As football season is fully underway, many of us get swept up in the weekly excitement of watching our favorite teams take on their rivals. Maybe you’re closely watching the ups and downs of your Fantasy Football team and strategizing about who to start each week and what the most beneficial trades may be. It’s an exciting time of year for many fans. Let’s take this opportunity to highlight the work one football player is doing off the field. (more…)
In 2006, during the first football game played in New Orleans’ Superdome since Hurricane Katrina tore through the city the previous year, Steve Gleason, a safety for the Saints, blocked a punt against the Atlanta Falcons. The blocked punt resulted in a Saints touchdown and marked the beginning of the winningest season for the Saints up to that point. More than that, though, the blocked punt turned into a symbol for the resiliency of New Orleans. Looking at challenges Gleason has faced in his own life, it’s easy to view the blocked punt as a symbol of his own resiliency as well. (more…)
Earlier this summer, Anthony Bourdain passed away. His passing was marked by a remarkable outpouring of grief, not just from people who knew him, but from his fans as well. This grief felt more widespread than when we’ve lost other public figures. Perhaps his cause of death was part of this, but I have a feeling it wasn’t just Bourdain’s death itself, but something more that made this loss so deep. Bourdain was an example to many of us of what it means to live a full life. He was an inspiration or, perhaps, an aspiration, to all kinds of people across the world. (more…)
As hard as it is to think about, the end of life will involve your loved ones cleaning out your home. At Merriman, we work with you and your estate planning team to get your financial affairs in order, both to ensure your wishes are met, but also for the ease of those people in your life who are most important to you. Margareta Magnusson recently published a book entitled The Gentle Art of Swedish Death Cleaning: How to Free Yourself and Your Family from a Lifetime of Clutter. Swedish death cleaning? While the sound of it may make you a little nervous, it’s a useful tool to cut down on possessions in a service to your loved ones and a fulfillment of that same goal.
As we get to know our clients, we always ask about the goals they have for their children and grandchildren. Over and over we hear a variation on a theme: I want them to have enough to do something, but not enough to do nothing. How do we go about teaching our kids and grandkids the value of a dollar, while giving them opportunities to have fun and enjoy what financial freedom can give? Moreover, how do we teach them about credit and borrowing money in a way that will encourage them to only spend what they have, and no more? We’ve found some useful tools to help young people learn the skills of budgeting and spending wisely, both with cash and credit.
To teach your teenager about spending, consider the American Express Serve prepaid debit card. The card requires no credit check or minimum balance, and has minimal fees. Parents can set up an account in their name, called a “Master Account,” and from there create up to four subaccounts for children aged 13 or older. Your child is issued a personal debit card with access to the funds in their subaccount, which can be used at merchants that accept American Express, as well as ATMs. They can also request funds from you, as well as send funds back from their account to yours.
Parents can view their child’s transaction history and set spending limits. Parents and children both have access to budgeting tools through American Express to see transactions divided into categories, or view each category as a percentage of their total spending. This is a great way to give kids power over how their allowance is spent, while being able to oversee spending and encourage good habits. These prepaid accounts can’t be overdrawn, offering another safeguard, and they do not affect the cardholder’s credit history.
Consider contacting your local credit union to see if they offer similar products with no fees.
What About Credit?
One of the best ways to teach your kids about credit, while also helping them build their credit history, is a secured credit card. Many major banks offer secured credit cards, which come with many of the same perks and services as traditional credit cards. Cardholders deposit funds into a checking or savings account. That deposit is then put on hold by the bank and used to secure the credit line on your credit card. A $300 deposit, for example, would become equivalent to a $300 credit line. The held funds continue to earn interest in the depository account, but can be spent using the secured credit card. Minimum payments are due monthly, and balances carried forward each month accrue interest charges just like with a traditional credit card. Balances and payments on a secured credit card are reported to the three credit bureaus, so making on-time payments is just as important.
After holding a secured card and making regular purchases and payments for a year, many banks will reassess the cardholder’s credit and, if strong enough, free up the funds used to secure the card, converting the account to a traditional card issued on credit. This type of card offers kids the ability to take time to learn about using credit cards, including the importance of making payments on time, as well as the process of billing cycles, interest charges, and spending only what they can afford to pay off each month. Some secured cards even offer rewards like traditional cards.
For something more traditional, college-age kids may consider the Discover it® for Students Card, which offers credit tracking and a reward for a good report card. A GPA of 3.0 or higher each school year will earn you $20 in rewards, and certain categories earn up to 5% cash back throughout the year. This card is also a great option for college kids who might be spending a semester studying abroad, as it charges no foreign transaction fee. Be sure to remind your student that while they may not see a fee for using their card abroad, they may still get less-than-favorable exchange rates on currency when using any credit card in another country. Lastly, in the event the card is misplaced, your student can freeze the card using an on/off feature accessible online and through the mobile app.
Cash and credit are both important tools for young people to feel comfortable using, and offering kids the freedom and responsibility to use them from an early age can make a huge difference in how careful they are with money down the road.