Category: Budgeting

Teach Your Grandchildren Important Lessons About Money

November 7, 2018
Budgeting, Community, Financial Planning, Guidance, Wisdom

You may have dealt with money for more than half a century. You understand hard work, following a budget, saving money, and spending wisely. You possess a wealth of financial wisdom—at least in comparison to your grandchildren.

As a grandparent, you can provide your grandchildren with sound, sage advice. Will they accept and heed it? Yes, researchers say. In fact, a survey of more than 1,000 young adults found that most (85%) were receptive to financial discussions with their grandparents.[i] However, just 8% of grandparents said they actually talk with their grandchildren about finances.

Nearly a third of grandparents said they thought they could influence their grandchildren’s financial decisions. The study also indicated grandparents are able to shape grandchildren’s decisions more than grandparents realize. Nearly three-quarters of grandchildren said their grandparents’ financial advice would influence how they save and spend money.

So, how do you do it? How do you talk to your grandchildren about money? Here are several ways to engage in fruitful discussions:[ii]

Just say no to gifts (sometimes).

Giving gifts or investing in college funds is nice and may provide the catalyst for a bright future. But when money is tight, often the best approach is talking about the value of money. Discussions help develop the sense of money’s value and a good work ethic in your grandchildren. Moreover, you may “hire” your grandchildren to do chores or household projects; you can then pay them an hourly wage for the work, like they do it in the real world.

Story time: “In my day…”

You first must determine whether you have a captive audience. If your grandchildren are interested, tell them stories about how you earned money as a teenager, how you paid for your school, and how you saved money. If your audience’s attention doesn’t waver or wane, you can segue into goal setting and saving money for college. You may also delve into the difference between what they need and what they want.

Go to the store.

This would be a good time to discuss history. You can explain how prices have gone up on products and how selections have changed. A loaf of bread, for example, cost 25 cents in 1970.[iii] A pound of hamburger meat cost 45 cents in 1960. Those types of discussions give children a wider perspective on the role and value of money in our lives.

Go high tech.

Grandparents who live a ways from their grandchildren can use video chatting or other methods to keep in touch. This will enable you to keep the conversation alive and to continue conveying your wisdom.

Serve as an example.

Maybe having a conversation isn’t the best approach or it’s not the right time. However, grandparents’ life stories can provide compelling lessons on the value of money and responsible financial management. Your story—in a family novel, at family gatherings, in other settings, or through other formats—may serve as powerful lessons later in your grandchildren’s lives. Parts of your story may include getting your first job, your first car, or even your house. After all, the most important legacy you can leave to your grandchildren resides in your heart, not your bank account.

If you have any questions about money management or would like help reviewing your financial strategy, give us a call at 800.929.1001. We’re happy to talk. Visit our website here.

Investment advisory services are offered through CapSouth Partners, Inc., dba CapSouth Wealth Management, an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information. This material has been prepared for planning purposes only and is not intended as specific tax or legal advice. Tax and legal laws are often complex and frequently change. Please consult your tax or legal advisor to discuss your specific situation before making any decisions that may have tax or legal consequences.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[i] https://www.tiaa.org/public/about-tiaa/news-press/press-releases/pressrelease512.html

[ii] https://money.usnews.com/money/personal-finance/articles/2014/09/24/grandparents-talk-to-your-grandchildren-about-money

[iii] http://www.thepeoplehistory.com/70yearsofpricechange.html

Use the Paycheck Checkup if You Have Other Sources of Income

November 7, 2018
Budgeting, Financial Planning, Guidance, Taxes

If you’re working for an employer and have other income sources outside your job, you should get a Paycheck Checkup. For more information, go to https://www.irs.gov/newsroom/time-for-a-paycheck-checkup.

Doing a paycheck checkup with the Withholding Calculator may help you avoid paying taxes at tax filing time. Go to https://apps.irs.gov/app/withholdingcalculator/.

Other income sources may come, for example, from the exchange of products and services in a sharing economy, interest, dividends, self-employment, capital gains, prizes, or awards.

Taxpayers may find the calculator especially important this year in the wake of changes to the tax code from the Tax Cuts and Jobs Act.

Here are some items to consider if you’re thinking about changing your withholdings to avoid a tax bill:

You should pay at least 90% of your income tax through withholding.
You can use Form W-4 to make adjustments to your income if the Withholding Calculator estimates you will have to pay taxes. Go to https://www.irs.gov/pub/irs-pdf/fw4.pdf.
If you’re generating income from other sources, you can still reduce or eliminate the possibility you’ll owe further taxes when you file your return by claiming fewer withholding allowances on your Form W-4.
You may also request your employer withhold an additional amount of money from your paycheck if you anticipate having to pay taxes at filing.
If you have to make additional tax payments through your paycheck, you may use Form 1040-ES, Estimated Tax for Individuals, to calculate an appropriate amount. Go to https://www.irs.gov/pub/irs-pdf/f1040es.pdf. Other details may apply, and you can find more information on the IRS website.
Tip adapted from the IRS.gov[i]
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
For additional questions, go to https://www.irs.gov/payments.

[i] https://www.irs.gov/newsroom/employees-with-other-sources-of-income-should-do-a-paycheck-checkup

To learn more about CapSouth Wealth Management, click here.

Teaching Teenagers About Financial Responsibility

November 6, 2018
Budgeting, Guidance, Investing, Life, Wisdom

Financial responsibility may not top the list of unmentionables for conversations with your teenagers, but it certainly may be one of the most important.

Today’s marketplace provides a wealth of alluring financial “opportunities,” many of which may lead the adolescent mind down unsavory paths with catastrophic consequences. Easy credit. The latest (and most expensive) in fashion. The finest and swiftest in high-tech gadgetry. And, of course, the inevitable lure of the automobile.

Good advice, taken to heart, may help steer your teenagers away from the youthful transgressions that have plagued countless generations past.

Before your teenager (or young adult) takes to the open road, here are four financial life lessons that may help keep them on the straight and narrow:

Credit and debit cards: Handled incorrectly or irresponsibly, these plastic cards can lead your children or grandchildren into some hot water. One in four students leaving college has more than $5,000 in debt.[i] One in 10 have more than $10,000 in debt. College students are hot property for eager credit card companies. Teach your teenagers how to use both credit and debit cards and hold them responsible for how they’re used.
Following a budget: It’s never too late to teach children about developing and adhering to budgets. Budgets help foster financial discipline and provide an important lesson on the value of money. Start by having your teenagers write down their expected income, expenses, and savings.[ii] Make sure they follow their budgets. Focusing on creating a personal budget early in life will create a very beneficial lifelong habit.
Establishing a savings account: Saving money can provide a few surprising and delightful benefits. Stashing away just $5 a week may sound boring, but once your teenager gets in the habit of saving, the easier it gets. Saving money helps develop discipline and reinforces the value of money.[iii] Encourage your teenagers to save early and often.
Automatically save every month. Modern banking technology makes saving money even easier. Teenage life may be filled with distractions, sending earnest adolescents off into financial traps. But understanding and utilizing sound financial tools may help alleviate some of the heartache. Automated savings—through bill pay or regular money transfers to bank savings accounts—can make it feel like another weekly or monthly expense.[iv] Saving money can become an ingrained habit.

If you would like to discuss your current financial needs or learn more about speaking to your teenagers about money management, we’re happy to talk. Call CapSouth at 800.929.1001.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third-party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third-party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third-party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[i] https://www.thebalance.com/credit-card-companies-love-college-students-960090

[ii] https://pocketsense.com/importance-saving-budgeting-teens-3077.html

[iii] https://www.investopedia.com/articles/personal-finance/031215/why-saving-money-important.asp

[iv] https://www.discover.com/online-banking/banking-topics/automate-your-savings/

Category: Budgeting

Teach Your Grandchildren Important Lessons About Money

Use the Paycheck Checkup if You Have Other Sources of Income

Teaching Teenagers About Financial Responsibility

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