The Arsenal Money Clip Podcast

Back to School: Talking Through Financial Planning for College From Your Kid's 1st Birthday to Their 18th

August 07, 2024 • Arsenal Financial • Episode 2

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Join Arsenal Financial advisors Doug Orifice and Jeremy Vaille as they open up their relaxed office conversations about various financial topics for everybody to hear. Today's episode is focused on financial planning for college where you'll hear about:

  • How Jeremy's 24-hour adventure race went and how they'll use that theme throughout the episode
  • The 3 age brackets and their different strategies: 0-6 Get Started, 6-12 Get Serious, 12-18 Get Your Kid Involved
  • The projected costs of different type of colleges in the years to come 
  • How to start the habit of saving for your goal as soon as possible (including what to do with Aunt Petunia's birthday card money)
  • How to think about 529 accounts and their recent changes that increase your flexibility
  • Introducing your kids to financial literacy 
  • The final things to consider once they've actually reached the stage of entering college
  • What's new in Hanover and Watertown
  • And of course some dad jokes from Jeremy to wrap it up

Learn more about Doug, Jeremy, and Arsenal Financial at arsenalfinancial.com or call (781) 335-9100.

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The information in this podcast is educational and general in nature and does not take into consideration the listener’s personal circumstances. Therefore, it is not intended to be a substitute for specific, individualized financial, legal, or tax advice. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a final decision.

Doug:

Hi and welcome to the Arsenal Money Clip Podcast. We are trying really, really hard to give the people a listenable podcast about money. My name is Doug Orifice and I'm a financial advisor here in Watertown, Massachusetts, and I am here with my friend and business partner, Jeremy Vale JV. How are you?

Jeremy:

Doing pretty well. Happy, it's Thursday afternoon. I w Really hot out there, though it's really hot out there. Yeah, I need to get cooled down.

Doug:

So this pod probably comes out in August, but we are recording this during a brutal, brutal stretch of heat here in July. So Jeremy and I, we run an investment and financial planning company called Arsenal Financial, based in Wate rtown, Mass, and in Norwell, massachusetts, and here's what we're trying to do on this podcast. C We're trying to talk the way that he and I normally do on our work days in office, on the couch after phone calls at lunch. You know, I guess for you and me, jv, it's all the behind the scenes stuff that our clients don't get to hear.

Jeremy:

A coffee talk in the morning.

Doug:

Yeah, and I guess the assumption is we come up with some good stuff, right?

Jeremy:

Once in a while. Once in a while. We have a good nugget or two.

Doug:

Yeah , so you know we're here as money guys. However, we don't want to be boring. We're going to try and keep this light, engaging, and really our goal is, as I had to explain to my 12 year old son, this is not about like being Bill Simmons and being the most popular podcaster on the planet. We're just trying to connect with our clients and our community and that's it. So maybe maybe someday he'll understand that, j, you and I are normally helping people plan for long distances and the long haul and you know I love a good analogy, right, and we're always telling people it's a marathon, not a sprint. Guy, I'm going to put you on the spot because this past weekend you did an adventure race for the ages, and how can I not have you start with this? Because I'm sure we'll refer back to this once you tell the peoples about your adventure.

Jeremy:

You always want to make me blush, I know.

Doug:

Well, it's a podcast, so they can't see you blushing.

Jeremy:

Tomato head, tomato head

Doug:

You know it's a risk-free endeavor to put you on the spot because nobody can see you blush. Tell them. This is amazing.

Jeremy:

First of all.

Jeremy:

I just wan t to thank the listeners for the feedback. We got really good feedback from our first session. Everybody, of course, loves your velvety voice.

Doug:

Stop it.

Jeremy:

E It reminds me of David Allen Boucher at m magic 106.7 nighttime magic.

Jeremy:

But yeah. So last time we talked a little bit about this adventure race thing I was going to do. For those of you that don't know what it is, it is essentially a timed event in a team where you have multiple disciplines It's trekking, it's mountain biking, it's kayaking or paddling and you do it all without any technology. So compass and maps. So you show up to the race, they give you a packet of information which includes five or six different maps, very vague maps with all different scales on them and the instructions, and you got to put together a plan to go and get these checkpoints out in the woods.

Jeremy:

So in this case it was a 24 hour event. We had four members of our team and there were 80 checkpoints available. It was all our first times and we successfully finished this thing, which is great. So it was a huge learning experience. We got along very well, which you would think at two o'clock in the morning, when you're lost in the middle of the woods and it's pitch black out, you're going to be at each other's throats. But that didn't happen. We got along very well and we didn't even know each other, most of us.

Doug:

I know some people are going to want to know 24 hours. I know the answer to this, so I'm going to ask. Were you expected to sleep at all?

Jeremy:

No, no, and my usual bedtime as a middle-aged father, it's like 8.30.

Jeremy:

So I'm like 10, 11 o'clock,

Speaker 3:

10, 11 o'clock.

Jeremy:

I'm going to be ready to snooze, but I was shocked at how well we all handled the 24-hour piece. It almost like getting better with the adrenaline of the night. I guess I don't know. It was interesting. I love it. Certainly an interesting experience, and I get addicted to things like this, so probably likely just the one of more to come.

Doug:

Well, we're proud of you, we're impressed by you, inspired by you and for the purposes of today's podcast, thanks for giving us an example and an analogy that we can keep going back to, because we are going to talk about something today that does require a great deal of planning. Now, on a scale of one to 10, I would get a 13 if we were measuring the kind of eye roll I would get from my 12-year-old son if I told him today's topic and today's topic is back to school topic and today's topic is back to school. Oh God, daddy downer, could there be anything worse than back to school as a topic? Right. But since you and I are professional misery givers to our boys, right, let's stay on brand. Let's give misery. Let's talk about back to school, yeah, so you know, let's. Let's jump into this.

Doug:

This has been top of mind for you and I, specifically because we're starting to talk to our clients who have college age kids where the bills are coming right.

Doug:

You and I are sending out checks and distributions from 529s and from other sources to pay these bills. Sometimes we're having these conversations about okay, hey, you know, which source do we tackle for year number two, sophomore year, you were the one to come up with this topic and I thought this was such a great idea. I think it gives us an ability to back up a little bit and not just focus on the end result. But let's go kind of all the way back, right, and I think, as we got into it right, there's different stages of planning for college. Yeah, and we'll get into those in a little bit, but I think they were called get started, get serious and get your kid involved, and we have those in different age bands. But before we get into these different chapters of college planning, why don't you kick us off and set the stage about the what's your goal piece and how, when we're talking with people, not a single college planning case or a single family is like another.

Jeremy:

Right, right, you know, fortunately enough, we're able to meet with our clients, hopefully earlier on in the game, right? So as soon as they have that baby, as soon as that social security number gets issued, we have the ability to open a 529 or a college savings plan. Right, Because as soon as the kid's born, time is against you. You've got a running clock right. You've got 18 years to get to the goal.

Doug:

Uh-oh, flashing red, flashing red. Analogy number one it's like your 24-hour adventure race, right yeah?

Jeremy:

You've got a finite race, right? Yeah, clock is ticking, clock is ticking. You got 24 hours. You got to be back at the start by 10 am, no matter how you get there, right. So you know that 18 years is coming up. Bingo, I talked about it the other day. It was like this is probably the third biggest honking goal you're going to have. Right, right, you save for retirement, which is the biggest goal. Yeah, probably buy your primary residence, which is a really big number, and then the next biggest number, probably a college education or two or three or four, right, right. And so, starting as early as possible, that's your best bet for as much flexibility and options as you could have down the road.

Doug:

There was a line that you said when we were talking about this, which was you know, besides it being the third biggest honker, what do you actually want to accomplish? Because let's assume a couple things. Let's assume the average person is not putting away 100% of future education costs and let's assume that the average child and the average student is not getting a full ride, which puts us square into, like I don't know, American reality. A really daunting goal. So it's how do we chip away at that? How do we get real about it Right? So I think, number one, before we get into the planning piece of it, having these, let's get real conversations about what you're thinking about, what higher education or even schooling looks like to you, even when, I don't know, you get a six month old baby in your lap and you have no idea what to expect or no idea who your child is. Yet Start with something on the canvas yeah, education might be important to me because, hey, my spouse and I went to school. We might want to foster the same thing with our child.

Jeremy:

Yeah, I mean, when we were going to school right, everyone went to school. Going to college was an expectation. Almost it was built into me. I don't know about you, but in the late 90s, early 2000s, it was just you're going to college after this Maybe that's changing a little bit.

Doug:

Yeah, we're going to give producer Matt Hanna many shout outs while we're doing this right here, and producer Matt Hanna showed that most of our listeners for our first podcast were inside the 495 belt in Massachusetts. So I think that perspective for a lot of not all a lot of high schoolers inside the 495 belt in Massachusetts there's a degree of expectation that there's some sort of education. Not everybody, Everybody's different and we certainly see a ton of it, whether it's in our own families, clients, friends, the whole nine.

Jeremy:

Dollars and cents, though. What does college cost? What does higher education cost these days?

Doug:

So is this a good time to start throwing out some fun facts.

Jeremy:

Sure, let's do this, let's do that.

Doug:

So one of our partners, jpmorgan Asset Management, puts out this college planning essentials deck which we print out and take a look at every year. So let's crush your brains with a couple things. Before the what's it cost, let's think about how costs have gone up, because our first episode was about what ugly I word Inflation, inflation, right, this is crazy. I get a deck in front of me that says over the last 40 years, the cost of clothing has gone up 32%, the cost of's peanut butter cup up 191%, housing up 235%, Tuition up 873% over the last 40 years, and that's a 5.7% average annual increase.

Jeremy:

Well, kind of like we talked about last time, right, we felt the college thing. We haven't felt that in those other things that you talked about and we recently have Right. So now, all of a sudden, those things that have been mostly uninflated over the last 25 years have caught up a little bit To what college and healthcare costs have been doing all this time.

Doug:

Right.

Jeremy:

Right, I remember going to apply for schools in the 90s and I really want to go to BU, bu. I remember going to apply for schools in the 90s and I really wanted to go to BU. Bu was $30,000.

Doug:

That was unaffordable and that was. Yeah, that was a no-go number.

Jeremy:

BU now $80,000 something, probably full ticket.

Doug:

Brand new no-go number.

Jeremy:

Right.

Doug:

Right, meanwhile, not to date myself as a commuter, my first year at Bentley, then college in Waltham Massachusetts, just a hair under 14 grand. Yeah, doable, doable, especially when you're working a job or two, right? You asked me about the cost of college, though I'm going to keep throwing out our producer, matt Hanna. Right, matt, by the way, you're doing a great job. Thanks for your help. Matt has a young child, so let's scare Matt, right, because we can't even hear Matt right now. And if he falls to the floor, granted, I'll screw up the podcast, but if he falls to the, oh, there he goes, here we go. If you have a child who's around the age of six or seven years old, you can expect to pay about $186,000 for four years of public in-state school. If you want to do public out-of-state school, we're looking at three and a quarter $325,000 over four years. Then, if you want to do four years of private school, $434,000. Matt has hit the floor, but the podcast is still going.

Doug:

Thank you, technology that's what we're looking at for costs.

Jeremy:

Is that total sticker price or is that average cost?

Doug:

That says projected costs. So I think we're looking at tuition room and board, your fees, so on and so forth. Probably doesn't include the other things, right, which is like kids got to do some stuff outside of school and maybe live off campus and maybe have some activities that aren't paid for.

Jeremy:

It could be travel costs if you're going away somewhere right, it could be travel costs.

Doug:

We've got some clients that are talking about their kids studying abroad. I've had conversations with three clients whose kids have had a semester abroad in Italy. I can start living vicariously through clients' kids, you know. So I think we've set the stage for one main thing it's freaking expensive College.

Jeremy:

Yeah, dude how do we even make a dent in this and is it worth it? Well, one of the things I think you already touched on is what's realistic, right? What do you actually want to accomplish? Right, you come to us, we have a meeting, you got kids that are 14, 12, 10, and you haven't started yet, right? You're not going to pay for all of college, right, kid, and then supplement with the rest, or is it? I want to save up for that much and then supplement with other sources like cash flow or student loans or other loan sources, right? So I think first, it's kind of identifying. We know it's huge, we know it's one of the top three to five most expensive things on the planet right now. What do you realistically want to accomplish when it's D-Day and the race is over and you've reached the 18 years?

Doug:

Because the other thing that we know is we know it's going to happen.

Doug:

You know if your kid successfully does the entire K-12 route, whether it's public, private. Whatever something happens after high school, whether it's an apprentice program, community college, undergrad, a gap year before you figure something else out, or right to school something happens and, as you've put in the past right, do you want to be prepared or not? So I think now is probably a good time that we can start to look at these different chapters right, these chapters of college savings and these you know really your age brackets for kids. Yeah, and we divided this into three. It's like really simple math that goes into six-year brackets Newborn to six, six to 12, 12 to 18. And we put little headers next to them Newborn to six get started, six to 12, get serious, and then 12 to 18, and this is the one that I'm thinking a lot about right now.

Doug:

Right, Because I'm at the very beginning of this bracket, get your kid involved, and I think that can manifest in a whole number of ways. So you're already hitting on it a little bit. Newborn to six. Let's start about the first chapter, right? You either have a new baby who ended up in your lap or you have kids who are two and four. What are the things that we're looking at, jeremy?

Jeremy:

I think it's just like anything else we do in our planning is to get the habit started as soon as possible. So starting early we talked about that you get the finite window. Every month that goes by that you don't do something is another month. That's not going to go towards the end goal, right? So we talk about setting up the bucket, and maybe the bucket is a savings account to start. You know you're putting the birthday money and you're putting the Christmas money from, you know, aunt Petunia in the account. I love my Aunt Petunia, but you know, maybe it's the 529. You know, I tried to start a 529 as soon as Andrew, my son, was born and started. Funding that on a monthly basis Probably isn't enough, it's probably not the right number, but I got the process started. It doesn't matter how much is in there, right, to start, you want to begin the habit, get that behavioral component in place and you have a carved off bucket that's dedicated to that specific goal.

Doug:

Somebody's going to ask about 529s, so maybe this is a good spot to stop. Do a quick primer on that, because I think you and I agree that a 529 plan is not the holy grail. It doesn't solve everything. But if we've had this conversation and you do believe that your child has a good chance of spending some money on education at some point, it's a very suitable core to a college funding plan. So you want to take us through some of the nuts and bolts of a 529 plan.

Jeremy:

Yeah, sure. So a 529 plan is a specific section of the IRS code, and what it does is it allows you to save for education in a tax-advantaged way. So when these things first came out, they were pretty restrictive, right.

Jeremy:

This is for secondary education, and then over time we've increased the ability of these. The flexibility continues to grow, Like, for instance, they opened it up to K-12 education and apprenticeship programs and then most recently, with what's called the Secure Act 2.0, they can now be used for student loan repayment and rollovers into a Roth IRA, which is a huge, huge advantage. So anything you don't use in your 529, you can roll now into a Roth IRA up to $35,000. But there are a couple of pros, even if you're not sure and that would be there's some state tax credits. Because 529s are sponsored by states, you get tax-free investment growth very similar to a Roth IRA. For our listeners that are familiar with Roth IRAs, Very similar to a Roth IRA.

Doug:

For our listeners that are familiar with Roth IRAs, you get tax-free growth on a 529 plan. Generally speaking, after taxes, that's like getting 4.1% on a taxable account. So in other words, if I have a savings account that pays 4.1% right now, investing the same amount in a tax-free plan is like getting 6%.

Jeremy:

Yeah, that's great. The other is and we already touched on it the behavioral element of you have a dedicated funding source now for education. If you say I'm going to put it down in my savings account, I'm going to keep it liquid and free. That's just going to get blended into the family. But with a 529, you know that that's specific for education.

Doug:

It's not the Swiss army knife that's going to get hammered for every single goal specific use. So talking about reality and funding and starting early, let's throw some numbers out here. Let's just say you decided to get started. You jump in with both feet and you know you don't have to start with a lot. I like the fact that you started off with just start to have it Set up, the bucket, get it going. So let's say that you do $250 a month from day one to starting at age six. If you did $250 a month from the very beginning to age 18, that's $95,000. If you waited until those first chapters over and you started at six and you do that same $250 a month and this is a 6% return you end up with 52 grand.

Jeremy:

That's the power of compounding in itself, right there right Power of compounding and starting early right.

Doug:

So if you can start the six years earlier, that's a $42,000, $43,000 advantage. You don't have to start big, you don't have to start big at all. The biggest takeaway of that first bucket newborn to six, get started is just that Get started, set up the bucket, don't be afraid. Jump in, no matter who you're doing these contributions with. You can put them on pause, you can be flexible, you can change them, but the one thing that you can't do is you can't roll back the clock and start over at age zero when your kid is celebrating their fourth birthday. So I think that gets us to that second bucket, which is age six to 12. And that is get serious. So to go back to your endurance race, you're past your first set of stages and you've done your kayaking bit and you realize okay, man, you know it's not realistic that I can grab all these checkpoints in this 24-hour race. It is what it is. You start to understand who your kid is a little bit. You understand your budget of what it's like to raise a family and whatnot, but we also understand the times running out. So let's get serious. We got in most cases less than 10 years until you're on a college campus. So how important is that goal? Do you want to make that a priority? Do you want to prioritize that over your own retirement? For a lot of people we have to talk to sometimes it's the choice between retiring earlier, working later and helping with college substantially or not.

Doug:

The other thing too is in getting serious. Think about your 401k plan at work. This is why we love 401k plans so much, is you raise your dollar contribution in your 401k plan every time you get a raise. If I'm doing 10% of pay and I'm putting that in every single week and I get a 5% raise year over year without adjusting anything, I'm putting more into my retirement plan. So if I have done that over a number of years eight to 10 years and I got eight to 10 raises of two to 5%, I've just increased the dollar amount that I put into my 401k quite a bit 50, 60% over 8 to 10 years. So a lot of times in 529 plans these are hard dollar amounts and a lot of folks aren't increasing those amounts, so that automatic raise isn't there.

Doug:

So I think part of chapter 2, 6 to 12 get serious is treat it more like the 401k.

Doug:

If everything around us is getting more expensive which it is and you're getting a raise, which most people do get, income bumps right, even if they're not enough Probably should raise this too, especially since, you know, very beginning this, we talked about the cost of college over 40 years going up 5.7%. So it's probably a good reason to take your education savings and give that a raise every year, right, right? I think the last little bullet point we put in this 6 to 12 too, is just having a plan with everything that relates to college funding. So like, in other words, you get a card from Nana and it says hey, johnny, great job with your grades, here's $20. Put this in your college fund. And then Johnny hands it off to mom and dad yeah, let's have a plan with where that goes and how, so we can kind of capture all these different sources. One other thing too age six to 12 is also that age where we can introduce our kids to how money works too, maybe the very first little bit of them getting some skin in the game.

Jeremy:

Yeah, financial literacy comes into play, definitely in this stage. And guess what School is not doing it for them. So it's up to us. They're not getting any of this information in school.

Jeremy:

And so, before you know it, they're taking out a massive loan for college because they weren't educated on this. I think this is an opportunity for us to get our kids kind of accustomed to some of the things having to do with finance. Obviously it's not going to be too complex, but six to 12, they can learn the value of a dollar. They can maybe get their first chore or part-time job, even if it's doing little things. They can take that dollar and figure out what to do with it Right.

Jeremy:

And we've talked about save, spend and share the three glass jars right. Yeah, we do that at home too. He's got a little piggy bank and it's got three sections to it and he's putting things in there. And I think I've told you before we're like we adopted a whale one year so he got the thing in the mail. He donated to the whale foundation all that he's taken and he's given a portion of it to church. So he's kind of gotten used to how to deploy the money, deploy the resources Right, and that's part of our financial literacy program for him.

Doug:

So I think in that 6 to 12, as we're getting serious as parents and savers it's the very beginning of our kids having some skin in the game too and figuring it out, whether it's that spend, save, share glass jars, like we're talking about, with your son, or even my guy who's 12 and a lot of his peers who are in fifth grade, sixth grade, seventh grade. There's a whole bunch of different service providers out there which can help with spending and tracking. We use Greenlight, for example, which is a company where it's an app on your phone and if your child has an Apple Watch, they can go and they can spend money and you as a parent can track where they are, where they're spending money, give notifications, give limitations on what they can spend on. You can even get a green light debit card as well. So I think the second stage get serious.

Doug:

It's as important for us, the parent, as it is for our kids too, because without giving them a foundation, it's hard to get to the next chapter and have success, which is 12 to 18. Get your kid involved. Obviously, everybody's different. Everybody has different feelings on college and everybody's destiny is gonna be different as they leave high school and move on. But I think giving some foundation of reality to your kid over this 12 to 18 period is huge and honestly, I think you and me are lucky because we get to talk to different families every single day and not only are we helping advise them, we're learning from them right, because we've been through school.

Doug:

You and I, our kids haven't yet and we haven't taken this journey personally as parents putting our kids through school yet, but for 20 years I've been on the front line of watching other people do this and there's nothing that's uniform about it. But one thing I'm constantly impressed with is when I talk to some families that are so super open about cost of college, the cost of things, the cost of their household, what they make and what they spend and how, in some cases, a kid needs to contribute one way or another, whether it's taking out one Stafford loan a year when you're in school or you're 15 and you're responsible for these three expenses. You wanna go out Friday night with your friends? That's your spending bucket. You're going to go to Canobie Lake Park in New Hampshire Cool, that comes out of your spend jar, that's right.

Jeremy:

I think this is a great period where you get that first job. For me it was. Well, I worked at the landscaping company since I was 10. So the other bucket. But worked at Somerville Lumber back in the day, right. So lumber store, worked as a cashier, then moved into the electrical department. I loved work and I loved making money and that's kind of from my parents the entrepreneurial spirit.

Jeremy:

But if I had a Roth IRA at the time, I would have absolutely started the clock on that because the five year window you start that first contribution, no matter how small. You got a lot of benefits there with that as time goes on. So starting that Roth early, because you're going to have 50 plus years for that thing to grow and compound Like we talked about that time element, that compounding you're going to get half a century of compound interest on that first dollar you put in. It's going to double five or six times by the time you get to needing that. So you're going to get that job, you're going to get that paycheck. You're going to see all the taxes come out. Whoa, mind blown. I made a hundred bucks and I only get to keep 60 of it.

Doug:

What, what do you mean what Next bucket after 12 to 18, instantly jaded. I got to tell you, man, I have really enjoyed talking to clients' kids this year. I feel like this year I've been doing that more than ever, and that's clients' kids who are looking to buy homes who are in their 30s, just out of school and in their first job, and in their 20s.

Doug:

But I've had a few of these conversations too with late teenagers just about how stuff works, and it's been cool, it's been a lot of fun. So that third chapter to 18, get your kid involved. We've talked a lot there, but let's turn back really quickly to 529s because, as you and I have gone from talking about age 0 to 6, 6 to 12, 12 to 18. Fast forward, somebody's been saving money into a 529 plan and doing the right thing for 12, 15, plan and doing the right thing for 12, 15, maybe 18 years. What's going on in that 529?

Doug:

So 529 plans are invested and what's interesting is these 529 plans always have a target date fund option, just like you have in the workplace. So if I have a 401 plan and I am 40 years old and I have 25 years left to go, I might be in the target retirement 2050 fund. Most of these 529 providers will have a college graduation date of X fund, so that the investments inside of your 529 are getting more conservative, which means less stock, more in bonds and cash the closer that you get to college. And it's interesting because the minute that you start saving for your kid's college, it's almost like somebody who's 48 putting away money for retirement. Their timeframe is really short.

Jeremy:

It's like you're instantly transported to 48 and start saving for retirement.

Doug:

Yes, they instantly inherit my hairline. In fact, my hairline is kind of the same as like a baby's hairline anyways, so-.

Jeremy:

Mine is a baby sale.

Doug:

Exactly so. We have that analogy as well.

Doug:

But the reason why I want to bring this up is, with the recent change in inflation and interest rates, the back nine we'll call it the final years of your 529, right, your money is still working for you and it is in a more conservative, less volatile position, and if it is in mostly bonds and cash, you're getting these pretty decent yields of 4-5%, which is still growing tax-free. So this is a lot different than a few years ago when many of these investments were yielding 0, 1, or 2% and not meeting the rise in the cost of college or meeting and beating inflation. Now it's a bit of a different story. So don't feel like your money's wasting away as you're getting into those final few years of your target date 529 plan.

Jeremy:

That's a good point, yep.

Doug:

All right. So we've made it through these three buckets right. And before we move on from the 12 to 18, get your kid involved, bucket JV, let's celebrate. I think you and I have been lucky enough to see incredibly hardworking people and communicative families and smart kids work together and make this happen, Sometimes with families the size of five, six human beings getting four kids through school, some of them doing undergrad and some grad school, and I'm so struck and in awe almost every time I see a family get through this. So, number one if you have a freshman or a sophomore or junior or senior going off to college, congrats and good luck. But why don't we turn our attention to kind of what's next right? So if you have a first time freshman or you have a kid returning to school, JV, you want to take us through a couple of tips as we send our college kids back to school.

Jeremy:

I know and I think about it, like my guy's seven and a half right now, and I'm thinking like am I going to give him enough so that when he hits that door on 18, he's going to be able to handle himself? I'm like scared to death. I'm like can I cram everything in there so that he knows what he's doing day one. But one of the things that's always top of mind for me when a kid, right kid is going off to college, guess what, they're 18. They're not a kid anymore. Right In the eyes of the law, they're an adult. So what does that mean?

Doug:

Responsibility and a whole lot of it.

Jeremy:

Yeah, oh, my God.

Doug:

I'm going to throw up just thinking about this man.

Jeremy:

And you aren't the guardian anymore. So when it comes to God forbid health issues on campus, you might not even get a call Right, right? If your son's at the hospital, your daughter's had an injury, a broken leg or something, you don't have any say-so anymore, right? So it's really important to get your documents in place for your adult child now. We recommend or oftentimes direct our clients to estate planners to help. Oftentimes it's in conjunction with them doing their own estate plan and also having those protections in place for their adult child, and maybe that's a healthcare proxy or a durable power of attorney and some of the documents that are important to have in place for them going off to school as an adult at 18. What else?

Doug:

How about spending money, and I think this reinforces starting good habits between 6 and 12 to know what you're doing with money, how to save money, how to access your money, how to budget your money. At 18, they're on their own. You definitely don't know what they're doing on the weekends, right? So hopefully they have a way to go pay for that too. So, from documentation to budgeting and making sure that they understand what limits they need to stay within while doing what they need to do, that's important. So communication, communication, communication. We did a good blog a few months ago about money communication within a family, whether you're talking to your six-year-old kid or your 18-year-old going off to school.

Jeremy:

Or your adult parent, or your adult parent right. Intergenerational financial wellness is what I like to say, right.

Doug:

All right. So I think we have hammered this, we've kind of gone over these different chapters right Zero to six, six to 12, 12 to 18. I'm going to ask you for maybe your couple of takeaways, but I think if I just listen to this podcast and I'm somewhere in that zero to six, the message I take is just to start as early as possible. Don't procrastinate. Start something somewhere, because if you don't start, the penalty of time is worse than anything else, right?

Jeremy:

Worse than anything else. Yeah, I would think about it in three buckets right. First, you set up that savings account to collect the money from birthdays and whatnot.

Doug:

Yeah.

Jeremy:

That's going to be a good first bucket. Then you might have the 529 bucket and or an investment bucket to supplement that. So you get three potential buckets and I end that zero to six window.

Doug:

All right, so I think we're going to wrap this up, and maybe before we do, there was one cool thing that was in this college essentials thing and it was about athletic college scholarships. I thought this was funny.

Jeremy:

That's why everyone's doing club sports right, Exactly.

Doug:

This is gonna be a downer once we read this off right, Because there was only five sports in which there is Division I full scholarships. All right, I'm looking at the five. I don't know if you're looking at this or not. Hopefully you're not, because I'm gonna quiz you real quick. Okay, what are the five sports where you can actually get a full ride for D1 college sports Go.

Jeremy:

Men's football.

Doug:

Men's football, ding correct. Women's basketball. We'll do this category as men's football. Men's football.

Jeremy:

Ding Correct. Women's basketball.

Doug:

We'll do this category as men's and women's basketball Bang Correct.

Jeremy:

Oh, oh, okay. Female gymnastics.

Doug:

You're a cheater.

Jeremy:

No, really.

Doug:

Yeah, hey, women's gymnastics Bang. That is number three out of five. You're good at this.

Jeremy:

Um soccer.

Doug:

No, no, no, no. Sorry, club soccer fans Two more guesses no, not baseball. Oh, not baseball, unfortunately.

Jeremy:

Volleyball.

Doug:

You're so good at this. Women's volleyball and women's gymnastics. Number three and number four One more left.

Jeremy:

Men's basketball, baseball, not hockey, or baseball. Five it's tough, I not hockey or baseball. Five it's tough, I don't know. Four Fencing.

Doug:

Three. I love that you dropped it. So it's not fencing, it is not sumo. And hello to my friend Steve Sanderson, who's actually in Japan right now and sent me a picture taking a sumo wrestling class. Wow, made me laugh my butt off. It was awesome. No, not sumo, not fencing, it is women's tennis.

Jeremy:

All right, all right. So if you're a man, football and basketball, that's it.

Doug:

That's pretty much. It so hit the books. Kids Play hard. Learn a lot from sports.

Jeremy:

But also make sure that mom and dad are putting in your 529 plan and that you're saving a few bucks and learning how to work with your own money to make the team have fun, but don't count on going for free yeah, that's it.

Doug:

You get to work twice as hard and pay as much as everyone else done. All right, my man. We're getting close to the end of this episode. Let's turn attention to our backyards. This podcast will come out in august, towards the end of the summer, of course. Talk to me about what's going on at the end of the summer in hanover, massachusetts I don't have a ton of updates in hanover.

Jeremy:

It's just hot that's awesome.

Doug:

You know what? It's just hot, it has been brutal, it's just been brutal.

Jeremy:

Everyone's going to the beach, maybe, I don't know yeah, what are you doing?

Doug:

I was gonna say, according to the traffic I've seen on route three back and forth, yeah, cape and South Shore beaches yeah, I think beaches have been full. What's up on the North Shore? The North Shore. Come on, man. We're one stop north of the Charles River. This is what happens from the South Shore. Guys, you would fail at the North Shore map.

Jeremy:

It's like the Berlin Wall.

Doug:

Here in Watertown. I would like to give just a plug and a shout out for the Watertown Arts Market First of all. And a shout out for the Watertown Arts Market First of all, shout out to chair of the Watertown Arts Market, kristen Kenney, for all her hard work. This is going to be the fourth annual Watertown Arts Market. It happens on August 17th noon to 5 pm. Just an amazing amount of vendors of all sorts of different arts and crafts. It's really an incredible event. It is free, there's no cost to enter. We got music playing all day long that is brought to you by the Watertown Business Coalition. Again, it's the Watertown Arts Market. You can learn more at watertownartsmarketcom 12 to 5 pm Saturday, august 17th, and that is at Filippello Park off of Grove Street in Watertown. So again, kristen Kenney, thank you so much for all the work you and the committee have put in. Jv that is it.

Jeremy:

Do you want the dad joke of the day?

Doug:

I mean we can't not. I'm buckled in, I'm ready to go.

Jeremy:

Where do criminal rainbows go?

Doug:

Where do criminal rainbows go Inside a Lucky Charm cereal box?

Jeremy:

Answer is prism, but it's a light sentence.

Doug:

Oh, from my science and engineering guy, I love it.

Jeremy:

Yeah, I know All right. Last one why was the broom late for the meeting?

Doug:

Give it to me.

Jeremy:

It overswept.

Doug:

Oh, so good. Well, with that, we're going to wrap this up. Thanks for tuning in to the Arsenal Money Clip Podcast. If you have any questions, please check out our website, wwwarsenalfinancialcom. We have blogs on a whole number of topics. If you click on our blog section, if you have a question about anything, you can reach us at info at arsenalfinancialcom or you can give a buzz to the office at 781-335-9100. Thanks for joining us and we'll see you next time.

Speaker 3:

Securities and advisory services offered through LPL Financial, a registered investment advisor member, finra, sipc. The information in this podcast is educational in general in nature and does not take into consideration the listener's personal circumstances. Therefore, it is not intended to be a substitute for specific, individualized financial, legal or tax advice. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a final decision.