Monthly Archives: December 2018

12 Days of Financial Tools

Tripping over piles of toys, and dusting around the must have item of Christmas past we find ourselves asking, What are some gift ideas that don’t include a “thing”? Senior Wealth Advisor Sarah Bird shares an idea each day for the twelve days of financial tools:

Day 1: A Book

Day 1: A Book

Day One: A Book. Our favorite financial advising book for 2018 is Ageproof, Living Longer Without Running Out of Money or Breaking a Hip by Jean Chatzky, the financial expert on the Today Show and Michael Roizen, MD. The book focuses on the importance of taking care of our physical health and our financial health. This book is an enjoyable read with several excellent checklists and worksheets.

Day Two: The gift of time. Do you have someone who dreads removing the snow from their driveway? Hire someone to help with a month of snow removal. Be sure to schedule a night out or a fun activity with the time that was saved. Schedule a time for an activity of choice for the recipient. Think about what they enjoy doing and be their companion.

Day Three: Piggy Bank. For our youngest recipients, a piggy bank is a physical reminder of a place to store money. You can have fun feeling your piggy bank get heavier as you save more and more.  

Day Four: Savings Account. When you move beyond the piggy bank, it’s time to open a savings account. I will never forget the smiles on my boys faces and their sense of accomplishment when they turned over their piggy bank savings to the bank for safe keeping. The bankers were thrilled to sit with their newest savers and explain how things work.

Day Five: Budgeting Tool. Money in and money out is a simple concept, but we need to have a system to track it. Methods range from a traditional notebook and pencil to an online solution or app on our smartphones. We would be happy to show you the budgeting solutions available in our Albion GPS (Guided Planning Service).

Day Six: Debit Account. For tweens and teens, a prepaid card is a good option. This could be something like an ITunes card or a card with a balance to spend. At thirteen, many banks offer the teen debit account. My oldest son has this. I transfer money at the beginning of each month and he has to budget his lunches and outings. He has access to an app where he can track and keep an eye on his balance. I love when we go to get a treat, and he says “Mom, I’ve got this” and he pays with his card. He is learning about budgeting, how to pay for things, how to tip and what is “worth” spending his own money on.

Day Seven: Stock certificate. A stock certificate in a stocking is a fun idea. Choose a company that your child is interested in. Do they like a certain brand of electronic, toy, sports gear or clothing? Buy a share of stock and request a certificate.

Day Eight: Roth IRA. As soon as a child has a source of income, look at opening a Roth IRA for them. They can fund their Roth with up to $5,500 in earned income for 2018. This money grows tax free, and is not taxed when taken out of the account if holding periods are met. Think of the power of compounding and the gift that this becomes over time.

Day Nine: Matching. Matching a child’s savings is a powerful motivator. Teaching them about this “free money” early encourages them to look for matches as they explore potential employment options in the future.

Day Ten: Debt reduction. Consider making a payment towards a loved one’s debt. Giving them the freedom of a period without a payment, or helping them see the impact of an additional payment is powerful.

 

Day Eleven: Emergency Fund.

It can be extremely hard to save up that 3-6 months of living expenses when you are figuring out how to live on a limited income. Helping someone in their early 20s set up their emergency fund provides them with some freedom.

Day Twelve: Service and giving back. Choose a charity or cause to donate your time to. Serving together is a powerful bonding activity. Some of my favorite days are the hours spent side by side with the Albion team and our kids volunteering at the Utah Food Bank.    

Sarah Bird, CFP® / Senior Wealth Advisor
Albion Financial Group
sbird@albionfinancial.com (801) 487-3700