Five Ways to Encourage Good Saving and Spending Habits in Your Children


How often do you discuss money with your children? If your answer is “not often,” you’re not alone.

There is an opportunity to help your children form strong spending and saving habits at an early age, and doing so can have a concrete impact on their futures. For example, recent research suggests that children with savings – even as little as $1 to $499 – are four times more likely to go to college than children with no savings at all. There are many reasons why it’s beneficial for children to learn how to manage money from a young age, and getting started sooner rather than later can drastically shape your children’s financial futures for the better.

Here are five ways you can encourage your children to develop good saving and spending habits.

Find a balanced allowance. One reliable rule of thumb for weekly allowance is to give your children $1 for each year of their age. For example, if your child is eight years old, you would give her or him an allowance of $8 a week. Of course, one size does not fit all, and you can adjust this allowance to fit your family rules and values.

Reward them for saving. Back-to-school shopping presents a great opportunity to teach your children how to differentiate wants from needs. Set a firm school shopping budget, and make a list with your children of what they need for school. Go over their list to see which items are really necessary versus which items are wants. Once you’ve determined what they need, help them calculate how much is left in the budget to spend on wants. Consider rewarding your children by giving them the surplus money to spend as they choose – but only if they’ve covered all of their necessary supplies first. If you have a teenager who’s hoping to drive a new car soon, consider matching his or her savings.

Take them to the bank. Middle school is a good time to replace that savings jar with a savings account, and if your children have been saving cash for years, it can be very rewarding to take that money to the bank or credit union and open their first account with it. This is a great way to introduce them to the concept of interest, and how savings accumulate over time when left unspent. Visit the Consumer Financial Protection Bureau’s website for more information on savings accounts for children.

Talk to your children about essential expenses. As your children enter high school, you may want to consider delving into more complex financial concepts with them. If your teen has a paid job, review their paycheck with them and explain where the money goes and why – for example, if money is withheld for tax purposes. Or talk to them about the larger expenses on the horizon, whether it’s a car or college tuition, and discuss all the financial pros and cons of these investments.

Help them earn their own money. Earning income through hard work is one of the best ways to learn the true value of money. Encourage your children to earn money, whether it’s through setting up their own lemonade stand, doing chores around the house or neighborhood, or, if they’re teens, getting a part-time or summer job. This helps your children supplement their allowance and teaches them the real-life value of working.

Bottom line: Learning how to save and spend wisely is crucial to good money management, and teaches other important values. The best way to help your children build solid financial skills is through practical, age-appropriate lessons, which are relevant as they grow into young adults.

By Nathaniel Sillin

3 Ways to Help Save Money on Your Kids’ Sports


Participating in local sports is one of the most important and influential times in a child’s life both in terms of personal and social development. Often for the first time, your son or daughter will be forced to not only get along with peers who are outside their normal comfort zone, but also to work together with them towards a common goal through hard work. It’s also a time, however, that parents tend to go a bit overboard with treating the situation like their kid as about to try out for the New York Yankees or New England Patriots.

Raising kids is hard enough on your bank account, so when they start experimenting with sports and other social clubs, it’s really important to invest your family’s finances on not only the right things, but also at the right pace. Here are three helpful hints that will assist you in giving your children the support and tools they need to succeed (and more importantly have fun) in their athletic endeavors, while keeping the family’s nest egg intact.

  1. Volunteer Your Time– One of the greatest joys a parent-child relationship can experience is that of a coach and athlete while growing up through your town’s youth sports leagues; and not only does it create lasting priceless memories for everyone involved, volunteering your time to the team has numerous practical benefits too. First and foremost, it will be easy to gauge your child’s passion for the sport; so if he or she isn’t into it, you can move along to the next one without investing too much time, energy, and money. Additionally, most leagues exclude the signup fees for the families of their coaches, which is a nice bonus for the effort you’ll put into the role.
  1. Be Smart with the “Needed” Accessories– We know you think your kid is going to be the next Derek Jeter (we thought ours were going to be too), but there’s no need to go buy everything in Modell’s right now just because your son or daughter want to play on their friend’s team. Start out by seeing what the league is going to provide, i.e helmets, balls, and bats. From there, look into cheaper means of acquiring what’s left to purchase- try garage sales, second hand shops, stores like Play it Again, and even look into family hand me downs. The quality of the items are normally more than appropriate because children grow out of things so quickly; there’s simply not enough usage to really develop wear and tear in some instances so don’t be afraid to give it a shot. More and more teams are also holding their own gear swaps too, which can be the perfect opportunity for cheap equipment.
  1. Make Friends with Other Parents– This one should be a no brainer because there are just so many responsibilities with having a son or daughter fully entrenched in sports, you’re going to need back up. Not to mention, developing friendships with the parents of your kid’s teammates will open up a whole world of money saving options. Carpooling alone will save you tons on gas and the health of your vehicle, while you can also take advantage of certain deals for equipment, clothes, and leagues by doing everything together. If your children wind up playing on travelling teams, you can even save by sharing hotel rooms and doing group meals instead of eating out every night. Additionally, let’s not forget the huge benefit of not having to run out on work or call a sitter every time something unexpected comes up with the team like makeup games or changing practice times. You’ll have a network of friends that can help in these situations, saving you plenty of cash along the way.


Investment Alternatives for Retirement Income



As retirement approaches, you might begin wondering whether the “golden nest egg” you’ve accumulated is enough to provide the retirement lifestyle you envision. To answer that question, you must determine how much annual income you’ll need in retirement.

After you’ve made that calculation, the next step is to develop a plan to turn your nest egg into an income stream that will be sufficient to meet your retirement needs and goals. Retirement income planning is a very individual matter, and no single strategy or investment is right for everyone. The strategies and investments you choose should be based, at least in part, on your desired lifestyle, risk tolerance, life expectancy, potential return on your investments and their degree of volatility, as well as other available sources of fixed income such as Social Security and pensions.

There are many different types of investments available. Understanding how they work individually and in combination with other choices can help you decide which investment options will work for you.

Caution: All investing involves risk, including the possible loss of principal.


Annuities are a common investment for retirement income planning primarily because they provide the opportunity to receive a stream of income for the rest of your life. Most annuities offer you the option to take regular or intermittent withdrawals as well. These types of annuities are called “deferred annuities.” Deferred annuities allow your contributions to grow during a period called the “accumulation phase.” During the accumulation phase, earnings accrue tax deferred (i.e., earnings are not subject to income taxes until they are withdrawn). Most deferred annuities allow you to periodically withdraw some of the earnings (or some of the earnings and principal) from the annuity, or you can withdraw all of the earnings and principal from the annuity (this is referred to as full surrender). Another withdrawal option found in most deferred annuities is called “annuitization.”

With annuitization, you receive an income stream from the annuity. The annuity issuer pays you an amount of money on a periodic basis (monthly, quarterly, yearly, etc.). You can elect to receive either a fixed amount for each payment period (called a “fixed annuity payout”) or a variable amount for each period called a “variable annuity payout”). You can receive the income stream for your entire lifetime (no matter how long you live), or you can receive the income stream for a specific time period (10 years, for example). You can also elect to receive the annuity payments over your lifetime and the lifetime of another person (called a “joint and survivor annuity”).

Immediate annuities offer the same payment options as an annuitized deferred annuity. However, immediate annuities differ from deferred annuities in a few ways. While you can make a single payment or many separate payments for most deferred annuities, immediate annuities are usually funded with a single, lump-sum payment. Immediate annuities do not have an accumulation phase; rather, payments begin within one year from your investment in the annuity. And, unlike deferred annuities, most immediate annuities do not allow for partial withdrawals, although there are some exceptions.

Immediate annuities pay a steady income for a fixed period of time, or for the rest of your life, or for the joint lives of you and  another. Often, if you have an immediate need for income, you may be able to buy an immediate annuity.

Caution: Annuity guarantees are subject to the financial strength and claims-paying ability of the annuity issuer. Also, withdrawals  made prior to age 59½ may be subject to a 10 percent federal income tax penalty.

Fixed Versus Variable Deferred Annuities

There are two basic types of deferred annuities: fixed and variable. The issuer (an insurance company) of a fixed annuity  promises that a minimum rate of interest will be paid on the annuity, but the actual rate of interest credited to the annuity may be higher than the minimum rate. Fixed annuities may provide a source of income by allowing you to withdraw interest earnings, often as frequently as monthly, and the annuity contract may also let you withdraw a stated percentage of the annuity’s account value, usually 10 percent each year, without incurring surrender or withdrawal charges. But, if you withdraw your money early from an annuity, you may pay substantial surrender charges to the insurance company, as well as tax penalties.

Variable annuities have a variety of investment options called subaccounts” available for your selection. The investment choices may include general equity stocks, balanced portfolios, bonds, and other specialty investments such as international stocks. Unlike a fixed annuity in which the issuer promises that a minimum rate of interest will be paid on your investment, the issuer of a variable annuity does not promise any rate of return on the underlying investment portfolios. There is no guarantee that you will earn any return on your investment, and there is a risk that you will lose money. Generally, earnings from variable annuities may be withdrawn in the same fashion as with fixed annuities. Also, like fixed annuities, most variable annuities allow for withdrawal of a stated percentage of the annuity’s account value without incurring withdrawal charges.

Caution: Variable annuities are long-term investments suitable for retirement funding and are subject to market fluctuations and risk, including the possibility of loss of principal. Variable annuities contain fees and charges including, but not limited to, mortality and expense risk charges, sales and surrender (early withdrawal) charges, administrative fees, and charges for optional benefits and riders.

Caution: Variable annuities are sold by prospectus. You should consider the investment objectives, risk, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the variable annuity, can be obtained from the insurance company issuing the variable annuity or from your financial professional. You should read the prospectus and consider the risks and objectives carefully before you invest.

Annuity Advantages

One of the main advantages of a deferred annuity is that any earnings accrue tax deferred until they’re withdrawn. However, annuities do not provide all the tax advantages of 401(k)s and other before-tax retirement plans, which not only allow you to defer taxes on income and investment gains, but also allow your contributions to reduce your current taxable income.

In addition, annuities may include a death benefit that will pay your beneficiary a specified minimum amount, such as your total purchase payments.

Another advantage of an annuity is that you can choose to receive payments from the annuity for your entire lifetime. Even if you live to the age of 100 or beyond, you will continue receiving payments.

There is no limit on how much you can invest in an annuity. In addition, most annuities have options available through riders, usually for a fee or charge, that add benefits to the basic annuity contract, such as an enhanced death benefit, guaranteed income without annuitization, and penalty-free access to annuity proceeds due to a terminal illness or disability affecting the annuity owner.

There is no age limit at which you must begin receiving payments or taking withdrawals. If you do not need the money from the annuity, you can continue to have the earnings accrue tax deferred.

If you die before the distribution period begins, the annuity proceeds will go directly to the beneficiary (or beneficiaries) you have named in the contract, bypassing probate.

Annuity Tradeoffs

Annuities normally come with higher fees and expenses when compared to other types of investments such as mutual funds and bank deposits. Almost all issuers of annuities, particularly variable annuities, charge a variety of fees for the administration and management of an annuity account, including mortality and expense risk charges, administrative fees, underlying fund expenses, fees and charges for other features and riders, and tax penalties if you withdraw your money before age 59½, unless an exception applies. Because variable annuities have more investment options than fixed annuities, variable annuity fees are generally higher, but in either case, fees can be costly.

Generally, deferred annuities assess surrender charges for withdrawals within a specified period, which can be as long as six to eight years, although these charges normally decline and eventually are eliminated the longer you hold your annuity. Also, withdrawals taken before age 59½ may be subject to a 10 percent tax penalty in addition to any gain being taxed as ordinary income.

Investments in an annuity are not tax deductible. You generally use after-tax dollars to purchase an annuity. And, annuity earnings withdrawn (but not principal) will be taxed at the ordinary income rate, rather than at the lower capital gains rates applied to investments in stocks, bonds, mutual funds, or other non-tax-deferred vehicles in which funds are held for more than one year.

While there are some exceptions, once you elect a specific distribution plan, annuitize the annuity, or buy an immediate annuity and begin receiving payments, there’s usually no turning back. For example, you are not allowed to change from an election to receive annuity payments for a five-year period to an election to receive payments over your whole life.

Another tradeoff with certain types of annuities (specifically immediate annuities) is that the income from the annuity may not keep pace with inflation over the long term.

If you choose to annuitize your deferred annuity or purchase an immediate annuity, and select a “life only” payment option, annuity payments will stop at the death of the annuitant. It is possible that the annuitant can die without receiving at least the return of the investment in the annuity.


When it comes to retirement income planning, the challenge is trying to figure out how to generate a steady and reliable payout from your investment portfolio without running out of money too soon. While your plan should involve an asset allocation personalized to meet your particular retirement needs, it is often necessary to combine assets oriented toward growth with investments that favor income.

Investments that generate a regular, steady stream of income give you a spending base and may help offset some of the ups and downs of the stock market. There are many investments that provide income, including certificates of deposit, Treasury securities, bonds, dividend-paying stocks, and real estate investment trusts. Income may be in the form of interest, dividends, or earnings.

Caution: Yields on income-oriented assets may not be enough to meet your retirement income needs. Also, inflation tends to  increase expenses over time, and some fixed-income investments may not keep up with these increasing costs. As a result, you  may need to combine income-producing assets with growth-oriented assets.

Caution: All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing  strategy will be successful.

Certificates of Deposit (CDs)

CDs, which can be purchased from banks and brokerage firms, can be used to provide regular income. CDs pay a fixed interest  for a fixed period of time, usually from three months to five years. They usually pay higher interest than a savings account, and a penalty is charged for cashing in the CD before its maturity date. Typically, you can have the interest earned from the CD paid to you as income, sometimes as frequently as monthly. Bank-issued CDs are insured by the federal government up to $250,000 per account.

Caution: A brokered CD is a bit different from a bank-issued CD. It may have a much longer term–up to 20 years–and a longer-term brokered CD may pay interest at designated intervals rather than at maturity. It also may have a call feature that permits the issuer to redeem it before maturity. If you needed to replace that income stream, there’s no guarantee you would be able to reinvest the proceeds of the CD at the same interest rate. Also, if a brokered CD is traded in the secondary market, the price you get if you sell it before maturity may be more or less than your original investment. Finally, if a brokered CD is issued through a bank or thrift where you already have an account, the $250,000 FDIC insurance covers both your CD and that account; anything over the $250,000 limit is not insured.

Higher yields are usually offered on CDs with longer maturities. However, to avoid the early surrender charge, you’ll have to keep the CD invested until its maturity. In order to obtain higher CD yields and still maintain some liquidity, you can buy CDs of varying maturities (this is referred to as laddering). This strategy allows you to take advantage of interest rates spread over several  maturities without sacrificing liquidity.

Dividend-Paying Stock

Some companies share their profits with their investors by paying shareholders a dividend. Companies that have regular profits and do not need to reinvest all of them back into the company may issue dividends regularly. Stocks that regularly pay dividends may supply an ongoing source of income. Dividends are taxed either as ordinary income or as qualified dividends. In order to be taxed as qualified dividends, dividends must be paid by a domestic corporation or a qualified foreign corporation, and you must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Qualified dividends are generally taxed at the rates applicable to long-term capital gains.

Caution: Because dividends on common stock are subject to the company’s performance and a decision by its board of directors, they may not be as predictable as income from a bond. Some mutual funds also are focused on providing income from stock dividends, bond interest payments, or some combination of the two.

Preferred Stock

Preferred stock may be used to generate income because it pays a fixed rate of return in the form of dividends. Dividends on preferred stock are paid before the common stockholders receive a dividend. Additionally, preferred shares usually pay a much higher rate of income than common shares. Also, while most preferred stockholders do not have voting rights in the company, their claims on the company’s assets will be satisfied before those of common stockholders if the company experiences financial difficulties. Almost all preferred stocks have a provision allowing the company to call in their preferred shares at a set time or at a predetermined future date.

Mortgage-Related Securities

Mortgage-related securities are fixed-income investments that generate interest revenue from pools of home loan mortgages. Mortgage-related securities represent an ownership interest in mortgage loans made by financial institutions such as savings and loans, commercial banks, or mortgage companies used to finance borrowers’ purchases of homes or other real estate. Examples include Government National Mortgage Association securities(GNMA or Ginnie Mae), Federal Home Loan Mortgage Corporation securities (FHLMC or Freddie Mac), and Federal National Mortgage Association securities (FNMA or Fannie Mae). The value of a mortgage-related security can vary depending on what is happening with the underlying mortgages. For example, if a large number of homeowners refinance those mortgages or default on them, as occurred in the months leading up to the 2008 financial crisis, the value of a security based on those mortgages can fall.

Corporate Bonds

Corporations issue bonds to help pay for expansion, equipment, or operating expenses. Corporate bonds are a company’s IOU for the money you’re lending to the company through the purchase of the bond. Corporate bonds provide a steady and predictable stream of income through interest payments. Though they are not risk-free(e.g., a bond issuer could default on a payment or even fail to repay the principal), bonds as a whole are considered somewhat less risky than stocks because a corporation must pay interest to bondholders before it pays its stockholders. If a company declares bankruptcy or dissolves, bondholders are compensated before stockholders.

However, bonds are subject to inflation risk. As inflation rises, interest rates also tend to rise. Because newer bonds would offer those higher rates, older bonds with lower returns are worth less on the secondary market. If you needed to sell a bond before maturity when its price was down, you could lose money. Also, if a bond is thinly traded, you could have difficulty selling it when you want to, or have to accept a lower price than you’d like.

If you’re considering using bonds primarily to provide current income, buying bonds at their face values and holding them to maturity provides a stable stream of income and the assurance that, unless a bond issuer defaults, you’ll receive your entire investment back.

In some cases, the issuer of the bond may exercise its right to call the bond–that is, to repay the debt evidenced by the bond before it is due. Each bond’s agreement specifies whether it is callable and how soon. Typically, a bond is called when interest rates drop and the issuer can refinance the loan at a more favorable rate. The higher the interest rate, the more likely the bond will be called. As with a brokered CD, if you needed to replace that income stream, there’s no guarantee you would be able to reinvest the proceeds of that bond at the same interest rate.

The variety of bonds available offers you the flexibility to tailor our portfolio to your individual needs and investing style. Strategies for bonds can range from something as basic as buying a bond and holding it to maturity, or earmarking the bond proceeds for a specific need, to strategies such as laddering maturities and bond swapping to achieve a higher yield or tax advantage.

Municipal Bonds

Municipal (muni) bonds are issued by state and local governments. Most state and local governments do not tax muni bond interest from that state, though regulations vary from state to state. Also, muni bond interest is usually (but not always)exempt from federal income tax as well. Whether muni bond interest is taxable at the federal level depends on how the issuing
government uses the money raised by the bonds. If the project that the bond is funding is deemed to have primarily a private rather than a public interest, the bond’s interest may be taxable at the federal level. Because of their tax-advantaged status, tax-free bonds almost always yield less than corporate bonds with the same maturity date. Munis are subject to the same risks as other types of bonds, such as interest rate risk, inflation risk, reinvestment risk, or default by the issuer (though the rate of muni defaults has historically been lower than that for corporate bonds).

Caution: Income from municipal bonds may be included in the calculation of the alternative minimum tax. Be sure to consult your tax professional about municipal bond income.

Treasury Securities

Treasury securities are sold on the open market by the Department of the Treasury and are backed by the full faith and credit of the U.S. government. That makes them a relatively safe investment, though they are subject to the same market forces as other bonds. The most commonly used Treasury securities are Treasury bills (T-bills), Treasury notes, Treasury bonds, and Treasury Inflation-Protected Securities (TIPS). Interest earned on these Treasury securities is not taxed at the state or municipal level, but is subject to federal income tax.

Treasury notes (usually issued in 2-year to 10-year maturities) and Treasury bonds (issued in 30-year maturities) pay interest semiannually until maturity.

TIPS are designed to adjust both your initial investment (principal)and the interest paid every six months to reflect changes in the Consumer Price Index (CPI), a widely used measure of inflation. If the CPI increases, the Treasury recalculates your principal to reflect the change. The interest rate is fixed; however, it also will change with inflation because it is applied to the adjusted principal amount. If the CPI figure rises, the principal will be adjusted upward with the interest paid based on the increased principal; if deflation occurs, your principal could actually drop, correspondingly decreasing the interest paid. When the TIPS matures, you will receive either the inflation-adjusted principal or your original investment, whichever is greater. TIPS are available in 5-, 10-, or 20-year maturities.

Caution: The inflation rate over time needs to exceed the difference between a TIPS’ yield and that of an investment without inflation protection; otherwise, the TIPS offers little advantage.

Real Estate Investment Trust (REIT)

A REIT is a company that buys, develops, manages, and/or sells real estate such as skyscrapers, shopping malls, apartment complexes, office buildings, or housing developments. Rather than investing directly in real estate, investors in REITs invest in a professionally managed portfolio of real estate or, in some cases, mortgage-backed securities. Some REITs trade on the major exchanges, just like stocks. Others, known colloquially as “non-traded REITs,” do not; these may involve both high fees and low liquidity, meaning you could have difficulty selling your shares when you want to. REITs may make money from rental income, profits from the sale of property, and other services provided to tenants. REITs also receive special tax considerations; they do not pay taxes as long as they pay out at least 90 percent of their net income to their investors.

However, REITs are subject to the same risks that apply to the underlying properties or securities. These may include declining property values, the failure of tenants to pay rents, lack of mortgage availability, oversupply of available space, changes in property tax or zoning laws, rising interest rates, natural disaster, early repayment of or default on mortgages, or a general decline in economic conditions. Those factors can affect an income stream from an REIT. There are many types of REITs, so before you invest, be sure you understand how the one you choose functions.


Some retirees put all of their investments into bonds or other fixed-income investments when they retire, only to find that they haven’t accounted for the impact of inflation or potentially decreasing bond yields. Keeping a portion of your portfolio invested in assets oriented toward growth gives you potential for higher returns, albeit with increased risk associated with market volatility.


What role should stocks play in your retirement income plan? Conventional wisdom had been that as you approach retirement, you should convert most of your stocks and equity investments to fixed-income assets such as bonds and cash. However, several factors have evolved that heighten the importance of including a growth component as part of your retirement portfolio. First, retirees are living longer than ever before, which means that your income will have to last longer. While past performance is no guarantee of future results, stocks historically have had better long-term returns than bonds or cash, while payments from bonds that are based on fixed interest rates can lose purchasing power to inflation over time.


Mutual funds can provide a way for retirees to conveniently obtain the benefit of owning a diversified and professionally managed portfolio. Each fund invests in numerous securities, and this diversification reduces the impact of a loss on any individual security.

A mutual fund spreads your investment dollars among several individual securities more efficiently than you might be able to on your own (though diversification alone cannot guarantee a profit or ensure against the potential for loss). Diversity can help you manage the degree of volatility you face, because gains from some investments can offset losses from others.

Tip: A new type of offering has merged in the mutual fund market that is designed to help retirees strike a balance between current income and future growth. Generically referred to as distribution funds, they are also known as managed payout funds and retirement income funds. These funds attempt to provide income while maintaining some equity for savings, though there is no guarantee they will always be able to do so. These funds can vary widely in their objectives and strategies for attempting to provide income. As a result, it’s especially important to familiarize yourself with a distribution fund’s specifics, which can be found in the fund’s prospectus, before purchasing shares.

Caution: Before investing in a mutual fund, carefully consider the investment objectives, risks, charges, and expenses for the fund.



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 rofessional 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.

Six Basics to Consider Before Investing with a Robo Advisor


You’re looking to grow your money, but you’re not quite sure how to get started.

Should you go robo?

Robo advisor, that is. A robo advisor is a digital investment management service that allows you to input your funds, financial data and investment preferences online and designs algorithm-based recommendations based on your responses. While a human advisor may charge one percent or more of your invested assets to help you manage your money, robo advisors typically charge only a fraction of that amount in management fees. Some allow you to open an account with only a few dollars, and others don’t even require a minimum deposit to open an account.

Major investment firms have entered the growing robo advisor market with their own computerized services. As new advisor options emerge and evolve quickly, it’s a good idea to consider all options carefully. Examine the services industry experts provide to know what you should look for in an advisor.

Here are some considerations to factor into your research on robo advisors as you evaluate whether they are right for your needs.

1. Reasonable management fees and small initial investments. Robo funds often have preset investment choices based on client questionnaires about risk tolerance and investment goals, and they typically charge lower fees than human advisors. Human advisors may charge upwards of one percent of all the money you have in your account, while robo advisor pricing options are typically a fraction of that.

2. The best robo advisor sites are streamlined and simple. Good robo advisor sites provide clearly organized, straightforward advice. For example, one of the leading robo advisor sites makes sure you have an emergency fund in place before you start selecting investments. That’s the kind of good financial practice you should look for in an advisor, robo or not.

3. Federal regulators are still evaluating robo advisors. The Securities and Exchange Commission has its own recommendations for investing with robo advisors, but the most important unanswered question is whether robo advisors (and the companies that own them) really exercise fiduciary responsibility by truly putting the needs of the investor first. It’s essential to understand the risks involved with entrusting your investments to the robo advisor market, where restrictions and consequences are still not completely clear.

4. As major investment firms and even banks enter the market, it’s likely that more diverse options in advisory services and pricing will emerge. As big investment names are starting to offer their own robo advisor options for small investors, different robo advisor providers will likely start to differentiate their marketing, services, and fees. It’s always smart to shop around for the best deals and fit for you.

5. Robo advisors are no substitute for a basic personal finance education. It’s easy to sign up for a robo fund or even find a fee-only financial planner, but it’s still important to cultivate your own financial knowledge. Consider public resources on basic financial topics, the range of money management resources offered on Practical Money Skills for Life, or workshops at your community college or public library. Self-education is the most powerful tool for any endeavor, but it’s especially essential to handling your finances.

6. Robo advisors aren’t capable of providing truly personalized investment advice. An algorithm can’t ask countless questions about your long-time financial goals and values or answer all of your queries during a major market change. Though robo advisors provide a low-cost way to get started in investing, you won’t have someone who can give you personal advice when unexpected situations arise. Before you sign up, take some time to consider how much personal assistance you think you’ll need.

Bottom line: Like most computerized services, automated financial advice and investment planning will probably get more sophisticated with time. But while robo advisor services allow lower initial investments and fees, it’s important to study the pros and cons first.

By Nathaniel Sillin

Choosing the Right Project for Your Home Renovation


Before the housing market collapse of 2007, all renovation projects – no matter how expensive – seemed like winners. Today, home renovation is a whole new ballgame and why you should carefully research any potential fix-up project you’re planning for your home.

For the past 14 years, Remodeling magazine’s annual Remodeling 2016 Cost vs. Value Report ( has tracked cost recoupment on renovation projects nationwide and by region, as local tastes are important. Based on trends from transactions tracked in 2015, several guidelines emerged:

  • Aim to cover your costs. Pre-housing crash, people were investing heavily in their homes and seeing returns greater than 100 percent on their spending. In 2016, the cost and return at resale for the projects listed in the report averaged 64.4 percent for a home sold within a year of the upgrades. Making a profit on a renovation isn’t guaranteed, so aim instead to tackle projects that will allow you to recover your costs at the highest possible level.
  • Smaller projects focusing on essentials can provide better returns. A decade ago, it was an upscale outdoor deck or a gourmet kitchen. These days, new doors, which can cost under $500 to replace and install, are one of the most popular projects. A high quality fiberglass entry door replacement can recoup an average 82.3 percent of costs; a garage door replacement can return over 90 percent.
  • Upgrade rooms and spaces, but keep it modest. A minor kitchen remodel including upgraded cabinet fronts, new hardware and the addition of one or two energy-efficient appliances averaged a return of more than 83 percent of original cost compared to the 65 percent for the gut jobs.

After assessing the national and regional averages, you’ll need to evaluate your personal situation, local home market and the type of homes that are selling in your neighborhood. Let’s start with the questions you need to ask yourself:

  • What kinds of improvements make sense for my neighborhood? Generally, exterior renovations that complement nearby homes have greater value, so consider how your new exterior might fit in with other houses on the street. As far as interior renovations, keep your spending in line with your future sale price. For example, a $100,000 kitchen in a home that might not sell for more than $300,000 would probably be a wasted investment – but a kitchen update worth $10,000 or less might help your house move quicker once it’s listed for sale.
  • How long will I stay post-renovation? Remember, the latest Remodeling magazine numbers cover only one year of cost recovery on projects. People renovate for a variety of needs, either to make the home more livable or to make it more salable. The longer you stay, the more you’ll get out of the investment – but if you have to sell soon, think carefully about what you’ll need to spend to attract a buyer.
  • Will this send my property taxes through the roof? Renovation projects that create larger homes can risk higher property taxes. You should think through potential property tax impact not only for yourself but also for your future buyer. Consider checking with your local residential taxing body to determine “before and after” property tax rates for renovated properties in your vicinity. Sometimes this information might be available on their websites. If you know a real estate broker with significant knowledge of your immediate neighborhood, you might consider speaking with them about this issue.

Consider consulting experts to help you answer the basic questions you’ll have as you make this decision. Start with trusted financial professionals who can offer a second opinion on what you’re planning to do, how much you want to spend, and what particular tax issues may arise when it’s time to sell. If you need to borrow to renovate, that means it’s time to make sure your credit reports ( are accurate and you are pre-qualified or pre-approved for your loan based on what is required.

In short, do your homework before you renovate your home.

Bottom line: In 2016, home renovation is far from a home run. Know how long you’re planning to stay in the home before you start and make sure the project you choose makes sense for your local marketplace or you won’t get your money back.

By Nathaniel Sillin


2 Summer Money Saving Tips

Saving for beach vacation or retirement, with pink piggy bank and sunglasses. Studio shot with plain blue background. Sharp focus on the five dollar bill. Space for copy. Warm color and directional lighting are intentional.

Summer is here, and the only thing that can rise higher than the temperatures on the beach this season, is the amount of debt you can go into if you aren’t careful! Look we get it- summer is awesome, and it’s certainly the best time all year for parties, vacations, and dozens of fun outdoor activities; but on the other hand, it’s also primetime for overspending since there are  so many desirable things to do or buy during those 3 highly anticipated months.

While they can certainly range in cost, from baseball games and concerts to just treating yourself to the trendiest swimsuits, the bottom line is that the natural good mood summer brings along makes all of us loosen the reins on our wallets a bit. So, how is a family supposed to do all the fun things they’ve been planning without going broke?

They can do so easily by being smart and strategic with their spending habits in certain other areas of their lives that actually benefit from special pricing/availability during late May through early September. Here are two helpful tips that will have you saving more money for summer fun in no time:

  1. Grow Your Own Fruits and Veggies-The minute the days get a bit longer and the sun stays out after you’ve come home from work, the grills come back to life and it’s time to eat outside! The excitement that comes along with this moment, however, can quickly cause us to overspend considerably on a wide variety of food products- from high quality meats to fresh seasonal fruits and vegetables. Instead of rushing to Whole Foods where anything labeled “organic,” is going to cost you at least ten dollars, look into growing your own ingredients. For example, the majority of fruit/veggie seedlings come packaged at just about every food, convenience, or hardware store for about $2 to $3; the amount of produce those seedlings can yield is pretty incredible compared to the few tomatoes or peppers the same money would get you at the store. Better yet, the savings for this type of action don’t end when the summer does, as any leftovers can often be pickled or canned for use in the fall and winter months. Why spend money on expensive roasted peppers during the holidays when you can make jars of your own for free in September? Depending on where you live, you may also be able to join a local group where you can swap ingredients you have an overabundance of or even sell them at local farmers’ markets. Additionally, the feeling of accomplishment and just outright better taste that comes with freshly grown produce cannot be denied.
  1. Leverage the Nice Weather Where You Can to Save Money– The warm temperatures that come with the summer months make it capable to do certain money saving activities that are sometimes unavailable throughout the rest of the year. For example, put your expensive gym membership on hold and get your exercise from either your yard work or running outside while the weather permits. Instead of going out to a restaurant or bar every time you want to see your friends/family, invite them over for some drinks on your back deck; not only will you be saving money on the elevated bar and food costs that tend to occur in the summer, these types of gatherings are usually more intimate and enjoyable anyways. When it comes to entertaining the kids, it may seem like EVERYTHING costs money. Well during the summer, get them out of the house and down to your local playground, park, lake, or beach. These types of days are fun for the whole family and while you may feel like you are away from home on vacation, in most instances, it won’t cost you a dime outside of maybe parking. Lastly, you can even think outside of the box a bit and purchase needed items that are drastically reduced due to not being in demand during the warm summer months. For example, jeans, sweaters, winter coats, and home improvement tools for the colder season (like rakes, shovels, and snow blowers) should all absolutely be purchased during their cheapest time of the year. If you wait until last minute after summer ends, you are going to get nailed with low product availability and sky rocketed pricing.