I was surprised when I asked parents to tell me the life skills they wish their kids knew, and there was a resounding request for kids to learn how to open a bank account.
Similarly, there was a huge call out for:
How to budget & balance accounts
How to write checks and pay bills
And how to start saving for retirement
It seems some of the things we take for granted are, as a result, missing from what we teach kids.
This article is the first article in the four-part series and will discuss the best and simplest way to get started with opening a bank account.
It seems easy, but there are several questions many people never think of that we’ll address in this article:
Checking or savings account?
Are there fees or minimum balances?
Should I get a Debit Card too?
Should I have my name on the account with my kid?
1. Choosing a Bank
When you choose a bank, there are a few criteria you’ll want to look at:
Number of branches
Ease of access
The location should be convenient to your home, but also have enough branches so that – in the case of an emergency – you can get to your bank.
I opened an account with Elevations Credit Union when I was attending CU Boulder. It was convenient and credit unions are really great to bank with. However, after I graduated and moved, there were no branches around me, which made things very inconvenient. I ended up opening an account with US Bank since they are in about every King Soopers, where I do my grocery shopping.
This is especially important with kids because you don’t want them to have to drive too far just to bank.
Similarly, ease of access into the branch is important. I remember having a Norwest (now Wells Fargo) account, and getting in and out of the bank’s parking lot was terrible. I had several near-miss car accidents and dreaded even going to the bank.
2. Checking or Savings Account
As you’ll learn in the future article about saving and budgeting, there should be an account that is used for saving and investing.
That means it’s important to have BOTH a checking and savings account.
The reason a checking account is important, is so that kids can learn how to write checks, and have a designated spending account aside from a designated savings account.
Checking accounts are important for paying bills (be it online or via mail) and will give kids the opportunity to learn how to write checks. Even if check writing isn’t as prevalent as it once was, it’s still important.
I was shopping one day and realized I forgot my wallet, which had my credit cards and cash. I started to panic because I needed some food. Fortunately, I keep a couple of checks in the car and was able to save myself by writing a check… they still come in handy!
3. Fees & Minimum Balances
Some banks have fees to have an account and others don’t. Obviously get the one that doesn’t since your kid shouldn’t have a huge account. Likewise make sure there isn’t a minimum balance or a very small ($10 or less) minimum balance.
Just as important is how overdrafts are handled!
When I was in college, it never failed: my peers (who hadn’t learned how to balance an account) would routinely trigger their overdraft protection and the hefty fees that went along with it.
They would look at their balance online and it would show $10. Then they’d check it again a few days later and it was at $30.
It was the magical growing bank account; and they never wondered where the extra money came from. Until the end of the month when they had over $200 in overdraft protection fees!
I would suggest NOT getting overdraft protection and instead making darn sure they can balance their account (which we’ll cover in a future article).
4. What About a Debit Card?
Here’s my thoughts on kids having debit cards: it makes it much, much harder to balance the bank account while making it much easier to overspend and run into trouble.
Are ATM machines convenient? Yes, but I have never once used one in my entire life. Part of teaching kids life skills is to teach them to be prepared. I keep an extra $10 in cash plus a few checks in my car. It wouldn’t bother me if it got stolen.
If you’re determined that your kid gets a debit card, wait at least six months after opening their account so they can learn “the old fashioned way” and understand how the debit card affects their account when they actually start using it.
5. Should I Be On The Account Too?
I think it’s a very good idea for you to be on your kid’s first account so you can monitor their spending and make sure they don’t cause a train wreck.
It’s good to get statements so that you can use that as a learning experience to go over them with your kid and teach them how to properly dispose of them (in a shredder) so that they decrease their risk of identity theft.
Come up with a time frame or benchmarks until you pull yourself off the account and let your kid take on the responsibility of an individual account.
Opening a bank account is a huge step into a new world for kids and it should be a great experience. Walk your kids through the setup and look for the learning opportunities along the way.
When discussing marketing, think of it as a contact sport. Marketing should be seen as a game for every attorney. Consider it to be a game in which you are seeking to obtain the most points of contact, meaning how many individuals can be seen per week, month and year. This game should also consider the individuals that are on your marketing team who are amenable to refer your business? Below are some of the many influential tactics that can be used in order to win this so called “game” of marketing.
Obtaining the correct targets
When playing a contact sport the correct material is necessary, you wouldn’t be playing soccer while using a basketball would you? When marketing you also need to find the correct targets. If you want to win this so called marketing game it is crucial for you to market the correct individuals. These individuals are those who want and need your services. Take the time in coordinating the ideal targets with your experience in order to meet the “points of contact.”
Formulating the right type of friends
Although the process of meeting other bankruptcy attorneys and legal specialists is important, it is crucial to become friends with the more dominant and the most influential players in the market you are in. For instance, if you are in the market that deals with construction companies that are seeking bankruptcy, then it is important to accompany the trade associations and attend their conferences. At these conferences is where the correct network connections will be made.
Become a scholar
Although you may not recognize it, there are many individuals that are interested in the knowledge that you have. It is important to take time aside in order to share this knowledge through a blog, articles and trade publications by sharing it throughout social media. There are many industry event coordinators that are seeking to obtain speakers and workshop leaders. When speaking or leading a workshop this puts you in the front of the room, which gives you all of the attention more than the average propaganda could ever do.
Build a list
There are times where the individual may be interested in your legal services, however may not be apt in purchasing. You can obtain these individuals through grabbing their attention by adding them to a mailing list in order to first get their approval. The mailing list that you create can administer a beneficial source of potential revenue and clients. However, it is crucial to keep the information that is given fresh with valuable information such as what is trending, events and news on bankruptcy.
You work throughout your life, invest and save wisely. You are enough careful of risks that threaten your savings and you would definitely like to pass work on to your dear ones after investing so much time, sacrifice and effort. However, you should be pretty careful about the least amount of government interference and tax while passing on your work. There are some well-established ways to make sure that the intended recipients get your financial legacy properly. Family limited partnerships, private foundations, wills, irrevocable trusts, revocable trusts and an alphabet soup of strategies are some of the indispensable parts in order to secure a financial plan.
Here is a list of some recommendations to minimize inheritance conflicts.
Address personal property separately
Make a separate list of your personal properties with proper instructions that who should inherit what item. The family members often start conflict among themselves regarding the inheritance of property. You can prepare a Personal Property Memorandum, i.e. a separate personal property list as a part of the will. You must put the date and signature while preparing a handwritten or typed list.
Update estate plan regularly
Make changes in estate planning as per changing circumstances, especially after a divorce. Under matrimonial laws, most of the states favour former spouses. You should immediately disinherit your former spouses, in order to avoid bizarre and unwanted results. Other changes in life like death or divorce of a child or incapacitation, illness or addiction of any beneficiary should also be considered while updating your estate plan.
Hold an open discussion on special assets
Family input is advisable in some situations. Conditions like the succession of a family business, care for a handicapped child, home require children and parents for continued enjoyment of a vacation should be listed on the same page.
Consider a prenuptial agreement
Inheritance conflict is mostly the reason for a second marriage. Conflict can be minimized at death with the help of a post-nuptial or prenuptial agreement. It clearly states the distribution of property among the spouses and other beneficiaries.
Clearly identify gifts and loans
Children with financial incapability are often helped by their parents. Parents generally offer help either as gifts or loans. Conflict can be generated due to the issue of unpaid loans from parents. Parents should clearly state about everything in their estate plan.
Property Fund Trust
In order to avoid conflict, you should properly retitle and fund all your assets. All the life insurance policies will name the trust as beneficiary if the will indicates equal distribution among testator’s children.
Estate planning is something no one really wants to deal with if only because you have to take on the subject of your mortality. Given the rather morose and unhealthy mindset we’ve developed regarding the end of life, it’s safe to say that most people try to avoid talking about death like, well, death. It isn’t an easy topic to bring up, and it certainly doesn’t get any easier when discussing how your belongings will be disseminated after your passing. What’s more, when it comes to your finances, the topic of estate planning is all the more difficult because it involves actually coming face to face with some serious numbers.
It’s too bad that so many people tend to face their final financial planning as a way of showing how little they’ve accomplished over their lifetime. People need to focus on the fact that they are making a plan the benefits their family after you are gone. They should be allowed to grieve, and proper estate planning accomplishes this task.
Here are five secrets (truth be told, it’s just common sense) to successful estate planning:
1. Draft A Will – Mocking up a simple version of your will doesn’t cost much and at least starts the process of where things may stand when you pass.
2. Name the Executor – As the title suggests, this is the person who will handle all aspects of your estate. You want someone you can trust, but you also want someone who you know will do a proper job.
3. A Living will – A living will scares a lot of people because it makes you face the possibility that you’ve either suffered a serious accident or are completely unable to communicate with those around you near the end of your life. Major court cases & drawn-out family dramas have come from a living will not being available & everyone scrambling to perhaps know what you might think would be possibly OK to do for you. It can get messy.
4. Update Your Will – Not only do you need to start the process of planning your estate, but you need to review the documentation at least once a year. Any changes that may come your way such as major life events (i.e., deaths, marriages, etc.) may change the contents of your will, so it pays to look it over regularly.
5. Communication – Before you pass & a final reading of your will takes place, and certainly before you are unable to communicate with your loved ones, you need to keep the lines of communication open so that you can tell everyone what plans you’re making. Yes, your will is the legal document of record, but should an issue arise regarding your intentions, you’ve at least been keeping everyone abreast to your wants.
Estate planning is not a fun time. Rather than approach the matter as a dreary “to-do”, though, think of it as just another note in your day planner. It is a rather defining moment in adulthood and one that everyone must understand is perhaps the most important thing they’ll do to help their family out when you’ve passed on. But it isn’t a way to signify an end to life; it’s more a symbol of you firmly having your sights set on the future.
Don’t let your personal estate planning fall through the cracks. Be sure to address this important documentation as soon as possible for sake of you & your loved ones’ peace of mind today.