Aug 24

Financing a Private School Education Without Sacrificing Financial Goals

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Financing a Private School Education Without

Sacrificing Financial Goals

 

By Paul Jarvis, CFP®

Areavoices Financial Planning Blog

 

Families that choose to send their grade- or high school age children to private schools, including parochial schools, face special challenges in financing this education. Compared to a college education, there are fewer savings tools available for private schools, and less time to build up those savings.

The balance between helping your children obtain your ideal education for them while still ensuring your own plan is on track takes proper thought and planning.

For parents looking to make private school more affordable, here are some cost-saving tips:

  • Incorporate specialized savings accounts into your financial plan: Two types of savings accounts parents should consider are Coverdell Education Savings Accounts (CESA) and Custodial Accounts (UGMAs and UTMAs). CESAs are similar to 529 plans for college, while UGMAs and UTMAs – typically considered for colleges – can be used for private schooling as well.

  • Negotiate tuition payments: It can never hurt to try and negotiate down a school’s sticker price. A school may offer discounts for families with multiple children attending the school, and most are willing to work with you in establishing payment plans.

  • Apply for financial aid: No matter your family’s wealth, be sure to fill out a school’s Parent’s Financial Statement to determine eligibility for financial aid. Many schools offer scholarships based on need, and in some cases, community organizations or churches that support the school may have funds for deserving students.

  • For religious schools, look for discounts: Members of a church or other place of worship may be eligible for tuition discounts at the schools sponsored and run by these religious entities.

  • Investigate loans/aid from outside sources: Sallie Mae offers a K-12 Family Education Loan at unpublished, but “competitive” interest rates. Another resource is Your Tuition Solution which offers pre-college education loans at fixed rates.

  • Consider “private” curriculums offered at a public school: Parents with academically gifted children might also look for public schools that offer International Baccalaureate (IB) Programs, housed in qualifying public schools. IB students are taught an advanced curriculum apart from the rest of the student body, but enjoy the same benefits of extracurricular activities, sports programs, and even public transportation.

For parents who think that private school is right for their family, it takes careful goal setting and financial planning to make this financially feasible. When making this decision, consult a CFP® professional that can provide objective and competent advice in the context of your personal situation, your family, and the future you are striving to build for you and your children.

 

ABOUT Paul Jarvis

Paul Jarvis is a CFP Board Ambassador and leads United Capital’s office in Fargo. Read more of Paul’s blog by visiting  financialplanning.areavoices.com or by calling 701-293-2076.

Jul 27

The Real Facts Behind Real Estate Investing

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The Real Facts Behind Real Estate Investing

 

By Paul Jarvis, CFP®

Areavoices Financial Planning Blog

 

With a rising economy and low interest rates, the fear of real estate investment that followed the 2009 market crash is slowly subsiding and investors are regaining their appetite for this particular asset class. Before buying up properties like a game of Monopoly, investors need to be aware of several unique aspects to real estate that can make or break an investment.

Like any investment, there is a right way and a wrong way to approach real estate investing and having a plan can help you avoid getting in over your head.

When deciding whether to make a real estate investment, remember the following:

  1. Not a stock substitute: One advantage the stock market offers over real estate is diversification, which protects against the irrationality of the market. Very few individual investors can achieve the same level of diversification through real estate, because that would mean acquiring commercial, rental, and industrial properties in different geographical markets.

  1. Expensive proposition: Investors need to put more money down upfront when purchasing property because of lender requirements. Interest, taxes, insurance, maintenance, and repairs are reoccurring costs owners will face as well. And real estate assets often require larger cash reserves for times when a property is not generating income because of a vacancy.

  1. Active management: Real estate requires an investor’s time, attention, and availability because tenants require attention at all times. Hiring a property manager is an option, but it adds to the costs of the investment.

  1. Becoming a business ownerBuying real estate is equivalent to starting a business. From weighing the benefits of a rent increase to doing a cost-benefit analysis on property improvements, properties require significant amounts of strategy and management. Like any business, investors also need to consider an exit strategy.

 

Making a profitable real estate investment takes skills beyond the average investor’s. While there is plenty of upside – in the form of ongoing income and appreciation – it does not come easily or cheaply. Consulting with a CFP® professional will help you to assess whether and when purchasing real estate for your investment portfolio makes sense.

Additional resources on several aspects of real estate that investors should consider before buying investment property can be found by visiting LetsMakeaPlan.org.

 

ABOUT Paul Jarvis

Paul Jarvis is a CFP Board Ambassador and leads United Capital’s office in Fargo. Read more of Paul’s blog by visiting  financialplanning.areavoices.com or by calling 701-293-2076.

 

Jun 29

Evaluating Your Trust Issues: The Who, Why & When of Setting up a Trust Fund

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Evaluating Your Trust Issues:

The Who, Why & When of Setting up a Trust Fund

 

By Paul Jarvis, CFP®

Areavoices Financial Planning Blog

 

We often associate trust funds with millionaires or the heiresses of well-known hotel chains. However, a trust is often a valuable part of estate planning, no matter how great one’s wealth.

Many times, individuals and families have little knowledge of trusts and the difference between the roles of a trust vs. a will.    By gaining a better understanding of the purpose of a trust, you can better decide whether or not trust provisions are necessary in your financial life.

When evaluating whether a trust makes sense for you and your loved ones, review the following steps:

  • Assess Your Need: Generally speaking, if describing your giving intentions would take more space than is provided by the blank line for a beneficiary designation, then you need a trust.

  • Determine Your Timing: You must decide if you want the trust to go into effect now or at your death. You can also make the trust revocable, which allows you to change the provisions of the trust anytime, or irrevocable, which means its terms cannot be subsequently altered once established.  

  • Name Your Trustee: By far your most important decision is your choice of a trustee – the individual or institution with the fiduciary responsibility to manage your trust’s assets and to honor all of its provisions. This person can be yourself, as in the case of a revocable living trust, or a stand-in for yourself, for when you’re no longer able to manage your assets.

  • Seek Expert Advice: Trusts can be complicated and expensive to set up. Contacting a Certified Financial Planner™ professional can help ease the stress of navigating this complex process. The trust plan created with a CFP® professional can then be taken to a licensed attorney who can render it into legal language relatively efficiently and cost-effectively.

A trust, while not appropriate for everyone, is a tool that offers those with detailed intentions for their assets critical planning, protections, and control. A CFP® professional can help assess the necessity for a trust as well as educate on how various trust provisions function, creating a plan that reflects your wishes, now and after you’re gone.

The CFP Board has provided several key considerations for deciding if setting up a trust should be part of your long-term estate planning in LetsMakeaPlan.org.

ABOUT Paul Jarvis

Paul Jarvis is a CFP Board Ambassador and leads United Capital’s office in Fargo. Read more of Paul’s blog by visiting  financialplanning.areavoices.com or by calling 701-293-2076.

May 28

Preventing a Family Feud: Advice for Navigating Inheritance Disputes

Preventing a Family Feud: Advice for Navigating Inheritance Disputes

By Paul Jarvis, CFP®

Areavoices Financial Planning Blog

 

Many emotions surround the death of a loved one – sadness, regret, loneliness, stress. Inheritance disputes only increase the stress of losing a loved one, creating tensions and rifts between families and often resulting in costly and time-consuming lawsuits.

Here are several paths that a “would-be or should-be” beneficiary can take if he or she feels short-changed in an inheritance.

  • Go to court. To pursue legal remedy, the aggrieved party must have legal standing as a beneficiary of the decedent, as a creditor, or as a legal claimant against property in the estate. This would include anyone who is actually named as a beneficiary in the estate documents as well as anyone who would have a right to the estate if a will did not exist or was deemed invalid.

  • Legal mediation outside of court. This involves using a trained mediator, often an attorney, who seeks to forge a contractual agreement among the affected parties. Mediation is frequently a good solution for smaller disputes or in cases where confidentiality is paramount.

  • Have a preventive plan. The best way to deal with inheritance disputes is to do everything possible to make sure they never happen. This means rethinking how good estate planning works. Rather than being a “once and done” exercise that you undertake when you get older, estate planning needs to be ongoing, and frequently reviewed and revised to keep pace with changing circumstances and family dynamics.

Thoughtful and intentional estate planning during life can dramatically reduce family inheritance disputes.  Very few people wish to simply pass on their estate; they are passing on family values and memories that were the sum of their lives.

It’s crucial to keep in mind potential inheritance disputes when creating an estate plan, and to include language and provisions that anticipate and limit the possibility of legal challenges among your beneficiaries. Consult with a CFP® professional who can help you and your family to develop a plan that will clearly outline your hopes and wishes for their future.

Read more by visiting: LetsMakeaPlan.org

Paul Jarvis is a CFP Board Ambassador and leads United Capital’s office in Fargo. Read more of Paul’s blog by visiting  financialplanning.areavoices.com or by calling 701-293-2076.

 

Apr 20

Stress Test: Americans, Especially Women and Younger People, Stressed by Finances

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Stress Test: Americans, Especially Women and Younger People, Stressed by Finances

CFP Board Survey finds financial planning most helpful in reducing stress

By Paul Jarvis, CFP®

Areavoices Financial Planning Blog

 

Americans, particularly women and younger people, overwhelmingly experience tress when it comes to thinking about and managing their finances, according to a survey released by Certified Financial Planner Board of Standards, Inc. (CFP Board). Nearly nine in 10 of those surveyed (86%) feel stress when it comes to their finances, with women (89%) and younger respondents between the ages of 18-44 (91%) more likely to feel any stress about their finances. Older Americans are the least likely age group to report financial stress, with only 78 percent of respondents age 65 or older reporting financial stress.

 

The survey, conducted on behalf of CFP Board by ORC International, found that Americans clearly recognize ways for successfully managing their financial stress, with financial planning the top solution. More than a quarter of respondents report that having a financial plan will help most in reducing their stress (27%), with younger respondents (ages 18-44) particularly confident in the value of having a plan (35%). Othes preferred solutions for decreasing the level of financial stress include having more knowledge in certain finance areas (22%), more knowledge about their own finances (14%) and more time to focus on their finances (12%).

 

Stress is often times a result of a perceived lack of control.  By taking control, creating a plan and working with a CFP® professional, stress can be dramatically reduced.

 

While the majority of Americans experience some level of financial stress, the reasons and occasions for their stress vary, as well as the ways in which they manage it:

 

  • Debt (23%) and everyday expenses (21%) are the leading causes of financial stress, followed by health expenses (14%) and retirement (13%).
    • Respondents age 65 or older are more likely to stress about health expenses (22%), whereas younger respondents (ages 18-24) stress about high education costs (23%).

 

  • More than half of Americans (53%) experience stress about their finances at certain times, including at the end of the month when bills are due (24%), around the holiday season (15%), and during tax preparation season (11%). A quarter (25%) feel stressed about finances all of the time.

 

  • While the majority of respondents say they get stressed about their finances, very few (13%) believe their stress definitely hinders their ability to make decisions about their money, while roughly a quarter (28%) say that it sometimes does.
    • Younger respondents (ages 18-44) are more likely to say that their stress either definitely hinders their ability to make decisions about their money (20%), or it sometimes does (38%).

 

  • About half (48%) indicated that they tighten spending as a result of financial stress, while a third (34%) admit to monitoring their accounts more frequently.
    • Younger respondents (ages 18-44) are more likely to do doing anything to take their minds off of the stress (21%), including go shopping or watching TV to distract themselves.

 

The survey findings are particularly interesting in light of previous national research conducted by CFP Board and the Consumer Federation of America. According to the 2012 Household Financial Planning Survey, having a financial plan leads to greater confidence and lower debt. Those who have prepared a personal financial plan are more likely to feel on pace to meet all of their financial goals, such as saving for retirement or for emergencies.

 

Consumers can learn more about creating a financial plan and finding and working with a Certified Financial Planner™ professional at LetsMakeaPlan.org.

 

Paul Jarvis is a CFP Board Ambassador and leads United Capital’s office in Fargo. See more at http://financialplanning.areavoices.com.

 

About the Survey Methodology

ORC International administered the online survey to a representative sample of 1,008 adults 18 years of age and older, from March 30 – April 1, 2015. Respondents for this survey were selected from among those who have volunteered to participate in online surveys and polls. The data have been weighted to reflect the demographic composition of the 18+ population.  Because the sample is based on those who initially self-selected for participation, no estimates of sampling error can be calculated. A complete report of survey findings can be found at CFP.net.

 

 

 

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