Finance
How to build a blueprint for your child’s financial success
FOX Business host Charles Payne analyzes the state of the economy for future generations to come on ‘Making Money.’
College tuition is on the rise, living costs are high and the future is uncertain.
Combine that with the pressure to secure your child’s financial future, and it may sound intimidating. However, a few expert-approved moves can help pave the path for their success.
“It’s important for parents to save what they can, when they can,” Tony Durkan, a vice president and head of 529 relationship management at Fidelity Investments, told Fox News Digital.
Durkan said 529 savings accounts are a “flexible, tax-advantaged” way to save specifically for education, including room and board expenses, tuition, apprenticeship costs, student loan repayments and more.
They can even be used for tuition at K-12 schools, but for most families, college costs are the biggest mountain to climb.
COLLEGE SAVINGS SHOULD START IN KINDERGARTEN AND KIDS SHOULD BE INVOLVED: FINANCIAL EXPERT
Kids could be one step ahead with the right financial knowledge and savings to support their transition into their teen and adult years. (iStock / iStock)
The average price tag to attend an in-state, four-year college, including tuition, fees, room and board, in the 2023-24 academic year was $24,030, according to data from Statista. The total cost for a two-year, in-district college was $13,960.
The rule of thumb is – the sooner parents start investing in their child’s education fund, the better, according to Durkan.
“[That way] contributions have more time to potentially grow,” he explained.
There are other ways to maximize a 529 account’s growth potential, he pointed out, including making everyday spending work for you.
“Consider a rewards credit card to help earn money toward college savings – one either directly connected to a 529 plan, or one earning cash back that can be earmarked for college savings,” Durkan said. He also suggested “getting friends and family involved.”
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Saving for college can be a daunting task, but a 529 account can be one of the most helpful tools to make sure your child has money available when the time comes. (iStock / iStock)
There’s also good news for parents concerned that 529 accounts could hinder their child’s chances of receiving more financial aid.
“In reality, parent-owned 529 plan assets are considered a parental asset and are factored into federal financial aid formulas at a maximum rate of 5.6%,” Durkan said. “This means that up to 5.6% of the 529 assets are included in the Student Aid Index (SAI) that’s calculated during the federal financial aid process. As a point of comparison, student-owned assets are assessed at rates as high as 20%.”
Even so, education is only a fraction of the financial pie.
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FOX Business’ Lydia Hu speaks with Jessica Daly and her daughter Madison about the rising cost of college as tuition has more than doubled since 2001 on ‘The Big Money Show.’
Kelly Lannan, senior vice president of emerging customers at Fidelity Investments, told Fox News Digital there are perks to custodial accounts and helping your child build good credit, all with the goal of establishing good habits that kids and teens can carry into their future.
Custodial accounts, or accounts that adults manage on behalf of a minor, help parents invest or save for their children until the account is turned over to the beneficiary at a certain age.
Another tool, which enables teens to take matters into their own hands, is the Fidelity Youth brokerage account, Lannan noted.
“[It’s] the industry’s first and only teen-owned brokerage account and allows teens to save, spend and invest in one single account. The teen is actually the owner of the account, so they’re able to make investing decisions on their own, with parental oversight,” she said.
“Fidelity Youth includes plenty of learning modules and resources to help teens and parents learn about investing and money skills, to help teens build valuable life-long financial skills,” Lannan added.
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Since credit history can help — or hinder — your child’s image as a potential borrower when adulthood comes, parents should also consider setting their child up for success down the road in this area.
Lannan said adding your child onto your credit card as an authorized user is beneficial in helping them build their credit score, but urged parents to make sure they educate their children about credit card usage from the start.
“You want to teach your child to never charge more than what they can pay and pay their bills on time every single month,” she said. “You should also teach them about credit card fraud and identity theft and monitor their monthly credit card statements to ensure there aren’t any fraudulent charges.”
Lannan also said a Roth IRA geared toward children is a useful method to build retirement savings.
Talking about finances can be stressful, but it’s even more stressful if you’re not sure what advice is good and what advice might put you in a worse position than you started in.
Recently, a Reddit user who goes by market_vision1 asked, “What is the worst financial advice people still repeat?” I took out a little pen and paper while I was reading through these, like, “Lemme write that down. And that. Oh! And that, too!” I’m curious what you think, though. Are all of these things we should avoid financially?
1. “One of the more damaging ideas out there is ‘Oh, you’re young, don’t worry about money, just go have fun and worry about it when you are older.’ Of course, the number one regret I hear from clients nearing retirement is that they wish they had just started saving when they were younger.”
—u/hems86
2. “The ‘tax bracket’ myth should be illegal. My uncle turned down a $10K raise because he thought he’d ‘lose money.’ He literally paid $10,000 to avoid $2,200 in taxes. That’s not a tax strategy. That’s a $7,800 donation to the Dumba— Fund, and he’s the chair.”
—u/Serious_Cress5040
Related: “31 Things Only Super Wealthy People Can Buy That You Probably Don’t Even Know Exist”
3. “People living outside of their means and not realizing it. They say things like, ‘You deserve X, don’t settle for less.’ Most of the people I see who are broke are not 100% victims of the system. The majority of people waste their money on dumb stuff that they can’t afford. They’ll tell me they’ve cut out all unnecessary spending, but when I look at their actual expenses, I see otherwise. Spending $800 a month on DoorDash, financing a new car with a $900 monthly payment, going on international vacations, spending 70% of their income on rent in a fancier apartment when there are options for cheaper living.”
—u/hems86
4. “I’m a financial planner, and some of the worst advice I’ve ever heard is ‘Don’t pay off your credit cards in full. Carrying a balance on your credit card builds your credit; paying it off every month hurts your score.’ People say this to me all the time when I ask why they carry a balance on their card with 25% interest when they have more than enough to pay it off.”
—u/hems86
5. “It’s not so much advice as it is a financial choice. I know people who are taking out 96-month loans on cars they never should’ve considered in the first place, just because they can make the car note when it’s stretched over eight years. They never considered the interest on the loan plus the rate cars depreciate and are befuddled when they can’t afford to trade it in.”
Finance
I’m a 25-year-old grad student on a budget. I’ve struggled to accept financial help from my Boomer and Gen X friends.
In August, I quit my steady job as a New York City public high school teacher to start a full-time graduate program in Manhattan. I worried about the choice not only because I loved my work with the kids, but also because I had traded a consistent paycheck and affordable health insurance for tens of thousands of dollars in tuition.
When I was teaching, I prepared for the cost by scrimping to save every cent I could. But my account balance still wouldn’t fully cover two years of school and living expenses.
Throughout my savings journey, I learned a lot of lessons, especially from my older friends.
I jumped into major money-saving mode
As a result, I redoubled my frugal efforts. I made a rule that I wouldn’t eat out or order takeout unless it was someone’s birthday. I asked to meet people in parks rather than restaurants and suggested $5 happy-hour spots from a meticulously crafted list on my phone.
On rare occasions when I dined out, I looked at the prices before deciding what to order and pored over the bill with a calculator.
It worked. While it was still difficult to watch my savings dwindle — buoyed occasionally by small deposits from part-time jobs — I kept my costs (relatively) low for a 20-something in the city. Most friends understood my restrictions or were in similar situations.
I worried when my older friends routinely paid for me
But this approach didn’t work as well with my five older friends from my intergenerational writer’s group. We’d been meeting weekly on Zoom for several years when we started visiting each other in our home states across the country. As women in their 40s and 60s in dual-income households with established careers, they understandably gravitated toward nicer places where the cheapest cocktail cost $20. My dive bars with weirdly stained walls weren’t going to cut it.
When I visited two of these friends in Chicago, I anticipated that we’d go to swanky spots and saved up for weeks, cutting out anything nonessential from my grocery list — chocolate-covered pretzels, bananas, frozen fried rice.
But when I offered to chip in for our multi-course dinners or luxury spa day, they brushed me off.
I was grateful for their generosity, yet overcome with guilt. They had contributed so much to our time together. I didn’t want to be a freeloader, the friend who couldn’t hold up her end of the deal. How could I pay them back and show my appreciation?
At the end of the trip, my friend Andrea, 46, and I ate lunch in a diner in the Gold Coast. I made one last offer to Zelle her. In response, she said something that stuck with me.
“When I was in my 20s, people helped me,” she told me with an easy smile. “When you’re 40, just pay it forward by buying a younger woman dinner.”
Her wisdom helped me slowly release my anxiety
I mulled over her words on the plane home. I was surprised that her view of the situation differed so much from mine, and relieved she didn’t see me as taking advantage of her. Yet it was still hard to fully let go of the weight in my chest — the feeling of being indebted to someone’s kindness, of accepting a gift while knowing you can’t reciprocate.
Months later, my 64-year-old friend from my writer’s group visited from Florida. We went out for coffee, and I thought to myself, Okay, now this I can afford. But when I offered to cover or at least split it, she waved me off, saying, “My treat.”
I thought of Andrea’s words and told myself, She’s being nice. Don’t worry about it.
“Thank you,” I said, and meant it.
A while later, when another friend visited from Washington, she paid most of our checks at the bars and restaurants we visited. Though I felt a twinge of the usual panic at first, by our second day together, I was able to let it go. As we wandered through the Upper West Side, the tightness in my chest lifted, leaving only gratitude that she was here.
I do plan on paying it forward
Andrea was right, I realized. Helping each other was what friends did, and they clearly weren’t bothered by it. Sure, I wasn’t paying for lavish things or hosting people, but I shouldn’t let my own hangups affect our time together, which always produces some of my favorite memories.
Eventually, I’ll be able to do what they’ve done for me for another woman, who can then help someone else.
Instead of worrying, now I let my friends’ kindness bring us together and smile, knowing that every time I pay for a 20-something woman in the future, I’ll think of them.
EL PASO, Texas (KTSM) — The City of Las Cruces’ finance director has received a national honor recognizing “exceptional contributions to public finance and local government service,” the City said.
Finance Director Lesley Doyle was selected by the Government Finance Officers Association (GFOA) to receive the organization’s “Recognition for Outstanding Public Service.”
The award recognizes Doyle’s leadership during a critical financial period for the City.
She stepped into the role of finance director as the City’s FY25 audit identified a projected beginning balance shortfall of more than $10 million in a community of nearly 120,000 residents, the City said.
Doyle led a coordinated effort to communicate the financial situation clearly to City departments, executive leadership, and the City Council, while working with the budget team to close the gap without reducing essential services.
Josie Trevino, assistant finance director, credited Doyle with building a culture of trust and collaboration between the Finance Department and other City departments from the beginning of her tenure.
Doyle came to municipal government after a career in public education, transitioning from a school district into City finance leadership.
“In her first year, she met the challenge with confidence, emphasizing open communication, transparency, and proactive problem-solving. Her leadership has helped strengthen relationships across the organization while fostering a positive and supportive workplace culture within the Finance Department,” the City of Las Cruces said.
“The balance of technical skill and genuine care for people is what makes Lesley’s leadership unique,” Trevino said.
The GFOA has published Doyle’s recognition on its website, and her story will also be highlighted during the upcoming GFOA newsletter and highlighted at the annual GFOA conference.
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