Ballantyne Magazine covers news, events, real estate, restaurants, shopping, health, schools and business in the upscale Ballantyne Area of Charlotte, NC.
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BALLANTYNE | family assets FINANCIAL ABC'S TEACHING CHILDREN THE VALUE OF A DOLLAR Piggybanks are making a comeback. In uncertain economic times, parents have a renewed interest in making sure their youngsters don't think money grows on trees. Fortunately, Ballantyne- based Carolina Premier Bank has developed two ways to help parents educate children in fi nancial management. For starters, the bank offers a Tree Frog Savings Club for children from birth to age 12. It pays an impressive 10 percent APR (Annual Percentage Rate) on balances up to $250, and comes with a cardboard "Moonjar" savings bank, coin holder and passbook. To encourage saving, the bank awards club members prizes such as stickers when they reach specifi c transaction levels. Little ones can also practice making deposits at a teller window scaled to their size. Once children hit 13, Carolina Premier Bank knows they become more serious about the green stuff, so the bank offers a unique New Carolinian checking account to introduce them to fi nancial responsibility. The account includes free checks and an ATM card with limits starting at $29 (parents or guardian must co-sign), plus online banking without bill-paying access so they can learn to balance their statement, monitor spending and set up e-mail balance alerts. To earn higher levels of access to funds via Point of Sale/ATM, teens must attend seminars held by the bank that cover age-critical topics such as identity theft and debit card dos and don'ts. Caryn Johnson, chief operating offi cer of Carolina Premier Bank, who runs the seminars, says it's critical for teens to know how to manage money responsibly before they leave for college. "We heard about kids heading off to school who didn't know how to handle their fi nances, so we decided to help them learn how to use a checking account and debit card so they wouldn't get into trouble once they were on their own," she says. Johnson has fi rsthand experience with this issue because she and her husband have two teenage sons. "We've found the ATM card has several plusses: It allows a teen with a job to get gas or food without carrying a lot of cash. Befor felt they might need g a lot of ca d $50 c sh. Befo disappeared pretty fast," sh they always have acc ore, our sons 0 or $60 all th save more money because th it all out." he says. "But now cess with the ATM T card, the The seminars Johnson conducts were designed with the help of a high re ag ca m ge the h ir credit from actions in college will prevent them gettin or mortgage," s roundtable disc and then encourage teens to ask the questions of their parents about h e same r how they manage their fi nances. Most of my values about money came from my parents, and we believe parents must be e the ones communicating those to their childre en as well." 70 BALLANTYNE MAGAZINE g that ng a car loan she notes. "We hold cuss nsions he time and it o tha h y at hey tend not to take h school summer intern, so topics ar a e relevant. "Kids need to realize they can dama on not there to fund your retirement, no one will give you a loan. Whereas, if a child is of age to go to school and money isn't there, they can still go to college and have the rest of their life to pay a loan off." ROBERTA CIANFRONE: "Some parents feel they are bad parents if their kids have to take out student loans, but that's not the case. If parents must go that route, when the economy rebounds or they have more cash flow, they can always help pay off those loans." Best Sources to Tap in Addition to Student Loans DOUG WOODRUFF: "529 Plans and Coverdell Educational Savings Accounts (also known as "ESAs") offer an additional tax benefit. You can put in $50 or $100 per month in a systematic way." There are many 529 Plans, but the North Carolina, state- sponsored plan carries additional income-tax benefits. 3 Consider custodial accounts. "You set aside money in the child's name, and other family members or friends can contribute, as in a 529." The catch is that the minor owns the assets, so at 18 they could gain access and blow the money. (Bass notes there are ways around this by having a custodian move assets to North Carolina's 529 Plan, though legal restrictions apply.) ROBERTA CIANFRONE: Think about a home equity line. "You're not touching retirement savings. A second plus is that depending on your tax situation, the interest may be deductible. An equity line may give you a tax benefit, whereas interest paid on a loan from your 401(k) is non- deductible personal interest." The American Opportunity CELEBRATING TEN YEARS 2000-2010 FALL 2010