College – It’s not for everyone (and that’s OK!)

If there is one theme I feel very confident in saying I run into in almost every planning encounter I do for families with young children, it’s college planning. Yet the research I’ve done, using Pew Research Center, indicates only “56% of students earn degrees within 6 years”. Combine this with an average student loan debt amount of almost $29,000 per borrower ($28,950, Institute for College Access & Success, 2015) and you have a recipe for financial disaster. Because if these students are not finishing their degrees, are they finding jobs paying enough  to cover the loans, or did they fall victim to a feeling of failure and take unskilled labor positions.

Not too long ago a college degree was not the only answer, individuals were proud to be craftsman and take up trades like plumbing, HVAC, electrical, etc. I joined the Navy as a Junior in High School using the Delayed Entry Program because at the time not only did I not have any interest in pursuing further education, I wasn’t really sure what I wanted to do with my life. And in 20+ years since then I’ve had several transitions – from completing my Journeyman’s as an Electrician, to a Six Sigma Green Belt and finally as a Financial Planner. Admittedly I’ve since gone back to school, and I’ll have my second Masters (MBA) later this year – but I’m doing so without taking on any debt.

I applaud parents for thinking ahead and saving for college for their children, but not at the expense of their own retirements (as so often seems to happen). But I want to raise awareness of other avenues available, especially for those (like me) who are not necessarily inclined to pursue yet more book learning after High School, and/or just don’t know what they want to be when they grow up. Less than 1% of the U.S. population serves in the military (309 million in 2010, NPR); and given the fact we’ve been involved in armed conflicts for as long as I can remember it’s not going to be the best option.

Mike Rowe, the host of Dirty Jobs and much, much more, started a Foundation to help those interested in pursuing a blue collar career. His Foundation, mikeroweWORKS, offers scholarships to help individuals learn a trade – from welding to agriculture. And let’s be real, no matter how advanced our technology gets we’re going to need people who can keep our lights on and water running. This isn’t about unskilled labor getting minimum wage, it’s about learning valuable skills that, although may evolve, will never (in my opinion) not be needed.

I’ll admit my position may be a bit unorthodox and unpopular, but I stand by my assertion those who take the time to learn trades can become very successful. Accumulating wealth isn’t about which school you attended (and are now indebted to), it’s about how much you can save and how well you can live within your means. Next time you sit down at your desk and start your computer, think about those who wired the building your in, or are producing the electricity you’re using – and what you would be doing without them. Success is a destination with multiple paths, don’t feel trapped into pursuing just one because it’s what is getting the most air time.

And finally, this is NOT a dig against college – if you know what you want to do, and you need a degree to do it, then go for it. This is an attempt to raise awareness of other options, and negate some of the negativity associated with blue collar jobs that I perceive. I refuse to believe we all know what we want to do as soon as we leave High School, and although college can help you “find yourself”, do you want to pay over $16,000 per year to do so (National Center for Education Statistics)?

If your child has a 529 plan – don’t despair, according to IRS rules these funds CAN be used for vocational training. “An eligible educational institution is generally any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education” IRS.Gov. Talk to your Advisor/Planner to get more information about options available for you, and don’t hesitate to think outside the box.

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Why it’s tough to save (and how to help)

I think most of us can relate to having wondered if we’d be able to save enough for our goals at some point in our lives. For one thing, it can be much more fun to spend than to save – especially with the instant gratification of receiving whatever it is you just purchased. Saving can seem like it takes forever, and it may not look like the money is growing, or it isn’t growing fast enough.

We need to remind ourselves why we’re saving – be it for retirement, a new house or putting our children through college. One way to do this is assign nicknames to the accounts – label it for what you’ll be using the money for. Some of us need more though, so giving ourselves visual reminders of what the money will be used for could do the trick. Why not make yourself a vision board with your top 3 or 4 goals, and put it where you will see it everyday; as incentive to put away a little more and keep you motivated when nothing seems to be going right (and admit it, we’ve all had those days!).

Don’t make all the goals long-term,  you’ll want to add one or two you can accomplish in the next few months, and in the next few  years. This is another trick to keep your motivation up, by rewarding yourself for doing the right thing. Before you know it your spending habits have changed, and you may find you actually enjoy saving money – because it’s now tied to positive experiences, not just ideas or platitudes.

If you’re interested in instituting a change, here is how I would start. Commit to saving an extra $50/month. Pick out something to spend $100 on in 6 months, say a spa day or a trip to Bass Pro Shop; whatever strikes your fancy. You’ll have $200 left over, and you’ll be rewarding yourself for increasing your savings. That $200 should be set aside for a mid-term goal, something you’ll want to do in 4 – 6 years – even if you don’t have anything on your mind right now.

Continue this for the rest of the year, and increase your commitment by $25 – $50 the following year. Eventually (or so I hope) you’ll see the benefit to saving, and you’ll increase the monthly amount on your own. Continue using 1/3 of whatever you save to reward yourself, because at the end of the day you’re saving 200% more than you were before you started this exercise – and I don’t believe we’re meant to live like monks (unless it’s your lifestyle choice).

By planning to spend 1/3 of what you save you’re teaching yourself how to live on a budget. I’d love to believe everyone has the willpower to save “x” amount from every check because it’s the right thing to do, but I’m not naive. We, as human beings, often need encouragement and rewards to delay our gratification. You CAN do it, I don’t want anybody to believe that they “CAN’T” save money.

Madison House Autism Foundation

Madison House Autism Foundation (“Madison House”) was founded to help families give their sons and daughters with Autism opportunities to live independently, or as independently as possible, upon transitioning from High School. They recognize the lack of services currently available to individuals with Autism after the supports provided during the school years have been removed; and are working with communities to create natural support networks. To name just a few of the ways they are doing this: through supporting/promoting public policy, training first responders and partnering with other, like-minded organizations.

Who They Are 

 

Madison House Autism Foundation was founded in 2007 by JaLynn and Gregory Prince, and named for their son Madison. Rather than try to tell their story for them, follow this link: How We Began

What They Do 

Where to begin?! they offer a host of resources on their website – including links for housing, medical and jobs (and much, much more)! Their housing programs include Madison Fields; envisioned as an “agrihood” found on a 400-acre farm complete with a barn and fields for hippotherapy (therapeutic horse-back riding).

The Medical tab takes you to another page, with a video interview of a physician (Faith Frankel, MD) and links to yet even more resources. If you’re still not convinced you need to at least learn more about Madison Fields, consider how few resources there are for parents like you and me, who either have or will have, adult children on the Autism Spectrum. Autism is not a disease, and there are no factors affecting mortality – so our children can fully expect to live a long life – how full and enriching of a life is in a large part up to us as parents.

 

What Else Should I Know

I love how much information Madison House was able, and willing, to aggregate and share. There are no requirements to become a “member”, everything is open-sourced with links addressing the questions I often find myself dwelling on, and I’m sure I’m not the only parent doing so. Questions like “What are my adult child’s employment options?” and “How will we pay for our adult child’s everyday living and service needs?

Disclaimer

I am not an employee of Madison House Autism Foundation and any errors noted are my own. If I have misrepresented, or misstated anything please provide constructive feedback so I may make the appropriate change(s). I’m doing my best to continue posting about one organization a month, using information and notes I took when I met with them – as well as additional research I completed online. The featured image is a picture I took while visiting Madison Fields. All opinions and views are my own.

Charitable Giving – A Gift to Yourself

I think most of us know it’s possible to receive a deduction from your income taxes when you donate to a charity, whether it’s clothes, cash or even a vehicle; but if you’re like me this in and of itself is not enough incentive to give.

I need to understand the organization’s mission, and believe in it, before I give of myself – either time or money. Understanding and believing in a mission gives me a sense of reward when I donate, because I know my contribution is going to something larger than myself and I can often see the results of the work the organization is doing. My bias is towards organizations helping those with disabilities and veterans, because of my background; and I think it helps to have a personal connection when deciding which charities to support.

Let’s discuss financial giving. Many non-profits subsist entirely from public donations. They create their annual budgets from the contributions they expect to receive, supplemented with any assets they’ve accumulated; and although they would love to have a dollar for dollar match of contribution to their mission, the unfortunate truth is most have overhead to pay – salaries, rent, utilities, etc. For this reason it can be more favorable for the non-profit to receive a commitment in level monthly contributions rather than sudden large sums. Imagine getting your entire year’s salary on January first, and planning every week’s/month’s expenses around this.

I don’t have any published studies I can reference, but I believe the vast majority of us are willing, and able, to donate to charity – but many are not now because either they haven’t found any that resonate with their beliefs and/or they don’t feel what they can afford to give would have impact.

Both of these are valid concerns. To find a non-profit which resonates, I recommend setting an hour or two aside and asking yourself what you’re truly passion about. It’s going to be different for everyone, but I think there is a non-profit aligned with just about everybody’s passions. Another way to find a non-profit is to ask friends, family and/or trusted advisors.

With regards to the value of your donation, although it sounds trite and overused, every dollar really does count. Let’s imagine every working adult donates 1% of their annual income. Using the United States Census Bureau’s median income of ~$54,000/year (rounded up to nearest thousand, source: Census Bureau), each individual would donate $540/year, or $45/month. Let’s assume a community of 500 people give this to the same non-profit every year; the money available to the non-profit has increased to $270,000!!! What an impact!!!!!

Maybe you can’t afford to give cash, but you’re willing to volunteer (2) hours every month. You could save the non-profit money by offering your skills and/or services. For example, using the same median income of $54,000/year, your hourly wage would be approximately $26/hour. $26/hour times 2 hours/month equals the equivalent of $624 per year saved by the non-profit. Even if the volunteer hours you provide are for unskilled labor, and we use the Federal minimum wage as a guide ($7.25/hour, Dept of Labor), you would be saving the non-profit an equivalent of $174/year. This number will scale up as the number of volunteers increases, but the need will be driven by the type of work the non-profit does. For example, Habitat for Humanity will likely have many more opportunities for volunteers than the Arc United States may.

I hope this illustrates the impact we can ALL have, regardless of income level. And I can’t begin to describe the feeling when you find the right fit; but in my opinion it becomes its own reward. The trick is finding the right fit, and not becoming discouraged if the first attempt or two isn’t successful. Take your time and do your homework, there are free resources like GuideStar to help you research non-profits; as well as working with Financial Planners like myself. Speaking only for myself, I enjoy connecting my clients with non-profits and helping them realize their philanthropic goals!!!!

THEY DID WHAT????!!!!!

I think it’s safe to say we’ve all either been in a position to say this, or know someone who has. This article is specifically focused on the titling of your estate. Far too often, in my opinion, there is conflict or confusion about what to do when someone passes away, and which is the last thing anyone should have to deal with when mourning.

Why does it happen? I think many of us just take it for granted everyone knows what we want, if we think of it at all. When I was Active Duty I was required to have a Will created before deploying, yet we never took the time to get one for my wife – just didn’t seem important back then. Even after she passed, it took me almost a year to get my estate documents prepared – and I lived it. The idea of our mortality is sobering, as it should be – but it shouldn’t be something to be afraid of, or taboo.

To be sure, it can be an uncomfortable conversation. Many of my clients have asked me for a “script” to approach their parents, acknowledging the irony they themselves don’t have plans. Unfortunately, it’s not enough to just “have the conversation” – action needs to be taken. So create a checklist with dates, and find somebody to help hold you accountable.

A good place to start is ensuring all your accounts have primary and contingent beneficiaries. Why contingent beneficiaries? Because it answers the question of what to do if something happens to both you, and your primary beneficiary.

If you have minor children, then you should have a trust. You don’t need to fund it, discuss with an estate planning attorney if a testamentary trust will be sufficient – it’s how I have mine set-up. Children cannot manage money, and it could be argued, to some extent, the same is true of  many young adults (< 25 years of age).The trust addresses and solves this problem, and because trusts are legal entities you can make them the primary or contingent beneficiary of your accounts.

Another situation I see far too commonly is not changing beneficiaries after a divorce. If you don’t remove your ex-spouse as a beneficiary, they are legally entitled to receive that money. I’m not an attorney, I don’t know the optimal time legally to change beneficiaries – but once the divorce is finalized I wouldn’t hesitate too long; unless there is something specific in your agreement or decree specifically addressing this.

Again, I want to acknowledge how difficult and overwhelming this can seem. As I stated above, it took me almost a year to get my estate documents in order after my wife passed away. Commit to a date you’ll have everything done by, doesn’t have to be this month but it does need to be this year. I wouldn’t put it farther than (2) months out, because it becomes too easy to ignore and delay. Once the date is set, talk to trusted friends and advisors – ask for referrals to estate planning attorneys.

Yes – you can use online resources like LegalZoom, but I would still have those documents reviewed by an attorney – because you want to make sure they meet the requirements for your State. Ensure the individual who will settle your estate, at a minimum, knows where to find your documents; perhaps even give them a copy. As a general rule you’ll want to review your estate plan every 3 – 5 years, or when you have a significant life event (birth of a child, divorce, etc). If/when you update your plan, be sure to destroy ALL the copies of the old one.

Speaking for myself, going through the process sucked. It did, not gonna sugar-coat it. But, and this is a huge BUT, when it was all said and done I felt like an enormous weight was lifted off my shoulders. You don’t have to do it alone, I offer to go with my clients when they meet with the attorney – and I’m sure most, if not all, of us have friends and/or advisors who will do the same.