Blog

Divorce is one of the most stressful life transitions a person can go through, but that stress isn’t the same for everyone. Your divorce can be significantly more stressful if children—particularly those with special needs—are involved. 

Children should always be a focal point of any divorce proceeding. But children with special needs change how a divorce should be negotiated, so let’s break down some of the unique considerations that need to be taken into account if a special needs child is part of a household that is divorcing. 

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A 529 plan can be a powerful tool to help fund a family’s education goals for their children. These plans have excellent value, and with the new changes made to them under the 2017 Tax Cuts and Jobs Act (TCJA), families have greater flexibility in funding their educational savings need.

This guide goes into the nuts and bolts of 529s, including their benefits, limitations, and variety. Ready? Let’s dive into the details.

 

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For many families—even those with significant savings and means—the cost of college has become daunting. According to FinAid, the nation’s current student debt amount is rising at a rate of $2,698.30 per second.

CollegeBoard reports that the average cost of tuition and fees with room and board is now $20,770 per year for public, four-year in-state school and $46,950 for private nonprofit four-year school—and these figures continue to grow faster than the rate of inflation.

This has caused families and their students to stretch all financial means available, sometimes without fully understanding their options.

Independent nonprofit organization The Institute for College Access and Success, reports on the wide range of average debt by state in their Project on Student Debt, and their other published data sets report that private loan borrowing is increasing, asserting that almost half of all private loan borrowers (by Stafford Loan Usage) could be using more affordable federal loans.

If you are unable to fully fund a college student’s education with your own resources, how can you best avoid having to take on overwhelming debt?

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If your kids are older and missed out on crucial financial building blocks like those outlined in the first article of this two-part series, it’s not too late to start teaching your child about money management. Remember that Chinese proverb: “The best time to plant a tree is twenty years ago. The second best time is now.”

According to CNBC, young Americans fear student debt more than North Korea’s nuclear threats. This fear of debt carries over into consumer debt, which, as CNN notes, can keep an individual from learning how to use credit wisely. Teaching your child money habits for life can lessen such fear, replacing it with confidence. And teaching children about money can happen no matter what age your child happens to be.

So let’s plant that tree. Here’s how.

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Teaching children about money and what it can do helps build crucial 21^st century skills. Most education curriculum falls short in teaching kids about the basics, and sadly many parents don’t seem to have the time or skills necessary to address this crucial topic.

Still, without basic financial expertise and behavioral understanding, children run the risk of getting trapped on a hamster-wheel of debt that our consumer-oriented culture seems to conspire to enslave us.

Here’s how to give kids the edge they need to successfully navigate modern money culture.

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Whether it’s talking about the birds and the bees or explaining the death of a loved one, parents know that difficult conversations are essential for their kids’ emotional and intellectual growth. For many parents, talking about money is one of the hard conversations they least want to have with their kids.

According to a 2015 T. Rowe Price study, over a quarter of surveyed parents say it’s not important to include kids in discussions about family finances; 41% report that they sometimes avoid talking to their kids about money.

But the sooner parents teach children about money, the more effective they’ll be in raising financially successful adults. So how do you start the conversation in a way that will be meaningful, comprehensible and engaging?

Here are some ideas for how to talk to your children about a variety of financial concepts.

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As advisors in the Bay Area, we know it really does cost more to raise kids here because we see it firsthand. We work with many high-net-worth clients. These are people who have successful careers, make smart investing decisions and have built themselves healthy nest eggs. Yet many of them still struggle with the high costs of raising a child.

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Over the past year, several clients have come to us with a query – is it right or fair to gift to one child who might be in need but not provide the same support to their other children? These clients might be in a situation where they can provide a certain level of gifting to one child from time to time but they don’t have enough to give similar gifts to all their children.

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As you weigh whether you’re ready for retirement, it’s important to consider a potential roadblock that could delay your plans: your children.

Our answer? Start a family council.

It'll help everyone involved.

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