Monday, November 26, 2018

Cutting the Cord: The Financial Side of Growing Up

A moving truck recently came to my house, but I didn't go anywhere.  My daughter did though.  Several months ago she and two friends signed a lease on a house. 

As parents move toward retirement, our kids move toward independent lives, but there are often ties that still bind them financially to their parents.  Let's take a look at some of them, and consider what to do with them.

Health Insurance

Since the passage of the Affordable Care Act, young adults have been allowed to remain as dependents on their parents' health insurance policies whether or not they live with their parents or elsewhere, whether they are married, or whether they are eligible for worse coverage with their own employer.  My employer charges a single fee for children's coverage, whether I have one child or ten.  Since I have to insure my younger daughter anyway, keeping Ms. Moved Out on my policy does not cost me more, and my coverage is better than her employer offers.  I guess I could charge her for her share, but I'm a nice mom.


Who owns your young adult's car?  Depending on when it was bought and with whose money, it could be owned by the young adult or by the parents.  If your child's car is in your name, move-out time is a good time to re-assess that.  Yes, it is going to cost to change the title, and some states will make the new owner pay sales tax, even if the car is given rather than sold, but once your child moves out, you will have no control over the car and as long as it is in your name, you can be held liable for any accident.  

While it is generally cheaper to buy the same amount of coverage as an additional vehicle on a family policy, if you have a substantial policy because of your substantial assets, your adult children who have no savings, student loans and cast-off furniture can generally get by with lower limits. so their overall insurance costs could drop by assuming ownership of their own vehicle. 


Who is paying the young adult's phone bill?  If it is you, do you want to continue to do so?  The family plan may be the cheapest way to finance multiple phones but as the kids move out, consider other options.  Maybe they can pay their share of the bill.  Maybe now that your text-happy teens are gone, the old fuddy-duddys at your house would be fine with pay-as-you-go plan--or maybe not.  

What about the Netflix bill or the Spotify charges?  Do you use those services, or are they really for your adult child?  Are there any other services you are paying for (check your credit card bills for those auto charges) that you won't need or want once your child(ren) move out?

Kids moving out is a bittersweet time for parents.  It is what we want to happen.  It means we did our job and raised independent adults.  Still we miss having them home with us.  

Saturday, November 17, 2018

5 Things To Know About Life Insurance

You May Not Need Life Insurance

As with any other insurance, the purpose of life insurance is to turn an unknown financial risk into a known premium. We are all going to die one day; that is a known fact. What is unknown is whether we are going to die at a time in our life when it would cause a financial hardship for our loved ones. Life insurance doesn’t keep us from dying nor does it comfort our loved ones when we do. Rather, its purpose is to ease the financial strain our death causes those we are responsible for.

Wednesday, November 7, 2018

5 Ways to Invest in Real Estate

When it comes to diversifying your investment portfolio, real estate is a go-to for many people.  People like owning something they can see and understand, and most forms of real estate investment allow that.  

Another big advantage of real estate as an investment is the ability to use OPM--other people’s money.  While buying stock on margin is considered risky, buying real estate with borrowed money is considered normal.  

Let’s take a look at some ways to invest in real estate and consider the advantages and disadvantages of each.