by Melissa Brock | Aug 16, 2024 | College Money Tips |
Why and what should teens care about cybersecurity? As your teen steps into the world of online payments, the stakes are higher than ever. What may seem like a simple transaction can have far-reaching effects. But you can beat this with a little bit of information and preparedness.
What might happen if you don’t?
An unsecured payment or sharing personal details on a dubious website can lead to identity theft, compromised accounts, or financial losses. These aren’t just immediate inconveniences but can impact their financial future.
And issues from insecure transactions can resurface and create obstacles later in life. This makes it vital for parents to instill safe online habits early on.
The Risks Every Parent Should Know
Before diving into solutions, it’s crucial to understand the specific dangers lurking online. Cybercriminals often target teens, who may not yet have developed the caution necessary to navigate the digital world safely.
Common Online Payment Scams Targeting Teens
Teens are frequently bombarded with attractive offers online, many of which are scams designed to steal money or personal information. These scams often present themselves as limited-time discounts, exclusive deals, or free giveaways.
Teens, eager to grab a deal, may not recognize the signs of a scam. Phishing attempts are common, where fraudulent emails or messages mimic legitimate companies, tricking teens into providing sensitive information.
Awareness of these scams is the first line of defense, so parents should regularly discuss the types of offers that are too good to be true.
How Cybercriminals Exploit Teenagers’ Online Habits
Teens’ social media use and online activity provide a treasure trove of information for cybercriminals. Often, teens share details like birthdays, school names, and even locations, which can be used to guess passwords or answer security questions.
Hackers might pose as friends or influencers, gaining trust before asking for sensitive information.
Encouraging teens to be more private and cautious about their online interactions can help mitigate these risks. For example, using public records lookup tools could be a great way to avoid falling prey to scammers. Regular conversations about the importance of keeping personal information secure are essential.
Recognizing Red Flags in Online Transactions
Teaching teens to spot suspicious activity is another critical step. Websites that lack secure connections, offers that demand immediate action, and vendors that ask for too much information are all red flags.
Encourage your teen to slow down, question deals that seem overly generous, and verify the legitimacy of websites before making any transactions. Building this habit will not only protect them now but will also set them up for safer financial practices in the future.
How to Recognize that a Site has Secured Payment
Here’s how to help your teen recognize a secure payment site quickly.
Look for Trusted Payment Providers
When making online purchases, seeing familiar logos from trusted payment providers can be a strong indicator of a secure transaction.
Companies like PayPal, Stripe, and Allied Pay have built reputations for secure, reliable payment processing.
These providers use advanced encryption to protect financial data and offer buyer protection features that can help recover funds in case of a dispute. If your teen sees these logos at checkout, it’s a good sign that the site values security.
However, it’s important to note that scammers can also fake logos, so this shouldn’t be the only verification step. Teach your teen to be cautious and to combine this check with other security measures.
Verify the URL and Security Indicators
Beyond checking for trusted payment provider logos, your teen should also inspect the URL of the payment page. A legitimate and secure site will have a URL that begins with “https” rather than just “http”—the “s” stands for secure.
There should also be a padlock icon next to the URL in the address bar, indicating that the connection is encrypted. This ensures that the information entered during the transaction is protected from prying eyes.
Phishing scams often mimic legitimate sites, using URLs that look similar but have subtle differences, such as a misspelled company name or an unusual domain extension.
Encourage your teen to double-check the URL for accuracy before proceeding with any payment. If something seems off, it’s better to back out and reassess rather than risk compromising their information.
Recognize and Avoid Suspicious Payment Requests
Legitimate payment processors will never ask for personal information, like social security numbers, passwords, or security questions, during the checkout process. If a site requests this type of information, it’s a major red flag. Teach your teen to recognize these suspicious requests and to exit the transaction immediately.
In addition, if a site pushes your teen to complete a payment quickly or offers a deal that seems too good to be true, it’s worth taking a step back. Scammers often create a sense of urgency to prevent buyers from thoroughly checking for security.
Teaching Your Teen Safe Payment Practices
After understanding the risks, the next step is to equip your teen with the tools and knowledge to handle online transactions safely.
Setting Up Secure Payment Methods for Teens
Begin with choosing payment methods that offer security features. Encourage your teen to use services that offer buyer protection, such as PayPal, or consider setting up a virtual credit card that can be used for online purchases.
These methods reduce the exposure of personal financial information and add a layer of protection against fraud. Discuss with your teen how these tools work and why they’re preferable over traditional credit or debit cards.
Guiding Teens on How to Identify Secure Websites
When your teen shops online, they should know what to look for in a secure website. Teach them to check for “https” in the URL and a padlock icon in the address bar, which indicate that a site is secure.
Emphasize the importance of only entering payment information on trusted and verified sites. Public Wi-Fi is another danger zone; encourage them to avoid making transactions unless connected to a secure network.
The Importance of Strong Passwords and Two-Factor Authentication
Passwords are the frontline defense in securing online accounts. Encourage your teen to create complex passwords that are difficult to guess and to change them regularly. Equally important is the use of two-factor authentication (2FA), which requires a second form of verification beyond just a password.
This extra step can be a powerful deterrent against unauthorized access. Explain how 2FA works and help them set it up on their accounts.
Monitoring and Managing Your Teen’s Online Spending
Even with safe practices in place, it’s important to keep an eye on your teen’s online spending to ensure they’re staying within their means and avoiding impulse purchases.
Tools for Tracking Your Teen’s Online Purchases
Various tools and apps are available to help track spending. Set up notifications for transactions, so you’re aware of purchases in real-time. These tools can help both you and your teen monitor their spending patterns, making it easier to spot any unusual activity or overspending.
Regularly reviewing these reports together can also be an opportunity to discuss responsible financial behavior.
Setting Spending Limits and Budgeting Guidelines
Discuss the importance of setting limits on how much they can spend online each month. Establishing a budget together not only prevents overspending but also teaches your teen valuable lessons about financial planning.
Encourage them to think critically about their purchases and consider what they truly need versus what they want. Setting these guidelines early on can help your teen develop strong financial habits that will serve them well into adulthood.
Discussing the Importance of Financial Transparency with Your Teen
Open communication about money is key to helping your teen manage their finances responsibly. Encourage them to be transparent about their spending and to come to you with any questions or concerns they might have.
Creating an environment where financial discussions are normal and encouraged will help them feel more comfortable managing their money and seeking advice when they need it.
Tools and Resources for Secure Online Transactions
As your teen navigates the world of online payments, providing them with the right tools and resources can make all the difference.
By equipping them with the knowledge and apps that prioritize security, you help them build habits that protect their financial well-being.
Recommended Apps for Safe Online Payments
One of the best ways to ensure your teen’s online transactions are secure is to introduce them to apps specifically designed for safe payments. Apps like PayPal, Venmo, and Cash App offer built-in security features such as fraud detection and buyer protection.
These platforms not only make it easier to track spending but also limit the amount of personal information shared with vendors. Discuss the benefits of using these apps and how they can add a layer of security to everyday transactions.
Using Parental Controls to Monitor Online Spending
Parental controls are another valuable resource in keeping your teen’s online spending in check. Many banking apps and services offer features that allow you to monitor transactions, set spending limits, and even receive alerts for unusual activity.
Setting up these controls helps you stay informed about your teen’s spending habits and allows you to step in if something doesn’t seem right. This oversight is especially useful in helping teens learn to manage their money responsibly while still under your guidance.
Educational Resources to Teach Teens About Online Security
In addition to apps and controls, educational resources can be incredibly helpful in teaching your teen about online security. Websites like Common Sense Media and government sites like OnGuardOnline offer a wealth of information on safe online practices.
These resources are designed to be engaging and informative, making it easier for teens to understand the importance of protecting their personal and financial information. Encouraging your teen to explore these resources can reinforce what you’re teaching them at home.
Empowering Your Teen to Make Smart Financial Choices Online
While tools and resources are essential, empowering your teen to make smart financial choices independently is equally important.
By guiding them to think critically about their spending decisions, you help them develop skills that will serve them well throughout their lives.
Encouraging Independent Decision-Making with Guidance
As teens begin to take more control over their finances, it’s important to strike a balance between guidance and independence. Encourage your teen to make their own decisions about purchases, while also being available to discuss the reasoning behind those decisions.
This approach helps them build confidence in their ability to manage money while still providing a safety net. Regular conversations about their spending choices can lead to valuable lessons and help them understand the impact of their financial decisions.
Teaching the Value of Comparing Prices and Services
One of the most practical skills you can teach your teen is the habit of comparing prices and services before making a purchase. Encourage them to research different options, read reviews, and consider the long-term value of what they’re buying.
This habit not only helps them save money but also teaches them to think critically about their purchases. As they get used to this process, they’ll become more discerning consumers, able to spot deals that are truly worth their time and money.
Instilling the Habit of Reviewing Statements Regularly
Another important aspect of financial responsibility is regularly reviewing bank statements and transaction histories. Encourage your teen to make this a monthly habit, checking for any discrepancies or unauthorized charges.
This practice helps them stay on top of their finances and quickly spot any issues that need addressing. It also reinforces the importance of transparency and accountability in managing money.
Staying Informed as a Parent
The world of online payments is always changing, with new apps, services, and security measures emerging regularly. Staying informed about these trends allows you to better understand the tools your teen is using and how they can protect themselves.
And you’re not alone in navigating the challenges of raising a tech-savvy teen. Many parents face similar concerns, and joining communities, whether online or in-person, can provide valuable support.
These groups are great places to share experiences, ask questions, and learn from others who are also focused on keeping their teens safe online. Engaging with other parents can offer new perspectives and tips that you might not have considered.
by Melissa Brock | Jul 26, 2024 | College Money Tips |
Families often find the costs of college a burden difficult to handle. However, what if there was an opportunity to smooth this task to some extent with the help of available digital resources?
Search engine optimization (SEO) tools might be one way to raise money. Through SEO tools, a lot of money that one would want to spend in college can be saved. To help parents and students achieve the goal of making college affordable, this blog post will explain the use of tools related to SEO. Keep reading to learn more about SEO for college savings.
Understanding SEO for Financial Gains
SEO is a technical marketing solution that improves website position in search engine lists to provide the maximum exposure to people. SEO attempts to enhance a site’s relevance and prominence to specific search terms in the context of sponsored and paid results through keywords, meta descriptions and backlinks, among others.
The traffic generated is organic, meaning you can rely on traffic for monetary value through advertising, affiliation or selling. If properly applied, SEO has been proven to be an effective technique for planning and financing college, since it helps a person make money continuously. SEO is beneficial on multiple levels and provides a great return on investment for your educational and financial objectives.
Practical SEO Tools for Parents and Students
Let’s take a look at some practical SEO tools you can use.
Free SEO Tools
Several free SEO tools can be a good starting point for parents and students. Google Analytics, for example, provides insights into website traffic, user behavior and the effectiveness of marketing campaigns.
Another great tool is Google Search Console, which helps you understand how Google views your site, alerts you to issues, and offers data on search performance. These tools can offer valuable data for free and are ideal for those just starting out in SEO or looking to improve their digital presence. Additionally, tools like Ubersuggest and MozBar can provide keyword suggestions and on-page SEO analysis, further helping you craft a strong SEO strategy.
Paid SEO Tools
While free tools are helpful, paid SEO tools offer more advanced features and more comprehensive data. Ahrefs and SEMrush provide not only keyword research but also in-depth backlink analysis, site audits and competitive analysis. Investing in these tools can significantly boost your SEO efforts by uncovering hidden opportunities and streamlining the optimization process. This, in turn, can enhance your website’s visibility, drive more organic traffic, and ultimately help you increase revenue streams that could contribute to college savings. Other notable paid tools include Moz Pro and Majestic, each offering unique features that can further refine your SEO strategy.
Step-by-Step Guide to Using SEO for College Savings
Check out a few tips to use SEO for college savings.
Keyword Research for Education Savings
Keyword research is the first step in any SEO strategy. Use tools like Google Keyword Planner, SEMrush, or Ahrefs to find high-traffic, low-competition keywords related to education and savings. Sometimes, resources like that, or even Netflix plan settings can be blocked by geo-restrictions, which is where virtual private networks (VPNs) work to your advantage.
VPNs allow you to change your IP address and access content that may not be available in your current location, giving you more options for keyword research. VeePN is an excellent VPN provider that offers multiple server locations and unlimited bandwidth for a budget-friendly price. By using a VPN for Chrome, you can uncover valuable keywords to target in your content and increase the chances of ranking high in search results. This will help you create content that attracts visitors who are specifically interested in these topics. Look for long-tail keywords that your target audience might be searching for, as these can often present less competition and more targeted traffic.
Implementing SEO Strategies
Now that you know your keywords, you need to optimize your website by applying these keywords. To begin with, go through all of the website’s on-page factors, from the title tags, meta descriptions and header tags, to optimize them. It’s also important that you use your chosen keywords progressively into your content, so your written work is easy to read and interesting. Ensure that your website is optimized for mobile gadgets and loads very fast in order to provide a good experience for users. Moreover, concentration should be on internal linking which acts as a guide to visitors and boosts the site’s ranking and relevance.
Creating Shareable Content
In SEO, content is king, so it’s all about creating good content that will be helpful and shared among users. Create a set of materials in the form of blogs, videos and infographics and e-books with useful information on how to save for college. Get visitors to your site and post your articles on social networks such as Facebook and LinkedIn.
Engage readers by using proper headlines and good graphics that will draw their attention. The greater the likelihood of a piece of content being shared, then there is a likelihood that it will be passed around, increasing viewership and possibilities of saving money. Even after sharing with your readers, you can call on them to share the content you have provided in different networks.
Beyond the Basics: Advanced SEO for Maximized Savings
When you’ve mastered the basics, feel free to go on to more advanced strategies.
Advanced SEO Strategies
For those who want to go beyond basic SEO, advanced strategies can offer even more benefits. For example, you can use schema markup to enhance your search engine listings, making them more attractive to users. Additionally, implementing structured data can help search engines better understand your content, potentially leading to rich snippets that make your listings stand out even more. Online calculators and other interactive tools can also draw more traffic to your site while providing valuable resources for your audience. These advanced strategies require more technical knowledge but can offer significant advantages in driving traffic and savings.
Leveraging Longtail Keywords
Longtail keywords are longer and more specific keyword phrases. They may have lower search volume, but they often have higher conversion rates. Using longtail keywords can help you tap into niche markets, maximizing your financial gains. Moreover, these keywords often face less competition, allowing your content to rank higher in search results and attract a more targeted audience.
The Role of Social Media and SEO
Social media can significantly amplify your SEO efforts. Platforms like Facebook and Instagram can drive a massive amount of traffic to your site. Optimize your social media profiles and share your content regularly to increase your visibility. Furthermore, engaging with your audience on social media can lead to more shares and backlinks, which are valuable for improving your search engine rankings. Social signals also contribute to building your brand’s authority and trustworthiness online.
SEO: One Way to Pay for College
It’s crucial to understand that the right approaches to SEO implementation can be instrumental in attaining the desired results to enhance college savings. By performing extensive keyword search, employing on-page optimization and other more technical SEO procedures and using the influence of social media, you can find effective ways of improving your Internet presence. Quality and relevant content will attract visitors, increasing traffic.
By constantly updating the work approach and studying the tendencies in SEO, you can develop a bulletproof strategy that can provide maximum visibility and, at the same time, help you save for your child’s educational dreams. Accept the current state of SEO and let it help you adapt to the changes so as to achieve your intended college savings goals.
by Melissa Brock | Jul 19, 2024 | College Money Tips |
As parents of high school children, financial freedom becomes even more vital.
It’s a time when expenses increase, college looms on the horizon, and the need for a secure financial future for the family becomes paramount.
Smart investment strategies can provide the means to ensure stability and growth, offering peace of mind and the ability to support your children’s dreams and aspirations.
By carefully selecting and managing investments, parents can create a solid financial foundation that supports both current needs and future goals.
Investing in Real Estate
Investing in real estate is a tried-and-true method for building wealth and achieving financial security. It provides numerous benefits such as passive income, potential property appreciation, and tax advantages.
For parents of high school children, real estate investments can be a powerful tool to bolster their financial portfolio and prepare for upcoming expenses like college tuition.
Buy-and-Hold Strategy
The buy and hold strategy involves purchasing properties and holding them for an extended period, allowing for steady rental income and appreciation in value.
Here’s how this strategy can benefit parents:
- Generating passive income: Rental income can provide a consistent cash flow, helping to cover educational expenses and other family needs. For example, purchasing a duplex and renting out one side while living in the other can offset mortgage costs, freeing up money for college savings.
- Appreciation: Over time, properties generally increase in value, offering a significant return on investment that can support long-term goals. A property bought in a growing neighborhood could significantly appreciate, providing capital that can be used for college tuition or other major expenses.
- Tax benefits: Real estate investments come with various tax advantages, such as deductions on mortgage interest, property taxes, and depreciation, which can help in managing overall financial health. Using a tax advisor to navigate these deductions can optimize your tax returns, maximizing your investment benefits.
Real Estate Investment Trusts (REITs)
For parents looking to invest in real estate without the demands of property management, Real Estate Investment Trusts (REITs) offer a practical alternative.
REITs are companies that own, operate, or finance income-producing real estate. Investing in REITs allows parents to:
- Diversify portfolio: REITs provide access to a diversified portfolio of real estate assets, reducing investment risk. For example, REITs like Vanguard Real Estate ETF offer exposure to various property types, from residential to commercial.
- Liquidity: Unlike direct property investments, REITs are traded on major stock exchanges, offering greater liquidity. This means you can easily buy and sell REIT shares as needed, which is beneficial when planning for near-term expenses like college fees.
- Dividend income: REITs are required to distribute at least 90% of their taxable income to shareholders, providing a reliable source of passive income that can aid in funding education or other significant expenses. An example is Realty Income Corporation, known for its consistent monthly dividend payouts.
Fix-and-Flip Strategy
The fix-and-flip strategy involves purchasing properties, renovating them, and selling them for a profit.
While this approach can be lucrative, it requires careful planning and execution. For parents considering this strategy:
- Conduct thorough research: Identify properties with potential for improvement in neighborhoods with strong resale value. For instance, using tools like Zillow or Redfin to find undervalued homes in up-and-coming areas can help identify good investment opportunities.
- Budget wisely: Ensure renovation costs and timeframes are realistic to avoid financial strain. Accurate budgeting is paramount for maintaining financial stability while undertaking such projects. Using renovation budgeting software like Homezada can help manage costs effectively.
- Leverage expertise: Working with experienced contractors and real estate agents can enhance the success of fix and flip projects, reducing the risk and increasing profitability. Hiring a reliable contractor with a proven track record ensures quality work and adherence to budgets and timelines.
529 College Savings Plans
A 529 College Savings Plan is a powerful tool for parents looking to save for their children’s higher education costs.
These plans offer significant tax advantages and flexible investment options, making them an ideal choice for building a college fund.
Understanding the various strategies and benefits associated with 529 plans can help parents maximize their savings and ensure they are well-prepared for future educational expenses.
Age-Based Investment Strategies
529 plans often offer age-based investment options, which automatically adjust the asset allocation as your child approaches college age.
This strategy is designed to maximize growth potential during the early years and reduce risk as the time to college draws nearer.
- Early years (newborn to elementary school): During the early years, it is beneficial to have a higher allocation in stocks (about 80% to 100%) to take advantage of growth opportunities. As your child is still many years away from college, this aggressive approach can yield higher returns despite the higher risk associated with stocks.
- Middle school years: As your child enters middle school, the investment strategy should start shifting towards more conservative assets. A balanced approach, such as 60% bonds and 40% stocks, helps in securing the gains made during the earlier years while still allowing for some growth.
- High school years: In high school, which is of special interest to us, it’s very important to minimize risk. A conservative mix of 70% to 80% in bonds and 20% to 30% in stocks is recommended. This helps protect your investment from market volatility as you near the time when you will need to use these funds for college expenses.
Tax Benefits and Rollover Options
One of the primary advantages of 529 plans is the tax-free growth and tax-free withdrawals for qualified education expenses. Starting in 2024, unused 529 funds can be rolled over into a Roth IRA for the beneficiary, providing more flexibility if the funds are not needed for education.
This rollover option allows up to $35,000 to be moved into a Roth IRA without penalties, provided the 529 account has been open for at least 15 years.
Impact on Financial Aid
While 529 plans are considered in financial aid calculations, they generally have a minimal impact when owned by the parents.
Only up to 5.64% of the account’s value is considered in the Expected Family Contribution (EFC) for financial aid purposes. In contrast, if the student owns the account, 20% of its value can be counted.
It’s usually more advantageous for the parent to own the 529 account to maximize financial aid eligibility.
Selecting the Right 529 Plan
Choosing the right 529 plan involves considering various factors, such as state tax benefits, fees, and investment options.
Many states offer tax deductions or credits for contributions to their 529 plans, making it beneficial to invest in your home state’s plan if these benefits are available.
Some plans have lower fees, which can significantly impact the growth of your savings over time .
When selecting a plan, it’s also important to look at the investment options and whether they align with your risk tolerance and financial goals.
Age-based portfolios are ideal for those who prefer a “set it and forget it” approach, while static portfolios may appeal to more hands-on investors.
Key Takeaway
By integrating a 529 College Savings Plan with strategic real estate investments, parents can create a robust financial plan that addresses both immediate and future educational needs for their children.
Seeking professional financial advice and regularly reviewing investment portfolios ensures optimal growth and adaptability to changing financial landscapes.
by Melissa Brock | Jul 18, 2024 | College Money Tips |
Achieving financial independence is a goal many aspire to, yet few fully understand its profound impact on life quality and future security. Financial independence means having sufficient income to cover living expenses without needing to work actively.
For parents, particularly those with high school students, starting to invest early can be a game-changer.
Early investments not only pave the way for a secure financial future but also set a strong example for children, teaching them the importance of financial planning and responsibility.
With the rising costs of higher education and living expenses, parents who invest early can ensure they are better prepared to support their children’s aspirations and needs. Learn the best way to save money for college below — make that multiple ways!
Going for Financial Independence
Financial independence refers to the state where an individual or family has enough wealth to live on without having to work indefinitely. This wealth typically comes from savings, investments, and passive income sources that generate consistent revenue.
The significance of financial independence lies in the freedom it offers — the ability to make life choices without being constrained by financial limitations. This can mean retiring early, pursuing personal passions, or simply enjoying peace of mind knowing that future needs are covered.
The long-term benefits of achieving financial independence are substantial. It provides a safety net in times of economic uncertainty, reduces stress related to financial instability, and allows for better planning of life events, such as children’s education and family emergencies.
For parents, achieving financial independence is particularly crucial as it enables them to support their children through critical phases of their lives, including college and early adulthood.
Why Start Investing Early?
Starting to invest early has numerous advantages, the most significant of which is the power of compound interest. Compound interest means earning interest on both the initial principal and the accumulated interest from previous periods.
Over time, this leads to exponential growth of investments. For example, a small investment made when your children are young can grow significantly by the time they reach college age, thanks to the compounding effect.
Early investments also contribute to financial stability for the family. They create a financial cushion that can be used for various purposes, such as covering unexpected expenses, funding higher education, or even supporting a comfortable retirement.
To make informed investment decisions, many individuals rely on financial publications and newsletters. For those considering subscription-based investment insights, reading a Paradigm Press newsletter review can provide valuable context on the quality of guidance offered by such services. This is particularly important when planning for long-term goals, such as mitigating the impact of inflation and ensuring savings grow in real terms, maintaining their purchasing power over time.
Early investments help in securing the future education costs of high school students. With college tuition fees increasing steadily, having a robust investment plan, potentially informed by reliable financial resources, can make a substantial difference.
Parents who start investing early can accumulate enough funds to support their children’s educational goals without resorting to loans or compromising their financial stability.
Setting Investment Goals
Setting clear, achievable investment goals is a fundamental step in building a successful investment strategy. Begin by identifying your financial objectives and determining the timeframe for each goal.
You might aim to save for your child’s college education in ten years, or you might want to build a retirement fund over the next 20 years. Specificity is key – instead of setting a vague goal like “save for college,” determine the exact amount you need to save and the timeline you have to achieve it.
Aligning investment goals with family needs and future plans is crucial. Consider your family’s financial situation, lifestyle, and future aspirations.
This includes evaluating the potential costs of education, retirement, emergencies, and significant life events such as weddings or family vacations.
By aligning your investment strategy with these needs, you can ensure that your financial planning supports both short-term requirements and long-term aspirations.
Investment Options for Parents
Parents have various investment options to consider, each with its own benefits and risks. Here are some popular choices:
- Stocks: Investing in individual stocks can yield high returns, but it also comes with higher risks due to market volatility. Stocks are ideal for long-term goals where you can weather market fluctuations.
- Bonds: Bonds are relatively safer investments compared to stocks. They provide regular interest payments and are less volatile, making them suitable for conservative investors looking for stable income.
- Mutual funds: These funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. Mutual funds offer diversification and professional management but come with management fees.
- Exchange-traded funds (ETFs): Similar to mutual funds, ETFs offer diversification but trade like stocks on an exchange. They often have lower fees than mutual funds and provide flexibility in trading.
- Real estate: Investing in real estate can provide steady rental income and potential appreciation in property value. However, it requires substantial initial capital and ongoing management.
- 529 college savings plans: These are tax-advantaged accounts specifically designed to save for education expenses. Contributions grow tax-free, and withdrawals for qualified education expenses are also tax-free.
Each investment option has its own set of benefits and risks. It’s important to diversify your investments to spread risk and increase the potential for returns.
Cheapest Monthly Dividend Stocks
Dividend stocks are shares in companies that regularly distribute a portion of their earnings to shareholders. Investing in dividend stocks can provide a steady stream of income, which can be particularly useful for parents looking to supplement their savings.
Monthly dividend stocks pay dividends every month, offering more frequent income than the typical quarterly dividend stocks.
The benefits of investing in the cheapest monthly dividend stocks include consistent income, potential for capital appreciation, and the reinvestment of dividends to compound returns. These stocks are attractive to investors seeking regular income and long-term growth.
According to Sure Dividend, some of the cheapest monthly dividend stocks offer high yields and have a strong track record of regular payments. These stocks are typically from stable, well-established companies with solid financials. Investing in these stocks can help parents build a reliable income stream to support their financial goals.
Creating a Diversified Portfolio
Diversification is a crucial strategy in investment to minimize risk and maximize potential returns. By spreading investments across various asset classes, sectors, and geographies, you reduce the impact of a poor-performing investment on your overall portfolio.
Diversification helps to balance risk and reward, ensuring that the performance of your investments is not overly dependent on a single asset or market condition.
To create a balanced and diversified investment portfolio, consider allocating your assets among stocks, bonds, real estate, and other investment vehicles. Within each asset class, diversify further by investing in different industries and regions.
For instance, in the stock portion of your portfolio, include a mix of large-cap, mid-cap, and small-cap stocks across various sectors like technology, healthcare, and consumer goods.
Rebalance your portfolio periodically to maintain your desired asset allocation and adjust for changes in market conditions and personal financial goals.
Involving Your High School Students in Investing
Teaching high school students about investing can have long-lasting benefits. It not only helps them develop financial literacy but also instills a sense of responsibility and the importance of long-term planning.
Early exposure to investing concepts can set them on a path to financial independence and better financial decision-making in the future.
Parents can involve their children in the investment process by starting with basic concepts like saving and budgeting.
Encourage them to set up their own savings goals and track their progress. Introduce them to the stock market by explaining how it works and discussing the performance of different companies.
Consider opening a custodial investment account where they can start investing small amounts under your supervision. Utilize educational resources like books, online courses, and investment simulators to enhance their understanding.
Tools and Resources for Investing
Several tools and resources can help parents start investing and manage their portfolios effectively. Here are some useful options:
Apps
- Robinhood: A user-friendly app that offers commission-free trading and is ideal for beginners.
- Acorns: Automatically invests your spare change and is a great tool for micro-investing.
- Stash: Provides personalized investment guidance and fractional share investing.
Websites
- Morningstar: Offers in-depth research and analysis on stocks, mutual funds, and ETFs.
- Investopedia: A comprehensive resource for learning about various investment concepts and strategies.
Books
- “The Intelligent Investor” by Benjamin Graham: A classic book on value investing.
- “Rich Dad Poor Dad” by Robert T. Kiyosaki: Provides insights on financial literacy and investing.
- “A Random Walk Down Wall Street” by Burton G. Malkiel: Explains investment strategies and market behavior.
Achieve Financial Independence to Secure Your Future
Achieving financial independence and securing a stable future for your family starts with early and informed investing.
By understanding financial independence, setting clear investment goals, exploring various investment options, and creating a diversified portfolio, parents can build a strong financial foundation.
Involving high school students in the investment process not only educates them but also prepares them for financial success.
Utilize available tools and resources to enhance your investment strategy and stay informed.
Start taking the first steps towards investing early to ensure financial independence and support your children’s future. With careful planning and disciplined investing, you can achieve your financial goals and provide a secure, prosperous future for your family.
by Melissa Brock | Jul 1, 2024 | College Money Tips |
If your child has just graduated from college or the date is approaching, you (and they) are likely excited and nervous about what comes after. As I’ve advised hundreds of families on preparing for college, I can also give you a few tips for after they get their AA or BA — tip number one is to take a deep breath.
Both of you can absolutely do this.
Here are some college graduate finance tips to deal with debt, uncertainty, and the world of personal finance. The sooner they start planning their finances, the sooner they’ll be planning trips, new car specs, and, hopefully, decor for their own home.
1. Invest in Financial Education
You know dealing with your finances takes a lot of skill, and you want to help your kid deal with the anxieties of starting out. Here are some financial education resources to take advantage of:
- Books: Start with Suze Orman’s classic, The Money Book for the Young, Fabulous and Broke or Cary Sieagal’s Why Didn’t They Teach Me This in School?: 99 Personal Money Management Principles to Live By.
- Online courses: Direct them towards online courses on personal finance through platforms like Coursera or Khan Academy
- Finance blogs and podcasts: Point them to reputable financial blogs and listen to podcasts that focus on budgeting, saving, investing, and other financial topics.
- Workshops and seminars: If you find a link to financial literacy workshops and seminars offered by community organizations, schools, or local banks, share it with your kid. (If you think they’re interested, of course.)
2. Educate Them on Managing Student Loan Debt
CollegeMoneyTips has all the resources for handling student loan debts for parents and graduates, so check out articles on home equity loans and other financial tools such as refinances.
The rest is up to your child. Make sure they understand the terms of their loans, including interest rates, repayment plans, and grace periods. Here are some basic tips:
- Consider consolidating or refinancing loans for a lower interest rate.
- Make extra payments when possible to reduce the principal balance faster.
- Check out income-driven repayment plans with Federal Student Aid.
3. Build Good Credit
If your child has student loans, there is one more reason to pay them on time: building good credit. A good credit score can help them secure a loan, rent an apartment, or get a job. According to Experian, the average American has a score of 715, but anything over 670 is considered good. For starters, they can even have a fair credit score.
Besides paying student loans on time, teach them about other ways to build a solid credit score:
- Getting a secured credit card, using it for small purchases, and paying off the balance in full each month (you can help them with this).
- Paying utilities and other bills on time (and using automated payments in their banking app to do this)
- Encouraging them to monitor their credit report, check for errors, and make sure their credit history is accurate.
4. Build an Emergency Fund
I understand the economy isn’t really helping young adults leave money aside each month, but that does not mean they should give up on saving altogether. If your child doesn’t use change rounding apps or automated transfers to save, there’s a simple starting point.
With time, they should be able to save for at least three months of living expenses, which is considered a minimum emergency fund. It’s a lifesaver in case of unexpected medical expenses, repairs or additional certification opportunities.
5. Prepare the Ground for Future Homeownership
I know, they’ve just started and may be in debt, so even broaching the topic of homeownership with them may feel like you’re getting ahead of yourself. Still, preparing for it ahead of time isn’t such a bad idea. Stats show the youngest generations have particularly poor financial literacy skills, so try to motivate your child with a clear goal.
Here is what you can talk to them about:
- Student loans: Student loans impact people’s borrowing power significantly, but they do not stop them from purchasing a home. They do affect eligibility, though: debt impacts everyone’s debt-to-income ratio, which is a key requirement. While the ideal DTI is 36%, some lenders allow DTIs of up to 50%.
- Researching mortgages: With low-to-moderate income, they can go with government loans such as FHA loans. If they’ve been in the military, VA loans can help them get a home without a down payment. For homes that are a bit more expensive or young adults who have been gifted down payments, a conventional mortgage (that is, a regular loan not insured by the government) may be a better choice as it may have lower interest rates.
- Co-signers: If your child has a steady job and a regular income, and they’re set on buying a home sooner, you or another family member can help them qualify by being their co-signer.
- Assistance programs: As a first-time homebuyer, they have the right to plenty of federal- and state-funded down payment assistance programs.
Finally, if you want to get them a highly useful gift, you can always schedule a talk with a certified financial advisor — they will help them reach their goals, whether it’s paying off student loans, buying a home, building savings or even investing (time is the magic ingredient that makes investments grow!).
And last but not least, congratulations to you and your child for making it through college.
by Melissa Brock | Jul 1, 2024 | College Money Tips |
Construction careers can be a viable option for new graduates. Whether you’re looking into a residential or commercial market, the population continues to expand, and new businesses continue to open, giving this type of career the potential for a secure future. Knowing the ins and outs of construction businesses can also be beneficial for a variety of related careers or help you to start your own business.
1. Consider the Different Trades and Choose Your Interest
Within the construction industry, there are many different trade opportunities. Specialized skills are in demand and essential for helping all the different elements of residential or commercial buildings come together. Trades to consider under the construction umbrella include drywall, electrician, insulation, roofing, carpenter, heavy equipment operator, plumber, HVAC tech, mason, glazier, painter and many others. If you’re just starting out, you may initially find work as a general construction laborer or as a laborer in a specific trade area.
General programs at community colleges or tech colleges may have programs related to a specific industry or trade. Trade-based programs like construction could help recent grads to build financial stability.
2. Obtain an Apprenticeship to Hone Your Skills
You may already have certain talents or skills that will help you be successful in a specific construction trade area. However, gaining an apprenticeship is where you’ll really dive into the specifics of a trade and learn all the ins and outs. There are different standards for various trades, and work is inspected in order to ensure it meets codes and requirements. Specific businesses may also have different processes and methods for the way they approach their trade. Some may specialize in doing things a certain way or having a specific quality control process, for example. You may work with a hiring agency, individual businesses, or local trade schools to find an apprenticeship.
3. Continue to Grow Your Skills at a Reliable Company
Once you’ve apprenticed, you’ll have a solid set of skills under your belt. You may find regular work with the same company you apprenticed with or make connections among other trades and quickly find a steady job that helps set you up for financial success. Finding a solid company can be important in order to have an employer that values your skills. Since construction trades can sometimes have busier and slower seasons, it’s also important to know what to expect in terms of pay. Know whether you’ll be paid hourly, per job, or with a salary. Hourly and per-job rates can fluctuate depending on how busy the season is, but overtime may be available in busy times which can help strengthen your income. As you grow your skills, you may also be able to get work with additional responsibilities or move up in the company.
4. Take Additional Courses or Learn About Intersections of Tech and Construction Trades
As you gain your knowledge and skills, take additional specialized coursework or learn how tech can be used in more traditional construction trades and how it can provide more value and opportunities. If you’re interested in sustainable building practices, a career involving solar photovoltaic panels might be a good option. If you have strong organizational skills as well as good construction knowledge, working as a construction project manager may be in the cards. There are also college degrees, such as engineering or construction management, that are related to the construction industry and could be worth considering.
5. Consider Starting Your Own Construction Business
While working for a good construction company and doing specialized trade work can provide excellent opportunities and financial stability, for some, the option of starting their own business becomes the ultimate goal. A construction business will take knowledge, networking, and skill, but can offer a massive number of benefits and new challenges. Contractor’s licenses are typically necessary to operate your own construction business, and there are varying categories depending on the type of construction you’ll be doing. Know that there are differences when it comes to licensure in different states. North Carolina contractor license requirements, for example, require people to be at least 18 years of age, complete the exam for the specific licensure type, and meet the minimum financial requirement based on the limitation of the license. In SC, people must pass the appropriate exams and have at least two years of work experience for the requested certification. Learning the requirements for your area can help you know what to expect.
Construction Careers Can Help You Have a Successful Future
For recent graduates who are interested in building, renovating, or trades, a career in construction could be a smart solution. Growing in skills and learning the ins and outs of specific trades can help you get the financial stability you need and grow a career you love. If you’re interested in starting, you may also find overseas construction jobs on Jooble.
For college juniors, checking into how a trade like construction could help build financial stability as well.
