Summer is time to slow down, enjoy family
If you are old enough to remember Gershwin’s classic song “Summertime and the Livin’ is Easy,” then you can envision sweltering weather, family gatherings, cookouts with deviled eggs, pedal pushers and plaid shirts. If you’ve never heard the song, Google it and you will find recordings by Billie Holliday (1936), Ella Fitzgerald (1968) and Norah Jones (2010).
July is prime summertime, but many readers would say their lives are hectic and livin’ is not easy. However, if there are kids in your family (either your children or grandkids), there is typically more flexibility during the summer, so I want to offer some suggestions for summer activities.
Some of these ideas are just for fun. Others include an educational component to help you teach your kids or grandkids how to become financially responsible.
GET TOGETHER: Plan a summer evening cookout for your family, friends, or neighbors. Choose a theme, such as old jazz tunes. Crank up the radio/iPad/smartphone, and dance the jitterbug, polka or the waltz. Wear a plaid shirt. Roast marshmallows.
Tell old family stories. Pass down money stories, including your successes and failures around money. Kids need to hear about our money mistakes, because everyone makes them, and we learn from our mistakes. Talk about your experiences living on a budget, and living within your means.
USE CASH: Take the kids or grandkids for ice cream, and have them pay with cash. Leave the credit cards at home. Credit cards give young children the message that nothing has to be paid for, because they never see you paying the credit card bill. Also, there is plenty of research that shows we spend more when we use a credit card than when we pay with cash. Likewise, withdrawing money from an ATM makes it seem to young children that money magically appears.
Have conversations with your young kids/grandkids about how your job results in a paycheck, and how that paycheck is used to pay your bills and save for the future. Tell them how hard it is to save, but also how important it is.
SAVE WITH TEENS: If your kids/grandkids are teenagers, talk with them about saving money when they have a summer job. If they have income that will be reported on a tax return, consider starting a custodial Roth IRA for them.
The Roth IRA can be funded up to the amount of income that is reported on a tax return (up to a maximum of $5,500 for 2018).
My research concluded that custodial Roth IRAs – and other small accounts – can be opened without any fees at Charles Schwab or TD Ameritrade. Vanguard does not charge fees if the customer chooses electronic delivery of statements and tax documents rather than paper/mailed statements. Fidelity does not charge fees, but the Fidelity representative said many of their mutual funds have a $2,500 minimum purchase. There are likely other brokerage firms that will not charge fees for a small account. Depending on the investment selected, there could be a transaction fee or commissions, but there are investment options available without these fees.
A Roth IRA is the best account for teenagers and young people because the future growth is tax-free and the contributions can be accessed whenever needed for any purpose. Only the “earnings” on the contributions have restrictions.
DAY TRIP: Go to a nearby town for a day with the kids/grandkids. Take only cash. Let the kids/grandkids research the activities and restaurants in the town. Plan some downtime and use it for hiking, cooking, reading or talking. Show your kids/grandkids that you can be silly. Laughter is a wonderful thing.
OFFER A JOB: If your garage needs to be cleaned out, offer to hire your child or grandchild. Work with them, and try to make it fun. Or how about that closet that is crammed full? Have them help you sort clothing or other items to be donated to a charity. Pay them fairly and professionally.
INCLUDE KIDS: Take up a new hobby or research project and include your kids or grandkids.
The goal is to start conversations with your kids and grandkids. Open up, let your guard down, and let them know your personality. Develop a relationship, and have fun!