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Understanding the concept and value of money is an important life skill that can help set kids up for financial success long into their adult lives. However, financial education is not always covered extensively in school curriculums. But parents can do a lot to help ensure their children learn important lessons about money early on. 

Fortunately, the learning process does not have to be boring or difficult. In fact, it can be fun and engaging for kids from grade school to high school.  

Make it relatable. A wonderful way to illustrate money concepts to kids is by using real-life examples and situations that are familiar to them. For instance, when grocery shopping, you can explain the importance of comparing prices on boxes of their favorite cereals to help them understand whether Peanuty Puffy Puffs or Choco Cowabunga Crunch is a better bargain.  

Tangible teaching tools. With younger children, it can be especially helpful to use physical objects — like coins, piggy banks, or their own toys — to bring financial lessons to life. You could put the actual money in front of different items like a teddy bear and a board game, for example, and ask them which one costs the most or the least.   

Gifts that keep on giving. Allowances, birthday, or holiday gifts can also be a fantastic opportunity to introduce kids to the concept of saving money. Encourage them to put aside some of their gift money to buy something they really want, like a toy or game. Then show them ways they can track their progress and celebrate the achievement with them when they meet their savings goal.  

Learning while earning. For older kids, money earned through an allowance, babysitting, lawn mowing, or part-time job experiences can be a fantastic opportunity for early financial education. And when your child starts bringing home a paycheck, you can teach them about taxes and budgeting.  

Teaching your teens. As your child enters their later teenage years, they may face new financial challenges, like paying for car costs. You can help by teaching them about budgeting for recurring expenses such as gas, insurance, and maintenance when they get their license. And if they are planning on college, you can discuss the importance of managing debt responsibly and the potential long-term financial consequences of carrying student loans. 

Start Early with WellCents Kids and Teens 

Instructing your kids about money can help set them up for a brighter financial future, so begin the conversation early. If you are looking for additional resources, WellCents Kids and WellCents Teens videos, available on YouTube, are an excellent place to start. These informative videos cover topics like budgeting, saving and smart shopping — and are presented in a fun, accessible way. By using these resources, kids can begin to develop important financial skills that can benefit them throughout their lives. 

You’ve been saving for years and making good progress toward your retirement and other investment goals. But a single catastrophic event — like major storm damage to your home or a serious car accident — can quickly derail your financial plan. That’s why having adequate insurance protection is a cornerstone of financial wellness. 

Many different types of policies are available. To help ensure you have all the protection you might need, it’s important to understand the options. 

Homeowners insurance. A homeowner's insurance policy can protect you from losses due to fire, theft, storms and other perils. And when there’s a mortgage on the property, it’s typically a lender requirement. 

Renters and condo insurance. Both of these types of policies can offer some of the same protection as homeowners insurance but are tailored to the specific needs of renters and condo owners. Condo owners, for example, don’t need as much structural coverage as homeowners. Renters primarily need insurance to cover belongings — and certain liability claims — and it’s often the least expensive of the three types of policies. 

Flood insurance. Damages caused by flooding are generally excluded from standard insurance policies, so you’d most likely need to purchase this type of coverage separately. Even homes outside of flood zones can be susceptible to flooding. 

Auto insurance. Car insurance can protect you from unforeseen losses resulting from accidents, storms, theft and vandalism — as well as property damage and injuries to yourself or others. Coverage requirements can vary by state, so it’s important to carefully review the terms of your policy.   

Boat, motorcycle and RV insurance. Operating watercraft and vehicles other than your car carry unique risks and require separate policies of their own. They may also include coverage for belongings stored on them. 

Health insurance. Preventive care, as well as treatments for diseases and other conditions such as diabetes and asthma, are covered by private or employer-provided policies. The Affordable Care Act guarantees 10 essential health benefits, including mental health treatment, maternity care, lab work and ambulatory and preventive services. 

Life insurance. Purchase this type of protection to safeguard the financial future of those you love should the unthinkable happen. Term policies typically cost less and pay a benefit for a certain number of years, while whole life policies cover an entire lifetime and can accrue cash value. 

Umbrella policies. You can obtain extra liability coverage beyond the limits of other policies — such as homeowners and auto policies — with this type of insurance. Umbrella coverage is often sought after by higher net worth individuals with more assets to protect. 

Disability insurance. If you’re unable to work due to illness or injury, short- and long-term disability coverage can help protect your income. You may have a policy provided through your employer, but you can also purchase disability insurance individually.  

Effectively knitting together adequate protection from a variety of policies can mean the difference between financial security and financial peril. With such high stakes, it can be highly beneficial to get advice from a qualified financial professional or licensed insurance agent to help ensure you have the types and amounts of coverage you need. The time to act is before disaster strikes — because insurance helps protect your financial future … and the things you value most. 

Many people wonder exactly how much it will cost for them to retire comfortably, and whether they’ll have enough money to do it. That can be a tough question to answer — but it’s an important one to get right. Learning about current retirees’ finances can be a helpful starting point when gauging your own retirement goals. 

According to the Data … 

The U.S. Census Bureau provides information regarding the typical retirement income of Americans. They do this by reporting two types of statistics — mean income and median income. 

Mean income is determined by adding all the annual incomes of retirees and dividing by the total number of retirees. The resulting number is the arithmetic average. However, this value can be greatly influenced by extremely high- or low-income numbers.  

The median is calculated by taking the middle value of all annual incomes of retirees when the values are arranged from low to high. Because a median isn’t influenced by those with very high or low incomes, it’s often regarded as more representative. In 2021, the median annual income of American retirees over the age of 65 was $47,357 — whereas the mean was $73,288.  

Where to Start? 

One often-cited rule of thumb when it comes to retirement income planning is that many people are expected to need approximately 80% of their pre-retirement income to retire comfortably. That means if you made $100,000 per year pre-retirement, you’d need about $80,000 post-retirement. Thinking about why you’ll need less is that your income tax obligations are anticipated to be lower, and you won’t have to pay for many job-related expenses. However, it’s important to realize that other costs, especially those related to medical needs, can increase significantly during retirement. 

The Number That Matters Most 

Retirement planning is ultimately a very personal decision-making process that depends on your unique situation and needs. That’s why things like the 80% rule are best regarded as a starting point and not a hard and fast rule. Because so many factors go into retirement planning — projected taxes, inflation, cost-of-living increases and much more — it can be useful to seek the advice of a qualified financial professional to assist you. In the end, it’s not the average retirement that matters most — it’s your own. 

Source 

https://www.annuity.org/retirement/planning/average-retirement-income/  

While terms like “financial planner” and “wealth manager” may sound synonymous, these two types of financial professionals have different areas of focus. Financial planners help their clients with investment advice, budgeting and dealing with debt— and while wealth managers do many of the same things, they tailor their practice to the unique financial needs of more affluent clients, often referred to as high net-worth individuals (HNWIs). HNWIs are those who have accumulated a large amount of wealth. Often, the threshold is considered to be more than $1 million in investible assets.  

Investment management. Investors with a lot of capital often have access to a broader range of investments such as private equity and hedge funds, which can take greater expertise and experience to manage effectively. Also, things like real estate can make up a larger proportion of their portfolios. These investments can have different, and often more complex, oversight needs than typical mutual funds and stocks. 

Tax planning. In part because HNWIs’ assets are often held in a broader range of investments, their taxes can be more involved. For some HNWIs, tax liability for capital gains is higher than their income tax. Wealth managers and tax professionals can offer strategies to mitigate HNWIs’ tax burden.  

Gifts and estate planning. Managing generational wealth is a frequent concern of HNWIs — and trusts are often used to pass assets on to their loved ones or charitable causes while helping to mitigate estate taxes. However, there are various types of trusts, each with different tax and other rules, so these instruments need to be set up carefully.   

A certain amount of assets is allowed to be gifted without incurring taxes — for 2023, up to $17,000 per person can be gifted — and that amount can be gifted from each spouse. But for certain types of gifts and donations, such as to a child’s college fund, there can be an even greater tax exemption of up to $75,000. According to the IRS, “Estates of decedents who die during 2023 have a basic exclusion amount of $12,920,000.” Wealth managers can also work with attorneys to assist in setting up private foundations or endowments to support charitable causes. 

Risk mitigation. Frequently, another important role of a wealth manager is asset protection, as HNWIs are often at increased risk for identity theft and fraud. Wealth managers can assist with privacy protection and fraud detection, as well as helping ensure their clients’ assets are properly insured. This may include securing umbrella coverage and policies or riders for tangible assets such as antiques and jewelry. 

Wealth Managers Have Specific Expertise for HNWIs  

While anybody can benefit from the guidance of a financial professional, oversight needs can become more complex as investments diversify and assets increase. And that’s one reason those who have amassed significant assets can often benefit from the specialized advice and services of a wealth manager.  

Contact a qualified financial professional to see if you might benefit from working with a wealth manager. 

Sources 

https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023 

https://www.bankrate.com/banking/savings/high-net-worth-

https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes 

https://www.investor.gov/introduction-investing/investing-basics/investment-products/private-investment-funds/private-equity 

https://www.covenantwealthadvisors.com/post/tax-strategies-for-high-income-earners 

While most people realize breaking a mirror won’t bring seven years of bad luck, many money myths are still widely believed. Can you tell whether the following are fact or fiction?  

Let’s put your financial know-how to the test. 

1. A mortgage is good debt, no matter how big it is. 

FICTION: “Good debt” is manageable and can help you achieve important life goals. While home ownership can be a great goal, not all mortgages are “good debt.” If your house payments are breaking the bank, or if your adjustable-rate mortgage (ARM) is about to reset to a payment you can no longer afford, even the mortgage on your dream home may not qualify as good debt.  

2. Financial planning is only for the wealthy. 

FICTION: You may think there’s no point in working with a financial professional if you don’t have a fortune in the bank, but most people can benefit from a little expert help. Even those with modest assets may have a lot to gain from advice about taxes, investments, budgeting, debt and credit. And this valuable service may also be easier to obtain than you think. Workers with an employer-sponsored retirement plan may already have access to a financial professional through their benefits package — check with your human resources department to learn more. 

3. If I’m still young, there’s no rush to save for retirement. 

FICTION: It’s actually never too early to start saving for retirement, but waiting too long could put some serious cracks in your future nest egg. If someone invests $30,000 into a retirement fund at 25, even with no further contributions, they could have nearly $450,000 by age 65, assuming an average annual rate of return of 7%. But if they were to wait until 45 to start saving, that amount drops to around $116,000.  

4. There’s no sure thing when it comes to investing. 

FICTION: There actually is a sure thing — and that’s your employer 401(k) match. This is an additional deposit from your employer into your 401(k) equal to a percentage of your contribution up to a certain limit. Your matching funds may not “vest” right away, which means they might not fully belong to you when they’re deposited. But while you may have to wait for your matching funds to vest, your employer match is like free money — and one of the few sure things in the world of investing.  

5. It’s better to pay down all your debt than invest your money. 

IT DEPENDS: Whether it’s best to pay down debt or invest first depends on your individual situation. It’s often advantageous to pay off higher interest debts like credit cards quickly — especially with the average credit card rate topping more than 19% in the final months of 2022. But for a low-interest mortgage or other manageable debt, it might make sense for investing to take priority — or do a little of both at the same time. This is an area where getting advice from a qualified financial professional can really help. 

Everyone can improve their financial wellness.  

WellCents can help boost your financial wellness. The first step is to take a short online financial assessment. Your individual results are completely confidential and can help you better understand your financial strengths and weaknesses. You’ll gain valuable insights into your retirement readiness, debt, credit, investments and more. And you’ll have access to e-learning and articles tailored to your needs, plus advice from a financial professional. No matter your current situation, it’s never too late to start improving your personal finances — and that’s a FACT! 

Sources 

https://www.bankrate.com/retirement/401-k-calculator/ 

https://www.federalreserve.gov/releases/g19/current/default.htm