Personal Finance Blog
These days, it seems that every dime you can get scraped together is helpful. Family budgets are stretched thin as can be, and more often than not, kids today have to rely on student loans and part-time jobs to get into (and maintain) college careers. Since most kids can only get jobs after the age of 16, that doesnât leave much time for them to save some money toward college before they get out of high school. Additionally, with the advent of common core standards, students are working harder than ever to make good grades so that they might earn scholarships that will help with schooling. Obviously, that leaves minimal time for students to find work that is actually worth their time when teenagersâ free time is so limited to begin with.
While sitting in my local cafe a few days ago, I happened to overhear a mother who was questioning a barrista about how old her child needed to be to work at this particular establishment. She was genuinely chagrined to learn that kids needed to be at least 18 here, and a discussion was promptly begun that revolved around the question of where might a 14-year-old find work? Now, I know that itâs a matter largely of personal discretion, but I couldnât help but wonder what would drive someone to want to get work so young. Between homework and extracurricular activities, family time and genuine relaxation, it seemed silly to me that anyone would be of the opinion that a 14-year-old would have any time at all for a part-time job.
How young is too young to hold a job? One would think that the industrial revolution would have taught us a valuable lesson about child labor in the United States. Really, who doesnât remember the pictures in our history books with all the little girls working in the textile factories? How about the stories that went along with those pictures about kids losing limbs to those machines? Those stories were remarkably common when the industrial revolution was kicking off. Strangely, though, there appears to be more of a sentiment to keep these kids working (and by extension, out of trouble) these days, than letting them be kids. For many families today, home chores often begin as early as possible. Kids might earn an allowance for emptying the dishwasher, for instance, or raking leaves, cutting grass or vacuuming. All this is well and good, but to try to pigeonhole kids into a part-time job so soon? Whatâs the point?
It could be argued that starting early could potentially help a kid save up for college, an increasingly expensive option these days, but certainly the best route to really getting into a âdream jobâ that exists. After all, those Advertising Executive jobs donât just fall out of trees! The reverse of this, though, is the contention that no part-time job and its paltry minimum-wage paycheck could possibly cover college expenses. Loans would still be required to get through. Others might say that its a character-building exercise to prepare kids for college. That, however, is simply bunk.
High school is tough enough these days without expecting kids to do their homework in the wee hours of the night after a shift at the local burger joint. Sixteen to Eighteen is a good age to begin to find their way in the work force. Until then, the best thing for kids to do (particularly if they are planning on going to college,) is to study hard, involve themselves in extracurricular activities, and put together plenty of educational resume-builders: Good grades, Good Attendance, and Good Attitude. With these in place, it will be far less likely that your âtween will need to worry much about getting a job before theyâre actually in college.
Recently, a story popped up on my news feed that concerned a kid who apparently had been able, by the time he turned 27, to sock away a little over a million dollars. Cool, huh? The essentials of the story were that the kid worked hard, saved his money and invested wisely, but thatâs only what you saw at first glance. There was a lot of subtext that went unmentioned, or was glossed over in the story. Now, thatâs not to say that I donât appreciate the ability of a kid to put off gratification to make it to a million dollars saved before he turned 30, but at the same time, I had to laugh, since the scenario that was presented was so incredibly improbable as to be worth laughing at. Iâm not hating, but Iâm going to break down the essentials of what the article went over, and show you how hard it really is to make it to that number that early in life.
The beginning of the kidâs life appears to have been pretty run-of-the-mill. He was a child of immigrants, and as we all know by now, the work ethic of newcomers to America is pretty much second to none. Thatâs a bit too much digression, though. When he was able to get work, he got a job at Subway, then said that he saved up every paycheck and deposited it into a savings account. Thatâs great, but I donât buy it. Kids have expenses just like anyone else, theyâre just different expenses. If youâre trying to tell me that he didnât go out on a single date, buy a single lunch, or put a tank of gas in a car at any point between being 16 and 18, and expecting me to believe it, youâve got another thing coming. The only way to manage that sort of frugality is if your parents are handing you a couple of crisp $20 bills every week.
Next up, he says that he joined the Navy, and earned $55,000 per year for four years, saving 60% of this income and investing it. That was expressly debunked by a very vocal majority of commentaries in the article who indicated that an âE-1 Enlistedâ pay is just a hair over $1500 per month, barely $19,000 per year. Over the course of his service, he would have had to have become an officer with multiple years of experience to be at the $55,000 per year level. Military pay schedules simply donât work the way that was indicated. However, he also indicated that he freelanced during this time, doing programming work online, but since this wasnât added in to the $55,000 number, but rather added on top of it, I have to call B.S. on that one, as well.
The third aspect of the kidâs apparent riches is more believable at least, since rather than relying on skill or determination, it comes down to simple blind, dumb luck. The article indicated that the young man had amassed well over $100,000 by the time the housing market sunk, and that he purchased two properties during this time, then rented them out. Their overall value is high, and the return on investment is high, so in this case, it is a believable scenario.
If this young man has, indeed, amassed over a million dollars in net worth, then more power to him. Most people today will never see that kind of money, and many wonât even be able to dig their way out of a negative net worth. The story serves as a great object lesson, though, in how difficult it really is to make a million dollars and hold on to it. One, you canât do it alone- whether it be family or employees, someone is going to help you get there, so donât forget about them. Two- You have to be specialized, work your butt off, and sacrifice a lot. Three- donât discount luck. Thereâs a lot to be said for being prepared and in the right place at the right time.
Understanding the difference between comprehensive and collision coverage insurance is one of the most important aspects of auto insurance that is often overlooked by drivers. While neither of these coverages is a requirement in some states, they are often required in the case of a newly purchased or leased vehicle, largely because in those cases, the bank which holds the title to that vehicle wants to ensure that their investment in your transportation is covered. On the other hand, a vehicle purchased outright may not necessarily need either coverage, depending on your willingness to risk the total loss of the car in the event of an accident. Additionally, vehicles purchased for cash on the secondary market may not need this type of coverage. Rather, state minimums (check in your local area to be certain) may be limited to carrying only liability and property damage coverage.
Comprehensive car insurance coverage is a universal coverage that insures your car against pretty much anything that collision coverage doesn’t cover. It is the insurance which will pay for damages incurred through such things as vandalism, fire, and theft. While comprehensive car insurance coverage is by its very nature, all-inclusive, there are limitations that will be clearly delineated within your coverage documents. For instance, comprehensive coverage rarely covers incidents termed âActs of God.â It does insure against weather mishaps, though, such as hail. In some cases, comprehensive insurance coverage might cover the contents of a vehicle, but may not cover damage to aftermarket accessories. Usually, a car insurance company will only pay to have a vehicle restored to its original condition, not necessarily the condition it was in at the time of the fire, vandalism, or theft. In these respects, it is very important to be aware of what coverage you have.
Collision coverage is the auto insurance component which pays for damages stemming from an accident that happened on the road. Traditional accidents, damage from loose debris on the roadway, or even damage from the roadway itself is usually covered by the collision coverage on your auto insurance policy. What collision coverage might not cover is damage incurred in a private parking lot while the car is parked, even if another vehicle is involved. Collision coverage pays for damages to or replacement of your vehicle that you more traditionally consider an accident.
While in some states, collision and comprehensive coverage aren’t necessarily required, they are a good idea for anyone who can’t afford to replace their vehicle outright in the case of an accident. If the value of the vehicle is less than how much you pay in one year for the insurance premiums, then you might consider at least scaling back on either or both of these coverage options, because if the car is totaled, you’re going to only receive fair market value for it, less your deductible. For instance, letâs say you’ve got a $500 deductible, a $2,000 car at fair market value, and pay $120 per month for car insurance (typical of a younger driver). In an accident, the settlement is going to be $1,500 for a total loss, but you will have paid out $1,440 in insurance premiums. You’ll only see $60 for the car’s value, when you might have saved the $1,500 to use toward the down payment of a newer car. Whether to carry either of these coverages on an older car is strictly a matter of your own personal comfort level with how you are insured, and the laws in your area to which you must adhere, but it is important to note that it may not be financially wise to be paying for a benefit that youâll never see.
Knowing your personal insurance planâs coverage is an important aspect of being an informed consumer, and in this, youâll be armed with the knowledge you need to have in order to make the best decision possible.