Teach Money Skills to Your Middle Schooler This Summer



According to a 2014 University of Michigan Study, the average high school senior – who may already be juggling a part-time job in addition to their schoolwork– knows little about saving or proper money management.

In fact, they spend most of what they earn on entertainment and clothing – a pretty bad precedent for young adults heading off to college and the working world. At that age, the money young teens earn in the summer usually comes from parents for household chores like mowing the lawn. Most parents never have a discussion with their kids about how to spend or save that money. Young teens generally don’t think about whether something is a “want” or a “need” — it is typically a want, which would be spent on a game, candy or comics.

If you’re the parent of a 12-14-year-old, that might give you pause – or provide a great opportunity to make a difference. Consider using this summer to stop your child’s bad money habits before they kick in. After all, even though most middle schoolers are shy of legal working age, many begin to work at odd jobs that are starting to put money in their pockets you don’t see.

Consider these steps for an informal summer money curriculum:

Introduce – or reinforce – the “Needs vs. Wants” talk. Maybe your child has a spending goal for the summer – new clothes, maybe a smartphone. It’s all about intelligent money management, even if the goal is somewhat short-term. The “needs vs. wants” talk is all about delayed gratification, the foundational behavior of healthy money management. Link it to smart shopping, encouraging the teen to price-compare purchases, gather coupons and come up with other ways to save in print and online. It’s also not a bad idea to let your child start suggesting thoughtful purchases when grocery shopping for your family. Before he or she can drive, you’ll have a chance to discuss choices and spending while you’re both in the store.

If they’re not working, give them an opportunity to earn. If your middle schooler isn’t picking up a few dollars babysitting or doing chores, come up with an earning opportunity for the summer. It could mean cleaning out the basement or garage or a project around the house that they can handle. It will provide you both with an opportunity to talk about what he or she will do with that extra income. If your child has an entrepreneurial spirit, encourage converting a hobby into a summer business. If they show empathy to help others, suggest they donate their time to help elderly neighbors with simple yard work.

Introduce the ‘bucket” system. It’s hard to know what to save, spend, give or invest without a system. That’s as true for adults as it is for kids. The “50-25-25” rule refers to setting aside 50 percent for everyday, non-discretionary expenses like school lunches or transportation, another 25 percent for savings and the remainder for discretionary purchases, better known as the latest smartphone your young teen says she or he can’t live without. If your middle schooler still doesn’t have a banking relationship, it’s a good time to get started. A custodial checking account will allow you to see how your child is handling money and debit cards are a reliable means of tracking every cent. Also, for savings, you’ll have the opportunity to introduce him or her to price-comparing accounts for features, savings rates and usage fees. Banking relationships should be treated like any smart purchase.

Discuss making a budget. Remind your children that if they want to maximize any part of the 50-25-25 system, they need to learn how to find value and stick to a budget. Most importantly, they need to know how to track their spending so they can stay within a budget. The number of mobile apps that allow people young and old to track their spending grows each year. Whether it’s pen and paper or technology, let the teen find a budgeting solution they like. They’ll be more inclined to use it and stick to a budget.

Consider being more transparent about your finances. There’s no single right answer to the question of how much you should tell your children about your own finances, but keep in mind that they learn by both good and bad examples. It’s important for young teens to know that anyone – even the most important adults in their lives – can make a great financial decision or a mistake. Speak openly about money, with the appropriate safeguards for personal and family privacy. Find a way to make your personal experiences part of the summer money conversation.

Bottom line: Middle schoolers may grumble they don’t have access to the car keys or the cool clothes and technology that the older kids do. But they do have something more valuable – time to learn critical lessons about money. Use this summer to build their financial knowledge for a lifetime.


By Nathaniel Sillin

Federal student tax? No such thing.

scammercallingImposters posing as IRS agents are trying to trick college students into paying a “federal student tax” – a tax that doesn’t even exist.

Students from many colleges are telling the FTC that the calls go something like this: the so-called IRS agent tells you that you owe a “federal student tax,” and often has some piece of information that makes the call seem legit. Sometimes it’s the name of your school, or another piece of information about you.

The caller demands that you wire money immediately, by MoneyGram or another untraceable method. And, if you don’t act quickly enough, the caller might threaten to report you to the police. If you hang up on the caller, they might make follow-up calls with spoofed caller-ID information.

So, while caller ID might say it’s 911 or the U.S. Government calling, it’s not. It’s all fake.

If you get one of these calls, what do you do? Well, first, know this: No one from the IRS will ever ask you to wire money, or pay by sending iTunes gift cards or reloadable prepaid cards. That’s a scam, every time.

In fact, the IRS will never contact you by phone first. If you owe money for an actual tax, the IRS will send a letter first. So, if you get one of these calls, hang up. Never wire money or give personal or financial information to one of these callers. Report the call to the FTC immediately. And tell your friends at school. They might get the next call!

by Andrew Johnson
Division of Consumer and Business Education, FTC

College Planning 101

gradhatMost parents have already heard the bad news: a college education has never been more expensive. Many, in fact, are still paying off their own student debt and would like their children to avoid that burden. The good news is that there’s a lot parents can do to help their children and make the costs of college more manageable.

  1. Invest in a Tax-Advantaged 529 Account The 529 account is an education savings account and it’s a fantastic deal to save for education expenses for a child, grandchild, or even yourself. Though contributions to 529s are not tax deductible, the account’s earnings are not taxed when you use the money for qualified education expenses – things like tuition, books and even room and board. Start automatic deposits from your paycheck when your child is young and you could have a substantial nest egg when he or she is ready for college.
  2. Apply for Financial Aid You have to be poor to receive financial aid for college, right? Wrong! While many scholarships and grants are needs-based, many other financial aid opportunities are merit-based. So, if your child does well academically, or meets other specialized criteria, he or she may qualify for assistance even if you are affluent. For example, many colleges and universities have endowments and use this “institutional aid” to attract promising students – and not just athletes — to their programs. When exploring your options, keep an eye out for scammers. While there are reputable college financial planners, no legitimate scholarship program will require students to pay to apply for aid. And, of course, be wary of any college funding strategy or investment that sounds good to be true!
  3. Explore Local Community Colleges Academically-speaking, community colleges offer a phenomenal value for meeting almost any degree program’s general education requirements. Plus, students at community colleges often benefit from close teacher-to-student ratios, while many university and four-year college GE classes aren’t even taught by full-time faculty. There are also huge savings on room and board when a child attends a local institution and can continue living with mom and dad. Just remember to investigate requirements for transfer students to ensure that preparatory coursework will be accepted by the student’s chosen degree program.
  4. Borrow Sensibly Even with financial aid and parental support, many students will still need to take out loans to pay for college. The key is to limit borrowing to an amount the student can reasonably be expected to pay back in ten years or less. The lower the loan amount, the better, but a good rule of thumb is to borrow no more than the expected first year’s salary.
  5. Let Your Child Have Skin in the Game If the money’s there to pay all of your child’s college expenses, it’s all good. However, parents who skimp on critical goals — like saving for their own retirement – to pay for a child’s education, may never recover from the financial hit. Remember, your child can pay for college with a combination of student loans and work earnings, but you can’t get a “retirement” loan to pay expenses when you’re no longer working!

Copyright® 2016 Balance

Maintain and Save

MaintainingWhen we’re looking to save money, the first thing most of us do is scrutinize our every purchase to see where we can squeeze out unnecessary spending. After all, a nip and a tuck here and there can add up to a bundle of savings over time! What many forget, though, is the cost savings that can result from proper maintenance of the things we already own – especially the really high-ticket items, like a home and car, which can be costly to repair and even more expensive to replace.

L. Polk reports the average person holds on to a new vehicle for just under six years. That’s longer than it was before the Great Recession, but with the average new car price topping $33,000, it makes good budget sense to find ways to extend the ownership period as long as possible. Just think of the boost it would be to your retirement savings if you bought just one fewer car in your lifetime, and instead directed that cash to an IRA or 401k account!

Here are some simple things you can do to keep your car and other stuff in good shape for the long haul.

Get Regular Oil Changes Be sure to read your vehicle’s owner’s manual to find out how often oil changes and other preventive maintenance is recommended. Nobody knows more than the manufacturer about what your car needs to continue running properly. Plus, not following the manufacturer’s recommended maintenance schedule could affect your warranty.

Check Tires Regularly A flat tire’s not just inconvenient and expensive to replace. If not fixed promptly, a flat tire can lead to costly wheel damage. In addition to checking tire pressure monthly, have tires rotated, balanced and alignment checked regularly. Oftentimes, this regular maintenance is included in the warranty for new sets of tires.

Following Cleaning Instructions If the tag says “dry clean only” believe it! Professional cleaning can add up, so you may be tempted to try laundering at home, but it’s a false economy if it means you ruin an expensive item of clothing. Instead, look at care instructions before you buy and decide then whether or not it’s a smart purchase.

Rotate Your Mattress Some super-premium beds have different maintenance instructions, but if you have a standard mattress and box springs set-up, you’ll get longer life out of it by rotating it at least twice a year. If you notice sagging sooner, go with a three-month rotation schedule.

Replace AC Filters Regularly A home’s air conditioning system is one of the most expensive items to replace if it goes bad. Twice-yearly maintenance is a prudent investment, and replacing filters regularly is really important since clogged filters can cause the system to burn-out prematurely.

Maintain Exterior Paint Shabby and peeling paint doesn’t just make the outside of a home look unkempt. A proper paint job protects surfaces from the sun and weather, and helps ensure that cracks are repaired, preventing leaks and helping to keep destructive pests like termites at bay.

Copyright® 2016 Balance

Summer Spending Tips

summerumbrellaEverybody loves summer, right? School’s out. Students are graduating. Friends are getting married. And everybody’s thinking vacay! Trouble is, the costs for all that fun can add up and sink your savings goals in the process. The good news is that with a little planning, you and your family can enjoy all that summer has to offer, without busting your budget.


Consider these summer spending tips:

1. Visit During the Off-Season. If you couldn’t swing Thanksgiving in Arizona or Christmas in the tropics, summer’s your time to visit. Destinations like these, that draw big crowds in winter, tend to slow down in the hotter summer months. If you can take the heat, you can snag some great deals during the off-season.
2. Try Camping. If you stock up on all of the newest gear, even camping can be expensive, but many outdoor retailers rent all the basic equipment you’ll need for a campground getaway. Some even offer free workshops to show you the ropes of pitching a tent and using a cook stove. Take up fishing and save even more on meals while you enjoy the great outdoors.
3. Skip the Cash Gifts. While it’s true that cash is a one-size-fits-all gift for new grads, it’s not very personal. And if you’ve got lots of students to remember, you could easily zero-out your checking account. Instead, consider giving each of the students in your life a book that’s been influential in your life. One that teaches the basics of budgeting, saving and investing would be a great way to get the new grad off on the right foot financially.
4. Make it a Potluck. Backyard barbeques are a summer staple, but when you’re footing the bill for everybody’s burgers, sides, drinks and desserts, the tab can run a little high. Next time you play host, ask each of your guests to bring something. Most people love to pitch in on a party, and even non-cooks can help by bringing things like soft drinks, ice, and disposable dinnerware.
5. Give a Family Heirloom. If you’ll be attending the wedding of a family member, think about putting together a cookbook of family recipes. Or perhaps it’s time to pass on a family heirloom, such as a piece of jewelry.
6. Be First on the Registry. If you’re not related to the happy couple, their online registry will let you know what gifts they’d really like to receive. But don’t wait until the last minute to shop. The day before the wedding, the only “unclaimed” items on a registry are likely to be super-expensive items that only the rich uncle can afford.

Copyright® 2016 Balance

Financial Planning: Helping You See the Big Picture


Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the financial goals that may be important to you, and each comes with a price tag attached.

That’s where financial planning comes in. Financial planning is a process that can help you target your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources.

Why is financial planning important?

A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a financial plan in place, you’ll be better able to focus on your goals and understand what it will take to reach them.

Helping You See the Big Picture

One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A financial plan will clearly show you how your financial goals are related–for example, how saving for your children’s college education might impact your ability to save for retirement. Then you can use the information you’ve gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you’ll know that your financial life is headed in the right direction.

The financial planning process

Creating and implementing a comprehensive financial plan generally involves working with financial professionals to:

• Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan
• Establish and prioritize financial goals and time frames for achieving these goals
• Implement strategies that address your current financial weaknesses and build on your financial strengths
• Choose specific products and services that are tailored to help meet your financial objectives*
• Monitor your plan, making adjustments as your goals, time frames, or circumstances change

Some members of the team

The financial planning process can involve a number of professionals.

Financial planners typically play a central role in the process, focusing on your overall financial plan, and often coordinating the activities of other professionals who have expertise in specific areas.

Accountants or tax attorneys provide advice on federal and state tax issues.

Estate planning attorneys help you plan your estate and give advice on transferring and managing your assets before and after your death.

Insurance professionals evaluate insurance needs and recommend appropriate products and strategies.

Investment advisors provide advice about investment options and asset allocation, and can help you plan a strategy to manage your investment portfolio.

The most important member of the team, however, is you. Your needs and objectives drive the team, and once you’ve carefully considered any recommendations, all decisions lie in your hands.

Why can’t I do it myself?

You can, if you have enough time and knowledge, but developing a comprehensive financial plan may require expertise in several areas. A financial professional can give you objective information and help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are covered.

Staying on track

The financial planning process doesn’t end once your initial plan has been created. Your plan should generally be reviewed at least once a year to make sure that it’s up-to-date. It’s also possible that you’ll need to modify your plan due to changes in your personal circumstances or the economy. Here are some of the events that might trigger a review of your financial plan:

• Your goals or time horizons change
• You experience a life-changing event such as marriage, the birth of a child, health problems, or a job loss
• You have a specific or immediate financial planning need (e.g., drafting a will, managing a distribution from a retirement account, paying long-term care expenses)
• Your income or expenses substantially increase or decrease
• Your portfolio hasn’t performed as expected
• You’re affected by changes to the economy or tax laws

Common questions about financial planning

What if I’m too busy?

Don’t wait until you’re in the midst of a financial crisis before beginning the planning process. The sooner you start, the more options you may have.

Is the financial planning process complicated?

Each financial plan is tailored to the needs of the individual, so how complicated the process will be depends on your individual circumstances. But no matter what type of help you need, a financial professional will work hard to make the process as easy as possible, and will gladly answer all of your questions.

What if my spouse and I disagree?

A financial professional is trained to listen to your concerns, identify any underlying issues, and help you find common ground.

Can I still control my own finances?

Financial planning professionals make recommendations, not decisions. You retain control over your finances. Recommendations will be based on your needs, values, goals, and time frames. You decide which recommendations to follow, then work with a financial professional to implement them.



Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer Member FINRA/SIPC) and SEC Registered Investment Advisor. products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. NASA Federal Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.

*There is no assurance that working with a financial professional will improve investment results.