May 2008 Financial Articles
How to Avoid Scams When Searching for Scholarships
Planning an Affordable Family Vacation
Teaching Children Money Smarts
Don't Let Your Teen Get Caught in a Credit Crunch
How to Avoid Scams When Searching for Scholarships | Top
Tuition and fees can add up to well over $30,000 at some universities. Many parents hope their children can secure a scholarship so that they can further their education without exhausting the family’s savings. With scholarship dollars often hard to come by, and parents anxious to get them, it’s no surprise that “scholarship fraud” is on the rise. In fact, people taken in by scholarship scams lose a total of $100 million annually, according to the college planning site www.FinAid.org. The good news, according to the Virginia Society of CPAs, is that there are steps you can take to avoid becoming a victim.
Question all fees
As a general rule, you should not have to pay an application fee to qualify for a college scholarship or an education loan. Sometimes parents are taken in by non-existent scholarships that require a fee to apply. Parents pay the fees, then later simply assume that their child did not qualify.
The Federal Trade Commission, which has studied scholarship scams, does advise that some legitimate companies may charge fees to search for scholarship information. If fees are required, find out in advance what they cover and when and if refunds are available. Get this information in writing before handing over any money, even a small amount.
Be wary of programs that request fees claiming to “handle all the paperwork for you.” Legitimate scholarships generally require the student or parents to file the application, so this claim is a red flag that the offer could be a scam.
Ask for help
If you have doubts about any scholarship or funding program, consult your child’s high school guidance counselor or another financial aid expert to get some feedback. In some cases, even a legitimate scholarship advisory group may offer to sell parents information about funding opportunities, but experts in the field may be able to guide you to the same information for free.
Don’t believe in "guarantees"
Legitimate scholarship programs do not guarantee that anyone will qualify for any of their offerings. If a group does promise that you will receive funds, it’s very likely that the organization is not trustworthy. Be wary, too, if there is a lot of hype surrounding the scholarship or if you are pressed to apply immediately in order to qualify.
Don’t share personal information
A legitimate scholarship program should not require you to share your credit card or bank account number or other financial information. Scam artists, on the other hand, may tell you they need your personal data to confirm that you’re eligible. They can then use this information to help themselves to funds from your bank account, run up bills on your credit card or commit identity theft.
Consult the experts
Web sites such as www.FinAid.org and www.collegeparents.org offer information you can use to learn more about securing the education funds you need without falling victim to a scholarship scam. In addition, your local CPA can offer expert advice on the best ways to pay for those high college tuition payments. Whether you have young children and want to begin planning early or you are looking for
ways to cover a teenager’s looming tuition costs, a CPA can help. Consult your CPA with questions on any of your family’s financial issues.
The Virginia Society of Certified Public Accountants (VSCPA) is the leading professional association dedicated to enhancing the success of CPAs. Founded in 1909, the VSCPA has approximately 8,300 members who work in public accounting, industry, government and education. For more information, please visit the Press Room on the VSCPA Web site at www.vscpa.com, e-mail vscpa@vscpa.com or call (800) 733-8272. For more information on financial literacy topics like money management, or to search for a CPA in your geographic region, visit www.FinancialFitness.org.
Planning an Affordable Family Vacation | Top
With the end of the school year fast approaching, many families are beginning to plan their summer vacations. Travel expenses can take a big bite out of your budget, but the Virginia Society of CPAs advises that there are many ways to make your vacation dollar go further.
Search for deals
Don’t miss out on the many online opportunities to find great bargains. You can use online travel sites to search for the lowest airfare, hotel rates and car rental rates, as well as entertainment deals. It’s a good idea to check specific airline sites, too, because they may be advertising specials that aren’t included on the bargain sites.
Pick the package
Before booking any segment of your trip, check out packages available from airlines or hotel chains. It’s often possible to find low-priced packages that include both hotel and airfare, and admission to local attractions, as well. However, remember that packages may not always be the cheapest deals. Examine the details and make sure that what you’re getting is worth what you’re paying.
Be flexible
Uncertain exactly where you’d like to go? Then plan your trip around the best deals available. Sites that specialize in low-cost travel usually advertise specials to certain locations, as do many airlines. If the location sounds like somewhere you’d enjoy exploring, you could save a great deal on your trip.
Choose a destination location
Want to save money on gasoline and admission costs for various attractions during your vacation? Pick a hotel that has a pool, playground, nearby hiking or other on-property activities. In addition, many hotels offer suites with their own kitchens. While these may cost more than regular rooms, the savings on restaurants may more than offset the higher price.
Explore the great outdoors
Camping is not only a fun family activity, it’s also a cheaper way to travel. There are campgrounds and cabins at national and state parks that offer an inexpensive way to explore these locations. Outdoor vacations are a great departure from the usual routine and make it possible to get away from the television and computers. And in many cases, they are much less rustic than you might imagine. There may be cabins available at some sites as well as water and electricity hookups.
In addition, getting in touch with nature may not be your only option when you camp. Disney World, for example, has campgrounds that can lower the price of what might otherwise be a fairly pricey vacation. You may find campgrounds near other theme parks or attractions, so don’t limit your search to hotels when looking for accommodations.
Head south
If you’ve dreamt of taking a vacation in the Caribbean or Mexico, summer is a great time to do it. That’s because summer is considered the off season, and many resorts offer promotions that feature great rates. If you’ve assumed you couldn’t afford a sunny resort locale, double check to see if prices are lower than you thought at this time of year.
Consult your CPA
Your local CPA has many great ideas for cutting costs in various aspects of your life. Turn to your CPA for advice on any of your financial needs.
The Virginia Society of Certified Public Accountants (VSCPA) is the leading professional association dedicated to enhancing the success of CPAs. Founded in 1909, the VSCPA has approximately 8,300 members who work in public accounting, industry, government and education. For more information, please visit the Press Room on the VSCPA Web site at www.vscpa.com, e-mail vscpa@vscpa.com or call (800) 733-8272. For more information on financial literacy topics like money management, or to search for a CPA in your geographic region, visit www.FinancialFitness.org.
Teaching Children Money Smarts | Top
Do your children understand the value of a dollar? Learning how to manage money early is a lesson that will be essential throughout their lives, according to the Virginia Society of CPAs. Here are some tips that you can use to ensure that even the youngest children learn how to save and spend wisely.
Give them responsibility
Most children begin to learn about money through their allowances. When you give your children a regular allowance and let them make decisions on how to spend it, you’re providing them with an opportunity to budget and take responsibility for their own expenses. Each child will be ready for an allowance at a different age, but 5 or 6 is often a good time to start.
An allowance is a great introduction to how money works in the real world. Your children may not always make the right decisions, but they will learn from their mistakes now rather than when they are adults.
Discuss allowance options
There are many ways an allowance can work. Some parents pay one amount every week, while other children receive money in exchange for certain chores or accomplishments. Some families require children to save some part of their allowance, while others leave this decision up to the child.
You should explain to your children what they are expected to pay for with the allowance. It may be meant to cover splurge items, such as new toys or pizza after school with friends, or you might ask them to chip in on other expenditures, such as equipment they will need for a sports team. On all of these questions, there is no one correct answer, so you can pick the approach that’s right for your family.
Encourage savings
Whether you require your children to save some part of their allowance or not, it’s a good idea to open savings accounts for them and suggest that they set a small amount aside whenever they receive it, including birthday gifts or money they earn from summer jobs. Of course, savings aren’t meaningful without a goal. When your child is dreaming of an expensive electronic gadget or some other pricey item, explain that he or she can have it — when there’s enough cash in the savings account to buy it. This will teach your children the value of saving and teach them an appreciation of money and the things it can buy.
Get information
CPAs have created several tools that you can use to teach your children about money. The 360 Degrees of Financial Literacy program, for example, contains a wealth of resources, including articles on teaching your children about different kinds of investments and helping teens manage their summer earnings. To learn more, visit www.360financialliteracy.org.
Virginia CPAs launched the Financial Fitness program to help improve the financial health of Virginians of all ages. Visit http://www.financialfitness.org/ for articles, tools and tips on a variety of financial topics designed to keep your family on track and help you build a sound financial future.
Have more questions about your family’s financial situation? Your local CPA can help. Turn to your CPA for advice on introducing financial issues to your children and on the best ways to manage your money.
The Virginia Society of Certified Public Accountants (VSCPA) is the leading professional association dedicated to enhancing the success of CPAs. Founded in 1909, the VSCPA has approximately 8,300 members who work in public accounting, industry, government and education. For more information, please visit the Press Room on the VSCPA Web site at www.vscpa.com, e-mail vscpa@vscpa.com or call (800) 733-8272. For more information on financial literacy topics like money management, or to search for a CPA in your geographic region, visit www.FinancialFitness.org.
Don't Let Your Teen Get Caught in a Credit Crunch | Top
When is it best to teach your children about using credit and borrowing money wisely? The Virginia Society of CPAs advises that the teen years are a great time to introduce children to the rules for managing debt.
Don’t miss out on the opportunity to broach this important topic. Young adults are swamped with advertisements for credit cards as soon as they enter college, and many don’t know how to say no. It’s estimated that undergraduates are carrying an average outstanding balance on their credit cards of $2,100. Between credit card debt and hefty student loan balances, young people often struggle to cover all their payments.
Explain the good and the bad
Let your child know that there’s nothing wrong with credit. It’s a useful tool that can make it possible for people to buy homes or finance cars, appliances — even a child’s college education. However, remind your kids that this privilege also comes with a responsibility to spend wisely and make the necessary payments when they come due.
Discuss interest rates and payoff dates
The next time you receive a credit card offer, sit down with your child and explain how it works. In particular, show him or her how to find the interest rate and any other fees associated with the card. Explain that if you don’t pay off a balance immediately, anything you buy will eventually cost you more than the sticker price because of the interest charged.
Calculate the difference
Your next step is to show them how interest works. Many online sites contain calculators that reveal the real cost of debt and how long it takes to pay off a purchase if you pay only the minimum amount due. Your teen will quickly see the cost of charging a purchase rather than paying it with a debit card or cash.
Try it out
After you’ve explained interest rates and shown some examples of how they work, let your teen test out a credit card. One way is to get a prepaid spending card that your teen can use to spend a limited amount and no more. Next time you go clothes shopping, hand your teen one of these cards and let him or her make decisions about how to spend the preset amount. It’s a great way for your teen to learn how to budget while becoming familiar with using a credit card. Another advantage to these cards is that there’s no interest on your purchases, since they are paid for in advance.
Use free resources
The 360 Degrees of Financial Literacy program — a public service effort created by the CPA profession — has a treasure trove of information on teaching your children to spend wisely. The “Childhood” section of the Web site, www.360financialliteracy.org, contains articles on topics such as teaching teens about money, investments and how to manage their summer earnings.
Virginia CPAs launched the Financial Fitness program to help improve the financial health of Virginians of all ages. Visit http://www.financialfitness.org/ for articles, tools and tips on a variety of financial topics designed to keep your family on track and help you build a sound financial future.
And don’t forget to consult your local CPA for any advice you need on financial issues facing your family. The teenage years are the best time to teach your children about using debt wisely, and your CPA can offer the advice you need to help them get the right start. Some helpful ideas from an expert can prevent bad spending decisions later on in life.
The Virginia Society of Certified Public Accountants (VSCPA) is the leading professional association dedicated to enhancing the success of CPAs. Founded in 1909, the VSCPA has approximately 8,300 members who work in public accounting, industry, government and education. For more information, please visit the Press Room on the VSCPA Web site at http://www.vscpa.com/, e-mail vscpa@vscpa.com or call (800) 733-8272. For more information on financial literacy topics like money management, or to search for a CPA in your geographic region, visit http://www.financialfitness.org/.
© 2008 American Institute of Certified Public Accountants
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