Monthly Archives: December 2016

News The True Cost of Attending College

College is expensive, and the costs appear to be rising. According to “How America Pays for College,” a recent study released by Sallie Mae, in the 2014-2015 academic year, the average family spent $24,164 on college fees, which represents a 16% increase from the previous year.

Many college students and their parents mistakenly think that tuition is the only cost that they need to prepare for. However, whether students major in English, biology or business there are many costs associated with the higher education experience–and they can add up rather quickly.

Room and Board

At many in-state universities, tuition isn’t even the biggest expense, according to Sean Moore, the founder of SMART College Funding. Moore says at many public schools, room and board cost more than tuition. According to research from U.S. News & World Report, the average student paid approximately $10,000 for room and board in the 2014-2015 school year.


“While some colleges, especially public universities may promise lower tuition, they tend to increase costs,” says Mike Pelosi, the digital media director for CardBlanc’s personal finance education platform for young adults. He explains that this allows schools to keep the sticker price low although the final bill is much higher. “
It’s not uncommon to see a course that costs say, $2000 to take, but the final bill is $2300 due to fees. Over the course of 120 credits this adds up,” says Pelosi.

 These additional charges may vary by institution but can include student activity fees, health fees, and library fees.

A 2013 report by the General Accounting Office found that the cost of college textbooks increased by 82% from 2002 to 2012. “Books will run $100-$400 per semester, and for students in medicine/engineering/science, it’s on the higher side,” says Pelosi. Used or rented books are an option. However, to get around that, Pelosi says many colleges are starting to self-publish their own books—which usually cannot be found online. That being said, it’s important to be aware of copyright laws when using self-published books.


“Very few meal plans are all-inclusive, and students should budget extra money for meals away from school,” advises Moore. Students who eat out instead of preparing food–either by choice or because their dorm rooms are not equipped with ovens could spend exuberant amounts of money on dining out.


Those club memberships may look impressive on your resume, but they’re not free. According to Pelosi, students could pay between $150 – $200 per membership fee. Further, Pelosi says that there are alternative ways of getting the benefits you’d receive from a club, “The proliferation of online job boards, LinkedIn, and
 other connective technology has eroded the ability of clubs and organizations to
 deliver the promised goods of jobs and connections.” He adds that fraternities and sororities also have associated fees.

Testing Fees

If students are going into a professional program, such as 
nursing, pre-law, or pre-med, they will likely have to pay testing fees Pelosi says, “You’ll need extra funds for test prep courses, the materials for those courses, registration fees, and associated travel costs to actually take the test.” For instance, Pelosi says, “If
 you’re an education major, there are at least three tests–in general 
education testing and concentration you will have to take before obtaining 
a license.” He says this can cost an extra $1000.


For students bringing a car, Moore says to factor in the cost of insurance, parking, and maintenance. And if students travel home during the year, Pelosi says multiple plane rides or train trips throughout the course of four years adds up.


Depending on the major, students may need to purchase software. “For example, when I was completing my M.A. in Economics and Statistics, I had to purchase STATA, Minitab, and SPSS, and pay for training resources to learn this,” says Pelosi. He adds, “Computer scientists, graphic artists, statisticians/math majors, and closely associated majors all need certain software and hardware components not included in the cost of a class.”

Dropped Classes

“While often uncomfortable, a discussion about taking extra classes or needing to repeat a class is important,” says Moore. He advises families to realistically budget for how long will it take the student to graduate. “Unfortunately, the four-year
 degree has become the exception rather than the rule, and families may need to
 budget for an extra year, or two.”

How to Teaching Financial Literacy To Kids

Financial literacy is the ability to use knowledge and skills to make effective and informed money management decisions. Personal financial literacy encompasses a range of money topics, from everyday skills such as balancing a checkbook to long-term planning for retirement. While literacy – the ability to read and write – is a fundamental part of the education system, financial literacy is often left out of the equation. In the United States, fewer than half of states have any financial literacy requirements for their K-12 education systems, and only four states require high school students to take personal finance classes.

While there is a movement to include more finance-related coursework in elementary, middle and high school settings, parents and guardians are the primary educators when it comes to teaching children the skills they need to develop a strong foundation for life-long financial competence. Many adults, however, avoid talking to kids about money, because they lack confidence in how they’ve handled their own finances. This is unfortunate, because adults have two things that children do not when it comes to finances: experience and perspective. You do not have to be a financial rock star with a perfect track record to teach your child personal finance basics and get the money conversation started. If your finances are currently in a mess, you can work to get them in order and be a positive role model.

Like other provocative topics, money is something that kids will hear about outside the home – at school, summer camp, sports practice and at friends’ houses. While this may sound harmless (what could they possibly hear that could be that bad?), kids can get the wrong message about money by getting information from their peers. For example, your child might hear a classmate say that rich people are lucky. If your child believes that wealth is a result of luck, what motivation will he or she have to handle money responsibly? It’s important to clarify at a young age that most wealth is not a result of luck – that most people work hard and make smart decisions to “get rich.” Even if you don’t know the difference between defined benefit and defined contribution pension plans, you can provide accurate information, introduce ideas, spark interest and awareness, and help empower your children to take control of their financial lives.

By teaching your children about money, you help them discover the relationships between earning, spending and saving. In doing this, children also begin to understand the value of money. This financial literacy can begin at a young age with simple money concepts such as counting coins and making change for purchases. Older children can learn about savings accounts, balancing a check book and creating a personal budget. The key is to teach a concept and let them try, even if it means a little extra time in the toy store while your little one painstakingly counts out coins from his or her piggy bank.

Letter Of Instruction Finance

In this article we’ll take you through everything you should include in your letter of instruction and explain what it can and can’t do for you. (To begin with the basics, read Getting Started On Your Estate Plan and Six Estate Planning Must-Haves.)

A Simple Remedy
One of the most important features of a letter of instruction, sometimes called a letter of intent, is it provides specific information regarding personal preferences in medical or funeral care or details concerning dispersion or care of personal assets that legal documents may not be able to outline. Letters of instruction can be used for many different things, but one of their main uses is simply to lead the person who must settle your estate through the process step by step in plain language that he or she can easily understand.

A good letter of instruction should contain at least the following information:

  • A complete list of all assets, both liquid and illiquid
  • The whereabouts of any and all tangible assets that are not readily accessible
  • The names, passwords, PIN numbers and account numbers of all liquid assets, including bank, brokerage, retirement and investment accounts (To learn more, read Managing Your Documents To Minimize Disaster.)
  • The names and contact information of any bankers, brokers, attorneys or other professionals who handle your assets
  • Informal information regarding the dispersion of assets, such as who would get a sentimental possession or heirloom (the will may state that these articles are to be distributed according to the letter)
  • Preferred charities for donations, if they are expected instead of flowers
  • Location of most recent copies of all financial and Social Security statements, tax returns, and legal documents (such as wills and trusts) (To learn more about wills, read Why You Should Draft A Will.)
  • List of all financial account beneficiaries and their contact information, if necessary
  • The location of all titles and/or deeds for real estate property, rental property, oil and gas leases, etc.
  • Your Social Security number and birth certificate
  • Location (and keys to) all safe deposit boxes
  • Any divorce and/or citizenship papers, or applications thereof
  • Contact information of any debtors, such as mortgages, credit cards and car loans
  • Contact information for any and all insurance coverage, especially life insurance. (For related reading, see Protect Your Kids And Pets With Custom Insurance.)
  • Care and placement of any pets (To find out how to care for Fido after you pass away, read Keep Your Pets’ Trust.)
  • Contact information for all retirement account or estate beneficiaries (To learn how to protect all of the important information you’ve just collected, read Identity Theft: How To Avoid It and Keep Your FInancial Data Safe Online.)

In the next section of the article we’ll show you how you can use a letter of instruction to augment your regular will, or leave a personal message for your loved ones.

Make the Letter Your Own
This letter can also outline more personal desires, including such details as where you want to be buried and the kind of funeral that you want. You can specify location, funeral home or even what type of flowers you would like, or whether you would like your ashes to be displayed at the ceremony. You can use the letter to voice other personal requests that may be inappropriate for a will or trust, such as a general sentiment about how you would like your heirs to use their inherited assets. You could even tell your aunt that she better not wear the blue hat with the giant bird on it to your funeral.

Another advantage is you can use the letter to expand on your living will, elaborating on the medical conditions under which you would like to be taken off of life support in more detail than is permitted in a healthcare or medical power of attorney. Many people also include an ethical will inside this letter. An ethical will is a document that allows you to pass down your values, beliefs and ideals to your loved ones.

Remember, this type of letter does not have to meet any kind of legal format or other formal requirements; it can be handwritten on plain notebook paper and kept in a file drawer if you like. Anything goes in a letter of instruction; micromanagers can even use these letters as chance to write their own obituaries.

A letter of instruction provides an easy shortcut for those who will have to settle your affairs once you are gone. As with any other estate planning document, it should be updated at least annually and kept in a safe place where it is accessible by your relatives or executor. While this letter is not required in any technical sense, it can serve as a final gesture of consideration for those you have elected to settle your affairs.

Some Tips for Family Wealth Transfers

A lack of communication and planning can be costly to the family in terms of taxes and other issues involving transferring parent’s wealth to the next generation and making sure they are cared for properly in old age. While this might sound like it only pertains to the very wealthy this is not the case.

Family money conversations are important and a trusted financial advisor can be a help in facilitating and moderating these family discussions as well as in guiding them through the entire estate planning process.

Family Financial Discussions

Fidelity’s study suggests four key ground rules to having successful family money discussions:

  • Initiate family discussions early.
  • Don’t be shy about bringing up detailed questions.
  • Let parents have the final say about their finances and care.
  • Have follow-up conversations.


This acronym from Fidelity stands for Priorities, Readiness, Estate Plan and Papers. The PREP approach can help everyone be prepared for meaningful and productive family money conversations.

Priorities. This is about fully understanding the parent’s goals and objectives for retirement. Parents should have an idea of what they want out of retirement, a vision for their lives. Children should be prepared to discuss any concerns about these plans. If the parents, for example, are planning to retire abroad how will the family get together and who will care for them in the event of serious illness?

Readiness. This entails knowledge of the parent’s financial situation. Parents should have a handle on all sources of retirement income, an estimate of the expenses associated with their lifestyle and details of how they will handle retirement healthcare expenses. Children should help parents test drive their plan to see if it is feasible.

Estate Plan. This is about having the parent’s estate planning documents in order and up to date. Parents should make decisions about their care in the event they become incapacitated. Who would care for them? Who would have powers of attorney over their assets? Who is the executor or trustee of their estate in the event of their death? From the children’s point of view, they might suggest the best family member to handle each of these tasks. Factors might include physical proximity to their parents and who is best in dealing with money issues.

Papers. It is important that everyone knows where key documents and papers are located. Parents should make a list of their key documents and papers and where they are located. Children can help their parents determine what documents are in place and which may need updating or creation.

Role of the Financial Advisor

Financial advisors can help clients plan for intra-generational wealth transfers in a number of ways. Adult children may have questions about how to approach the topic with parents if their family is not in the habit of having open family money discussions. A financial advisor can help them understand the issues involved and some of the questions to ask. They might also suggest some ice breakers to help the children open these difficult discussions with their parents or other older relatives.

For parents a financial advisor can be a great sounding board for their ideas about wealth transfer. Who do they want their money to benefit? Do any of their children have special needs that must be addressed in terms of funding? What do the parents want out of retirement? What are their feelings about long-term care? Do they have long-term care insurance or have they made other provisions to deal with these expenses? An advisor can often suggest ideas and strategies the client might not have considered. Additionally, most financial advisors will have relationships with estate planning attorneys and sources to obtain long-term care insurance if needed and can provide referrals to these vetted professionals.

A financial advisor can also be the perfect person to help moderate and facilitate a family financial conversation. As a disinterested third party they are detached from the emotional issues that are inherent in these types of conversations. As experienced financial professionals who have seen a number of different family situations they can offer ideas that the parents and the family may not have considered.

Lastly, most financial advisors have encountered adult children whose goals seem more about their own financial well being than that of their parents. At the end of the day the wealth transfer discussion should be first and foremost about making sure that the parent’s or older relative’s needs and desires are met before worrying about the next generation. This includes their retirement goals and that proper care is provided for their later years. The advisor can help prevent the goals of seemingly greedy children from negatively impacting their parents.