When only 1 percent of collegiate student athletes end up making a living at their athletic craft1, it’s a wonder that financial literacy is not taught to every NCAA athlete. As parents, fans and athletes prepare for yet another exciting collegiate sports season, parents and athletes of all ages should prepare for life beyond athletics. ESPN’s documentary “Broke” shows the dramatic picture of young athletes’ lack of financial knowledge. “Some guys don’t even know how to open a bank account,” noted professional basketball player Jamal Mashburn. When you mix financial illiteracy and the fact that high-performing athletes are more prone to devastating injuries than others, the risks to their financial future are palpable. Luckily, the NCAA recognizes these risks and does offer various forms of insurance for these athletes to protect against potential lost wages due to catastrophic injury.2 Despite the odds being against athletes making it to the big time, parents and schools can do small things to ensure the long-term financial future of those they care about the most.   GOOD CREDIT First and foremost is earning and maintaining good credit. College students aren’t known for making sound financial decisions, and many find themselves saddled with crushing debt from student loans and credit cards. A 2013 nationwide study3 by the private, nonprofit student loan guarantee agency NSLP found nine out of 10 first-year college students scored a “C” or below on financial literacy. Understanding credit is vitally important to good financial habits. Good credit can be built by limiting student loans and making payments on time. It can also mean not rolling up credit card debt. If students do pick up a credit card for incidental expenses, those balances must be paid off each month. Doing so builds good credit and good financial habits.   REMEMBER TO SAVE The average professional athlete retires at 33 and his or her earnings must stretch longer than the average person. And if you’re not one of the “chosen” ones, saving should begin early to prepare for whatever future may come. This saving is less about compounding interest and more about learning to plan and prepare for the unknown. Athletes notoriously view themselves as invincible and saving is part of planning for the unknown. Be it for a broken bone, loss of scholarship or an unplanned car repair, saving is a part of sound financial planning.   STICK TO A BUDGET A budget is the basis of everything; It guides the way to purchases large and small and, when implemented appropriately, provides a clear view of a true financial situation. Student athlete softball player Maria Pandolfo4 attended a financial literacy course at Boston College, to great advantage. “The program taught me how to be smarter with my money and I realized it’s never too early to make a budget,” she said. Before going to college (or deciding which college to attend), students and parents should talk about their budgets: how much school will cost, where that money will come from and [...]

Everyone needs money, but unfortunately, not everyone knows how to manage it to make it last. You can encourage your teenager to have positive financial habits by first modeling good behavior when it comes to your money and then giving them opportunities to learn how to balance their own books. Keep reading for some great tips to make that happen.   Teaching Teens How to Budget Creating a budget when you have a mortgage, car payment, student loans, utilities, and other adult obligations isn’t easy. However, when you learn how to do this at an early age, the task is not quite as daunting as it initially seems. If your teen is already driving, start by helping them understand the total cost of operating the vehicle. Even assuming it’s paid for, gas, which is a variable cost, maintenance, and auto insurance don’t just go away. Specific to insurance, there are many factors that determine how much it costs to put protection on a vehicle each month. Teenagers, however, can expect higher premiums due to their age and lack of driving experience, with teen males often having higher rates because of their increased risk of an accident (. Maintenance costs can change as well, but make sure your children understand that things like tires and oil changes are inexpensive ways to reduce the chances of a premature major repair — and the bill that goes with it. Still using the car as an example, sit down with your child and calculate their expected monthly costs. Then, make them responsible for paying them. You might set them up with a prepaid debit card with slightly more than what they need. If their total expenses come out to $200 each month, add $225 to their card and let them know that it is up to them to set their priorities. They will be tempted to spend more than their excess on things like stylish new shoes or movies with their friends. If they fail to meet their financial obligations, however, the consequence is losing their driving privileges for the next month. It will not take long for them to learn how to balance their wants and needs and this is an excellent first introduction to budgeting.   Earning Opportunities If your child finds it difficult to balance their limited budget with their newfound freedom, encourage them to look for ways to increase their wealth. By the time they are old enough to drive, they should be more than capable of handling a part-time job, even if it is only a few hours each week or on the weekends. LocalWise notes that some of the best jobs for teens are dishwasher, ice cream scooper, and lifeguard. Most of these are extremely flexible and will also serve as an excellent introduction to work ethics.   Saving for the Future When it comes to teaching your children about financial responsibility, immediate needs are not the only thing to consider. Your children [...]

First, a riddle: What’s hard to find, difficult to replace, and essential to your competitive edge? The answer: a top-notch, trustworthy, talented executive team. Now, a thought experiment: What would you do if you woke up tomorrow morning and your lead sales person, or your go-to advisor, were to never show up again? Whether they were poached by a competitor or struck by something unexpected, it’s kind of startling to think about, isn’t it? In fact, 71 percent of business owners said they are very dependent on a few key employees.1 That can create additional stress for a business owner, on top of running the business itself, which is particularly relevant to business owners who tend to cluster in the Ambitious Spenders segment.2 If you want to protect your business, and sleep better at night, you need to safeguard your most vital assets: your top people. A smart way to build your team, retain the top performers, and protect your business all at the same time is through two strategic business concepts rooted in life insurance: executive bonus plans and key employee insurance. EXECUTIVE BONUS STRATEGY What is it? While you have most likely thought of rewarding your key people with a cash bonus at the end of the year, there is another incentive for those most valuable to you. That’s where an executive bonus plan comes in. In short, it’s a life insurance policy owned by the employee and purchased in place of a cash bonus. A win for your employees. Executives like these plans for their inherent advantages. First, it provides the employee with death benefit protection. Second, it builds cash value that can be used by the employee. A win for your business. For businesses, this type of executive bonus plan is a smart recruiting and retention tool that is easy to setup and manage. An added benefit, it is tax deductible for the business. There are little to no out-of-pocket expenses and minimal administration on your part. KEY EMPLOYEE INSURANCE What is it? Particularly for small businesses, the death or disability of a valuable employee can be difficult to bear from both an emotional and financial standpoint. In extreme cases, it can even sink the business. Companies can insulate against the loss of key talent with coverage that gets paid out to the business in the event of an employee death. The direct benefit. There’s no easy way to talk about it, but if one of your top performers dies, a cash benefit is paid out in a lump sum. This cash can then be applied to the ongoing operations of the business while you recover from the loss. The indirect benefits. Your business is better positioned in several other ways. First, the policy’s cash value is counted as an asset on your balance sheet and can function like a cash reserve. Second, your creditors and investors can be put at ease just by knowing you have such a strong and clear contingency plan in place. There are also tax [...]

Physical fitness and financial fitness are inextricably linked, says financial advisor Pamela Gilmour. Ignore your health or your wealth, and it can catch up to you. The parallels are striking. When people live an unhealthy life in their 20s, 30s and 40s, the risk of disease and debilitating conditions grows. By the time people reach their 50s, medical care often becomes an expensive necessity. Likewise, those who ignore their finances — keeping credit cards maxed out and living paycheck to paycheck — live with high levels of unhealthy stress. When they reach their 50s and start thinking about retirement, a new reality sets in: They may arrive at retirement without enough to live on. Pamela Gilmour, CEO of Financial Fitness in Towson, Maryland, has been providing financial planning for over 25 years. A golfer, runner and certified Yoga instructor, she defines financial fitness as having the financial means to live the life you want without undue stress. How do you know if you’re financially fit? She says the following warning signs suggest you may need to give your finances the same attention you give to your workouts.  ARE YOU HAVING TROUBLE SLEEPING? “Waking up in the middle of the night is an alert from your subconscious,” Pamela says. You may successfully rationalize an unhealthy financial situation during the day, only to have deep-seated nightmarish anxieties. In fact, in a 2017 survey, 65 percent of Americans reported losing sleep over financial concerns.1 ARE YOU STUCK IN A VICIOUS CREDIT CARD CYCLE? Pamela sees many young adults who fall for the lure of interest-free credit cards as a way to reduce debt. “They have a balance of $10,000 on one card, so they flip it to a new interest-free card with the idea they will pay off that amount without incurring more interest. Instead, they run up more debt on the first card, so they’re in even worse shape.” By the time people reach their 30s, Pamela says they should be paying off their credit cards fully each month. ARE YOU ENGAGING IN EMOTIONAL SPENDING? Just as emotional eating can derail a health-conscious diet, coping with feelings of anxiety, boredom or unhappiness by buying things you can’t afford can seriously damage your finances. One client, after listening to Pamela talk about financial planning, said, “That sounds great, but it won’t work for me — I’m an over-spender.” Pamela replied, “Is that like having an incurable disease? If you keep saying you’re an over-spender, you’re going to be an over-spender.” Working hard to change your habits — to become an under-spender — can help build financial fitness, she says. ARE YOU PASSING-UP GOOD OPPORTUNITIES? An inability to say “yes” to opportunities like sending your child to a top-notch university or buying a beach house with friends — even though you’re making good money — is a warning sign. If you feel you should be able to afford something but can’t, you need to explore why. Taking a tactical approach to personal finances could be [...]

Financial planning means something different to everyone. For some, it's about getting by on their paycheck, for others it's about watching the stock market each day. Unfortunately, very few of us feel prepared to meet our ongoing financial obligations and objectives. Worries about money have become one of the greatest anxieties of our day. Because our lives and goals are so different, there is no turn-key solution for managing ones finances and meeting financial goals. We can, however, identify several steps successful people take in planning for and meeting their financial goals. We call these steps "Life Cycle Planning" because each step can be tied to the attainment of certain life defining events that almost everyone goes through. DEVELOPMENT OF HUMAN CAPITAL Human Capital is a person's ability to turn their skills and abilities into a livelihood. The development of these skills and abilities helps us maximize our income potential in a competitive marketplace. In our early years, usually between age 19 and 25, we set ourselves on a course that largely defines our Human Capital potential. Each of us makes an investment in Human Capital, whether we realize it or not. For some this is an investment of time, gaining experience and skills on the job. For others it is an investment in trade school or college. It should also be noted that although our greatest focus on Human Capital development is in our early years, this is an investment we should continue to make and assess throughout our working careers. MANAGEMENT OF EXPENSES, BUDGETING Once our "Human Capital" investment begins to pay dividends in the way of earnings, we must begin to develop and apply management skills to our newfound earnings. Without managing our expenses, our wants and needs will invariably outpace our ability to earn. By implementing some form of budgeting, we can begin to set our sights on saving and meeting our longer term financial objectives. A beginning budget can be as simple as setting aside a predetermined percentage of our earnings each month for saving, spending what is left until it is gone, then spending nothing more until next month. ADEQUATE LIQUIDITY As our budget begins to pay off in a healthy savings account, we begin to wonder how best to apply our limited savings to our unlimited needs and wants. Without exception, the first financial need we should meet is to have an emergency fund. An emergency fund allows us to cover unexpected short term needs using cash instead of leveraging our future earnings through costly loans. As a general rule of thumb, your emergency fund should be adequate to maintain your standard of living for three to six months. ADEQUATE INSURANCE PROTECTION A major disability, the loss of a family breadwinner, a fire in your home, a major medical problem for a family member... the most dramatic emergencies can seldom be planned for through personal saving. Although such tragedies can create devastating individual financial hardship, the financial risk [...]

College was fun. But now the bill has come due. American students have over $1 trillion in student debts. The debt burden college graduates have is a substantial obstacle to personal financial progress, but you likely already know that. There are strategies you may want to consider in lightening the weight. LOOK INTO PUBLIC SERVICE LOAN FORGIVENESS For people working in government, non-profit and other public service jobs, certain federal loans may be forgiven after 10 years of qualifying payments. Many individuals are not even aware that they qualify for the program. VOLUNTEER There are a number of programs, e.g., AmeriCorps, Peace Corps and Military service, whereby such service will accrue a benefit that reduces an outstanding loan balance in an amount that varies with each program INCOME-BASED REPAYMENT PLAN Your payments on eligible federal loans can be capped at a percentage of your income, if you have a partial financial hardship, which is defined as monthly repayment amounts in excess of the level calculated under a 10-year standard repayment plan. If you make such payments and meet other requirements, any remaining balance will be forgiven after 25 years of qualifying repayment. PRE-PAY PRINCIPAL Pre-payment of principal will help lower the lifetime interest costs of a loan. Of course, the challenge for many young workers is that they may not have the cash flow to make pre-payments. Consider ways to raise cash specifically for such pre-payments. Do you still receive birthday and holiday presents? Ask for cash instead. Did you receive a raise, bonus or overtime pay? Direct unexpected cash flow to pre-payments. Student debt can be overwhelming. It may seem, at times, like you’ll never get past it. Don’t despair. Remember, time is in your favor. As you gain work experience, the economy improves and Baby Boomers retire, opportunities for economic advancement will emerge and help you move ahead.   Jerry Maldonado Jerry specializes in retirement, insurance and tax off-set strategies for professionals and small business owners. His focus is to help clients identify their definitions of legacy and financial security while simultaneously implementing innovative strategies to help make those financial goals a reality. For more information on his services, he can be reached at: JGM Consulting LLC [email protected] (951)858-0798 Lic#0H33733 www.jgmconsultingllc.com