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5 Financial Gifts I Hope to Give My Children

By U.S. News & World Report

Parenting is a challenging yet wonderful opportunity for us to help create a better future. With two young kids running around at home breaking everything in sight, it’s hard for me to imagine a day when financial matters would actually mean something to them. But when that day finally comes, I want to make sure I leave them these five financial gifts.

Having enough saved for my own retirement. Having money to last the rest of my days does much more than eliminating my own financial worries. I want to have enough so that my kids never have a back-of-the-mind worry about needing to financially support me. This way, they won’t be hindered from making their own choices as they see fit. I also want to set a good example and show them it actually is possible to stay on top of your finances.

Have intelligent conversations about money. There are so many little nuggets of wisdom I’ve learned through the years of writing about personal finance I want to pass onto my children. And with solid finances myself, I could confidently tell them that these tips aren’t just theory but work wonderfully well in practice. Many of the strategies, such as saving early, Roth conversions or tax-loss harvesting seem like common sense to those who know about personal finance, but are relatively unknown to the general public and often life changing when implemented consistently. I want to make sure my kids know about them so they will have an easier time achieving financial freedom.

The tinkering needs to stop. I always have an urge to tweak my investment plan. I constantly entertain thoughts about adjusting my asset allocation, adding different investments with a slightly better expected return, rebalancing and even market timing. But tinkering will only increase the risk my assets will run out, not to mention the extra stress I endure every time I change my already very solid plan.

Save enough to pay for college for my kids. While everyone should think of his or her own retirement first, I believe that I will be able to save for college costs for my children and save for a comfortable retirement. The money will have to come out of current spending, but allowing my kids to graduate debt-free is one of the best gifts I can give them. This goes back to the freedom to choose their life’s plan I mentioned earlier. Without short-term obligations, they are free to work on what’s best for them over the long term.

On the other hand, I don’t want to give my kids so much money they’ll never have to work for anything either. It’s a powerful feeling to be able to make a living to support yourself. I don’t want to deny them that opportunity.

Convince them to save in a Roth account consistently. I would like my kids to have their own Roth account where they contribute to the maximum limit every year. Thinking about the heights your Roth account could grow to after multiple decades of investment is always fun, but maximizing their Roth account also tells me that my kids fully understand the power of saving early and saving on taxes, even if the numbers fall short of the rosy projections. It’s the saving mindset that will make them wealthy.

It will be a long time before I present my children with these financial gifts. But like most aspects of personal finance, starting early is the easiest way to achieve my goals. I have already started to make plans for the financial future of my children.

David Ning is the founder of MoneyNing.com.

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5 Financial Gifts I Hope to Give My Children originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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