MONEY Kids and Money

Would You Spend $60 for Your Kid’s Lunch Box?

Laptop Lunches Bento Set with Sandwich and Yogurt.
PB& J in a Spiderman lunch box, or a Laptop Lunches bento set with carrots and yogurt? Laptop Lunches

In search of toxin-free, reusable, leftover-friendly lunch gear for their children, some parents are willing to pay a premium.

When it comes to kids’ lunches, we’ve come a long way from PB&J, an apple, and a cookie in a brown paper bag.

Beau Coffron, of Fremont, Calif., packs his daughter’s school lunches in stainless steel containers that cost at least $20 a pop. He apportions all of her food into little compartments, making cartoon characters like Charlie Brown and animal shapes such as tigers and llamas out of the ingredients. Her sports water bottles cost about $10, and the sack to carry it all came with the lunch kits but would retail separately for about $25.

Everything is toxin-free and reusable, naturally.

What started as simply a creative way to pack lunches has become a movement in the U.S. to reduce waste from individual packaging, save money by buying in bulk, make use of leftovers, and have toxin-free food containers—and share it all on social media.

Coffron, who posts pictures of these lunches on his blog, is part of this wave of moms and dads who are willing to pay much more than the cost of a box of plastic baggies at the dollar store for these benefits.

Parents who are investing in fancy lunch gear say it’s worth the upfront costs because it lasts longer than disposable items. The annual savings from reusable items amount to an average of $216 a year, according to a study by U-Konserve, whose lunch kit runs $39.95.

While popular in Japan, Bento-style lunch gear, where a variety of food is packed in small containers or compartments in a specialized, lidded tray, is still a very small portion of $1.4 billion food storage industry, according to research firm Euromonitor International. However, the small companies that sell these products report phenomenal U.S. growth during the last several years as the trend has exploded.

Laptop Lunches, one of the oldest and biggest of these companies, launched in 2002 and now sells more than 500,000 units a year, according to the company. On the smaller end of the spectrum is PlanetBox, which sells under 100,000 units a year. Launched five years ago, PlanetBox says sales are up 150% the last two years.

Products vary from all-in-one solutions like PlanetBox, which has a $59.99 Bento lunch kit with a bag and stainless steel lunch tray, to multi-piece solutions like Laptop Lunches’ $32.99 kit. A simple Goodbyn tray with three compartments runs $8.99.

That’s a lot of cash for something that is likely to end up lost within the first week of school, which is why more manufacturers are offering customization. For example, PlanetBoxes offers magnets to put on cases and Goodbyns come with stickers so that the items are easily recognizable in the lost-and-found bin. The heft of these products makes children realize they need to take care of them, too.

Mix and Match

Investing in one expensive lunch kit might not be enough, which is why there’s some mixing and matching that goes on, parents say.

Venia Conte, based in Las Vegas, has two PlanetBox lunch kits, in case one gets misplaced or is dirty, plus a couple of LunchBots lunch kits, which run $20 for the stainless steel containers. She also uses stainless steel food thermoses, which cost around $25 each, plus $1.50 re-usable napkins from Etsy.com and various water bottles.

“When you look at their shoes, which they grow out of in six months, $50 for a lunch box doesn’t seem so bad,” says Conte, who blogs about her lunches to keep herself engaged for 180 days a year.

While the bento lunch fad has been ongoing in Japan for years, most of the companies selling these products in the U.S. emerged after the recession in 2008.

“When I started the business, parents were like: $25 for a lunch box, that’s like way too expensive. But parents are factoring that equation differently,” says Sandra Harris, founder of ECOlunchbox, whose three-compartment stainless steel kid’s tray runs $12. “Now, BPA-free is a household word,” she says, referring to the Bisphenol, a chemical that is found in polycarbonate plastics.

For Tammy Pelstring, who started Laptop Lunches, the biggest surprise has been the community that has sprung up around these lunch kits, fueled by social media. Her company started before Pinterest and Instagram, so the first thing she noticed was people posting photos on Flickr of lunches packed in her lunch boxes—thousands upon thousands of them.

“We completely hit on something,” Pelstring says. “There’s this joy that people get when you create a beautiful lunch. It feels really good.”

MONEY Estate Planning

Want Less Stress? Get Your Estate Plan In Order

Preparing the right paperwork will help ensure that your wishes are followed and may save your heirs a bundle of money.

After helping a girlfriend through the messy, tangled finances left in the wake of a parent’s death, John Kerecz had a message for his own mom and dad: Get your paperwork in order.

A few years later, Kerecz’s father passed away unexpectedly. The 52-year-old environmental engineer from Harrisburg, Pennsylvania went to the house and looked where his father and mother used to keep their important documents, but nothing was there. It was pure luck that he went to the computer to look up a phone number and saw a folder on the desktop labeled “DEATH.”

“Sure enough, everything was there in that folder,” Kerecz says.

Armed with a copy of the will, lists of the financial accounts and insurance policies and other paperwork, Kerecz was quickly able to settle his father’s estate and use the funds to take care of his ailing mother, making him extremely grateful.

The difference between having your files organized or not is about more than just stress; leave behind a mess and it can delay inheritors’ access to funds and cost a bundle in legal fees.

“It could be six months or longer if you don’t have the paperwork in order, and … your family is in the dark, not knowing things, jumping through hoops. It’s not a fun existence,” says Howard Krooks, president of the National Academy of Elder Law Attorneys.

Taking care of the necessary documents is a hallmark of good parenting, he adds, rather bluntly: “More than any kind of monetary legacy, if you really love them, you’d do this.”

HOW TO GET IT DONE

Compile a list of the financial information your heirs will need upon your death: wills, trust information, investment accounts, legal contacts, etc. You can keep this information in an electronic file – in one master document or several attachments – to serve as a road map to find all the physical paperwork.

Or, you can do what some of elder law attorney David Cutner’s clients do, and just pull out a cardboard box and start piling up the papers.

You have to do more than just gather the information, though, cautions Cutner, co-founder of the Lamson & Cutner Elder Law firm in New York. You have to tell your loved ones you have done it and tell them where to find it. You can either hand over the file immediately or keep it in a safe place (away from the prying eyes of caregivers and potential scammers).

A safe deposit box, by the way, is not a good place to keep these papers, says Cutner, because it’s too hard to access when needed.

THE WILL

Top of the list is a copy of your will, hopefully the most recent version, plus contact details for the attorney who drew it up and any executor named. Also important are trust documents, if they exist, estate experts say.

While power of attorney and living will documents are crucial should you become incapacitated, they will not be useful after your death, says Krooks—your heirs will then be using a death certificate to obtain access to accounts.

The real power in assembling all these items is that it forces you to go through the process of specifying your wishes. Without them, your family would have to put your estate into probate, which is when the state determines the distribution of your assets. This can take up to a year and eat up about 5% of the estate, says John Sweeney, an executive vice president responsible for Fidelity’s planning and advisory services business.

FINANCIAL ACCOUNTS

Your heirs will need to know all of your account information, down to your utility bills and your tax returns. You can either create a list or include copies of statements in the file, or just directions to where to find them. Also useful is a list of relatives to contact.

Knowing passwords for online accounts is not as important as naming another person on key accounts ahead of time, says Sweeney. This way, if the family needs to make mortgage payments or pay any medical bills, they do not have to wait until the estate is settled.

“Children are often dipping into their own assets to pay for taxes and mortgages when the last surviving parent has passed away,” says Sweeney.

In that same vein, make sure to sign another person up for a key to any safe deposit boxes or home safes, says Krooks. Include clear directions on how to access any other valuables that may be stashed elsewhere, so that it’s not mistakenly thrown out.

SURVIVOR BENEFITS

Pensions and insurance plans have many different payout rules, so you need to leave behind detailed information about policies. Insurance information should extend beyond life insurance to car, home and boat insurance, says Sweeney. It is also critical to include your Social Security benefit information, he adds.

The job of assembling all of this information can be massive, but most people appreciate it in the end.

“At first they curse us out because it’s so much to gather and put in one place. But by the time they come into the office, they’re really glad they did this exercise,” Krooks says.

MONEY Financial Planning

What Would You Do With $100,000?

Stack of Money
iStock

Deciding how to spend a large inheritance isn't as easy as you might think. Heirs who have received big bequests, along with financial planners, share lessons learned.

What would you do if you suddenly got $100,000, no strings attached?

It’s a hypothetical question for most of us. But for Peter Brooks, it was reality a few years ago.

After the untimely death of an old friend from pancreatic cancer, a lawyer called Brooks and told him there was a check waiting for $107,000, taxes paid.

With $30 trillion set to change hands from one generation to the next over the next 30 years, many others will find themselves in a similar position, according to Accenture .

While some may receive a few trinkets and others millions of dollars, the median inheritance will be between $50,000 and $100,000, according to a survey by Interest.com.

Handling new and unexpected wealth may sound wonderful, but can be a financial challenge. We asked financial experts to assess the decisions of three different beneficiaries:

WELCOME BOOST

For Brooks, a 55-year-old marketing consultant from the San Francisco area, the money significantly improved his quality of life.

At first, he deposited the check into a managed portfolio that his bank recommended. This was just before the market crash in 2008. Frustrated when the portfolio didn’t budge, Brooks rolled the money into a certificate of deposit, which turned out to be fortuitous.

“When the market crashed, I thought, wow, I must have a guardian angel,” he says.

Brooks decided that real estate was the biggest risk he could stomach, and he found an old Victorian house to buy for himself in nearby Vallejo for $97,000.

Indeed, buying a house is one of the most common financial moves people make with new money, according to Susan Bradley, a financial planner and founder of the Sudden Money Institute, based in Palm Beach Gardens, Fla., who specializes in helping people manage newfound wealth.

“If your inheritance increases your sense of home and safety, that’s a really lovely thing to do with it,” Bradley says.

Her caveat is that this works only if you’re able to handle the upkeep on the house, which Brooks has been able to do just fine.

A SPLURGE (OR TWO)

By contrast, John Kerecz, a 52-year-old environmental engineer in Harrisburg, Pa., went on a spending spree after he inherited about $160,000, plus a broken-down house, when his father died two years ago.

Because his father had his paperwork in order, Kerecz was able to quickly access the cash. He hired a lawyer based on the recommendation of a family friend, got the death certificate, and had a payout from the insurance company within a couple of weeks.

Then he embarked on a series of trips to Europe, Nashville, and New Orleans with his mother, who was in declining health, and eventually spent about $100,000.

What remained went toward a new home for Kerecz and his mother, who now suffers from dementia. He is trying to sell his parents’ original home and intends to invest the proceeds from that sale.

“I feel bad that I kind of blew it, but I wanted my mother to enjoy life while she could,” he says.

It may seem irresponsible, but using an inheritance to make memories has intrinsic value, says Bradley.

“Sometimes you can meet that purpose without spending $100,000,” notes Bradley, who says she would have coached him to take a little more time to figure out how to build those memories with just $60,000.

IN OVER YOUR HEAD

Many inheritors get in even further over their heads, especially if the money comes when they are young.

Richard Rogers, a financial consultant with Stephens Private Client group in Little Rock, Ark., had a client who inherited a significant sum at 25 and insisted on buying an $80,000 car.

“I tried to tell him that if you compound this money for a few years, you can buy a lot nicer car. But you can’t tell somebody what to do,” Rogers says.

CarmenBelcher could have used that advice, too, when, at 22, she inherited $300,000 out of the blue from her estranged father.

The money came quickly because her name was on his bank accounts and she was listed as the beneficiary of his veteran’s benefits.

Belcher responsibly paid off her college loans, then moved from Missouri to New York for a graduate program in journalism. She used what was left to support herself.

Now, eight years later, the money is gone.

She blames that partly on not being savvy about spending in New York, and partly on the money not being invested optimally by a bank adviser in Missouri who first helped her.

“It’s unfortunate, when people haven’t thought through it and, before you know it, [the money is] gone,” says Bill Benjamin, chief executive officer of U.S. Bancorp Investment.

The ideal thing to do is to draw up a financial plan before you start dipping into an inheritance, he says.

While Belcher thinks she is better off than before — she is building a career as a fashion editor in New York — overall, the experience was negative.

“I couldn’t appreciate the amount of money,” she says. “If this would have happened at an older age, I would have had more knowledge.”

MONEY Kids and Money

How to Get a Grip on Your Child’s Therapy Bills

Parent and journalist Beth Pinsker explains how to get your kid the mental health treatment he or she needs without breaking the bank.

When I signed up my kids for therapy after my divorce, I made some financial mistakes. The biggest was choosing an out-of-network provider, over one who takes my insurance.

Instead of a simple $20 co-pay, I spent $150 out of pocket and get 70 percent of it reimbursed, which works out to about $1,000 more over a school year. In contrast, I have a friend whose child’s therapy sessions require no co-pays at all.

In this way, mental health coverage has a lot in common with airline pricing, where seats on the same plane may sell at many different price points.

Overall, Americans spend about $2,100 per child for healthcare, according to the Health Care Cost Institute’s report for 2007-2010. During that period, HCCI says, the use of mental health services by children jumped 24 percent.

At the same time, nearly half of all psychiatrists no longer take insurance, according to JAMA Psychiatry, with a similar portion of psychologists now only accepting private payment.

Add to that an overall shortage of providers – there are 8,700 child and adolescent psychiatrists, compared to about 50,000 for adults, according to Dr. Paramjit Joshi, division chief of psychiatry and psychology at Children’s National Health System – and you have a supply and demand problem that makes cost a real issue for parents.

Stay in-network

Finding a provider in your area may be easy enough, but finding one whose availability suits your child’s schedule could be downright impossible.

That’s why I went the private-pay route. My area of Brooklyn has no shortage of doctors on my plan, but after calling a dozen and finding that an after-school slot would entail a months-long wait, I went with a personal recommendation.

To avoid the appointment runaround, lean on your plan’s customer service department to make calls for you, says Dr. Ian Shaffer, executive medical director for behavioral health for Healthfirst, a New York health plan.

Need a therapist with a specialty? You may be able to get that provider covered if you ask, Shaffer says.

He cited a case where the family wanted a therapist who shared their ethnic heritage, and had been recommended someone who charged an eye-popping $350 a visit. Healthfirst found them another therapist with the same credentials, and covered the visits.

Reduce co-pays

My friend with the zero co-pay has insurance through the state’s child health plan, but enrolment in the plan is possible only if you don’t have access to other coverage.

Most people who are on health plans through their workplace don’t have payment wiggle room, but you can ask individual providers what they can do to help, especially if you have a high deductible.

Many private-pay therapists have sliding scales based on income; others have lower fees if you work with a trainee. Since the latter are supervised grad students, “it’s like getting two doctors for the price of one, says Clair Mellenthin, director of child and adolescent services at Wasatch Family Therapy in Salt Lake City, Utah.

Also check state resources to help pay for therapy, especially if treatment is needed for some kind of trauma following a crime. Many states have victim funds, says Mellenthin.

Mark progress

Therapy can seem like an endless process, so parents need to make sure it’s staying on track, says Mitchell Prinstein, a professor of psychology at the University of North Carolina at Chapel Hill.

After the initial evaluation, make sure you have a clear treatment plan and markers to help you figure out if your child is making progress. If there’s little improvement, get a second opinion, Prinstein says. And don’t feel bad about moving on if the therapist is not the right fit.

Fight for your rights

For ongoing treatment, it’s important to make sure the insurance company is not crimping your coverage.

Even though parity clauses in the new healthcare laws say you should get as many sessions as you need, that’s not always the case.

After a while, insurers may start saying the sessions are no longer medically necessary. This is especially true if your child has a serious ongoing problem, says Alan Nessman, senior special counsel for the American Psychological Association.

Any denial of coverage can be costly.

Joe Hoyle’s bill for one month of his daughter’s treatment for a serious illness was $125,000 after his insurance company denied the claim (he negotiated a lower payment with the hospital directly). To obtain ongoing coverage, Hoyle and his wife, who live in Virginia, got her on Medicaid.

“They say they cover things, but then they get to decide when things are ‘stable,'” he says.

Hoyle urges parents to get care early for their children to try to head off bigger problems.

“You can go along for 10 or 12 years and think your kid is just quirky, then almost literally overnight, it can go to full-blown mental illness,” he says. “You hate to talk about it, but people need to know because state governments need to do more to help people out.”

MONEY Kids and Money

4 Ways to Influence How New Grads Handle Money

Take heart. When high school and college seniors come into some cash, they mostly do good things with it.

When her son recently turned 18, Lisa Kirchenbauer and her husband had him sign papers to take control of an account for minors they had long ago set up as a college fund–which had grown to about $60,000.

“What if I ran out and bought a car with it?” he asked.

It was mostly a joke question, but still heart-stopping for Kirchenbauer, a financial planner in Arlington, Va., because she knew he could do exactly that if he wanted to—and it would be perfectly legal.

There is a jarring lack of parental control when high school and college seniors come into some cash upon graduation – anything from a $100 check from Grandma to multi-million dollar inheritances.

“You have to go for less of a parenting, finger-pointing mode and talk to them as an adult – that’s what they are now,” says Rachel Cruze, who co-authored the book Smart Money, Smart Kids with her father, financial guru Dave Ramsey.

Mostly, good things happen with the money. According to college loan purveyor Sallie Mae, about 25% of parents say that at least some high school graduation gift money ended up paying for college expenses. A 2010 poll for the National Endowment for Financial Education found that 25% of recipients put money into savings, 10% used it for travel and entertainment, and 5% put the money toward a car.

While it’s still a little scary for parents to lose control, here are four strategies to make sure that new young adults handle graduation gifts responsibly.

Test With Small Amounts

Many parents try to teach their kids healthy spending habits with allowances, which pays off when they hit young adulthood. Jill Totenberg, mom to a high school senior in New York City, started her daughter off with $5 a week in third grade, then upped it to $80 a month in high school.

Now, the 18-year-old has a bank account with a debit card and is learning to manage a credit card. Mom is pretty confident that any graduation gifts will go straight in the bank. “She totally gets it,” says Totenberg.

John Boland, a financial planner in Montpelier, Vermont, also has tested his 17-year-old near-graduate with a debit and credit card, necessary because the teen is on a travel sports team. “He knows that if he does anything foolish, he’ll lose it,” Boland says.

This past winter, when Boland’s parents asked their grandson what he wanted as a Christmas present, he said cash for college in the fall.

Roll Over Into a Trust

When higher dollar amounts are involved, young adults face pressure from families and financial advisers to lock the money up, especially for minor accounts that turn over to the child at age 18 or 21, depending on state law.

“I’ve had some of my clients say: ‘Can we not give him the money?'” says Kevin Ruth, head of private wealth planning for Fidelity. “The reality is, you can’t.”

Matt Brady, senior director of planning at Wells Fargo Private Bank, says he has seen parents convince children to roll their newly acquired funds into a family partnership or trust, so they can continue to oversee it.

“The worst thing is to just have them take control of money they can’t manage,” Brady says.

For money in trusts, it all comes down to the provisions for distribution. Many of them set limits preventing the youngsters from getting anything unless they complete tasks, like graduate.

Fidelity’s Ruth says the trend is to keep the rules as restrictive as possible.

Incentives are crucial, he says. “You can get money if you start a business or get a masters degree. A lot of times, they can only get out as much money as they earn. They have to show up with a W-2,” Ruth says. “And if you’re not doing the right thing, you will get zero money.”

The cost of setting up a trust with an estate attorney will depend on how much money is invested, and ongoing professional money management will cost an annual fee of around 1% of assets.

Allow a Little Splurge

For Tim Noonan, managing director of capital market insights for Russell Investments in Seattle, the key to his financial parenting was instilling a sense of mystery about the power of money. The message: “Money is a magical tool, but it will turn against you if you do the wrong thing.”

While he doesn’t expect his daughter to get a lot of cash gifts when she graduates this month, he was willing to shell out for a celebratory present. She asked for a party for all her friends, which he was happy to do because she already has a job lined up.

Totenberg, the New York City mom, is expecting her daughter to be responsible but also allowing for fun. “She may buy some shoes or some ridiculous gift pack from Sephora that is all pretty packaging—something she knows I’ll never buy for her,” she says.

Direct Gifts From Family Members

One stealth way to maintain a little control over funds is to direct family members toward appropriate non-cash gifts. This is what Kirchenbauer, whose son has the $60,000 college fund, is doing when family members ask what her son would like for graduation. To one she suggested a set of luggage, to another a suit, and to a third a laptop.

“My mom is just writing a check,” she said, which she hopes her son will put in a savings account.

 

 

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