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Kids & College

Lesson 29 from: Personal Finance for Artists & Freelancers

Galia Gichon

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Lesson Info

29. Kids & College

Lesson Info

Kids & College

So before you talk about saving for your kid's college education and hopefully a lot of you are just tuning out now or maybe you're not maybe you're focusing but again this is just part of the financial planning checklist but one thing I realize is I hadn't talked about health insurance and I cannot believe I left that off this is a workshop for freelancers and artists and health insurance is so so important andan most people that I work with to have health insurance so I think maybe that's why I wasn't as focused but it doesn't mean that it's not a concern on dh that is a conversation that's come up the last three days and so far that's an issue for you definitely let me know so again we just think the freelancers union just I'm a huge fan of theirs and I know there's a lot of people who are not happy with the health insurance company they've got but guess what? The freelancers union was formed to provide health insurance to people who are freelancers and that's mostly artists and so ...

what a great organization in new york city to offer health insurance where it is so expensive there's also websites that such as e health insurance dot com and if you make below a certain income wherever you live I know new york it's healthy new york and connecticut it's husky and california there's one plan that I'm not familiar with but in most states, if you make below sir, if you're truly the starving artist and you don't have a lot of money yet, you're really making under thirty thousand you khun get health insurance fairly cheap I'm not even going to start to go into obamacare because I can admit that I don't know much about it at this point I have started to learn and so I just don't feel comfortable really sharing too much but whether you like it or not it's a resource, so use it as a resource what I want you to walk away with is do not not have health insurance, there are things that you can do even if you think you can afford it and I get it you're younger, healthy a lot of you that are listening or on the chat rooms and you think, well, what I want to pay for it? Well, guess what, you could get hospital only so if you really are I can not afford it you really cannot afford health insurance, maybe get the hospital only, but I spoke to somebody here in the by the crew this morning who doesn't make a lot of money she's got great health insurance through kaiser pays one hundred fifty dollars a month, so there are ways I actually think of your outside of new york it's a lot easier to get health insurance that's much much, much less expensive. So let me know if you have any specific questions around it. If not, we're going to move on but don't not include health insurance as a line item. It's I really believe strongly in that you can also have a much higher deductible, and that way your premiums are much lower and so you can put that money into saving. So if you really don't think you need it, it's not cheap. I mean, every month that I pay for my health insurance, you're grumble grumble on my co pays my prescriptions and, you know, all that I had physical therapy about a year ago for my shoulder, and it was, you know, it just didn't pay for a lot, so I get it it could be really expensive, but all the more reason that we need it, especially as we get older, okay, let's, talk about saving for a kid's college education, so if you don't have children, this is where you can take a break. It's, um, coffee come back because you're not gonna want to miss what we're going to talk about, so this is really, really important. If you have children, you can definitely start thinking about saving for them, but you first want to make sure that your first saving for your retirement I think I had mentioned early on that I was quoted in the new york times about three, four years ago where, said there's no student loan for retirement, it was a little controversial, and I had people write me and call me an email me and say, well, you've got kids, I cannot believe that you're not saving for your kids, you know, what kind of parent are you? And I think I mean, the first thing that came to my mind is I'm being a really responsible parent that I'm not burdening my children with my retirement with my retirement cost my physical cause, my financial costs so again, if you have an extra five hundred dollars a month, maybe a hundred or fifty goes towards your child's college education on the four hundred goes towards your retirement, you know, if you've got dead, obviously you keep separating it out so it's. Not that you can't help your kids out, but you really want to focus on making sure that you're taking care of yourself with that being said there's some really, really great programs for saving for college. So the most popular is the five, twenty nine and that's again a tax law. And so what the five twenty nine dozes that lets you put that money in on a post tax basis so you do get a little bit of a tax break in terms of the gift tax but you don't necessarily get a tax deduction the money grows tax free just like an ira and when you take that money out for any accredited college it's tax free, so imagine if you've put fifty dollars a month or hundred dollars a month into a five twenty nine you started your at a young age you take that money out for any accredited university khun b cooking school art school for your university any state it's tax free so it could be a great great place to save money so if you are going to save money for your child's college education, we definitely focused on the five twenty nine it doesn't matter where you necessarily save the five twenty nine as the state they can go to any college so you could be living in california open a five twenty nine three year state there but then they could go to college in north carolina so that doesn't matter and they can go to any college in the united states. What I would say though is I would focus on setting up the five twenty nine through your state's plan because when the money comes out you do get a state tax deduction so it's federal tax free and state tax free so if you're living in california to the california five twenty nine, I think it's scholarshare or you schoolgirl california five twenty nine so if you're living in california, open up the five twenty nine through that when you take that money out your child and go to college in alaska doesn't matter, but if you're not living in california anymore and you have the california plan, you're going to pay state taxes on that money. But if you're still living in california and the plan is in california it's state tax free in addition to federal tax free, so a lot of people don't understand this and there are thinking, well, I need to open the plan in the state, my child's going to college too, and that's not the case put it the plan in there and you were still in california, but your child went overseas, so I knew you were gonna ask me that. I did, um I don't know the answer, you know, some states let they cover like it's really accredited university. So if it's a true credited university of my cover it I'm not sure about the answer to that, but I knew you were gonna ask me that, says she's gonna ask me about that the wheels are turning the other kind of state plan which if you really don't have a lot of money and you really want to say for your kid's college education you can also do what's called the prepaid college program and that's through your state and I actually did that for me so I grew up in florida so my parents essentially prepaid my college education through the florida university system so they essentially prepaid four years of college in like two years and then I could on lee go to a florida state university though so every state has their planet's called the prepaid college program and it's a great great option for people that just don't have a lot of money saved but really want to pay for their child's education. Obviously the limitation is you have to go to the state university but in florida I think there were nine state universities in new york there's all the sunni schools in california there's all the uc schools so you live in a big state like I know I was talking to a client in colorado and she's doing that because the colorado state schools are excellent she's like I'm thrilled that like my child's going to goto colorado state school so it could be a great way for you to essentially help finance your child's education very, very expensively what if you save the money in the five twenty nine account and you don't use it your child doesn't go to college, they become a true artist and they do not necessarily go to art school in that sense well, you can pass it to siblings so five twenty nine's khun b past two siblings or family members or they can also be used for grad school so maybe you're gonna have a child that goes to grad school so it can pay for that you could also use it for yourself, so maybe you decide that you want to go back to law school or you want to take photography classes or continuing ed classes you could use that five twenty nine money for that what's the worst case scenario you've got nobody to spend it on you take it out you pay the penalty in the back taxes, but you save the money that's really the worst case scenario so it could be a great, great option for saving for college. But again, make sure you're first taking care of yourself, so we're to find five twenty nine plans savingforcollege dot com it's a great website that lists all the five, twenty nine planes from all the states and I will say it's just like back to the mutual funds that we learned about so every five twenty nine plan has fees they have expense ratios, its underlying mutual funds, so I know I'm in new york state person so my college plane is and why saves dot or ge and its surveyed guard but you know t rowe price fidelity so every state has it you promises a great create other tools so what you could do is you can link a credit card to a five, twenty nine account and every time you use the credit card to put some dollars in the five, twenty nine account so it's a great way for family or friends to help. So I have a lot of clients who had family members who didn't necessarily either have a lot of money but link their credit cards to the five twenty nine account and so you know, maybe it's an extra two hundred dollars a year five hundred a year you make a big difference if you want to get a little more nitty gritty and really how much to save this is a fantastic investment calculator it does ask for a little more information, but it actually uses statistical math and it and it is it's fairly simple to figure so it's just google t rowe price college investment calculator so it's a great little calculator and actually puts like private university public university on guy was working with a client recently who was looking at college for her daughter and she's like oh my daughter wants look here and here and they hadn't saved a lot her daughter is already sixteen and I said, well, why are you not looking at state schools she's like, no, she just wants to go to this school in this school like, well, how you financing and are you paying for it? She's like, oh, we're taking out student loans, I said, okay, let's, do the math today today, private school, private university is forty two, fifty thousand dollars a year, so you're going to finance two hundred thousand dollars essentially maybe a little bit less, but maybe she'll finance one hundred eighty thousand because at this point, she doesn't know if her daughter's going to get a scholarship. So you're essentially going toe let your daughter graduate college with one hundred eighty thousand dollars in student loans, like if she's truly good planning, I'm going into a higher earning industry. She might pay it off, but, you know, I worked with a lawyer ah, high earner corporate lawyer who had a thousand dollars a month in student loans and was still struggling to pay that off. So just think about that if you're really going to set yourself up to take those student loans before the fact, whether it's for your child or for yourself is it worth it? You know, especially if you do plan on going into a creative industry or becoming a teacher or something like that which is amazing but maybe you're not going to earn a high income do you really want to take that on? So just I went to a state university I'm a big fan of that in the sense of the quality of the education if I can afford to send my kids to private school, I will but I'm also fine if they go to a state school so my niece goes to a state school it is such a great university, such a great education so you know, just I think thinking about the big picture is like how do you want to set your life? You know, do you really want to set your life with the loans if you don't have to? So your homework is open a five twenty nine savings account in your state regardless of where you go to college, you can link it to your checking account and contribute at least fifty dollars a month. And so I have a lot of clients that have set us up because again they probably don't miss the fifty nine fifty dollars a month is this going to be enough to finance their child's college education? Probably not, but at least it's something and I really so give him a heads up so before we were going to really talk about next is how do I find the time for dealing with my finances? And so what I wanted to quickly do before I get into howto find the time and resource is is I just want to stop and recap all the topics that we have covered the last three days because we have covered so many and I'm not necessarily overwhelmed, but I'm thinking, wow, this is a lot of information and I'm I promise you, you really shouldn't spend more than half a hour week on your finances and so if you really stop and so I thought this was a great opportunity to think about, well, where's my money going? What am I doing with my money? But more importantly, listening to all the topics, especially since we just covered them for the last three days and just hope hopefully just choosing one or two that resonate with you and part of your homework? I'm sort of giving you a fast ford on your homework is your homework immediately is saying, what is my one action item that I'm going to take right now immediately one action item to keep the momentum and a lot of you have already done it you've done so much, but if you haven't there's a lot of you that I've just really taken it in taking a lot of notes but you haven't had a money conversation, you haven't change your savings, you haven't created budget, you haven't opened on ira anyway, I'll get into that s so think about what you're going to dio so the first three cap that I want you to think about it and I I sense this frankly already is that there's been a change in confidence? Like what I have heard from you in the studio audience I've heard from the crew, definitely from the chat room I have gotten, I got hundreds of e mails a day since I started teaching this class, I don't get that many emails, not that popular. What I have sense, and I don't think I've gotten one negative comment light years to get one or two because money brings out a lot of negativity to I've not gotten one negative comment on twitter on facebook, and really, I just I mean, I have high thing one hundred thirty emails just from today like, I don't get that much mail I've gotten that every day since I've been here, nobody, I mean, a handful people I know most people, I don't know confidence that is why we're up here, that's why you're all here and again, just and maybe they're just really excited to be here for me, but I'm really something that from the people that I've worked with here I created live as well, the confidence of, like I can do this, I can absolutely do this if I can do this it's just going to translate into more than I would I'm going to do in my life on why are you here? You're here because you're an artist, you're a freelancer and there's a few of you that are freelancing because you're just in between jobs and you're hoping to get a full time job and that's great, and this is a means to an end, but a lot of you are not a lot of you are creative, a lot of you are really following your passion, you're doing what speaks to you, you're not necessarily focusing on just let me make a much money as I can, I mean, we'd all like to get paid don't get me wrong, I know that's why I'm up here, I could have stayed working in banking made a lot more money than I'm doing now, but I can I can really relate, and by taking control of your money, you're just that confidence will only help you and I see it. I definitely see the power on thinking about I mean, I think we've learned some pretty tough topics that we didn't study in school and so think about those topics and you're like, I got it and that confidence like wolf, I can understand roth I r a s an individual for one case and steps and five twenty nine's. Well, of course they can ask for twenty percent more in the next project. Of course, I can start to make three thousand dollars more a month absolutely could have fifty thousand dollars for down payment. Heck, yeah, right, of course I can open an ira in a ten minute break. So that's the confidence. So really again, why we're doing this in sarah horowitz said, this who's the freelancers union is I want to sleep better at night. I won't have less stress in my life. I do want more money. Why not? Just because I'm passionate and I'm creative doesn't mean I want more money. I don't want your money and just not going to sacrifice so much for the more money. But by doing this, you will have less stress, more money in your life? Absolutely. So who is this for that's what I thought. Very interesting. So obviously this cost us for artists and freelancers. And, you know, there was a common in the chat room initially that, well, it seems very business focus, and I'm an artist. What I love is that most of the comments have come in from artists who've just been excited about it and embraced it, so this is absolutely for artist this is absolutely for freelancers, this is absolutely for people who do not have a penny saved this is also for people who have two hundred thousand dollars saved or a million dollars saved and didn't think they could manage it and they could this is for people who are transitioning, you're you've got a corporate job, you want to leave, you've got a nine to five job you want to change. What was interesting about this too, though, is that I got a few comments from people who are listening, and this is definitely from people that are my clients or my readers or such who do work nine to five job your corporate jobs, and they said they've gotten so much out of this course, you know, they took it because I want to do another course with dahlia, this is something she was offering. Let me just sign up and watch her, and I've gotten emails from people saying, I'm not a freelancer, I'm not an artist, but man, this has been a great check up for me because probably the one area that we covers really you're unstable income or your variable income, but other than that the equations are the same so if you're listening and you want to give this to somebody who's not a freelancer an artist absolutely this is great for you too, so that's something that I really resonated for me hopefully you've changed your money conversation? I mean, I know you guys have just had conversations it's s o forget about even changing you just started to have a money conversation, which is huge, but you're changing your money conversation like I'm not I mean, I don't we all have negative stuff in our life we have complains, but this isn't about that this is really about like, yeah, I can do this let me move on um we did our thirty second snapshot someone took three hours something like thirty seconds, but maybe that's all you're doing is just saying here's where I am today we went through a lot of people's numbers I mean there's so many people who send in numbers that we didn't get a chance to dio but we just really went through those numbers and said here's, our thirty seconds here's what I owe here's what I own here's what I spend here's what I earn I rolled up my sleeves with some people that work here and did it with them freelancers I found mohr money in every person's thirty seconds snapshot find that money in yours tracking aps let's take charge of our money and this is part of what we're going to talk about in a few minutes is you have to keep money in your life on a regular basis. So min dot com is easy but then also just have fun with it. Have some tracking aps where do we want to be in six months? Like, do you guys have a better idea as to where you want to be in six months? Let me look, I actually had no one have a sep ira. I want to have, um twelve hundred dollars, at least twelve hundred dollars, in my rainy day fund. Um and I want to be earning maybe a third more than I have earned this past year. Do you feel pretty confident those things happen? Yeah, I actually yeah, absolutely actually did the math on how many more days a month I would have to work and it's not very many, actually. So and then have your when we first started, you said, well, I just want to save money for a trip to iceland and maybe that's all you want to dio which is amazing I'm not saying it's not enough, but look how that conversation she's, right definitely still goto I mean, definitely I think iceland is not gonna happen this year, okay? But it can happen next year right? And I'm not telling you not to go and I didn't tell you not to go when you said no but look at that conversation in just a few short days how that's changed haven't you summary? Well, I want to take my current sepp and I want to actually incorporate the mutual funds and do I do more research around um now I know how I read it what what what it means and how to select and choose um beyond that I really want teo continue to find more ways to save on and have more organization around my savings I have two savings accounts right now I wanna have like ten so that you know it's very specific with the purpose of age one and I didn't know that I could find it so easily online just to start a savings account and I'm actually there's a third thing I'm going to go into my bank and I'm going to tell him that I'm not paying fees anymore please let me know how that goes yeah like literally I mean I didn't get to go out after yesterday but I'm gonna wear that out you know what I was gonna say no more fees, okay great great I love it and we you know we even share that you talked about your five places which really were like seven please is that you plug yeah, which was amazing amazing places that you found money and so this is all by june do you think you'll be there by june? Oh my gosh, yeah right absolutely probably by the end of january I'll have all those things fell and I have no doubt you will no doubt so these are just two people and I've heard from so many other so if you're in the chat room, let me know what you hope to do by joon that you think you will do for me my goal is to continuously fund my sep ira and to really build my vacation account I mean, I'm doing a lot of this again I have plenty that I don't do well, but I am doing a lot of this it's why I'm up here but my goal is to really save into myself ira and just pump that up I love working, but may I'm gonna hit fifteen don't wantto and so that's something I'm really concrete my husband's ten years older than me too, so I don't know what our goals are I mean, we talk a lot about it, but things could change so that's something that really comes up for us is what does that mean for our lives? So I know teo really, really fun myself ira to create that choice if he's sixty or sixty five and I'm fifty fifty five maybe I don't want to work as much I want to work differently so that's something that's really important to me and then traveling I still have the bug I love it and so I feel like I don't do it enough I really want to go someplace fantastic next summer I don't know where that is or what it could afford but I'd love to go toe why give talking about us east coasters? Why has a mysticism I have to say I know us coasters go a lot but I agree I haven't been to hawaii yet and nobody can believe it out here you haven't been there yet I'm like no I'm from the east coast, right? Right? I mean it's and I've heard it's just incredible, so no I don't again I know if I'm going to go I want to stay in a really nice place and goto the good island or whatever I don't even know what island it is, but the point is we talked to her where we see ourselves in june and that's that so manageable we made our goals like what I loved about what you shared, how veer your goals were dollar specific, you were like I'm twelve hundred I've thirteen you know, a few more days I have a third more I mean you're so clear on your numbers you're a documentary film producer why not right by the way, you're only going to run budgets better when you're managing your producing your phil's because you're taking charge of your money and I have a wonderful client in new york, I'll talk to you about this afterwards. Who's an amazing shoes won an emmy or what is that for winning films? Is that as we know? Is that emmy andi she's? Not she was she didn't want to not know you know what? She worked at abc news for a long time. She is an amazing, amazing documentary film producer she's been a client of mine for ten years to a shoutout for her out of the blue films she's really wonderful um she knows budgets. She has to she's totally creative and she knows budgets so it goes hand in hand with running your own business. She's got a great little office in new york cities. So she's amazing way talked about her debt plan and you know, obviously the conversation the energy changed in here but if that's holding you back, then come up the plan to pay it off. Don't let it hold you back and again that's going to really come from your spending so maybe that's your goal is really just tackling that dead you can still save at the same time as they saw it did someone examples most goes toward that, but still start saving bill that happen because what you don't want us to be eight years from now, and you haven't paid yourself. We looked at some of the calculators and we keep talking about them and they're fun. They're really fun, so get online, play with them. You know, sometimes sometimes when we think about all of our goals, we get so focused on what I need to do this. I need to do this, and I'm like, you know, just have fun with the calculators, go to the web sites and then see what you need to do. We looked at our credit score no it's it's. Not probably the most exciting thing to do, but it's such an essential part of our financial checklist. So we did that we dealt with our fico score credit score. No, we rolled up our sleeves and we did some budgets or spending plans. And we did four different kind. So which is the right one for you? Maybe it's just examining where your money's went. Maybe it's plugging the twelve places of john marie plug. All right, I'll give you five. Maybe it's. All right, but maybe it's just putting twenty percent automatically just you know saying I'm going to force it and just take it out or just coming up with the weekly mta live on I couldn't live without my weekly amount I get it in cash on monday or your credit card so do something like that we talked a lot about love and money and friends and money because if you're in a relationship love and money can be really contentious it could be really difficult you know even had somebody asked well if I'm thinking about being in a relationship how do I deal with that? So it's there's a lot of fear and shame and more importantly, fights so I mean I can't tell you how many couples I've worked with money was an issue and I felt like I was a mediator and I didn't want to peek so don't let that hold you back and if you're in a relationship I mean you both have said that like I love it that you're having those conversations and have they been negative actually not yeah so that's great you've got kids talk about money with your kids I mean again this is not the therapy session but when we really really are fearful about our money we realize it's because her parents don't talk to us about it we weren't raised who's saying that there's no freelance class and why this is I mean this is starting to be taught more schools right, right there's, no freelance class, but the idea is that we're not taught this in schools, but more importantly, we're not taught this at home. So let's, talk about that with our kids or let's talk to our parents about it. Why not? We talked about automatic savings. The freelancer saying yes, I can absolutely can make it automatic. Set it up banking or you're gonna get rid of your fees. You're going to go to credit union taxes. Making tax is a line item. Like I love that towards the end, the budget started changing when people said this's post tax, this is after attacks a candidate is part of your vernacular. Your conversation. We delved into retirement plans. We learned what those initials mean. Roth ira, sep, ira, individual for one k may we all strive to put as much money and we can into our individual for one case because we're making a lot of money. Let's go for it. So let's do that. But regardless know what kind of ira you want toe open. And then where you gonna open it are you knew that vanguard fidelity with an investment advisor at ups at merrill lynch once you know what you want is pretty easy to figure out where you should do it. And then also simplify your life, and I think today when we really talked about asset allocation and the different investments, seeing how you need to get more organized with your finances and really picking just a few places to have all that money and all those investments can really make a big difference. Um then we went through the retirement forecast because you saw I sat here for ten minutes and just played with calculators. They weren't that hard, so do that. Play around with it yourself, it's plugging numbers, even if you don't know what to plug. And then we went over a mutual funds. Did you ever think you would learn about mutual funds? The chek is the morning star ratings, the expense ratios, the loads, the performance thean bags I could just keep going on and on getting very excited here, but but this takes practice, so just go on. Morningstar going your company's website just not sure what to find but then pick of fund if you're not sure what to pick, pick an allocation fund picking target date fund, but just get started. Make sure you clean up your funds, go through your checklist, bookmark your sights um, I definitely have fun with her, we talked a lot about insurance that was kind of the sobering moment, the wills maybe that's. What you need to do, maybe you're like, you know what? I've done a lot of this already. So I really need to focus on my wills in my life insurance.

Class Materials

bonus material with purchase

Day 1 Presentation
Day 2 Presentation
Day 3 Presentation
Monthly Spending Plan Worksheet
Weekly Spending Plan
Budget Worksheet
Emotional Side of Money Checklist
Mutual Fund Checklist
Personal Finance Checklist
Retirement Planning worksheet

Ratings and Reviews

Kieu Truong

I love how approachable and welcoming and easy to understand this course has make financial terms and situation sounds. I love Galia and she makes I really feel calm and comfortable learning from her. Great!

Danielle Allen

This class was an eye-opener for me. I love the way Galia makes you feel comfortable thinking about as well as talking about your financial picture. I also appreciated her many examples and actionable steps for planning.

Shannon Borg

Galia is AWESOME! I love how down-to-earth she is (hence the name of her business!). I learned so much, and am going into a new year with a totally different outlook on my money. Now I have a plan, goals and much less anxiety about the whole process! Thank you, Galia!

Student Work