Setting students up for success
Families all over the country are preparing to send their kids off to school this month. If you have a child or grandchild in high school or leaving for college soon you might be wondering how to best prepare them. You taught them how to read and how to ride a bike, but have you taught your children how to manage money?
One study household with student loan debt showed that the average amount owed was $47,671.1 And more than 20% of recipients with outstanding loans will either default or be delinquent in repaying those loans.2
For some college kids, it may be too late to avoid learning about debt the hard way. Take the opportunity to save them (and yourself) some heartache by teaching them the basics of smart money management. Check out the Department of Educations’ Money Management Checklist for College Students.
Here are some tips to help them jumpstart their financial future:
Have the conversation. Many everyday transactions can lead to discussions about money. At the grocery store, talk with your kids about comparing prices and staying within a budget. Show your kids a credit card statement to help them understand how “swiping the card” actually takes money out of your pocket.
Let them live it. Budgeting can help teach students the relationship between work and money. Let them decide how and when to spend their allotted money. This may help them learn to balance their wants and needs at an early age when the stakes are not too high. Though make sure they have the tools to succeed. Encourage them to create their own budget.
Teach kids about saving. To inspire students to save, you might offer a match program, say 25 cents for every dollar they put in a savings account. Make sure to encourage them to set savings goals.
As you share your money wisdom, don’t get discouraged if they don’t take your advice right away. Mistakes made at this stage in life can leave a lasting impression. Also, evaluate all the circumstances before bailing them out. Sometimes we learn better when we reap the natural consequences of our actions. Students probably won’t be stellar money managers at first, but what they learn now could pay them back later in life – when it really matters.
Do you have loved ones preparing for the school year? Please give us a call if you have questions.
Your Eagle Wealth Team
P.S. Remember that Eagle Wealth Community family members can speak with one our advisors through our Invested In Graduates program. Read more about it here.
Do you brunch? This summer the Hobson family started a new Sunday morning tradition. Matt and Lynn and the “kids” get to work in the kitchen to craft an extravagant brunch. They build a spread of fancy scrambled eggs (with lots of veggies, spinach, and feta cheese), plenty of fresh fruit from the local farmer's markets, and of course mimosas. Then they gather around the patio table and enjoy the backyard.
Sharing an exceptional meal over good conversation may just be the recipe for a perfect Sunday morning.
The Week on Wall Street
In a quiet week of news, stocks moved lower amid simmering concerns over the Delta variant’s effect on the progress of economic reopening.
The Dow Jones Industrial Average declined 2.15%, while the Standard & Poor’s 500 dropped 1.69%. The Nasdaq Composite index fell 1.61% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slipped 0.63%.1,2,3
In a holiday-shortened week of trading, markets were choppy as investors grew cautious in the face of a potential Fed tapering decision later this month and the impact of Delta on the economic recovery.
What little news there was, it was decidedly mixed. Job growth showed real strength coming off a shaky employment report the previous Friday, while the Producer Price Index surged by 8.3% year-over-year, representing the largest annual increase since November 2010. The release reminded investors that inflation remained a market risk. Stocks tried to stage a rebound on Friday before sagging to close out the week.
After a disappointing employment report, two labor market reports last week appeared to show that the labor market recovery appeared intact. The JOLTS report (Job Openings and Labor Turnover Survey) showed 10.9 million open jobs, a number that exceeded the number of unemployed by more than two million. The rate of hiring, however, decelerated, perhaps explaining why the August employment report fell short of expectations.4
A day later the weekly initial jobless claims fell to a new pandemic low of 310,000, coming in below its four-week moving average of 339,500. Continuing claims fell to their lowest level since March 14, 2020.5
THE WEEK AHEAD
Key Economic Data
Tuesday: Consumer Price Index.
Wednesday: Industrial Production.
Thursday: Jobless Claims. Retail Sales.
Friday: Consumer Sentiment.
Source: Econoday, September 10, 2021
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
Companies Reporting Earnings
Monday: Lennar Corporation (LEN).
Source: Zacks, September 10, 2021
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
1. NerdWallet, 2019
2. U.S. Department of Education, 2019
3. Contributions to a Traditional IRA may be fully or partially deductible, depending on your individual circumstance. Distributions from traditional IRA and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70½, you must begin taking required minimum distributions.