Kids’ Snacks and Your Retirement…


Before I hung up my cleats from coaching youth soccer, I always had one goal while coaching kids:  Make sure they had fun! So when planning practice and game times, we always made sure kids had a treat afterwards.  Each parent took turns supplying a treat and drink.  These treats really added that extra FUN quotient, helping me reach the goal of providing fun, fun and more fun.  We built lasting friendships with hundreds of young people over the years and that gives me warm feelings everyday.

Fast forward 20 years and I see parents giving big treats to their children, like college educations.  Parents are giving their kids the 529 Plan with lots of money in it and they’re going without in terms of their retirement funding so their children can go to college without figuring out how to pay for a cent of it by themselves.

Now I ask you, what is your philosophy about giving children so much that they don’t have to learn some responsibility in life?  If you have the resources I guess it’s okay, but what are you teaching your children?  Are they learning how to cope? Are they learning how to deal when life hands them struggles?  In my experience life keeps coming up with surprises and kids who get handed everything don’t learn how to grow up and deal with those surprises — they seem to just cave in, then move back home with you. Umm, not good.

The bigger concern I have, however, is for parents who don’t have those shutterstock_254511226kinds of resources and what it’s doing to their retirement.  By helping children so much, most parents are jeopardizing their retirement.  Before you give another cent to your grown (or almost grown children) look at your own future. If you can see that you will be short on retirement income, you need to seriously cut back on how much you give your college-bound (or wedding-bound) kids.  Do you think it will hurt your children not to have their own car, or their own apartment, or pay for some of their college expenses? Check out this post for an enlightening view on the idea of not helping your kid with every little thing:  Are You Trading Your Retirement for Kids’ College Education?

Balance is a good thing.  So weigh your options and take care of yourself, then see what you can do with helping your children.  Like the airline hostess explaining safety regulations, if the oxygen masks drops down, you should put this on yourself first, then put the mask on your child.  This advise applies to your money and your children as well.  For more, go to  

Education Is Not How Fast You Can Finish, But Consistently Learning for a Lifetime

Consider one of Aesop’s Fables, “The Tortoise and the Hare.”  The winner, the tortoise, was steady and consistent.  This story has a lot of significance to me because I spent many months in the hospital at age 19.  When I got out of the hospital most of my friends had graduated from college.  I thought of how hard it would be for me to “catch up with them.”

Remembering this story of the Tortoise and the Hare, I began to attend college one class at a time and took ten years to graduate.  But what I learned while there was most helpful.  As I took an accounting class, I was able to apply it that very day with my clients I was currently working with as a full-time employee in a small accounting firm.  I had to study to pass the test, but when I had a question of how accounting applied to a specific client, I asked my professor and then applied that answer to real-life situations.  This kind of education has stayed with me all these years and been very beneficial to me, more beneficial than if I had just hurried through school and acquired knowledge simply to pass a test.

As for my friends who went four years to college and graduated, they missed out on a lot of things that I was able to participate in by being slow and steady in acquiring knowledge. They didn’t have the computer back in 1970, nor many other advanced technologies, but since I took my time getting through school, I got in on the cutting edge of the technology and learned how to apply it both in real-world applications and at school. The timing for me was great,  though I didn’t think so at the time.  Each night I came home from work and had to turn right around and go to college for the entire evening… I was very tired.  But when I learned some incredible information that helped me in my work with clients the very next day, I was rewarded.

From this I learned two things:

  1. You need to learn how to learn.
  2. Learning doesn’t stop when you graduate from college; it needs to continue for the rest of your life

My ten years of college really helped me to set a pattern of learning that I have continued to this day.  And this is something I try to pass on to my clients, especially when it comes to financial education. As Money Mastery Principle 5 teaches, ” and Principle 6, “The Rules Are Always Changing.” Adopt an attitude of continual learning and you will have the option other people don’t of creating wealth on ANY income! Learn more at



The Pros and Cons of Using a 529 College Tuition Plan

Parents ask me all the time about how to best save money to pay for college education for their children. The cost of tuition has risen faster than inflation in recent years. Huge numbers of college students take out loans to pay for their education, but end up graduating with income levels not capable of repaying this debt. The most common question I receive is, “what is the worth of using the IRS 529 education funding plan?”

I researched the IRS Web site and found their answers.  Read through their response, then I will give you my perspective on their answers:

Questions and Answers about the 529 Education Plan from the IRS:

What is a 529 plan? A plan operated by a state or educational institution, with tax advantages and potentially other incentives to make it easier to save for college and other post-secondary training for a designated beneficiary, such as a child or grandchild.

What is the main advantage of a typical 529 plan? Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board. Contributions to a 529 plan, however, are not deductible.

What is new this year with 529 plans? A qualified, nontaxable distribution from a 529 plan during 2009 or 2010 now includes the cost of the purchase of any computer technology, related equipment and/or related services such as Internet access. The technology, equipment or services qualify if they are used by the beneficiary of the plan and the beneficiary’s family during any of the years the beneficiary is enrolled at an eligible educational institution.

What does “computer technology or equipment” mean? This means any computer and related peripheral equipment. Related peripheral equipment is defined as any auxiliary machine (whether on-line or off-line) which is designed to be placed under the control of the central processing unit of a computer, such as a printer. This does not include equipment of a kind used primarily for amusement or entertainment. “Computer technology” also includes computer software used for educational purposes.

Is this “cost of the purchase of any computer technology or equipment or Internet access and related services” available for any other education benefit under the tax laws? No, it is only for 529 plan withdrawals. Such costs are generally not qualifying expenses for the American opportunity credit, Hope credit, lifetime learning credit or the tuition and fees deduction.

How long have 529 plans been around? Congress created them in 1996 and they are named after section 529 of the Internal Revenue code. “Qualified tuition program” is the legal name.

Can anyone set up a 529 plan? Yes. You can set one up and name anyone as a beneficiary — a relative, a friend, even yourself. There are no income restrictions on on either you, as the contributor, or the beneficiary. There is also no limit to the number of plans you set up.

Are there contribution limits? Yes. Contributions cannot exceed the amount necessary to provide for the qualified education expenses of the beneficiary. If you contribute to a 529 plan, however, be aware that there may be gift tax consequences if your contributions, plus any other gifts, to a particular beneficiary exceed $14,000 during the year. For information on a special rule that applies to contributions to 529 plans, see the instructions for Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

Are there different types of 529 plans? There are two basic types: prepaid tuition plans and savings plans. And each state has its own plan. Each is somewhat unique. States are permitted to offer both types. A qualified education institution can only offer a prepaid tuition type 529 plan.

Am I restricted to my own state’s 529 plan? No. Your state’s 529 plan may offer incentives to win your business. But the market is competitive and you may find another plan you like more. Be sure to compare the various features of different plans.

Who controls the funds in a 529 plan? Whoever purchases the 529 plan is the custodian and controls the funds until they are withdrawn.

Each 529 plan account has one designated beneficiary. What does that mean? A designated beneficiary is usually the student or future student for whom the plan is intended to provide benefits. The beneficiary is generally not limited to attending schools in the state that sponsors their 529 plan. But to be sure, check with a plan before setting up an account.

Can I change the beneficiary of a 529 plan I have set up? Yes. There are no tax consequences if you change the designated beneficiary to another member of the family. Also, any funds distributed from a 529 plan are not taxable if rolled over to another plan for the benefit of the same beneficiary or for the benefit of a member of the beneficiary’s family. So, for example, you can roll funds from the 529 for one of your children into a sibling’s plan without penalty.

What is an eligible educational institution? 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.

I have not set up a 529 plan for my child. Can I start one now and take advantage of this new computer benefit? You can start one anytime. But the benefit of a 529 plan comes with the tax-free withdrawal of earnings that build up in the plan based on the contributions made. Like other types of savings accounts, earnings are usually a function of time. A 529 plan which is set up while the student is already enrolled in college or in other postsecondary education may not accrue enough earnings to be of immediate benefit.  However, that doesn’t mean that such a student wouldn’t benefit from a 529 plan as his or her postsecondary education continues.

Where can I find more information about 529 plans? A good source is IRS Publication 970, Tax Benefits for Education.

Is setting up a 529 plan for my child right for me? Only you can figure that out. 529 plans are not for everyone, and are also not the only option available for paying for college. Setting up a 529 plan is an investment decision, which means both the benefits and drawbacks must be considered, along with alternative ways of accomplishing the same thing. There are many independent sources of information on 529 plans. Also, you may want to consider consulting a trusted tax professional or financial planner.


In my experience, having assisted my own five children through their college education, I have my own feelings about this process.  I have watched them struggle to pay tuition and costs.

First, not all children will go to college, or even want to.  So any money placed into the 529 plan, will just tie up the money and be illiquid to pay other expenses, debts, or emergencies.  We still need to prepare, but realize this possibility.

Second, if your child decides to leave the U.S., the 529 plan cannot be used for anything other than education in the U.S., so unless you cash it out and pay taxes and penalties, it is tied up in a U.S. education.

Third, if your child will need aid, the form your child fills out requires them to list any 529 plan money and may very well disqualify them from getting education grants, school financial aid, etc.

Fourth, your child may not use all of the money in the 529 plan.  If not, the money is tied up for many years.

Fifth, many parents have limited money so they think if they invest for a higher return, this will help.  The only problem with this is the market can go down and even lose the money you put into the 529 plan.  Be careful with this kind of risk, especially if your child will start college within a few years.  The timing of the investments may go against you.

Sixth, 529 plans allow the money to be managed within investment firms.  The fees for this service can be from one-fourth of one percent, all the way up to 1.84% each year on the total amount in the 529 plan.  This means you have to earn enough to overcome the fees, plus give you a return.

The 529 plan basically puts your money is a box and tapes down the lid.  This money is not liquid, and cannot be used any way you wish… you have very little control.  If you can’t tell, I am against using these plans.  The alternative is to use a properly structured whole life insurance policy and stick cash in it.  It is always liquid and there is no tax on the growth. It receive a guaranteed rate of return of 4 percent, plus dividends.  If something happens and you (the parent) dies, college education is fully funded and much more.  

If you would like more information on funding college educations using a whole life insurance policy, call or email me: (801) 292-1099, ext. 2,

Passing the Financial Torch

As a mother of small children, I often assess whether or not I am teaching them all they need to know to be successful individuals. I teach them to eat healthy, I make them wear bike helmets on the way to school and look both ways for cars. I require them to speak to others in a respectful manner. However, until I started restyling my own financial life, it never occurred to me to start them on financial skills. In my mind, it seemed like that kind of teaching was down the road when they were teenagers and had actual bills to pay and things to budget for (like that really expensive pair of shoes that mom just refuses to buy).

I have since changed my mind. Although I do not want to take from my kids the thrill and freedom of having a few dollars to call their own, I don’t see any reason why many of the principles I am learning regarding spending plans and tracking can’t be applied to my children as well. My hope is that by learning the value of money at a younger age, they will be more prepared for when it actually matters. So, I have decided to try an experiment for a few months. I have created a category in my personal spending plan that redirects some of the funds from our family activities budget. I decorated a jar full of poker chips and when the kids do well at their chores, get along with each other, or choose to take on an extra job to earn money, they get to transfer a chip from the main jar to their own personal jars. shutterstock_284334773At the beginning of the month, they cash in the chips for actual money. The kids know that I will cover all the things they need, and we still have a spending category for some family activities, but when it comes to buying a new toy or candy bar, they are now responsible for budgeting their personal funds. Right now, we are dealing with very small amounts, but when they are teenagers, this rule will still apply.

I implemented this plan differently with each of my kids because of their varying ages. I started my four-year-old at the very beginning in the hopes that she will make the connection that things cost money. I got her a  bank where she puts her money. When she has accrued a dollar or so, I take her to the dollar store to pick something out. She makes her selection and handles the transaction and hopefully, it impresses on her that things are exchanged for all those coins she earned. When she sees that her bank is empty, she knows that she needs to start again.  The dollar store has been a great place to start her in this first step to money mastery. In a regular store, she doesn’t understand the difference between prices yet, other than that it is frustrating when most of her selections cost too much.

My boys are 7 and 9 and I bought them both a bank and a blank book to track their spending. In the book, they write down the things they want to buy as a goal. On another page, they write down the amount that is in their personal stash. Occasionally, they will take some money out to buy something small, like a pack of gum or an item at the dollar store. As they add money and remove it, I remind them to write it in the book with their new total. Each time, I have been interested to see them pause and look at the numbers and their list of goals and decide if it is worth it. Because their personal financial plan is so simple, they can easily count their money and see what is left, or estimate in their heads, but the act of writing it down and seeing it on paper has made a difference in the purchases they make, not to mention, they are both getting a lot of enjoyment out of seeing the numbers grow when they show restraint. I try to remind them of some of the same things that my Money Mastery coach, Alan, reminds me in our sessions, which is, you can have anything you want, you just can’t have everything. That means I have to learn what my own priorities are and what a really value so I can have enough money for the things I need and want right now and also for the things I will need and want in the future — there simply is NO WAY to have everything… I must make a choice.   

Occasionally, my children try to bargain with me and get me to front them money that they will “work off later.” To Wantsbe honest, this is something I might have considered before I started financial coaching, but in most of the cases, I have been firm that what they have is what they have and they don’t get to buy things on “credit” nor do they get a second chance to earn back an unearned chip.

Because they are young and because they don’t have debts and bills to pay, their tracking isn’t quite as crucial as it will be when they are older, but I am gratified to see them enjoy the feeling of control, even if it just means keeping that five dollars in their pocket a little while longer. And I have been very proud of them for sticking with saving for the one big thing they want, instead of several small things that they would ultimately be less happy with. That’s a lesson that took me almost 30 years to learn.

My hope is that this will set the foundation for skills my kids need to learn that are just as crucial as saying “please” and “thank you.” As soon as they are old enough to earn money of their own, they will need to create a spending plan, even if it is very simple. The simple act of always being aware of how much you have compared to what you need to pay or save for is a good habit to develop at any age. Financial skills, like any other, need to be taught and it is never too early to begin passing on the torch of Money Mastery.

Like the Millennials, It’s Time to Shake Things Up

Millennials have grown up with Moore’s Law, which predicts that every 12 to 18 months technology will more than double, all the while becoming half as expensive.  They are used to these improvements coming along every two years and they plan on it.  Older people haven’t taken an interest in the exponential growth of technology and, I think, are missing out on a lot of exciting new experiences.MooresLaw2-640x429

An early example of Moore’s Law can be found in the vinyl record manufacturing industry.  Record companies made flat round disks that played on a revolving phonograph at 45 or 33.3 speeds. These companies were around for 50 years or so but in the 1970s, the 8-track tape deck was introduced and replaced vinyl records within one year. Just when we all purchased these 8-track players, then came the small cassette tape with handheld recorders. Then VHS players came along and you could hook them to your TV and watch incredible movies.  Each change put someone out of business and introduced new success stories for others.

In the new millennium, the iPod, MP3 and smartphones were all introduced offering texting, skyping, high-quality photography, videography, and much, much more.  It has been so exciting to watch technology expand and, just like Moore’s Law predicts, pricing for such amazing advances has dropped like a rock in the last five years.  I love my iPhone and 64 gigs of memory, with Instagram and Facebook and LinkedIn, and of course Pinterest and Twitter.

I wonder what will be next?  I certainly look forward to these innovations.  Whole industries have been replaced and many new opportunities have popped up to replace them, making technology open to all… which brings me to YOU.

How can you benefit, on a personal level?  What difference might all this new technology mean for you? I suggest you embrace new technology.  A friend of mine just got his college degree in IT at age 64.  He has worked with computers for the last 30 years and watched as all the changes and improvement have been made. Most recently the college he attended was on the cutting edge.  He learned so much he could not believe how much this education has helped him.

If you need more income, or you want to add excitement to your life, it’s never too late to learn new things, to take advantage of new technology, to expand your mind. If you’re sitting at home, bored and “retired” it may be time to redefine retirement and get excited about new possibilities for growth and learning. Take adult continuing education courses to test your sincere desire in entering a new field then try it and see how it “fits.”

You could sit back in fear and think how far behind you are in the world and that you can never catch up but I dare you to stretch yourself and get involved in new technology, new education, new online activity. Shake your tree and see how many nuts fall out!

Are You Trading Your Retirement for Kids’ College Ed?

I often wonder, why do so many Americans think it’s their responsibility to pay for their child’s college education?  When are people going to stop thinking in a herd mentality, and start thinking for themselves about this issue?  The idea of paying for a child’s higher education is a notion that has been perpetuated by the super wealthy echelons of society, THOSE WHO HAVE THE EXTRA MONEY TO DO SO!!!  Since when does that trend have to trickle down to those who may or may not have the money, even well educated, higher-income parents.  Just because you “think” you’re supposed to do this, doesn’t mean you are.


Just a few questions I’d like to ask about this notion:

1.  When are people going to stop thinking it is their responsibility to make sure their children do better financially than they did?  Sure, we want to help our children as much as possible, but after they become adults, you sort of hope the help you gave them was teaching them to stand on their own, how to be self-reliant and responsibly functioning adults, instead of always relying on you for everything.  I would think this would be a greater investment in your child than a check made out for their entire four-year college tuition.

Of course the argument could be made that our kids live in a much more difficult world financially, where tuition is higher and paying for education is becoming very difficult. The argument could be made that it’s harder to get an education, get a job, and so forth.  Well, I guess that would be a good argument except how do you make it to the people who managed to live through the Great Depression AND get an education?  Yes, education cost less then, but everyone also made a whole lot less, too.  Times are definitely more complex financially than they were 70 years ago, and there are many financial pitfalls children can fall into, but teaching them how to manage their money would probably do more for them than just paying for their education outright.

2.  Many people are spending their retirement to pay for children’s college education, but why? It just makes no sense whatsoever.  Why are people dipping into precious retirement funds and getting further Clockinto debt, especially at an older age, to help their ADULT children?  Don’t your children have more time ahead to earn a living and plan for retirement, with or without an education, than you do?  When you give retirement money to them for college, does that mean that they will help support you, with college-earned jobs, later when perhaps you can’t retire because you’re out of time and money?  If you had to use retirement funds for their college education, then yeah, they should.  Will they?  Not likely because they’ll be too busy trying to support their own families and cannot worry about supporting aging parents.  OLDER AMERICANS WHO DO NOT HAVE MONEY TO PUT ABLE-BODIED ADULT CHILDREN THROUGH COLLEGE PLEASE WAKE UP! If you cannot live comfortably, stay out of debt, and not be forced to work in your older years, then STOP giving money to grown children!

3.  When will people learn that at some point children must learn to sink or swim?  If a child wants a college education bad enough, and you can’t afford it (“afford” meaning you have retirement funds and extra college funds) they will find a way to get a college education.  Ask yourself, is a college education for my child my dream or theirs?  If you send them to college how much will it mean to them?  Help children in ChildHomeworktheir younger years learn to love education and learning.  Help them want to get good grades so they can get scholarships.  Help them want to excel by expecting them to pay for some, or all of their education.  If you can afford to pay for college educations, then do your kids a favor and help them “earn” some of the money you will be giving them later for that education.  Try setting up matching programs where for every dollar your child earns for college, you match it with another dollar.

When I went off to college, my dad, with some chagrin, handed me $20 and said, “Sorry dolly, this is all I have to give you for your education.  Good luck and hope it works out for you.”  I did not resent him then nor have I ever resented him for that.  I knew from a young age that I would probably be paying for most of my education. I worked hard in high school for scholarships, my parents gave me a love for learning and a deep desire to go to college, I worked many hard hours in the summer to earn my tuition money, and I worked part-time to pay for room and board during school. In the end, my education was worth every penny of the $42,000 and five years it took me to earn it.  My dad did co-sign on a couple of student loans, and when I graduated, my mother, with tears in her eyes and a deep apology, gave me her car that already had 150,000 miles on it and said she was ashamed that they hadn’t done more for me.  But I was not ashamed of them.  I was thankful that they taught me how to be a functioning, self-reliant adult.  To me, they had more than done their job.  The old Subaru my mom gave me got 40 miles to the gallon and continued running like a charm. The odometer broke at 300,000 miles so I  have no idea how many miles it actually had on it when I sold it four years later for $350, but it got me through the first years of my career until I could buy a newer car.

So, bottom line.  If you really feel compelled to pay for your children’s college education, then make sure you have the funds to do so without jeopardizing your own life.  The only way to be sure of this is to build a spending plan, debt plan, tax plan, and savings plan as part of a holistic, big picture Master Plan.  Start building plans today by contacting the experts at Money Mastery.

Statistics about Debt in Young Americans

Student loans are ballooning larger and larger every single year, with young Americans being saddled with a heavier burden than ever before when they finally achieve their degree. The state of student loan debt has gotten so bad in this country that there are some who question whether the degree is even worth it any more, especially considering the lack of decent-paying, full-time jobs available for college graduates compared to years passed.


Consider some of these statistics for student loan debt in the United States:

  • The median net worth of households with heads of house younger than 40 differs vastly between people with and without student debt. For those without student debt, they are valued at an average of $64,700, seven times greater than those with student debt, who have a net worth of only $8,700 on average.
  • It’s also interesting to compare net worth of people who are and are not college educated. People who are not college educated with no loan debt are worth nine times more on average ($10,900) than those with loan debt ($1,200).
  • Young people with student loan debts are also significantly more likely to have car loan and credit card debt. About 43 percent of those with student debt also have vehicle debt, compared to 27 without, and about 60 percent of those with student debt have credit card debt, compared to 39 without. This demonstrates the effect student loan debt can have on other areas of personal finance.
  • Finally, the median total indebtedness of college educated households with student loan debt has reached astronomical levels. Educated households with student loans are, on average, in debt a total of $137,010, compared to $73,250 for those without student loan debt. People who do not have a college education but have student loan debt are $28,300 in debt on average, compared to $2,500 for those without a college education or student debt.

The good news is there are still ways you can plan for your future while getting yourself through paying your student loans. Contact the team at Money Mastery for assistance in your financial planning.