The finances of young Americans are not in great shape.

The typical millennial has less than a week of salary (less than $1,000) saved for emergencies and leaves school with more than $37,000 in debt, on average. Many have nothing saved for retirement. Compounding these problems, millennials are also hesitant to negotiate: Only 37% of milennials have ever asked for a raise compared to 48% of baby boomers.

A lot of that comes down to parenting, experts say: Two-thirds of people ages 21 to 35 say their parents didn’t show them how to increase their wealth outside of having a job, a 2018 study from Pittsburgh-based financial services company PNC Investments found, and one-third said their parents did not give them any advice whatsoever.

So how can you do better if you have young children now? Here are the best ways to teach them finances and negotiation.

Start young

Children can negotiate before they can even speak, said Stuart Sopp, chief executive officer of Current, a digital-first banking system for teens. These skills can be seen in children as young as toddlers when they demand food or toys. Parents can harness these habits and begin to set boundaries.

Children can do basic chores like making their bed and picking up toys from a young age, experts say, and the earlier you start to reward these tasks, the better. As the kids gain more responsibility, parents should give them the option to ask for more money — whether through a chore chart or through an app.

“We need to give them tools of negotiation,” Sopp said, noting that the app Current allows kids to digitally ask parents for a raise, selecting new chores or different responsibilities. “The way we deal with money and people has changed.”

Chores and allowance

Help your child make a budget through chores, said Tim Sheehan, co-founder and CEO of Greenlight, a debit-card for minors. “Personal financial management skills are usually not taught in schools, but kids need to learn these skills if they are going to successfully manage their finances later as adults,” he said.

Chores with an allowance, a job with a paycheck, or even running a lemonade stand are all good ways for kids to learn the basics of business value exchange, he said. But be sure to diversify the tasks your child takes on and pay children equally.

Often boys take on more labor-intensive chores and thus are paid more, according to a June 2018 study from app BusyKid. Boys ages 5 to 7 earn 50% more in weekly allowance than girls, the study found. Be sure to monitor which chores your child chooses to keep them equal.

Embrace their innate skills

If you’ve ever cared for a child, you’ve likely experienced their ability to challenge your choices, whether it’s enforcing a bedtime, asking them to finish their food, or making them brush their teeth. Some of these rebellious behaviors can be used for good, Sheehan said. “Kids are natural negotiators, ask any parent,” he said.

This means providing a child with real-life experience: Ask them to do chores and give them opportunities to negotiate. Let your child determine if they have enough money to make a purchase, or make them calculate the check with tip at dinner. If a younger child wants a new toy, or an older child wants a phone, offer them the option to take on more responsibilities in exchange for pay.

Claiming Social Security benefits early could reduce the monthly payments you receive by as much as 30%, but taking these benefits early can help many people retire better and sooner. In fact, here are three reasons why you may want to take your Social Security benefits at age 62, rather than delaying until your full retirement age, in order to get bigger checks later on.

1. You’re an excellent investor in a strong cash position.

If you have done a superior job saving for retirement, or you plan to be working while receiving income from sources other than Social Security like your own retirement accounts, then you may be able to make your benefits go further by investing the income you receive from Social Security in the stock market.

It’s true that the size of your Social Security checks will be reduced if you claim your benefits before your full retirement age (FRA). as defined by the Social Security Administration (SSA). But workers often overlook the fact that they will receive more, albeit smaller, checks by filing before their FRA.

As an example, let’s say you were born in 1960 or later and are entitled to a $1,500 monthly benefit at your full retirement age of 67. If you claim Social Security at 62, your checks would instead be $1,050, a sizable difference. Yet you would also receive 60 more checks than you would had you filed later, coming to $63,000 in total excess benefits.

If you’re able to invest this money — and you invest it well — you could end up with more wealth than if you had waited to claim Social Security. But before you decide to use this strategy, be aware of the risks and honest about your abilities as an investor. Don’t invest any money you’ll need in the next three years.

2. You need the money immediately for living expenses.

Unfortunately, most Americans are not in a position to invest their Social Security benefits because they depend on the money in the near term. If you need the money to pay your current living expenses, there’s no reason to feel bad about taking Social Security at 62.

Taking benefits early could be a very smart financial move, when compared to the alternatives like using credit to take on debt. Often people fall into debt as they struggle to make ends meet. Credit card balances spiral quickly out of control, and as high interest rates and penalties for late payments pile up, it can be extremely difficult to escape from this debt trap.

So if you’re struggling financially, rather than taking on debt, the better move could be to claim Social Security early and use this income to strengthen your financial situation.

3. You are likely to die younger.

Many people don’t know that regardless of whether you claim Social Security benefits at 62 or 70 or any age in between, the total amount of money you receive is designed to be the same on an inflation-adjusted basis. Six of one, half a dozen of the other, goes the saying.

The payments are based on average life expectancies. File early and you get more monthly payments but less money per check. File later and you get fewer payments but more money per check. Either, way, it’s expected to be about the same amount of money — if you live an average lifespan. While most people won’t die exactly at their average life span, this age serves as a baseline.

What is an average lifespan? According to the Social Security Administration, “a man reaching age 65 today can expect to live, on average, until age 84.3” while “a woman turning age 65 today can expect to live, on average, until age 86.7.”

If instead, you live a longer-than-average life, waiting to file for Social Security until your full retirement age will likely result in you receiving more money on an overall basis. That’s because once you reach your break-even age, the larger checks you receive will have made up for the fewer number of payments. This is also why many financial advisors recommend that people wait to file for their Social Security benefits. The larger payments can provide a form of longevity insurance, meaning you’ll have more money to live on when you’re older.

However, if you think you may live a shorter-than-average life, it could make sense to file for your benefits at 62. Factors to consider when estimating your own lifespan include your health, your family history and your genes. You’ll receive more payments while you’re alive, when you can use — and hopefully, enjoy — them.

When should you take Social Security?

Everyone’s situation is unique, and there are a host of factors that need to be weighed. It can sometimes make sense to claim your benefits at 62, and sometimes it pays to wait — perhaps even until you turn 70. Calculate your break-even age, and take the time you need to study the potential benefits and risks for claiming your benefits at different ages, so you can make the best choice for your personal situation.

How to create a household budget & set financial goals for 2019

January 5, 2019 By News Team

Which budgeting app should you use? Here are the pros and cons of some of the best.

There are a lot of apps and tools ready to teach you how to manage money — but which are the best? Some credit card companies have started offering credit card management apps; should you use those, or stick to one of the well-known money apps like Mint or YNAB?

Ultimately, the best budget app is the one that meets your individual needs, whether you’re looking to pay down debt or save up for a down payment. However, it’s worth learning about these services’ pros and cons before you decide which money management app to install. We’ve put together a list of some of the top personal finance apps, how they work and whether you should consider them as potential tools to help you balance your budget.

Mint

Mint is often included in “best personal finance app” lists, and for good reason — its simple, easy-to-use interface helps people keep track of where their money is going and how much they have left to spend.

Mint, like many money management apps, connects directly to your bank accounts, as well as your credit card accounts, investment accounts and loan accounts. Once your accounts are connected, Mint automatically collects and categorizes new transactions in order to give you a clear picture of your spending. It also tracks your credit score, and you can even add upcoming bills and get reminders when they come due — that way, you won’t accidentally miss a credit card payment and see your credit score drop.

However, you can’t just set-it-and-forget-it with Mint; you’ll need to make a budget, in order to see whether you are over- or underspending in any given category, and you’ll also need to double-check Mint’s work. I’ve used Mint in the past, and its auto-categorization system isn’t 100% accurate; once it categorized a dental appointment as a daycare bill, possibly because the dental office was called “Smile Center.”

Mint is an excellent and easy way to track your expenses and compare your monthly budget to your actual spending. Mint is not as good at showing you what happens if you overspend; you can sign up to receive notifications when you spend more than you budgeted in a given category, but Mint doesn’t explain how that overspending might affect you in the long-term. If you set your budget with good intentions and then end up spending $5 extra on restaurants or $50 extra on clothing every single month, you might want an app that forces you to reconcile that spending against future purchases — otherwise, you could end the month without enough cash to pay the electric bill.

Simple

Simple is both a bank account and a budgeting app — and its goal is to make your finances as simple as possible.

Once you open your FDIC-insured bank account and receive your Simple Visa® debit card, Simple will begin subtracting your recurring and scheduled expenses (rent, car payment, Netflix subscription, etc.) from your current balance. The money left over is considered Safe-to-Spend®, and it represents the money you can spend while still having enough left over to pay your bills. As you buy lattes or movie tickets or cover those unexpected expenses that always come up, Simple will automatically update your Safe-to-Spend amount.

Simple also lets you set spending goals, such as “go on vacation” or “save up for a down payment.” Once a goal is set, Simple removes a daily savings target from your available Safe-to-Spend number. That way, you won’t have to postpone your vacation just because you saw a pair of shoes you really liked. You can also use Simple’s goal-tracking system as a way to save for common expenses that don’t always show up as recurring monthly bills, such as birthday gifts or charitable giving.

Although Simple is easy to use and its Safe-to-Spend feature is a useful budgeting tool, some people might not want to transfer all of their money into a Simple bank account. If you’re already happy with your bank, or if you and your spouse have multiple accounts with multiple banks, brokerages and other financial services, Simple might not be the best option for you. Simple is best for people whose finances are, well… simple. If your biggest financial goal is to know whether you can go out for dinner tonight and still have enough cash left over to cover your rent, Simple could be exactly what you need.

YNAB

YNAB is what you might call an “advanced” money management app — but it delivers. According to YNAB, the average new user saves $600 in their first month of using the app and over $6,000 in the first year. To achieve those results, you need to follow the YNAB system, which involves giving every dollar a job, saving for both your immediate and your true expenses and balancing every penny you overspend.

When you set up your YNAB account, you create budget categories not only for your day-to-day bills and expenses, but also for any expenses you may likely have in the future. If you think you might need to replace your laptop in the next three years, for example, YNAB wants you to set aside $42 each month for “new laptop.” When the three years are up, you’ll have the $1,500 you need for that new MacBook. YNAB also wants you to set budgeting categories for clothing, gifts, car repairs, and other variable or occasional expenses — which YNAB calls your “true expenses” — and start saving for them right now.

Once you have your budget set up, you need to give every dollar a job. Yes, even the dollars in your savings accounts. Like Mint, YNAB lets you automatically connect your bank and brokerage accounts; unlike Mint, YNAB wants you to assign every dollar to a potential expense, either now or in the future.

Why? Because YNAB understands that we’re saving for something. If you already have $5,000 saved a for down payment, set up a “down payment” budget category and assign $5,000 to it — and then set aside a little more money for your down payment every month. If you have an emergency fund set up in case you lose your job, start assigning those dollars to future grocery bills and car payments and see how many months your emergency fund really covers.

The last part of the process involves reconciling your actual spending with your budget. Unlike other money management apps, YNAB forces you to cover overspending in one category with available dollars in other category. In other words: if you spend $5 extra on dining out, you have to decide whether to take that $5 out of your clothing budget, your vacation budget or the budget for that laptop you think you’ll need in three years. This is one of the reasons why people who use YNAB reduce their spending by an average of $600 in the first month — the app doesn’t let you overspend.

Although YNAB describes itself as “simple,” many new users aren’t fully comfortable with the program until they’ve taken one of YNAB’s many free tutorials. YNAB is also fairly labor-intensive; every transaction needs to be confirmed, cleared and categorized, and I often check my YNAB app multiple times a day to keep the transactions up-to-date and balance any over- or underspending.

YNAB is also the only tool on this list that isn’t free. A subscription runs at $83.99 per year, so you’ll need to set aside $6.99 per month in your YNAB budget to cover the cost.

Finn by Chase

Like Simple, Finn is both a money management app and a bank account. Sign up for a Finn checking and savings account through Chase, get the accompanying Finn Visa® debit card, and start using the app to track your spending, save for the future and learn which purchases are most aligned with your core values.

The “core value” theory is extremely popular in personal finance right now, and here’s how it works: as you become more attuned to which purchases bring you happiness and fulfillment (and which purchases bring you discomfort or resentment) you’ll be more likely to cut back on certain areas of your spending so you can put more money towards your core values. Maybe you’ll spend less money grabbing mediocre sandwiches on your lunch breaks, for example, and put that income towards a once-in-a-lifetime meal or a donation to your favorite charity or a trip to visit your family.

Finn invites you to rate each purchase based on the emotions it makes you feel, and then analyzes which types of purchases bring you the most happiness. Finn also has an autosave program that helps you bring your spending even more in line with your core values; every time you pay for parking, for example, Finn might set aside $5 for a future vacation. That way, even the purchases that don’t make you happy can help fund the ones that do.

Like Simple, Finn is best for people who can manage their finances through a single checking account, savings account and debit card. Chase credit card users can also manage their credit card accounts within Finn. If your finances are more complex than that, Finn might not be the right app for you.

My Money Map

Wells Fargo’s My Money Map has fewer frills than the other apps on this list — in fact, it isn’t so much an app as a feature that you can access with your Wells Fargo online account. However, if you’re looking to track your spending, create a budget and set up savings goals, My Money Map has got you covered. Wells Fargo credit cardholders get free access to My Money Map.

My Money App includes three major components:

• My Spending Report, which tracks your spending and offers interactive charts to help you understand where your money is going
• Budget Watch, which helps you create an online budget and monitor monthly expenses
• My Savings Plan®, which helps you create a savings plan and set up automatic transfers into your savings account

Users also get access to a selection of resources and tools to help them plan their financial future.

Although My Money Map might be a good tool for some Wells Fargo account holders, other people might want a money management app that’s a little more robust. Mint, for example, offers most of the tools that My Money Map includes (except the ability to set up auto-transfers into savings) and comes with additional features such as a credit score tracker, the ability to add and monitor additional bank accounts and the ability to track progress on loan payments.

Bank of America Mobile Banking

Most banks and credit card companies offer some kind of mobile banking app to help you track your deposits, withdrawals, payments and charges — but Bank of America’s mobile banking app takes this to the next level, turning what could otherwise be a standard banking app into a fully-fledged personal finance tool.

When you sign up with Bank of America’s mobile banking app, you get access to Erica, a virtual finance assistant that can help you check your FICO score, deposit checks or send money to friends and family via Zelle®. You can also ask Erica to pull up your most recent transactions or tell you how much money is available in your checking account. Bank of America credit card users get free access as a perk of membership.

If you aren’t a fan of using virtual assistants, you can check all of that information and more through your account dashboard — it includes your FICO score, your account balance, any potential fraud alerts and the ability to send money through Zelle. Your dashboard also shows you any Bank of America rewards you may have earned and makes it easy to redeem them.

The one tool the Bank of America app doesn’t offer? A budget. If you’re hoping to set some limits on your spending or create some savings goals, you’ll have to download another one of the top money management apps instead.

These aren’t the only budgeting apps out there, of course — but this list is a good way to help you start thinking about what you want out of a money management app and whether any of these apps are right for you. You can even download a few different apps to your phone, test them out, and choose the one you like best. Once you find an app you love, remember to keep checking in with it and using what you learn to improve your finances, whether you want to save for a big trip, see if you can afford to go out to dinner or bring your spending more in line with your values.