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This Is The Biggest Life Event That Millennials Don’t See Coming

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Ann Brenoff’s “On The Fly” is a weekly column about navigating growing older ― and a few other things.

Sorry to be the bearer of bad news here, but you are about to get sucked into a hellhole unlike anything you’ve ever previously imagined. It will devastate you, leave you emotionally spent, make you physically ill and resentful at times. It could totally derail your career or force you to dip into your retirement savings ― and then one day it will abruptly end and leave you in a state of deep grief. Oh, and the government doesn’t really give a damn about any of this, so you are pretty much on your own.

What is this nightmare scenario? You are about to become my generation’s caregivers.

That’s right. A recently released AARP report, “Millennials: The Emerging Generation of Family Caregivers,” points the finger squarely at you. It notes that your caregiving responsibilities are just starting to rev up, with about 1 in 4 of you already putting in an extra 21 hours a week taking care of us. To be clear, that is 21 unpaid hours ― while you work at your real jobs and/or care for your own families at the same time.

Close to half of you will be helping a parent or a parent-in-law. In most cases (65 percent), it will be your mother, said AARP. About 76 percent of the people cared for by millennial family members are 50 or older, and the average care recipient is 60 years old. The average care recipient helped by a grandchild is 77 years old. And more than half of millennial family caregivers (51 percent) are the sole caregiver, alone in their duties.

You can expect this trend to continue. As more people like me go not-so-gently into our elder years, more of you will be asked to step up and take care of us. Why? U.S. public policy has lagged woefully behind today’s reality that 10,000 baby boomers a day are turning 65. And that burden is headed straight to your shoulders.

So let’s start with what caregiving entails. My generation already knows this, because we’ve served as our own parents’ and spouse’s caregivers, but here’s the CliffsNotes version for you.

It’s a dirty job, but somebody’s got to do it.

Family caregivers today do many of the same things that nurses do, and then some. And much of it isn’t pretty.

You can look forward to changing adult diapers (just don’t dare try to claim those as a caregiving expense!), giving medications, installing safety bars, taping down rugs and telling your grandmother who helped raise you that she can’t drive anymore while she sobs and asks you what your name is. Again.

You will be changing catheters and testing blood and hooking up your dad to a home dialysis machine because visiting health aides don’t come every day. Family caregivers do. You will sometimes forget to dispose of your “sharps” properly and someone will call you on it.

You will make multiple trips a week driving your loved one to doctors, waste hours in line at the pharmacy and spend hours on the phone with insurance providers all the while trying to juggle your own life, family and job. You will blow your stack, cry yourself to sleep and endure days when you don’t even have time to shower. Your own health will suffer. The stress of trying to work while doing all this will feel unbearable at times, especially if you’re doing it without help. Impatience may become your middle name.

You not only don’t get paid; it will cost you.

You are a godsend ― that’s what everyone will tell you. After all, the work done by the nation’s family caregivers would cost about $642 billion a year if it were done by paid skilled nurses, according to the Rand Corp. Meanwhile, Rand put the annual income lost by family caregivers for the elderly at $522 billion. That was in 2014, so you can mentally adjust for inflation.

It’s staggering. Bear in mind: Family caregivers labor free of charge, contributing their time, their energy and often their own well-being. You will join their ranks out of love, obligation, guilt ― and for one other important reason: You’ll have no choice.

And it will cost you in yet another way. Caregivers’ out-of-pocket costs were nearly 20 percent of their annual income, AARP said in its 2016 report, with average annual spending of $6,954.

To cover the extra expense, AARP notes, many family caregivers cut back on their own spending. They reduce, if not stop, saving for retirement altogether. They don’t eat out or take vacations. And many have dipped into personal or retirement savings.

The damage to caregivers is long-lasting.

Many caregivers find their health adversely affected. A UCLA Center for Health Policy Research survey found that nearly one-third of the estimated 3 million-plus informal caregivers in California reported emotional stress so severe it disrupted their lives. “Caregiver syndrome” is the popular name for the anger, guilt and exhaustion that come from providing unrelenting care for a chronically ill loved one.

As you will quickly find out for yourself, respite care ― an outsider to come in and give you a break once in a while ― is expensive and not always available.

Caregiving can impact your health, but what it does to your career is something awful times two. Caregivers miss days of work, don’t apply for or accept promotions, and sometimes just drop out of the paid workforce altogether to care for their loved ones.

Lost wages and benefits average $303,880 over the lifetimes of people 50 and older who stop working to care for a parent, according to a National Academies of Science, Engineering, and Medicine report. To add insult to that injury, a lower earnings history means reduced Social Security payments when you become eligible.

Government could help a lot but doesn’t.

That National Academies of Science, Engineering, and Medicine report provides a very sobering look at the state of family caregiving in the U.S. It notes that caregivers are cracking under the strain, and although things could be done to support them, nobody is really paying attention.

What could be done to ease the almost certain misery you’re headed for? How about tax credits for caregiving or reimbursement for caregiving expenses? Why not offer Social Security credits so that caregivers don’t miss out down the road? And maybe pass paid family leave to take care of an elderly loved one, so that after you’ve spent the night dealing with Grandpa’s tendency to rage after sunset, you don’t have to report to work at 9 a.m. the next day?

P.S. Welcome to the club.

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4 things kids need to know about money

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(NC) Responsible spending includes knowing the difference between wants and needs. Back-to-school season, with added expenses and expectations around spending, is the perfect time to not only build your own budget for the year ahead, but also to introduce your own children to the concept of budgeting.

The experts at Capital One break down four basic things that every child should know about money, along with tips for bringing real-life examples into the conversation.

What money is. There’s no need for a full economic lesson,but knowing that money can be exchanged for goods and services, and that the government backs its value, is a great start.
How to earn money. Once your child understands what money is, use this foundational knowledge to connect the concepts of money and work. Start with the simple concept that people go to work in exchange for an income, and explain how it may take time (and work) to save for that new pair of sneakers or backpack. This can help kids develop patience and alleviate the pressure to purchase new items right away that might not be in your budget.
The many ways to pay. While there is a myriad of methods to pay for something in today’s digital age, you can start by explaining the difference between cash, debit and credit. When teaching your kids about credit, real examples help. For instance, if your child insists on a grocery store treat, offer to buy it for them as long as they pay you back from their allowance in a timely manner. If you need a refresher, tools like Capital One’s Credit Keeper can help you better understand your own credit score and the importance of that score to overall financial health.
How to build and follow a budget. This is where earning, spending, saving and sharing all come together. Build a budget that is realistic based on your income and spending needs and take advantage of banking apps to keep tabs on your spending in real-time. Have your kids think about how they might split their allowance into saving, spending and giving back to help them better understand money management.

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20 Percent Of Americans In Relationships Are Committing Financial Infidelity

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Nearly 30 million Americans are hiding a checking, savings, or credit card account from their spouse or live in partner, according to a new survey from CreditCards.com. That’s roughly 1 in 5 that currently have a live in partner or a spouse.

Around 5 million people — or 3 percent — used to commit “financial infidelity,” but no longer do.

Of all the respondents, millennials were more likely than other age groups to hide financial information from their partner. While 15 percent of older generations hid accounts from their partner, 28 percent of millennials were financially dishonest.

Regionally, Americans living in the South and the West were more likely to financially “cheat” than those living in the Northeast and Midwest.

Insecurity about earning and spending could drive some of this infidelity, according to CreditCards.com industry analyst Ted Rossman.

When it comes to millennials, witnessing divorce could have caused those aged 18-37 to try and squirrel away from Rossman calls a “freedom fund”.

“They’ve got this safety net,” Rossman said. They’re asking: “What if this relationship doesn’t work out?”

As bad as physical infidelity

More than half (55 percent) of those surveyed believed that financial infidelity was just as bad as physically cheating. That’s including some 20 percent who believed that financially cheating was worse.

But despite this, most didn’t find this to be a deal breaker.

Over 80 percent surveyed said they would be upset, but wouldn’t end the relationship. Only 2 percent of those asked would end the relationship if they discovered their spouse or partner was hiding $5,000 or more in credit card debt. That number however is highest among those lower middle class households ($30,000-$49,999 income bracket): Nearly 10 percent would break things off as a result.

Roughly 15 percent said they wouldn’t care at all. Studies do show however that money troubles is the leading cause of stress in a relationship.

That’s why, Rossman says, it’s important to share that information with your partner.

“Talking about money with your spouse isn’t always easy, but it has to be done,” he said. “You can still maintain some privacy over your finances, and even keep separate accounts if you and your spouse agree, but you need to get on the same page regarding your general direction, otherwise your financial union is doomed to fail.”

With credit card rates hovering at an average of 19.24 percent APR, hiding financial information from a partner could be financially devastating.

But, Rossman adds, it’s not just about the economic impact but also the erosion of trust.

“More than the dollars and cents is that trust factor,” he said. “I think losing that trust is so hard to regain. That could be a long lasting wedge.”

Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.

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7 Examples Of Terrible Financial Advice We’ve Heard

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Between television, radio, the internet and well-meaning but presumptuous friends and family, we’re inundated with unsolicited advice on a daily basis. And when it comes to money, there’s a ton of terrible advice out there. Even so-called experts can lead us astray sometimes.

Have you been duped? Here are a few examples of the worst money advice advisers, bloggers and other personal finance pros have heard.

1. Carry a balance to increase your credit score.

Ben Luthi, a money and travel writer, said that a friend once told him that his mortgage loan officer advised him to carry a balance on his credit card in order to improve his credit score. In fact, the loan officer recommended keeping the balance at around 50 percent of his credit limit.

“This is the absolute worst financial advice I’ve ever heard for several reasons,” Luthi said. For one, carrying a credit card balance doesn’t have any effect on your credit at all. “What it does do is ensure that you pay a high interest rate on your balance every month, neutralizing any other benefits you might get from the card,” Luthi explained. “Also, keeping a 50 percent credit utilization is a surefire way to hurt your credit score, not help it.”

Some credit experts recommend keeping your balance below 30 percent of the card limit, but even that’s not a hard-and-fast rule. Keeping your balance as low as possible and paying the bill on time each month is how you improve your score.

2. Avoid credit cards ― period.

Credit cards can be a slippery slope for some people; overspending can lead to a cycle of debt that’s tough to escape.

But avoiding credit cards on principle, something personal finance gurus like Dave Ramsey push hard, robs you of all their potential benefits.

“Credit cards are a good tool for building credit and earning rewards,” explained personal finance writer Kim Porter. “Plus, there are lots of ways to avoid debt, like using the card only for monthly bills, paying off the card every month and tracking your spending.”

If you struggle with debt, a credit card is probably not for you. At least not right now. But if you are on top of your finances and want to leverage debt in a strategic way, a credit card can help you do just that.

3. The mortgage you’re approved for is what you can afford.

“The worst financial advice I hear is to buy as much house as you can afford,” said R.J. Weiss, a certified financial planner who founded the blog The Ways to Wealth. He explained that most lenders use the 28/36 rule to determine how much you can afford to borrow: Up to 28 percent of your monthly gross income can go toward your home, as long as the payments don’t exceed 36 percent of your total monthly debt payments. For example, if you had a credit card, student loan and car loan payment that together totaled $640 a month, your mortgage payment should be no more than $360 (36 percent of $1,000 in total debt payments).

“What homeowners don’t realize is this rule was invented by banks to maximize their bottom line ― not the homeowner’s financial well-being,” Weiss said. “Banks have figured out that this is the largest amount of debt one can take on with a reasonable chance of paying it back, even if that means you have to forego saving for retirement, college or short-term goals.”

4. An expensive house is worth it because of the tax write-off.

Scott Vance, owner of taxvanta.com, said a real estate agent told him when he was younger that it made sense to buy a more expensive house because he had the advantage of writing off the mortgage interest on his taxes.

But let’s stop and think about that for a moment. A deduction simply decreases your taxable income ― it’s not a dollar-for-dollar reduction of your tax bill. So committing to a larger mortgage payment to take a bigger tax deduction still means paying more in the long run. And if that high mortgage payment compromises your ability to keep up on other bills or save money, it’s definitely not worth it.

“Now, as a financial planner focusing on taxes, I see the folly in such advice,” he said, noting that he always advises his client to consider the source of advice before following it. ”Taking tax advice from a Realtor is … like taking medical procedure advice from your hairdresser.”

5. You need a six-month emergency fund.

One thing is true: You need an emergency fund. But when it comes to how much you should save in that fund, it’s different for each person. There’s no cookie-cutter answer that applies to everyone. And yet many experts claim that six months’ worth of expenses is exactly how much you should have socked away in a savings account.

“I work with a lot of Hollywood actors, and six months won’t cut it for these folks,” said Eric D. Matthews, CEO and wealth adviser at EDM Capital. “I also work with executives in the same industry where six months is overkill. You need to strike a balance for your work, industry and craft.”

If you have too little saved, a major financial blow can leave you in debt regardless. And if you set aside too much, you lose returns by leaving the money in a liquid, low-interest savings account. “The generic six months is a nice catch-all, but nowhere near the specific need of the individual’s unique situation… and aren’t we all unique?”

6. You should accept your entire student loan package.

Aside from a house, a college education is often one of the biggest purchases people make in their lifetimes. Often loans are needed to bridge the gap between college savings and that final tuition bill. But just because you’re offered a certain amount doesn’t mean you need to take it all.

“The worst financial advice I received was that I had to accept my entire student loan package and that I had no other options,” said Gina Zakaria, founder of The Frugal Convert. “It cost me a lot in student loan debt. Now I tell everyone that you never have to accept any part of a college financial package that you don’t want to accept.” There are always other options, she said.

7. Only invest in what you know.

Even the great Warren Buffett, considered by many to be the best investor of all time, gets it wrong sometimes. One of his most famous pieces of advice is to only invest in what you know, but that might not be the right guidance for the average investor.

In theory, it makes sense. After all, you don’t want to tie up your money in overly complicated investments you don’t understand. The problem is, most of us are not business experts, and it’s nearly impossible to have deep knowledge of hundreds of securities. “Diversification is key to a good portfolio, and investing in what you know leads to a very un-diversified portfolio,” said Britton Gregory, a certified financial planner and principal of Seaborn Financial. “Instead, invest in a well-diversified portfolio that includes many companies, even ones you’ve never heard of.”

That might mean enlisting the help of a professional, so make sure it’s one who has your best interests at heart.

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