’s within our budget to ensure we are not stressed over finances and that we have a safety cushion for emergencies.

Visit the options. 
I learned that many sites allow one free day of care for your evaluation. Take advantage and schedule tours to ask questions. Here are some questions you may want to ask:

  • Are you accredited by NAEYC?
  • Do you accommodate cloth diapers or only disposable?
  • How do I provide breast milk for my child?
  • What is the child-to-teacher ratio?

Choosing childcare is a big decision and we are very nervous about it. We still have several visits to make before we make a final decision, but as long as we stay true to our list of needs and wants, we are confident we will make the right choice.

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