Volume 13 Issue 1

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Story 1 of 5:

College Student Finances: Budgeting

By Cora French-Robinson, Family and Consumer Sciences Agent for Ohio State University Extension in Lake County

Parents send young adults off to college with an academic plan in mind. However, few have taught them to have a financial plan in place before they depart. The clock is ticking -- only a few months until high school graduation and then college in the fall.

But let's face it. Creating a budget or spending plan for the first time can be confusing. It helps to look at it this way: A budget is a tool to get a realistic picture of what you owe and how much you are spending. It can help a person gain skills in controlling their finances by controlling their spending habits.

Here are some tips to guide you through the discussion of budgeting with your teen:

-- Distinguish between wants and needs. Needs are those things required to live (housing, food, shelter, transportation). Wants are the things you want to have, but are not necessary to survive.

-- Track your spending. Keep all receipts, or write down every time you purchase an item and add it up at the end of the day or week. This will help you see what is being spent on needs and on wants.

-- Make a list of expenses. Fixed expenses are those paid on a regular basis and at a set amount, such as a car payment or rent. Flexible expenses are those that change, such as purchasing gas, food, clothing, recreation and personal items.

-- Determine your income. This will help you figure out the amount of money available to meet monthly fixed and flexible expenses and how much you can put into savings.

-- Live within your means. Expenses for the month should not exceed income for the month. Have a discussion with your teenager to find ways to cut back spending and to avoid using credit cards to get the things they want but can't pay for.

-- Set limits. Talk to your teenager about the amount of financial support you will provide while your teen is in college. You may decide on a monthly amount or yearly figure. Be consistent with your decision. Inconsistency or mixed signals will hinder your child's development toward financial independence.

-- Give practical experience. Open a checking account, get a cell phone, or purchase calling cards that they are responsible for. Give them the same amount of money for allowance and have them keep a written budget that can be reviewed each month. Once they have mastered these resources, walk them through getting a credit card. (See related article below.)

Sources:
Lyons, A. March 2003. Parent Smart: Putting Your Student on the Road to Financial Independence. University of Illinois Extension.

Lyons, A. March 2003. Parent Smart: Setting the Stage for Financial Success. University of Illinois Extension.

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Story 2 of 5:

College Student Finances: Credit and Savings

By Cora French-Robinson, Family and Consumer Sciences Agent for Ohio State University Extension in Lake County

All parents should have a practical discussion about managing money with their teenagers. Starting them on the road to financial independence now can help them to become smart financial consumers for life.

That discussion must include credit cards, which can allow a person to accumulate large amounts of debt. Debt is caused by the lack of spending control, as well as a lack of financial information on how to use the cards responsibly.

When used responsibly, credit cards can provide a resource in emergencies, a convenient method of payment at the point of purchase, and a means to establishing a good credit history.

When used irresponsibly, they can damage a young person's credit rating and make it difficult for them to obtain credit again. It may affect one's ability to buy a car or get a job. The consequences are severe.

Parents should be involved in the credit-card decision-making process. Together, evaluate some of the credit card offers that come in the mail. Then, let your college-bound teen apply for one credit card that he or she will be responsible for using and paying off each month. Agree on a limit that will be charged and repaid each month. When the monthly statement arrives, sit down and read the statement together. Discuss the annual fees, grace periods, interest rates including introductory offers, and cash advance fees. Explain the consequences if they do not pay their bill on time. Also, talk with them about late payment fees, compounding interest, and keeping a good credit history.

Tips for first-time credit card users:

-- Credit cards are loans that cost if you do not pay them off each month.

-- Pay off credit cards each month or at least pay more than the minimum due.

-- Do not apply for too many credit cards; this increases the chance of not paying them off each month.

-- Ignore credit card offers in the mail!

-- Find a card that does not charge an annual fee, and avoid credit cards with temporary low introductory rates and transfer fees.

The best advice any parent can give their children is to encourage them to save at an early age. This can best be done by example or role modeling. Use the adage, "pay yourself first." Make saving money a part of the fixed money expenses that creates a lifetime of savings for future use and retirement.

Sources:
Lyons, A. March 2003. Parent Smart: Putting Your Student on the Road to Financial Independence. University of Illinois Extension.

Lyons, A. March 2003. Parent Smart: Setting the Stage for Financial Success. University of Illinois Extension.

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Story 3 of 5:

Keeping Your Family on Track

By Marge Wolford, Family and Consumer Sciences Agent for Ohio State University Extension in Pickaway County

Working parents with young children may have difficulty balancing all of life's tasks, so it is important to think of ways to keep the family unit "on track."

Let's visualize the family like a train moving from one destination to another. Think of the train's cars as the family unit, with parents as the conductors. The track provides the family unit with activity choices they can pursue. The movement of the train symbolizes the actual decisions the family makes on a daily basis. To stay on track, the family must work together and communicate with each member to avoid a train wreck.

Parent-child interaction is an important part of the family "track." What about using some of these inside and outside activities to spend quality time with your children? From my experience, young children, say age 3, like to have parents and other adults (especially grandparents), to help them with indoor activities like stacking blocks, putting shapes into matching holes, putting puzzles together, drawing pictures and listening to a story or a family tradition.

Outdoor activities may appeal to your family this year. Take a walk in the woods; go snow sledding or build a snowman if possible; visit a zoo or other outdoor exhibit appealing to young children.

Another suggestion to stay on track is to share material things with a charity. Children learn to share by giving to others. Adopt a family to help throughout the year. You can ask your children to share some of their used toys with other children who may not have many. Give outgrown clothing to a community clothing center or form a clothes-sharing cooperative with friends and relatives.

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Story 4 of 5:

Strong Bones -- Strong Life

By Cindy Bond-Zielinski, Family and Consumer Sciences/Community Development Agent for Ohio State University Extension in Guernsey County

Your life is busier than ever, yet you want to enjoy all of life's experiences. You do not want your life to be disrupted by disease, especially one that can be prevented. Osteoporosis is a disease that gradually weakens bones so they become more and more fragile and likely to break. It is often called the "silent disease" because bone loss occurs without symptoms. A person may not know they have it until their bones become so weak that a sudden strain, bump or fall causes a fracture or a vertebra to collapse.

Osteoporosis does not have to be a normal part of aging. Building strong bones, especially before the age of 30, can be the best defense against developing osteoporosis. A healthy lifestyle can be important for keeping bones strong. Prevention of this disease is very important: There are treatments for this disease but there is no cure.
The National Osteoporosis Foundation recommends these four steps to prevent osteoporosis:

-- A balanced diet rich in calcium and Vitamin D.

-- Weight-bearing exercise.

-- No smoking or excessive alcohol use.

-- Bone density testing and visiting a doctor for evaluation when appropriate.

Whether you are 20 or 50 years old, it is never too early, or too late, to start an osteoporosis prevention program.

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Story 5 of 5:

Living Well In The Middle

By Sharon Alexander, Family and Consumer Sciences Agent for Ohio State University Extension in Portage County

Helping aging parents meet and plan for their needs doesn't need to be an overwhelming and dreary task. Over a period of time, relaxed conversations and breaking the process into small pieces can make things much easier for everyone involved. Many aging parents have developed clear ideas over their lifetimes about what they believe is the "right" way for them to arrange things. However, when the adult children are also involved in taking care of their own young children at the same time as their aging parents have increasing needs, the overload of responsibilities can create tremendous stress.

In order for the family members to cope well with the stresses of dealing with multi-generational issues, open communication needs to be encouraged. Everyone can be a part of the stress management process at some level, whether in taking over appropriate tasks in the home or creating relaxing moments for the family. The adult children, who generally are responsible for seeing that all the pieces and parts of everyone's lives get taken care of, must also develop a plan for meeting their own needs, as well as those of the children and the older parents.

There are some specific strategies that can help everyone meet the new challenges:

-- Clarify the house rules. Stay flexible and make adjustments as needed. Encourage ideas and input from everyone in the family.

-- Have a weekly meeting. This will make positive communication much more likely and can a great place to handle potential conflicts in a atmosphere of good humor and fun.

-- Prepare a long-range financial plan. Not only is it important to have a plan so everyone knows what they're responsible for, it also is important to allocate resources well and have good records for tax purposes.

-- Use community programs and services. Most communities have programs available for any age group. Discover how they can provide needed services for family members.

-- Respect one another's privacy. All generations should have appropriate personal boundaries and personal space.

In an atmosphere of love, gentleness and good humor, adult children can assist their parents in making their decisions while including good memories and stories about their lives, and can include young children in parts of the process. This has the added advantages of helping the aging parents feel they are being honored and cherished, giving the children a sense of belonging to a dynamic family, and assist the adult children the opportunity to positively impact the growth of the family.

Source: Boss, Pauline (2001), Family Stress Management, Sage Publications,
Inc., Thousand Oaks, CA.