Stop Overlooking Your Biggest Investment {sponsored infographic}

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Did you know April is Financial Literacy Month? The great people at My Job Chart have sponsored this post to bring an important financial topic to light for all parents and caregivers. What is your biggest investment? How did you plan for it? What is your ROI (Return On Investment)? As a parent I like to say the Booper is a big investment, but how am I investing myself in him? This is a timely piece that has really opened my eyes to some things I'm doing right as a mom, and to a couple areas where I see change is needed. Raising children is no easy task, but if you want a good ROI you need a game plan. Have a look at some great investing tips.

In Honor of Financial Literacy Month, Stop Overlooking
Your Biggest Investment

                                                    (Hint: It’s not your House or Car)

You often hear that the biggest investment you will ever make is buying a home.
That’s because it’s an emotional experience and involves very critical eyes.
Hours of looking on the internet or driving around to see different neighborhoods
takes a lot of time and energy and it should because it’s a big decision. In fact, in
2010 the median home price in the U.S was $222,000. That’s a lot of dough to
plunk down at once. This is a long-term investment to provide shelter for your
family and comes with an expectation if you care for it and improve it you will see
appreciation in its value.

Then comes the second largest purchase - your car. According to the National
Automobile Dealers Association, the average price of a new car sold in the
United States is about $30,000; the average used car is $11,850. Once again,
hours searching on the internet, test-drives and time at the dealership quickly
adds up. Buying a car is a spendy proposition, but it’s not anywhere near your
biggest investment, none the less you have expectations for it to provide your
family with reliable transportation for years to come and be worth something
when it’s time to replace it.

Most people overlook their biggest investment. It’s one that is larger and more
important than either of the previous two investments and it doesn't come with
granite countertops or leather seats.

Your Biggest Investment
Your biggest investment is your KIDS! According to a 2011 USDA report, it costs
$295,000 to raise a kid from birth to age 17. And that’s per kid! The sad news is
that doesn't even cover the cost of college. For an in-state 4-year program you
can tack on another $68,524 or $154,356 for a private college. Where you live,
your income level and the educational institution of choice can all make those
numbers even bigger.

This doesn't mean we shouldn't have kids. It simply means that we need to put
these costs into perspective and start treating the price of kids with more
attention to detail and a sharper eye on expectation for return.

So, what expectations do you have for the BIGGEST investment you will ever

As a Certified Financial Planner (CFP) I have spent my entire career counseling
people on how to carefully select investments, pay close attention to them and
make sure their portfolios are tweaked for maximum return. My clients have

come to expect this type of attention to detail.

If you are like most Americans you don’t have a plan for the investment of your
kids because it’s not a one-off transaction. Instead the cost is stretched over a
17-year period, and THAT’S THE PROBLEM. It’s money slipping slowly through
our fingers over time. Buying a new pair of pants or another trip to get a haircut -
it all slowly adds up.

So now that we know kids are the biggest investment you’ll make, how do you
take charge to get the most out of your investment?
1. Make your kids aware
2. Make a conscious effort to share on big ticket financial items
3. Help them enjoy work and money
4. Don’t cultivate entitlement, tie work to reward
5. Consistency counts

Make your kids aware
The days of keeping hush-hush when it comes to finances are over. Ninety-five
percent of parents feel it is their responsibility to teach their kids about money,
but only 26 percent feel comfortable doing it. To reverse this trend, start with
some small steps. Let the kids know how much the electric bill is next month. I
did this last summer when our electric bill was over $700. Yes, we live in Arizona
and the A/C seems to never turn off in August! However, by letting them know
how much it costs, they were more mindful about not leaving the doors open and
how they can do their small part to save.

Also, let them know how much it costs to fill the gas tank of the family car. In April
of 2011, the average amount American households spent on gas was $368.09.
That’s just one month. All that running around from soccer practice to school
adds up. There’s a good chance you will get some raised eyebrows when you
expose those figures. Kids are smart.

Share on big-ticket items
Make a conscious effort to discuss big-ticket financial items. Don’t be afraid to
discuss your home’s value and mortgage with your kids. They can look it up on
Zillow anyways, so forget the “50’s” mentality of “we don’t share family money
matters with our children”. Start sharing this financial information with them and
empower your kids. Don’t leave them in the dark. Kids can feel when there is
stress in the home about money, so have a sit-down meeting and discuss openly
the issues and work as a family on how to get through the hard times. Maybe it’s
sacrificing the skiing trip or skipping dinner out on the weekends.

Once their eyes are opened to the costs of running a family and what it looks like
to budget you’ll be surprised at how quickly they start learning how to make
better money decisions. You’ll also start hearing things like, “Dad, that is a total
rip off! Let’s not buy it here when we can get it cheaper somewhere else!”. These
skills will last a lifetime. Get your kids to participate.

Help your kids enjoy work and money
Getting through college takes a lot of hard work, but studies show it pays off.
Median income for someone with a bachelor’s degree is $54,756. Compare that
to $33,176 for a high school diploma. If you do the math on this over a 35 year
career that’s an additional $740,000. For a master’s degree you can add another
$400,000 over a career. That’s a pretty good return on some hard work if learned
early. If kids are held to a high standard when it comes to helping around the
house, being diligent in their studies or staying on top of their piano lessons they
will learn to enjoy work. Will you hear some complaining along the way?
Definitely, but it will be worth it.

Don’t cultivate entitlement, tie work to reward
When it comes to paying kids for their work, there is plenty of debate. The bottom
line is that you can call it what you want: allowance, commission, work-pay,
whatever… but it needs to be tied to family contribution and it needs to teach
your kids something about work ethic. Giving allowance not tied to contribution
only encourages the entitlement mentality. We do not need any more of that!
Adults work to earn money so kids should learn this expectation as well. Have
you ever been on a job interview where the employer offers you a salary and
then never expects you to show up to work? It’s not reality and your kids should
learn that early.

Don’t feel like you have to pay your kids for every little thing they do around the
house. Of course some things are expected, but if it is above the call of duty
make it worth it. As they work and you pay them for it, it will create meaningful
conversations about contribution, hard work and how to make good financial
decisions with their money, such as how much they should save, spend or share.
Give your kids some jobs around the house where they not only earn a little
money, but they can develop a good work ethic. Don’t let your kids sit around
and plays video games all day and never learn how to contribute and become
responsible. It’s a life lesson and one parents are responsible for teaching. Get
them off the couch and let their potential blossom! If you let them sit on the
couch don’t be surprised if they’re still there when their 30! There is no better
place to teach good money management lessons then in your own home.

Consistency counts
Don’t be hard-core one day and the next let everything slide. Stay strong and
don’t give in. Once your kids learn your new resolve they begin accepting it as
part of the routine where accountability and responsibly become a normal
expectation. Repetition is the key to learning. Start them early with chores and
family activities around the house that will help them learn how to be smart with
money from a young age. This will pay big dividends down the road for them
personally and for society as a whole.

Your kids truly are the BIGGEST investment you’ll ever make. The return on that
investment won’t be seen immediately, but you’ll see glimmers of it as they grow.
They’ll gain personal accountability, confidence and financial freedom. When kids
leave home and know how to live within their means and not get suckered into
bad financial products like high fee bank accounts and credit cards with hidden
charges, when they know how to budget and talk about finances you’ll know
without a doubt your investment paid off. We must pay more attention to our kids
and inspire them to reach their potential. Raising your kids has a big price tag,
but it’s worth every dime, especially when you start to see your return on
investment and the responsible citizen they’ve become.

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