 Photo Credit: Pixabay As a parent, it’s easy to decide to save for your child’s future. However, deciding the best way to save is a bit harder. It really depends on your purpose for saving. Therefore, before you choose how to save, determine what your ultimate goal is. Life Experiences and Beyond If you want your child to have enriching experiences throughout her childhood or during college, consider opening a custodial brokerage account in your child's name. This money could be used for summer camp, music lessons, a study abroad trip, or a nest egg. Commonly reserved for long-term objectives, parents usually use a nest egg for their child’s future education costs, home purchase, or retirement plan. With a custodial account, each child can receive up to $14,000 a year from each parent without being subject to a gift tax. However, the account is still taxable under the so-called “kiddie tax” rules, which state the first $1,050 will be tax-free. Then the second $1,050 is taxed at her rate, which is usually lower than your rate. Any amount after that is taxed at your rate. Until your child reaches a certain age, generally between 18 and 25 (depending on your state), you manage the account. Once your child is of age, she gains control of the account and can use the money however she wants. If you wish to remain in control of the savings account for a longer period of time, a trust account may be a better option. Custodial accounts have quite an impact on financial aid, according to the Balance. Assets in a custodial account belong to your child and count more heavily. When determining aid eligibility, 20 percent of a child's assets are assumed available for college, while only 5.64 percent of a parent's assets are considered available. While thinking about the future, you may also wish to consider whether life insurance is a viable option. Not only will a life insurance policy provide your beneficiaries with income-tax-free money, but the value also grows over time. Of course, you will likely have to pay a monthly premium for the policy, so learn the pros and cons of life insurance. Building a Career in Business An essential tool that has become more synonymous with high-level business jobs recently is the MBA. Obtaining this next level of education can provide you with greater career choices and increased earning potential. These changes will have a direct impact on your ability to plan for your family’s future and financial stability. Other added benefits of an MBA are expanded leadership skills, growing job prospects, and the ability to impact your family's success in other ways (inspiring and leading by example). College Plans If you wish to save for college, a 529 plan offers two enticing benefits. First, the money grows tax-deferred, and any withdrawals are tax-free, as long as they’re used for qualifying expenses for college, such as tuition, room and board, books, and computers. Second, a 529 plan is considered a parent's asset, so unlike a custodial account, there's less impact on financial aid. The lifetime contribution limits for a 529 are high at about $200,000. Family members and friends can contribute, and some states offer additional tax incentives. So, if you have family and friends in other states, consider shopping around to find the best 529 plan to fit your needs. The friend or family member can open one, and you can contribute. Retirement Plans The only way to save for retirement through an IRA is with earned income from the account holder. Once your child becomes old enough to work, she can invest her money into an IRA, and Schwab recommends using a Roth IRA account. While your child is still a minor, you can help her get a head start on retirement savings by opening a custodial Roth IRA on her behalf. Although smaller brokerage or mutual fund companies may not offer these accounts, many of the larger ones – Vanguard, Schwab, and TD Ameritrade – will do so. Although you can teach your child to save using a piggy bank, consider helping her save through investing. The best route of investment depends on what your main goal is for saving. No matter which option you choose, you're thinking ahead and planning for your child’s financial future, so that is a parenting win.  This year my goals were a little more difficult to pick than normal. I had trouble pin-pointing my One Word challenge word even, which is usually the easiest and most fun for me. Its been a bit of a crazy year and so that's likely one of the main reasons that trying to figure out what's next was so hard. After weeks of back and forth I ended up with the following: Financial:
Spiritual:
Health & Wellness:
Social & Recreational:
Relationship & Romance:
Career & Business:
Education & Personal Development:
Household & Home Life:
Until next time,  Last year I experimented with a number of different types of Happy Planners: vertical, color block, budget, mini fitness and even some DIY pages. I planned work tasks, chores, events, vacations, cancelled plans... lots of cancelled plans, and my budget & finances. So many different planners. And I loved them all in turn. This year I really wanted to streamline so that I could carry a single planner around with me since I am a little more spread out between offices at the moment so multiple planners would be more difficult to manage. I spent about a month looking at different layouts and special versions of planners to decide which one I wanted, which would work best. I knew that I still wanted a Happy Planner as I like the ring bound design and the accessories but I decided that a dashboard layout was my best bet, something completely new for me. I also decided that I would need a little bit extra to make it fit my ideal planner, the productivity extension pack. I may end up adding an additional extension pack later in the year but for now I'm happy with my choice. Click the video below to see the planner that I chose: Detailed Florals. And the Productivity Extension Pack... I look forward to planning with you all in 2021! Until next time, November has finished and we're in a mad dash towards the end of the year at this point. I'm happy with the direction my finances have gone this month- almost $40k increase in my net worth year to date! What!?! I'm super excited about that obviously but not as excited as I am about being ready to pay off a credit card in December and being a third of the way towards another as well after my savings for this month were taken into account. One step at a time, even if they feel like wobbly toddler steps sometimes. :) What accomplishments did you have this month? Until next time,  Imagine an office where the coffee machine is right next to you, there are always snacks in the fridge, and you can wear whatever you want. That’s more than just a fantasy for millions of people in the information economy such as copywriters, journalists, and web developers who have made the move to working at home in the new gig economy. Here are some tips on how you can join them and start living the dream rather than just dreaming. Set Up a Workspace Once you’ve gotten the legal documents filed and your business plan worked out, you can move on to the fun stuff. Setting up a dedicated workspace is important if you intend to work from home. Your computer and its accessories are your new lifeblood, and you do not want to face a meltdown when approaching a deadline for your first client. Take a look at the system you have now and get ready to upgrade if necessary. An old laptop the entire household uses for gaming is not going to cut it, so you may have to invest in a new one that is dedicated to your new career. Check out the state of your cables and peripheries as well before you head to the shop. Next up comes your chair. Since there’s a good chance you’ll be sitting down and tapping at the keyboard for the better part of the day, you’ll want something that’s ergonomic to avoid back and shoulder pain. The right one should support your posture while reducing pressure on your hips, factors that will increase your overall comfort and make work a lot easier. Install an Accounting System You want to be ready for your first client, who might show up sooner than you expect. This means having a system in place to manage your income and expenses; otherwise, you won’t know how much money you’re making, and you could end up in hot water come tax time. A simple Excel spreadsheet may suffice in the beginning but not once the business starts picking up. According to the Freelancers Union, a website devoted to the gig economy, the right cloud-based software will not only minimize the amount of time you spend on accounting but improve your financial decision-making. They propose a variety of solutions, including one that’s free and others for as little as $9 a month. Stick to a Schedule Time management could be the difference between success and failure, as hours spent gazing at cat memes can be costly and cut into your bottom line. That’s why experienced freelancers agree: Make a schedule and stick to it. This includes rather mundane things like getting up at a decent hour and getting showered, dressed, and ready for action. Too much freedom can be your worst enemy. Next comes the actual work. It’s handy to make a checklist of the things you need to do each day, then set aside specific hours for each task. Remember not to make your schedule too tight. Trying to do too much in too little time is a real risk when you’re getting started, as the pressure is on to bring in the revenue. Be sure to include breaks and meals in your planning to avoid being run ragged. Get Out and Network Now that you’ve set up your home office and established a daily routine, it’s time to leave. Some of your most valuable work won’t be found online at your desk but by meeting with potential clients at networking events, so be sure to fit this into your schedule. You can start small by contacting other freelancers in your area and inviting them out for a cup of coffee. For bigger occasions, make sure to be prepared. This means learning a little about other attendees, dressing appropriately, and having business cards at the ready. And remember, the contacts you make are only worthwhile if you follow up later with an email or a phone call. Your marketing and self-branding should continue unabated when you’re back at home in your comfy office chair. Though success may not come immediately, you’ll hit your stride soon enough by staying motivated and sticking to your schedule. So get back to work and stop looking at those cat memes!  Lucy is available at: Gigmine.co
Welcome to month 4 of working in this workbook at the end of each month. :) I'm excited to see that I ended up spending less in quite a few categories this month than last month, even though there were a few blaring red categories as well. My sinking funds are slowly growing and I'm on track for all of my annual bills as well as my short term savings goals (like a grill, safe, and etc). Next month I'm hoping for a few more gains than this month. Fingers crossed! What kind of budget review and comparative items would you like to see on the Budget Reviews in the future? Do you like this format? Until next time,  |
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