Seeds Planted Early Bear Fruit Later

June 8, 2009

Financial Tips

It’s important to work on your child’s financial awareness early on, for once they’re teenagers, they are less likely to heed your advice. Besides, they’re busy doing other things – like spending money. When your kids are young, giving them small amounts of money helps them prepare for the day when the numbers will get bigger. Teenagers and college-age kids have bigger responsibilities. Checking accounts, credit cards and debt are as elemental to the college experience as books and parties. Teaching high-schoolers about banking and credit will make them more savvy when they leave the nest.

Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, a registered investment advisor.

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The Good, The Bad, The Ugly…Debt

June 5, 2009

Americans are loaded with credit-card debt. The average American household with at least one credit card has nearly $10,700 in credit-card debt, according to CardWeb.com, and the average interest rate runs in the mid- to high teens at any given time.

However, some debt is good. Borrowing for a home or college usually makes good sense. Just make sure you don’t borrow more than you can afford to pay back, and shop around for the best rates.

Of course, some debt is bad. Don’t use a credit card to pay for things you consume quickly, such as meals and vacations, if you can’t afford to pay off your monthly bill in full in a month or two. There’s no faster way to fall into debt. Instead, put aside some cash each month for these items so you can pay the bill in full. If there’s something you really want, but it’s expensive, save for it over a period of weeks or months before charging it so that you can pay the balance when it’s due and avoid interest charges.

Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, a registered investment advisor.


College Savings Plans

June 2, 2009

School is almost out for the year and that means you are one year closer to the children in your life leaving for college. If you have grandchildren or children at home you’d like to help with their college education, it pays to start saving as early as possible.

The government has given us a tool that makes saving for college a lot easier. The 529 college savings plan is a great tax-advantaged program to help you get a head start on your children’s college costs.
There are two excellent options available to help you save for college-the 529 college savings plan and prepaid tuition plans. The money you contribute to a 529 plan grows tax free within your account and withdrawals from the plan for qualified educational expenses are exempt from federal taxes. By investing in a 529 plan outside the state in which you pay taxes, you may lose tax benefits offered by the state’s plan. Withdrawals used for qualified expenses are federally tax-free. Tax treatment at the state level may vary.

You might also consider a prepaid tuition plan. These are offered primarily by state colleges and universities to help you lock in today’s prices for tomorrow’s tuition costs. They allow you to pay tuition in advance to cover your child’s fees and expenses.

With prepaid tuition plans, your concern might be that your child may decide on a college in a different state. Fortunately, these plans allow you to transfer the value to out-of-state public and private colleges.
Don’t wait too long to start your college savings plan. Talk to your financial advisor about setting up a savings plan for you to ensure that your children or grandchildren have the resources they need to get a college education.

Covering your back
No matter how well we plan, unexpected adversity can take us off track. That’s why it’s vital to include risk management as part of your financial planning process.
It’s important to review your insurance coverage from time to time to make sure that you and your family are adequately covered to get you through difficult times. Do you have sufficient life, health and disability insurance? Does your homeowner’s insurance policy provide enough coverage to protect you from law suits that may result from mishaps at your home?

Find out if you have the coverage you need to make it through your difficult times. For your own peace of mind and the financial security of your family, take some time now to sit down with your financial advisor and review your insurance coverage.

By investing in a 529 plan outside of the state in which you pay taxes, you may lose tax benefits offered by the state’s plan. Withdrawals used for qualifed expenses are federally tax-free. Tax treatment at the state level may vary.

Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, a registered investment advisor.