I am not referring to the traditional, albeit laudable, approaches of writing to your state and federal legislators to at least maintain the current levels of government aid in the form of school and student grants and other subsidies. Even if one could affect public policy, it may not directly benefit your family due to, say, income qualifications.

I am referring to those items entirely in your family’s power and control. These items can have an enormous impact on the ultimate cost and debt incurred (if any). They require unwavering, laser like focus and the long term commitment of the parents and child alike on the ultimate prize; namely, the education of your dreams at the lowest possible cost. These items include:

1. Create the proper incentives with your children. Let them know early and often how much money will be available from family resources for their college education. In effect, your children will be placed on notice that they will be responsible for the balance through scholarships, savings or student loans. These conversations should motivate your child to do their very best to earn scholarships and ultimately make prudent, net cost sensitive college selection decisions (see http://bit.ly/ZpXuf).

2. Academic Achievement…Academic Achievement….Academic Achievement! Schools will “buy” improvements to their US NEWS & World Report College Rankings by awarding academic grants to students that will improve or at least maintain their rankings. From the schools perspective, higher rankings generally translate into greater selectivity, greater pricing power (tuition & fees), more research grants and larger endowments over time. Students, take those AP classes and get great grades!

3. State College Honors Programs vs. Highly Selective Private Schools. If your child has the academic credentials and is accepted into the highly regarded honors program at your state college, paying that in-state tuition can represent a 60% savings. From the perspective of potential employers and graduate schools, degrees from State College Honors Programs are frequently deemed equivalent to those from expensive, highly selective private schools.

4. Get accepted to those colleges with the highest endowments. These highly selective colleges (Ivies, Stanford, etc.) generally have the most financial need based aid available which is awarded based upon generous, transparent financial aid formulas. Further, the admissions selection process is (financial) need blind.

5. Attend schools that award three year bachelor degrees. These programs represent a 25% savings and will become more common as a result of the economic downturn.

6. Start off at low cost community college for 2 years. This strategy can represent a 40% savings. It will become more of a norm as a result of this economic crisis. Note: many community colleges are now also awarding four year degrees, another attractive option.

7. Reward your children if they graduate early. By taking that extra course each period (at normally no extra cost), a student is able to graduate early. For instance, a new car is a great incentive for the child and is a net savings to the parents (vs. tuition, room &. board). Conversely, penalize your child if they take more than 4 years to graduate which, unfortunately, has become the norm.

8. Women: consider majoring in engineering. Women represent only 20% of engineering majors. Schools are attempting to attract more qualified women into engineering (and the sciences) with significant scholarship funds. Biomedical and chemical engineering are particularly attractive.

9. Specialize in sports where the NCAA permits more scholarships per starter. For instance, the NCAA only allows 9 scholarships for Division 1 Men’s Soccer or .82 scholarships per starter). With often 30 players on a college team, soccer coaches frequently “stretch” there soccer budgets by awarding partial scholarships to players on the rooster. On the other hand, football offers 88 scholarships (mostly full scholarships) and there are 22 starters, or approximately 4 scholarships per starter.

10. Parents: Do your part! Maximize the funds available to your children by saving early and often on a tax advantaged basis. You need to develop an optimized college investment plan from the thousands of available of investment options from 529 Plans, Education Savings Plans (Coverdell Plans), etc.

If you need professional, independent advice, try www.401kid.com which parents and financial advisors like you use to obtain optimized, unbiased investment and financial aid advice.

Please let us know what you would like to see from 401kid!

Making your education dreams come true,
Bob Lally
401kid, Inc. COO
(father of a current college student + a recent college graduate)

401kid, Inc. provides unbiased, college financial planning advice via www.401kid.com where families and advisors can optimally fund education dreams with superior a) conflict free asset allocation and financial aid advice; b) a comprehensive ’supermarket’ of education savings investment options; c) savings discipline opportunities for building client wealth; and d) value added content integrated with social networking

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Not that talk! I am referring to the kitchen table talk about going to college and how much family resources will be available.

It is important for you and your child to be on the same page financially. Ideally, there will be multiple talks starting early in your child’s high school career or even late in their junior high years.

The talk goes something like this:

“Honey, we want to do everything we can to put you on the best possible path for life. That will be involve going to college and we want to make that happen for you.”

“As you know some colleges are very expensive. Just so you know, we saved enough to pay $X per year which will cover the expenses of approximately y% of the cost of an instate college. To make this work, you will be responsible for the rest through scholarships, your savings or student loans”.

“It is important that you do everything you can to become an attractive scholarship candidate to colleges by achieving your very best in school and sports. In many cases, you will have to apply for scholarships and they are often awarded on a first come, first serve basis. Therefore, you need to be diligent and timely.”

“Again, we are on this journey together. We want to help you make your dreams come true. We would love it if you graduated with little or no student loan debt. Please keep the communication lines open with us. We can do this!”

A talk like this goes a long way to extablishing expections and making clear to your child that they have “skin in the game” (i.e., their action or inaction will directly determine the amount of student loan debt they will have upon graduation). Talks like this will also properly incentivized your child.

In terms of student loans, please be aware that the Stafford Loan (i.e., loans that the student is totally responsible) limit is “only” $31,000 (aggregate). This covers the cost of only one year’s attendance at many colleges. Then “parent loans” (i.e., PLUS Loans) are required. (Note: a $57,000 Stafford Loan limit is available if the parent does not qualify for PLUS loans due to substandard credit scores – see http://www.finaid.org/loans/studentloan.phtml).

As a parent, what should you do now? You need to uphold your end of the bargain. You need to develop an optimized college investment plan from the thousands of available of investment options from 529 Plans, Education Savings Plans (Coverdell Plans), etc. Incorporating an optimized financial aid plan is a critical component of the process.

If you need professional, independent advice, try www.401kid.com which parents and financial advisors like you use to obtain optimized, unbiased investment and financial aid advice.

Please let us know what you would like to see from 401kid!

Making your education dreams come true,
Bob Lally
401kid, Inc. COO
(father of a current college student + a recent college graduate)

401kid, Inc. provides unbiased, college financial planning advice via www.401kid.com where families and advisors can optimally fund education dreams with superior a) conflict free asset allocation and financial aid advice; b) a comprehensive ’supermarket’ of education savings investment options; c) savings discipline opportunities for building client wealth; and d) value added content with social networking.

It’s a 401(k) for Kids:

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New IRS regulations now allow enrollees to change their investment strategies twice a year. Have you taken advantage of this change in light of the financial crisis? If you have not, you should!

Unfortunately, many 529 Plan enrollees have suffered significant investment losses because they, or their advisors, did not know what the enrollees owned. They violated a golden rule of investing.

Age-based portfolios are NOT labeled in terms of their risk tolerance (conservative, moderate risk, aggressive, etc.). While all age-based portfolios reduce risk by automatically shifting a higher percentage of assets from stocks into bonds and cash as the student beneficiary nears college age, there can be significant differences among portfolios in their equity allocation at a given age. The age-based portfolios with relatively high equity allocations underperformed, significantly in some cases, during this financial crisis.

Also consider the investors in the Oppenheimer Core Bond Fund (see OppenheimerFunds Probed by States on 529 Plan Losses). State of Oregon officials said “Oppenheimer Core Bond Fund was supposed to be a conservative investment, designed for students in college or planning to go to college within one to three years. Instead, OppenheimerFunds put the money into a hedge- fund-like investment fund that took extreme risks in a search for speculative large returns”.

What should investors do now? Investors should optimize and rebalance your portfolio consistent with your time horizon (i.e., when you need the funds) and your risk tolerance (i.e., conservative, moderate risk, etc.). Above all else, know what you own!

If you need professional, independent advice, try www.401kid.com which investors like you use to obtain optimized, unbiased investment advice.

Please let us know what you would like to see from 401kid!

Making your education dreams come true,

Bob Lally
401kid, Inc. COO
(father of a current college student + a recent college graduate)

401kid is an unbiased, independent internet SEC Registered Investment Advisor where families and advisors can optimally fund education dreams at www.401kid.com with its superior a) conflict free asset allocation and financial aid advice; b) a comprehensive ’supermarket’ of education savings investment options; c) savings discipline for clients; and d) value added content with social networking.

It’s a 401(k) for Kids:

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TV rots the senses in the head!
It kills the imagination dead!
It clogs and clutters up the mind!
It makes a child so dull and blind.
He can no longer understand a fantasy,
A fairyland!
His brain becomes as soft as cheese!
His powers of thinking rust and freeze!
An excerpt from Charlie and the Chocolate Factory,
By Roald Dahl, 1964

In last week’s blog entry, titled Education Starts and Ends at Home, I posed a list of ten thought-provoking questions for parents, which relate directly to how their children are educated or influenced at home. We addressed question 1, about health and fitness, an issue which we all know plagues American kids and families. Today, we will deal with a directly correlated issue – that of watching television – because naturally, in the course of any given day, with limited time at hand, the more kids watch TV, the lower the chances of them being physically active and healthy. Here is the question which was posed, that I address in this post:

2. How many hours per week do your children watch TV?

One billion television sets have been sold worldwide since the first ones appeared in the 1920s. Aside from the obvious corrupting forces that children can be exposed to – drug use; emotional, psychological and physical abuse – television is the most destructive force on a child’s mind. The same could be said for people of all ages, but this statement holds true especially for children, who are very delicate and impressionable. This is a strong statement but one that is correct. Of course, television has many potential benefits, including:
Educational purposes – learning about the world, science and current events; moral lessons portrayed through quality programming.
Entertainment – making us laugh, cry and experience other emotions, while identifying with characters from our favorite shows.

Of course, there are two important caveats to the general statement that “TV is bad” -
1. It depends what you watch. Watching quality programming and watching attentively makes a difference. The explosion of choice in television programming over the recent two decades is a double-edged sword; at least, kids can be exposed to quality educational content through the available choices.
2. It depends how much you watch. If watching is limited, non-addictive and prioritized after the achievement of other important activities, negative impacts are neutralized. What the proper limits of television watching for your children is depends. I would put the range at 5-15 hours per week, with variance depending upon other responsibilities and competing activities in a given week.

However, the list of ills that result from television viewing is much longer than the potential benefits, including but not limited to:
* Passive Activity – Watching television can hardly be considered an activity since most TV programming requires zero effort, of concentration, interaction or of any kind. This breeds laziness and mind-wandering
* TV as Babysitter – Depriving children of human interaction.
* Impact on Cognitive Development – According to John Tirman, Executive Director of MIT’s Center for International Studies, “Heavy TV watching leads viewers (even among high educational/high income groups) to have more homogeneous or convergent opinions than light viewers, who tend to have more heterogeneous or divergent opinions.” For more interesting research, cited by Tirman, check out his website.
* Hypnotic Impact – Captivates children, fantasies and illusions, disconnecting them from reality.
Consumerism – Programs children into good little consumers, building voracious appetites for toys, games, junk food and other possessions.
Media Sensationalism and Negativity – Breeds fear and unrealistic view of the world, making kids and parents believe that the world and people are more dangerous than they really are.
Radiation – In 1968, the Radiation Control Act passed, setting limits on radiation emitted from televisions to 0.5 milliroentgen of radiation per hour – a level considered safe at the time the standards were drafted. However, recent findings by scientists in the Department of Health, Education and Welfare (HEW) indicate that X-ray emissions below the 0.5 level and on down to zero penetrate body tissues with subtle but harmful effect. For more information on this controversial topic, read this article from Operation Awakening blog.

System for Monitoring TV & Video Games

There is really no magic behind creating a system for monitoring television watching. It’s really pretty simple. You have to ask yourself whether you agree or not with what is being said here and elsewhere about the negative impacts of TV on your kids. If you agree, and don’t feel like you have a good system in place, then it makes sense either to consider what is prescribed herein or investigate other alternatives. What I propose is to set hourly budgets or limits on particular free-time activities, including watching TV and playing video games, whether at home or elsewhere. For example, here is a sample Time Budget chart for the week.

TV: 8 Hours
Internet & Video Games: 8 Hours

Create a chart that gets posted by the TV and Computer, where your kids log their time. If they don’t do so, you can log it yourself as you discuss their day with them. If they go over-budget one week, you can use your discretion to reduce hours from the following week’s budget. If they go under budget, then you can possibly let them carry over time from week to week.

Behavioral issues are inevitable, especially in this day and age. If there have not been rules set forth in the past around these topics, your kids will naturally be resistant to rules. That is OK. If you are serious about it and enforce the rules well, your kids will benefit in spite of their resistance. The best way to approach it, in my view, is to lay down the guidelines and then give them flexibility in how they utilize their ‘free time’. You should be prepared to negotiate with your kids to a degree, but be firm on the limits, even if they do not like the rules and throw a tantrum.

Of course, the hardest part of limiting television watching is that it requires parents to spend more time with their children or at least more time monitoring their activities. You may feel that you don’t have the time, due to your own busy schedule and desire to have your own free time, which of course, you are entitled to. Evidence suggests that if you make the time to put a well-defined system in place, once children start to understand the rules and develop good habits, not as much effort is required over time to maintain the system. It does require a high-level of dedication though from parents, there is no denying that. The benefits will be undeniable. I would love to hear from you parents out there, on how many hours per week on average your children watch.

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I am concerned about parenting in America. While I am not a parent yet, and do not therefore write from direct parental experience, I can see from those around me what the challenges are. I have also coached, taught, mentored, babysat and taken care of enough children to get a sense for the tremendous challenge of parenting. As a result, I have the utmost respect for all of you parents out there, especially the ones who take the role on diligently, with the highest sense of responsibility. It is clearly not an easy role. I also reflect back to my own childhood from a different, young adult perspective now. The general challenges of living are escalating, with increasing financial pressure on nearly everyone, and society’s support structures seem non-existent to most. Even if you are handling your family life well and staying on top of your affairs, you can just feel it getting worse overall in our society, can’t you? Who is to blame? More importantly, what is within your grasp as a parent when it comes to your children’s education?

In the previous post – Fixing and Funding Education in the U.S. – I discussed five key non-formal education categories, that are supplemented by the formal educational system (schools). To rehash those briefly -

1. education at home – from parents and family;
2. education from media – which reflects influences from TV, Internet, video games, newspapers, advertising, politicians and businesses;
3. extracurricular education – from coaches and non-formal teachers, such as a piano teacher, religion teacher or camp counselor;
4. education from social influences – friends, activities with friends, and members of one’s surrounding community; and last but not least,
5. self-education – interests which one chooses to pursue as a result of their own inclinations and/or influences from any of the categories above.

Today, I want to focus on #1 from this list – Education at Home, which begins with parenting and also includes influences from siblings. Education at home drives and shapes all of the subsequent non-formal education areas, such as education from media and extracurricular activities. So let’s start with a list of thought-provoking questions, that are directly correlated to how kids develop their minds, bodies and life skills. The questions are mostly related to how you and your children spend time and energy in a typical week. If your kids are still too young for some of the items, this can be a great opportunity for you to contemplate what your approach might be to these issues.

1. What is your kids’ level of physical health and fitness?
2. How many hours per week do your children watch TV?
3. How many hours per week are the kids playing video games or chatting/playing on the computer?
4. How much time each week, on average does the whole family spend together?
- Just the family unit, without friends?
- Just the family unit, talking or interacting, without the TV on, video games or other technology involved?
5. How much one-on-one time does each child typically spend with one or both parents each week?
6. How much time do your children spend reading (or have a parent or sibling read to and with them) each week?
7. How much time do your children spend studying each week? Do you check or help them with homework?
8. How often do your children meditate, pray or have any kind of moral, spiritual or religious rituals?
9. What kinds of chores and responsibilities do your kids have in the home?
10. Money & Allowance: What is your philosophy towards money when it comes to your kids?
- Do they receive a set allowance?
- If so, how much do they get?
- From what age did allowance start and how has the amount changed over the years?
- Are there any rules or restrictions on the allowance?
- Do you encourage your kids that are of age to work?

1. What is your kids’ level of health and fitness?
This is not a Yes/No question. Think objectively, which I know may be difficult for parents, about the level of where your kids stand in terms of physical health. If they participate in anything less than five different occasions of physical activity of at least 30-minutes per session, fitness is likely below par. And playing Nintendo Wii doesn’t count! Obesity, a rampant problem as we all know, is another key indicator of your children’s health in an area directly related to parenting. Hopefully, they are getting at least two home-cooked meals per day, with the possibility of a third, if lunch is prepared at home and brought to school. Snacking and eating between meals is fine, as long as it is monitored to some degree. What your kids eat, as well as how much, makes all the difference. Remember, generally speaking, they eat what is in the household. So if your kids eat a lot of junk food, then the question is who bought it, and why do they have free reign on the cookie jar? Shopping consciously and wisely, and bringing home fresh, healthy food, is one of the most important responsibilities for that parents have. Don’t short change it!

The key message that you need to take home from this item, which also holds true for most of the subsequent questions, is that kids will “do what you do, not what you say”. So don’t be a liability in your children’s education process! If you are drinking, smoking, over-eating, or not exercising regularly, there is a very high likelihood that they will end up doing the same exact thing, either now or when they get older. Even if you expose them to other good influences, such as great sports coaches and a positive school environment, children always revert back to what they see at home as their primary source of education.

One of the keys, in my humble opinion, after setting a good example through your own behavior, is to have reasonable rules in place, and to monitor your children well. I would advise not to monitor too rigidly, but do so routinely, especially during the pre-teen years. Make sure that your children are exposed to these rules, verbally as well as in written form. Consistency is important, as opposed to the typical scenario, where parents take advantage of their authority by judging things arbitrarily based on their own moods, current energy levels and personal interests. You have to be fair. Of course, parents reserve the right to “amend” the family rules, but it still makes sense to have somethings clearly articulated, which children can learn about and abide by. As it relates to health and fitness, several key rules of thumb should help keep everyone in the family, including parents, on track.
1. 5+ sessions of physical activity per week, which could be soccer practice, playing in the backyard, riding a bike, or wrestling with dad.
2. At least 2 servings of fruit and 2 servings of vegetables per day.
3. At least 10 home-cooked meals per week (which allows for eating out and ordering in several times per week).
4. Limitations on candy and snacking (to be determined by parents, and individual cases).
5. Portion control and management (to be determined by parents on a case by case basis; although some level of consistency is important). Learning and teaching how not to eat until one is full is critical. Over-indulgence leads to obesity, if not as a child, then as an adult.

That is a lot to digest (no pun intended), I know! I hope that you are not reeling too much, or running to the cookie jar, from all of these questions. While I won’t go into depth on the rest of them today, I promise that we will get to each point, as well as many others, over the coming months. I encourage you to stay with me, share your experiences by commenting to the posts or better yet, by participating in the 401kid Forums.

Remember, without a high-level of physical health and the positive energy that result from it, everything else in life becomes less important and potentially more problematic, including all of the other aspects of education that we discuss. The path which your children take when it comes to health and physical activity will follow very closely behind what you set forth as an example, in terms of your own life and habits, and a framework of household rules. So live well and so will your kids!

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