A Financial Education Event

Before You Say “I Do” – Premarital Financial Counseling


“Bye, bye!”  I smiled and waved from the front porch, Bob by my side, “Nice to meet you!”

Speaking like a ventriloquist, I continued to wave at my son and his girlfriend,

“I give It less than one week” I told my husband, “two weeks tops.”

Bob smiled, giving his very poor ventriloquist rendition, “I don’t know, she was, ah, very conversational.”

“Yeah,” we turned to walk back in, “and her favorite topic was herself!”

We had just entertained one of our sons and a girl he brought home to meet us. In our family, we are predisposed to like the significant others that our children bring home because our kids have very good judgement. Contrary to popular belief, we aren’t sitting on “no” when it comes to these friendships that could blossom into something more.

One week later, we got a call from our son letting us know that he and the girl were not going to work out.

“Yeah,” our son reported, “I realized that the only thing we had in common was that we both thought she was pretty.”

The Kay whammy had struck again.

“What is the Kay whammy?” you ask.  It’s pretty simple, when our kids bring a special person home to meet our family, they either stay together for life and get married. Or, they break up within two weeks.

We are an intense family and we tend to drive away the faint of heart. But we are also a loving, loud and loquacious family and that attracts the brave hearts.

When it comes to a spouse, our kids look for certain qualities and when they get serious, we ask for a credit report.

I’m kidding.

Not really.

Knowing your future mate’s money habits is a significant part of deciding if they are a “forever” friend or not. Since “money matters” is cited as the #1 reason for divorce in America, it’s important to be on the same page regarding this topic. So far, all of our kids have opted for premarital counseling before the big day and this counseling should include the topic of money management.

Here’s a quick list of the financial topics that should be covered before you say I do.

8 Topics to Cover in Financial Premarital Counseling

Your Family of Origin’s Financial Situation

How did your parents manage money? What did they teach you about money? Chances are good you may manage your finances the way that your family did and this may be different from your significant other’s point of view. Did your parents save, believe in tithing, pay cash for everything or did they live paycheck to paycheck? Hashing out the differences, finding the similarities and developing a new plan for you and your spouse will be topics you cover under this heading.

Your Spend Plan

Do you currently have a budget? Go over both of your current budgets. If you don’t have one, then that is also a discussion point. Decide on what a new budget will look like for you as a couple when you are married. There’s a great app I use called Mint that can be accessed and updated by both parties at any time. This is especially good for military families who are apart but want to keep track of mutual spending.

 Holidays, Birthdays and Vacations

How do you spend money on vacations and holidays? Some families spend so much on Christmas, that it takes until the following May to pay off that debt. Others never take a family vacation. Our family had a low-key Christmas where each child got three modest gifts so the emphasis could stay on the Christ child. Then we went all out on their birthdays where the child was so celebrated that it became a highlight of the year for them. All these different approaches will impact your budget and your relationship.

 Born Spender or Saver?

What is your money personality? You could take the Money Harmony Quiz to see whether you are a born hoarder, spender, money monk, avoider or amasser.  Bob was a born spender, I was a born saver and we made it work nonetheless. But it took a lot of discussion and an action plan to learn to live in harmony with an opposite type of money personality.

 One Checkbook or Two?

Are you each going to keep your own checking account or are you going to combine them? Who will pay for which bill? What about savings accounts and credit cards? Will those be combined or remain separate? Now is a good time to download my free Sixty Minute Money Workout to help you learn how to discuss this topic and others within a time frame that minimizes conflict and maximizes the work you are doing in this area.

 Your Credit History or Debt

You and your significant other need to bring your credit reports to a premarital financial counseling session. Depending on what is there, it may be a wee bit uncomfortable. I married into 40K of consumer debt I didn’t know about and it had a huge impact on our lives together. Your mate may not count student loan debt as debt and you may find out there is an 80K loan that will impact your marriage. You can get a copy of your credit report, once a year, for free at Annual Credit Report and get one for each of the three reporting bureaus at this site. You can also get a copy of your credit score (different from a report) at Credit.com where they will also tell you ways to improve your score. Be prepared to enter your social security number to get this information. Talk about these debts and discuss a repayment plan.

Long Term Financial Priorities

My adult daughter says that life is about investing in experiences, not things. Her priority is travel over a newer car or designer clothes. Her husband’s priorities are slightly different because he’s a born saver. They learned how to discuss these diverse perspectives by doing a Sixty Minute Money Workout so they can get on the same page.  Your mate may want to buy a house as soon as possible and would forgo vacations to make that happen. You may not care that much about home ownership but really want to go home for the holidays. It’s important to discuss topics like housing, retirement, vacation and other long term goals before you get married. I like to say that you can have it all, but not at the same time. Bob and I chose to put our kids in private schools rather than drive new cars. Today, our kids are done with school and we drive the newer cars. We just have to choose the timing on our purchases.


Who Does the Math?

Someone is going to need to balance the checkbook, pay the bills and set up the budget. Yes, you should set up your spend plan together, you can even pay the bills together, but that’s usually the exception rather than the norm. One of you may be predisposed to balancing the books better than the other. One of you may actually enjoy paying the bills. In our family, I’m the financial expert and my husband flies jets, so you would think I balance the checkbook. But I also know that my husband needs to be aware of the bottom line because he’s the born spender, so he keeps the books and I review the statements. There needs to be a check and balance. One person should not have absolute control over the couple’s money. Sometimes, he who controls the money controls the house. So it’s important that both partners have access so that there’s no abuse of power.

Which of these topics have you already discussed with your significant other? Which topics still need to be explored? Set a day, time and topic to talk about money with your mate and don’t forget to get the free Sixty Minute Money Workout download.


Real Tips to Teach Kids About Money

Real Tips to Teach Kids About Saving

Children, Banks, and saving money. Sometimes, those things are difficult to weld together. Here are a few practical tips to get your children saving wisely, and, more importantly, learning the principles of money.


  • From Piggy Banks to Real Banks – Let’s look at the practical part of saving money. A good place to start when you have elementary aged or preschoolers is to get a piggy bank. This visual aid will help to make their savings visible and real. Then you can help your child open their own bank savings account and help them make deposits each month. Around seven-years-old is a good age to open that account—that way, saving money in a piggy bank and transferring it to a real bank will be more memorable.
  • Children’s Banks – These banks are tailored for children; some even have steps in front of the teller windows where children can stand. If you live in a smaller community without a children’s bank, then get out your handy dandy yellow pages—or smart phone—and call your banks. Find a child-friendly bank by asking what programs they have for children’s savings plans and if they offer tours to families.
  • Your Bank – If, for convenience sake, you want your child to bank at your bank (instead of a special children’s bank), you’re not a mean, selfish ogre of a parent—you’re just wise with your time. Call your bank and tell them you want to bring your child in to open an account. Ask them if they can help make the child’s first visit special because you want to encourage your child to save their money and establish the trip to the bank as a fun and enjoyable exercise.
  • No Fee, That’s Me! – Some banks offer a no-fee, no minimum balance accounts for minors. If you bank charges a fee, ask if any special arrangements can be made for your minor child. Sometimes you have not because you ask not.
  • Pay Yourself – When it comes to saving money both adults and children need to just do it. By paying God first and yourself second, you can consider it a job well done. Saving twenty cents on every dollar is a way of paying yourself.
  • You’ve Got Mail! – Kids LOVE to receive mail in their name. Ask your bank if they will mail monthly statements to your home and include your child’s name (as well as your own). This is a great, regular reminder of the growth of their savings and interest.
  • Goals – Larry Burkett said in Financial Parenting, “When we teach our children to save to buy something instead of getting it on credit, we teach them two basic financial principles: responsibility and wisdom in stewardship.” Some kids will save money to buy a new bike or doll, while others will just save it for the savings sake. Either way, we need to teach the benefit of balance when it comes to saving. If you can never allow yourself to enjoy the fruits of your labor by hoarding every penny, then this leads to a spirit of stinginess. On the other hand, if your child spends his allowance before it can see the inside of a wallet, then he needs to learn the balance in their spending habits and the value of saving money.

        While savings goals are important, it’s also important to keep some money in savings that will not be spent, but will be a long-term investment. This teaches the true value of compounded interest and saving for the long run.

  • Get Some Money From That Wall – When we were driving by my husband’s favorite ATM haunt, our youngest started yelling, “Get some money, mama!” and pointed. Sometimes kids know that money doesn’t grow on trees, but they think it comes out of a wall. Teaching them the concept of the safe and wise use of an ATM is as simply as explaining where the money comes from, who pays it and why you should never get in the habit of getting money out without marking it toward your monthly budgeted expenses.
  • Online Savings Resources & Teaching Tools – There are some great resources online to reinforce the value of saving. At http://www.jumpstart.org/, there are resources and activities that seek to insure personal financial literacy in young people from grades K-12. This site lists resources that represent a wide range of formats including the four main areas of income, money management, saving and investing, and spending. This site will show them how to set up a budget, how the stock market works, the role of insurance and responsible credit card use. Some other similar sites are http://bankingkids.com/, http://firstkidbank.com/, and http://www.younginvestor.com/.

What are YOUR tips to teach kids about money?

Ellie Kay

America’s Family Financial Expert (R)

Leaving Home 101

Our five-year-old son, Philip, was very mad and having a horrible, no good, very bad day. His two-year-old brother, Jonathan, had taken all his favorite GI Joes and threw them in the toilet—again.

“I haffa tell ya’ mama,” He announced when he came into the kitchen where I was mixing a batch of brownies, “I’m gonna’ run away.”

I leaned down and met his eyes, “Well, we’re going to miss you around here, son. Let me at least pack you a lunch before you go.”

As a veteran mom of many, I knew Philip’s terrible, no good, very bad day would pass and that he was probably just going to his friend’s house to play. I asked his older brother, Daniel, to get on his bike and follow his younger brother to make sure he would only go as far as the Maerten’s house.

Juggling the phone with the brownie bowl, I dialed Leanne Maertens number, “Hey is Philip there yet?”

I heard her doorbell ring in the background, “Yes, I think he’s at the door now.”

“Well, he’s run away from home and I figure he’ll hang out until dinner. Let me know when he leaves.”

Philip spent the entire afternoon playing with Christopher and Edward and then Leanne called to say that our little runaway was coming home. He returned a few minutes later and announced, “Well, I’m back from running away, Mama! What’s for dinner?”

Fast forward a few years and Philip’s left home again—for good. He’s in graduate school at Stanford and has to cook all his own dinners. He learned that there’s a good way to leave home and a not-so-good way to leave. Here are the things parents do to help their kids leave home well.

Budget Babies

     Before your child leaves make sure that you help them establish a workable budget. The categories should include housing, transportation, clothing, food, entertainment, and (if necessary) tuition and books.  Go to Ellie Kay’s tool page and for an online budget. Decide, up front, what they will pay for from their own work money and what you will cover. Ask them to send you a monthly budget report and review it with them. Look at this as an opportunity to coach them in right choices but beware of funding their failures by bailing them out on a regular basis. This is the time for them to learn to live on their own in a healthy way.

Banking and Credit Cards

      Your college bound student will need banking accounts for checking and savings. Research banks (or savings and loans) that offer student banking programs. Or go to CheckingFinder . Now is also the time to educate your child on the dangers of easy credit. They will have access to thousands of dollars worth of credit through a variety of offers that may show up in their student mailbox—if they can find a co-signer or prove they have an adequate income. Teach them to shred these credit card offers in order to help protect their identity and also direct them to order their free annual report from each of the three major credit reporting bureaus at AnnualCreditReport (& warn them to bypass any offers that require money, only get the FREE report.)

Help your children set up their own credit card by getting an additional card that you control on your own credit card account (we use American Express) and make sure that initially, they only have a $300 credit limit. As they charge and pay off the balance each month, they’ll build their own credit score as well. Our son, Daniel, when he was a senior in college built enough good credit to prequalify for a townhouse! It all started with our involved effort to help him establish and build credit wisely—without getting into debt.

Borrowing and Student Loans

     Parents often ask, “How do we pay for college, should we get a HELOC, refinance our house, or get a second mortgage?” I do not believe you should leverage the equity in your home (which is part of your future retirement) in order to pay for your child’s future. HELOCs (Home Equity Lines of Credit) are also a poor choice. Instead, look at a variety of scholarships, work study programs, and other options available through the financial aid office at the school. Another financially healthy option is to have your child attend a college you can afford. Our mantra for our college bound kids is: I will go to the school where I can get the best education possible for the least amount of student loan debt. Email assistant@elliekay.com and request “College Crunch File” to see ways to minimize college debt or even put kids through school with NO student loan debt, as we have done with five of our seven children.

Bagels and Broccoli

My daughter, Bethany, started to do some of our grocery shopping when she was still in high school in order to teach her how to shop wisely when she was on her own at college. When she got the the bakery department, she exclaimed: “Wow! I can get this bag of eight bagels for less than this other bag with only six!” She was so proud (and so was I!)   Be sure your kids know how to price compare and how to read the store labels as well. Show them the “price per ounce” on the shelf so that they can recognize value. Walk them through the frozen foods section to compare the difference between buying fresh broccoli versus frozen and let them see the savings in frozen convenience foods versus fast food pizza.  Introduce them to the website CouponMom for ways to save hundreds on groceries and have them read my grocery shopping blogs.

Boomer Helicopter Parents

    One of the characteristics of Millenials (i.e. your college student) is that their parents tend to “hover” too much, not allowing the child to fail or pay the consequences of failure when they stumble. Most student loans cannot be granted beyond a certain threshold unless you (or someone else) co-signs. The same applies to credit cards for those under 21. There is a balance, it’s important to hold the line on student loan debt and other forms of credit for your Millennial. Remember another one of our mantras (that you can borrow) “Our love is unconditional, but our money is conditional.” If you’re paying for college, and investing in your student, then you automatically have a right to expect that they’ll do certain things in return, like pass their own classes, maintain a budget and earn part of their college through work/study programs, scholarships and/or part time jobs.

Launching a child can be costly and stressful unless you are strategic and purposeful in your planning. With the right moves, you can help your student finish well at home and start their new life with a healthy financial perspective.  But the part about missing them and crying those secret tears when no one is looking is something I can’t help you with right now because I’m too busy missing my own college kid (love you Jonathan)!

Ellie Kay

America’s Family Financial Expert (R) 


Earn 4.3% on Your Checking Account? You Can Double the Returns on Short Term Investments

The return on your savings account, money market account or certificate of deposit is probably hovering at 1.7% (see below), but what if you could boost that return to 3.4% or more? You would double the returns on your short term investment!

In the spring of 2008, consumers were saving less than 1% of their income. But then the economy headed south and savings headed north to where Americans were saving over 6% a year later. In fact, as a nation, we saved 5.6 trillion dollars last year. But wait! That’s not all the good news—there’s more! Inflation is projected to remain relatively low for the next five years, hovering around 2.5%. This means that all those people who have been saving money have a legitimate question to ask—what should we do with our savings? If you put it in your basic checking account, you will lose money due to inflation, but how do you make it grow without risk? I was recently on ABC NEWS NOW to discuss this problem and here are some of the highlights:

Q. Ellie, many of the people who are putting away 6% of their income are saving for a time in the near future when they feel comfortable enough to spend again. What are some of the things that these savers should not do with their money?

Ellie: I think it’s just as important to know what not to do with your money as it is to know what to do with that savings. If you are like most of those savers, you’re saving for the short term—at least temporarily. So that means you should not tie up your investments in stocks. If in the next three to five years, you plan on starting a business, buying a home, sending a child to college or buying a car—you should look at short term investing and not long term. There is a difference between funding long term investments, such as retirement and saving cash that you might need in the next three to five years. Second, you should not put these short term investments into money market accounts or traditional CDs because the money sitting in these low yield accounts, when weighed against inflation are basically making you nothing. When you do the math, you’ll see that a basic account making around 1.7 % interest, after you pay taxes on the growth and then adjust for a 2.5% inflation rate, is losing you money. In fact, that $100 you now have will be worth $98.60 next year.

Q. Then where do we start and if you are advising savers to avoid putting their short term savings into a savings account, then where do they put it to protect the principle and make the money grow?

Ellie: High Interest Bearing Checking accounts are a good place to start. In the past, these kinds of checking accounts haven’t been worth the effort. But recently, some financial companies have responded to the economic situation and they have found a way to still make money by allowing you to earn money as well. These kinds of high interest bearing checking accounts can usually be found in small to medium sized banks and some of them are paying 4% interest, which is 30 times what you could make in an average checking account or money market account. You can go to http://www.checkingfinder.com/ to find one of these kinds of accounts. An example of this is Royal Banks of Missouri, that pays 4.3% on balances up to $24,999 and 1.4% on balances over that maximum. There is a catch, however, you must use your debit card at least 10 times during the statement cycle, make at least one direct deposit or an automatic payment per month and then receive your statements online. If you don’t meet ALL this criteria, the hit is a big one because you’ll only earn .15% on the entire balance for the month.

Q. So a High Interest Bearing Checking account is one way to double your return. If we’re not having much luck in average money market funds and traditional CDs, then is there another kind of CD out there that might help those who want to double their return?

Ellie: As a matter of fact, you can look at some of the nontraditional certificates of deposits to get a better rate. First, look for the introductory teaser rate which are found at bankrate.com or ratebrain.com. I found some for 4.3%. You’ve seen the teaser rates for credit cards and these are basically the same kind of offer—they have limitations and stipulations and if you want them to work for you, then you’d better know what those boundaries are. Most of these introductory CD rates are from banks who want to boost their deposits by offering a drop dead gorgeous interest rates. As long as they are FDIC insured, you don’t have to worry.

Q. In the past, it’s been wise to ladder your CDs, is that still true, even with the nontraditional certificate of deposit?

Ellie: Yes, the laddering concept is still the same. Basically, you’ll divide your CD money into four or five pots of money, then invest the portions into CDs that will come due over the next five years. That way, when interest rates rise (and they will) then you won’t have to wait five years to take advantage of the higher rate; you’ll be able to roll over the CD that matures next. This strategy also gives you more access to cash, should need it.

Q. One of the new nontraditional CDs that can give you twice the return at no risk is called a STEP-UP product. How does this work?

Ellie: This is a new kind of product that offers longer maturing CDs at a higher rate for each year that you hold the certificate. The first year, it may offer a 1% return, but in years two and three, you could see it rise to 2% and in the fourth and fifth years it would be 4%. They are FDIC insured and you will need to buy them through your brokerage firm. But the good news is that you do not pay the commission, the issuing bank will cover that amount. However, if you want out of the CD early, you could go back to your broker and they could try to find someone to buy them from you, but in that case you would be the one paying the broker’s commission.

Q. A second kind of non-traditional CD is called a “Structured” CD, how does it work and are they a better option than a traditional CD?

Ellie: The returns on a structured CD are tied to an index (such as the S&P 500) or they could be tied to currency movements or inflation. You are guaranteed not to lose money should the index decline, which is nice but if it goes up, you’ll only get to take advantage of a part of that gain. So if the S&P goes up 10%, you may only get 6%. While some of these are FDIC insured, others are insured by the bank. I recommend the FDIC insured variety.

Q. Most of those who saved a part of that 5.6 trillion dollars last year, are short term investors who are saving to buy a car, house, or pay for college. While some aspects of the bond market have been attractive in recent months, is there a short term bond investment that will still allow savers to double their returns with no risk?

Ellie: There is a group of short term bonds that invest in municipal and corporate bonds and these can earn up to 4% and 5% in returns! Like our nontraditional CDs, these are also purchased through a brokerage firm, but as with any kind of a mutual fund it is a good idea to check the fund’s rating at Morningstar.com. Not all of these funds are created equal and some are better than others. Of all of the returns we’ve talked about so far, this investment option is the riskiest. Sometimes the bond market performs well and sometimes it doesn’t, that’s the risk you are taking for the higher return in this case.

Ellie Kay
America’s Family Financial Expert (R)