As we enter the back-to-school season, many families are trying to navigate decisions around distance learning, in-person learning, and a hybrid approach from kindergarten all the way through college. The JNBA Financial Planning Committee has provided some reminders for parents and students as you prepare for the upcoming school year.
Estate Planning Documents
Once your child turns 18 years old, it is important for them to have documents in place that will allow you as parent or guardian to help with health or financial matters if needed. These could include a Health Care Directive and Durable Power of Attorney.
Create a Budget
It is never too early to start learning good money management skills that will be helpful to your child in the future. This can be especially important for college students as they prepare to manage their finances as a young adult.
We also know many families are and will be juggling tutors, camps, and other activities to help create structure for kids during this period of distance learning. A budget is a good way to have financial peace of mind that all expenses are covered for this school year.
IRA Contributions
If your child had a summer job and earned income, there may be opportunity for them to contribute to an IRA or Roth IRA for 2020. Assuming the child does not need the funds in the short- or mid-term, this is a great opportunity to start retirement savings habits.
Build Credit
For college-aged children, a good credit score is important to create financial opportunities post-college, such as qualifying for an apartment, purchasing a vehicle, qualifying for a loan with a lower interest rate, etc. There are different strategies for building a credit score, but some options might be making payments on a student loan while in school or getting a secured credit card (where your credit limit is equal to the amount of money you deposit).
These are just a few of the things parents and students should consider as we enter the start of the school year. For a more comprehensive list for those in college, please click here to view our Planning for College checklist.
We understand that families are navigating a lot of changes this year due to COVID-19, so please reach out to your JNBA Advisory Team should you have any questions or need assistance planning for the changes this year.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, LLC.
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