If during a two week summer vacation, you heard that there was an escalation of tensions between the US and Korea; two international terrorist attacks; a US domestic terrorist attack; a looming debt ceiling crisis; and political upheaval in the White House, you might think that US stock markets would be in free-fall. You would be mistaken. Although markets were down over the most recent fortnight, the damage was fairly limited—about two percent overall. Even with the recent declines, the S&P 500 remains 8.3 percent higher on the year and just 2.2 percent below its record high, while the NASDAQ is up 15.5 percent in 2017. Given these numbers, its not surprising that the most frequently asked question that I have fielded over the past month has been, “I can’t believe that market is doping so well, considering (fill in the blank)…SHOULD I SELL MY STOCKS?”
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As millions of parents prepare to send their kids off to college, it is critical that they communicate about safety, hygiene and of course study habits. But it is also important that they discuss money and communicate to their kids that they are responsible for their finances and should act accordingly. Here are the introductory topics to cover: Money Management 101: Each family will create a different system for managing money, but in my experience, the most successful plans start with the creation of a realistic budget. You will then need to discuss what the parental contribution (if any) will be. From that point, parents may choose to provide the student with a lump sum for the semester, though I recommend a monthly allotment, which should help young adults get used to managing finances in the same that they will do so after college.
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