by Richard H. Fogg, CFP ®

When family and finances intersect, things can often get complicated. Asking for help and receiving advice before making important decisions can make a big difference in how you feel about your finances. Here are answers to some common family finance questions:

Q. I’m considering contributing to a Health Savings Account rather than a traditional health insurance plan. What should I think about before making the switch?

A. An HSA is a low premium, high deductible plan that allows you to save money tax-free for your healthcare expenses. An HSA can be a good option for you and your family if you don’t visit the doctor often. Before you sign up, be sure to calculate the true amount of what you may spend annually. Calculate how much you’re willing and able to put into your HSA account and stick to a systematic deposit plan.

Q. I want to teach my children good money management skills. How old should they be before I start paying them allowance?

A. You can begin teaching your children about money as soon as they’re old enough to put coins in their piggy bank. One approach is to start by giving them small amounts of money in exchange for chores or tasks. Allow them to make their own decisions about what to purchase with their money, and encourage them to save for pricier “wants” by creating a chart in which they can track their progress. If they choose to spend their savings before reaching their goal, explain the trade-offs that come with making that choice.

Q. My 16 year old daughter is a dedicated student and is involved in several extra-curricular activities. She doesn’t have much free time, but I think working part-time is important for teens. Should I encourage her to get a job?

A. Working part-time goes a long way in teaching young adults the value of money and helping them get a jump-start on their post-grad resumé. If she has friends that work or if she really wants the extra spending money, she might voluntarily choose to give up an extracurricular in favor of a job. If you expect her to help fund her college education expenses, it’s crucial that you explain this to her now so she can make trade-offs in her busy schedule and begin saving money.

Q. My sister has always been financially irresponsible and keeps asking me if I can loan her money. When should I cut her off?

A. If the money you’re lending to your sister is jeopardizing your current – or future – financial situation, you need to have a conversation with her right away because the financial health of you and your family is most important. By prioritizing your own financial goals and stability, you may even have the ability to comfortably help family members in the future. If your sister is really in need of help with necessities or to fund an unexpected short-term expense, consider creating a written document containing how much you’ve lent to her, and under what terms. Use it to clarify your expectations of when and how you anticipate her paying you back.

Q. I want to start taking better care of my finances. What kinds of resolutions should I set for myself to begin my money makeover?

A. Looking at the big picture is the best thing you can do to evaluate your money management. Take time to step back and consider what you’re really trying to achieve overall. Make a list of all your financial obligations and goals – from daily expenses to long-term plans. Then start prioritizing, being honest with yourself about the “need to haves” like retirement savings and “nice to haves” like tuition paid in full for your college-bound child. Also re-evaluate the products and policies you already have in place and ensure you’re making the most of options like your employer’s 401(k) match. Lastly, develop an emergency savings for minimizing the amount of risk that unexpected events like an illness or divorce, will have on your financial security.

FoggWith 16 years of providing comprehensive fee-based financial, investment, retirement and estate planning, Richard Fogg and his team know clients value their unique approach, experienced advice and the outstanding level of personal service provided. Based in Carmel Valley, the Fogg team is appreciated by clients for bringing experience and integrity to help them achieve their hopes, dreams and aspirations. Fogg & Associates is an Ameriprise Platinum Financial Services® practice of Ameriprise Financial Services, Inc.

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