Personal Banking E-Newsletter - August 2011

Rules of Responsible Financial Parenting

Today, many families are concerned about the potentially adverse effect of wealth on the financial values of their younger generations. The goals that many affluent parents and grandparents have set for their children or grandchildren reflect core values, an honest work ethic, and a desire to "give something back" to the greater community.

The skills and knowledge needed to help children adhere to these values should be developed early in life and continue well into adulthood. The following strategies can assist older family members in becoming positive financial role models.

Start early— According to recent research, parents can start talking to children about money by age three. Between four and five, you can explain the importance of good spending habits, and by age six or seven, you can help children open a bank savings account. By the time children reach their mid-teens, they should start seeking after-school and summer employment.

Support education — Personal finance education helps instill such pragmatic money management skills as setting a budget, balancing a checkbook, understanding the role of debt/credit, and developing strategies for funding college. Encourage your child's school to offer personal finance as an elective "life skills" course, send your teen to a community college/adult education class, or tap the many educational resources on the Internet.

Lead by example — Your children will learn their most valuable lessons about money from the examples you set. A few simple rules: Enjoy the fruits of your labor — but don't go overboard. Set a healthy example regarding credit/debt. Pay bills on time. Save and review your savings plan on a regular basis. Above all, be consistent. Grandparents can be especially effective role models by following these suggestions.

Practice incentive planning — To ensure that important life goals remain at the forefront of your children's/heirs' priorities throughout their lifetimes, incorporate the use of incentives in your estate plan. What exactly is an incentive trust? It is an estate planning tool that allows you to reward desired behavior or impose appropriate penalties for undesirable activities. It also provides a way to address the needs of beneficiaries who require special assistance. Common themes guiding incentive trusts are education, moral and family values, and business/vocational choices, as well as charitable and religious opportunities.

Encourage philanthropy — Wealthy families often use philanthropy to convey the message that their success has been the result of hard work and good fortune and that success comes with the responsibility to give something back. If you want to ensure future generations of volunteers and donors, you must teach children how to give of their time, their skills, and their money. Once children understand the scope of their contributions, philanthropy becomes a real and prominent part of their lives.

© 2010 Standard & Poor's Financial Communications. All rights reserved.

Securities and Insurance products offered through LPL Financial and its affiliates, Member FINRA/SIPC.


Not FDIC insured

No Bank Guarantee

May lose Value

Not a Deposit

Not Insured By Any Federal Government Agency


Coulee Bank and Coulee Investment Center are not registered broker/dealers and are not affiliated with LPL Financial.

Which Comes First: Credit Card Debt or Mortgage?

If you had to choose between mortgage and credit card debt this month, which would you pay? Traditionally, most Americans have put their homes first. But with consumers owing more than $100 billion, many households are paying off credit cards, according to a study released by TransUnion at the end of 2011's first quarter. And another, TransUnion/Zogby survey has learned that most respondents in the U.S. (42%) spend less than 10% of their monthly income on paying down debt.

Recession's toll: permanent shift in family finances?

The number of consumers who default on their mortgages but keep up with their credit card payments has stayed well above normal even as the country has progressed toward economic recovery. Some financial experts are asking if this shift reflects a permanent change in how families manage their finances as a result of the recent recession. The TransUnion study found that 30.4 percent of subprime households were behind on their mortgage payments but current on their credit card payments. At the same time, only 12.3 percent were late on their cards but paid up on their home loans.

The most important debt to pay on time

It seems as if some consumers consider house payments a liability and the consequences of skipping a mortgage payment remote. Banks and other lenders need months to carry out a foreclosure and evicting a tenant from a rental property doesn't take place overnight. But financial advisers caution that the mortgage is still the most important debt to pay on time, and many Americans agree. Losing a home can result in financial and emotional upheaval that can scar a family for life. It still makes sense, if you can't come up with the mortgage payments, to call the lender and try to negotiate. You won't be the first one asking them and might be pleasantly surprised at their response.

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Don’t Take a Vacation From Your Budget

Summer is a great time to spend time with family and friends. But summer vacations can also eat up a lot of money if you haven't budgeted for them. You can spend months or even years paying off a week or two of vacation splurging. This summer, don't take a vacation from your budget. Instead, budget your vacation and enjoy a guilt-free getaway.

Plan Ahead and Save

If you know you are going to take a vacation every year or two, make sure your budget accounts for that. Save a little each month, and cut back in other areas if you can. To motivate the family to save for the vacation, start a vacation fund piggy bank. Forego eating out once in a while and deposit that money into the piggy bank.

Vacation Within Your Means

Big expensive vacations can be fun, but so can well-planned affordable ones, and without the debt hangover the expensive ones can give. Planning a fun vacation can be done on a budget, and you may be able to enjoy it more knowing that you won't have guilt afterwards.

Budget the Trip

Once you and your family agree on a destination, start working out the costs. Try to determine approximate costs for transportation, lodging, food, tickets to attractions and spending money.

If you Must use Credit Cards, use Them Sparingly

It's better not to charge your vacation. After all, you are going to pay more for your vacation if you have to pay interest on your purchases. For hotels and rental cars, which may require a credit card, make sure you've made plans for how to pay off that expense.

Keep Your Receipts

Saving the receipts from each purchase will help you keep track of how much you spend. Carry an envelope, place all receipts inside, and tally them up at the end of the day to ensure you have stayed within your spending limits.

A Letter to Our LPL Financial Clients

Dear Valued Client, 

Please take note that I will be out of the office on maternity leave starting on or about August 22, 2011. It is anticipated that I will be out approximately 8 weeks.

While I am obviously excited about the upcoming birth of my first child, I also want to assure you that arrangements have been made to provide you with assistance with your account with LPL Financial should you have any questions during my absence. 

If you have any questions regarding your account, please call Jackie Keith at 608-829-5525 or Lisa Lasecki at 608-829-5527. Both are representatives of LPL Financial from the LPL supervisory branch office locates in Bankers' Bank at 7700 Mineral Point Road in Madison, Wisconsin. They will be able to assist you with any questions or requests that you may have.

If you simply need to place a trade in your existing brokerage account at LPL Financial you can call the trading desk at LPL Financial directly at 1-800-558-7567.

Thank you in advance for your understanding and, as always, thank you for your business. I will look forward to speaking with you when I return.


Shari Hopkins, CFP®
Financial Consultant

Not FDIC insured

No Bank Guarantee

May lose Value

Not a Deposit

Not Insured By Any Federal Government Agency


Coulee Bank and Coulee Investment Center are not registered broker/dealers and are not affiliated with LPL Financial.