MONEY family money

This Company Will Give You $500 If You Have a Baby Today. Wait, What?

141017_FF_BabyMoney
Mike Kemp—Getty Images

It's no joke. As part of its rebranding campaign, investment firm Voya will give money to the newest of new parents.

Lucky for you if you’re in labor right now.

A company called Voya Financial has announced that it will give every baby born today—Monday, Oct. 20, 2014—500 bucks.

The promotion, timed to coincide with National Save for Retirement Week, is part of a marketing campaign to alert the public that the business that once was the U.S. division of ING is now a separate public company with a new name.

Get out the castor oil and order in Indian if you’ve already hit 40 weeks, because the offer is only available to those who exit the womb before midnight tonight—though soon-to-be-sleep-deprived new parents have until December 19 to register a child.

Voya estimates that it may have to kick in as much as $5 million, since there are about 10,000 babies born every day in the U.S.

While the company has promised that families will not have to sit through a marketing pitch to get the money, and that the baby’s information would be kept private, this special delivery still comes with a catch.

The money is automatically invested into Voya’s Global Target Payment Fund, which according to Morningstar has above-average costs and below-average performance.

Regarding the fees, Voya’s Chief Marketing Officer Ann Glover says that the funds Morningstar uses as comparison are not apples to apples. In any case, Glover says families are free to sell out of the fund if they so choose. “Of course, we would hope people would hold on to the investment,” she adds.

But hey, money is money, so if you’re due, you may as well take what you’re due.

And for those mamas and papas whose progenies aren’t quite ready to make their debuts? While you won’t get money from Voya, you may have other opportunities to get big bucks for your little one.

Start by checking in with your employer to see whether the company helps with college savings. A growing number do. Unum, for example, offers its workers with newborns $500 towards a college savings account.(Our Money 101 can help you find the best 529 college savings plan.)

Also, in several communities around the country, charitable or government programs seed savings accounts for kids. For example, residents of northern St. Louis County in Missouri can get $500 through the 24:1 Promise Accounts. Babies born in Connecticut get $100, plus $150 in matching funds by age four, thanks to the CHET Baby Scholars program.

“This is gaining significant momentum nationwide,” says Colleen Quint, who heads one of the nation’s most generous free savings program, the Harold Alfond College Challenge. Started by the founder of Dexter Shoes, the charity gives every resident newborn in Maine a $500 college savings account.

In fact, Mainers can get the most free money for their children according to a survey of such programs by the Corporate for Enterprise Development, which has gathered details on at least 29 free childrens’ savings programs.

Besides the $500 college savings account, a state agency will match 50¢ for every $1 parents contribute each year up to $100 a year and $1,000 over a child’s lifetime. So Mainers can, in theory at least, get up to $1,500 in free college savings money on top of any additional freebies they can get from companies.

That should be more than enough to buy a chemistry textbook in 2032.

MONEY family money

Money Fears Keep Women in Abusive Relationships. Here’s How to Change That.

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Ray Rice with his wife, Janay Palmer. Vernon Ogrodnek—AP

Domestic abuse victims have opened their hearts to share #WhyIStayed stories on Twitter—and many cited financial dependence among their reasons. These 8 key steps can help break the cycle.

“Why did she stay?”

That was the question many people asked online Monday after they saw the graphic video of Baltimore Ravens running back Ray Rice punching his then-fiancée, Janay Palmer, in an elevator. The media event inspired Palmer’s fellow victims of domestic abuse to come out—through the Twitter hashtag #WhyIStayed—to explain why leaving isn’t that easy.

One of the major themes running through those tweets is financial dependence.

Many victims who tweeted their stories said they feared they’d be homeless or living in poverty if they left. Some said they’d be without any income or health insurance. Others expressed that their partners exerted economic control to prevent them from leaving: keeping them from getting jobs, running up debt on their credit cards, restricting access to money.

Even when victims of domestic abuse do leave their partners, ruined credit scores, erratic employment histories, legal issues, or debt threaten their future employment and financial security—which then leads many of them right back to their abusers, experts say.

“Economic self-sufficiency is frequently the difference between violence and safety for many victims,” states the National Coalition Against Domestic Violence.

One in four women experience partner violence, according to the coalition. If you are one of those victims, or know someone who is, make sure financial planning is part of the exit strategy. The advice outlined below can help people get ready financially to go—so that more can share their stories at #WhyILeft.

Understand where you stand

If you don’t handle the family’s money, you may not be aware of the state of your entire financial situation. Try to get a sense of what you and your spouse own and owe, and in whose name those assets and debts reside.

Unfortunately, this info may not be easy to get. “Some victims are scared to even inquire about these accounts for fear of violence or verbal abuse,” says Brent Neiser, senior director for the National Endowment of Financial Education, which has created a free book to help domestic abuse victims called Hope & Power for Your Personal Finances: A Rebuilding Guide Following Domestic Violence.

Also, by trying to acquire account information, you may accidentally flag your intentions to your spouse. So you’ll need to be careful. “Find a safe place where you can write down information as you come across it, like noting which bank the statements are coming from and any bank account numbers you find,” says Neiser. “You may have to go into a branch and inquire in person about accounts.”

If you’re looking online for information, be sure to use a private browser window so that your searches are not saved in the cache for your partner to see.

Gather key documents

Try to make copies of any important financial or personal documents—bank statements, birth certificates, marriage certificates, ownership documents for shared assets. Store these with friends or family or in a safe place at home.

When you do leave, take these copies and, if possible, all original documents that list your Social Security number and passwords.

You’ll want to have all your personal data with you to help re-establish yourself and keep your abuser from being able to commit ID theft. If your partner knows your information, or if you weren’t able to take all your records with you and fear your partner may seek financial revenge, consider changing your Social Security number, says Neiser.

Check your credit

Request a free copy of your credit report from one of the three major credit bureaus via annualcreditreport.com.

Look at the document to make sure that your partner did not open any lines of credit in your name that you don’t know about. If there is any fraudulent or incorrect information in the report, dispute the error with the credit bureaus.

Change your passwords

Pick new personal identification numbers (PINs) and passwords on all accounts just before you leave—maybe as soon as a few hours before if you’re afraid of your spouse finding out—or as soon as possible afterward. Don’t forget about your email and benefit plans, says Neiser.

Avoid using personal details that your partner could guess in your password, so as to keep the person from running up bills in your name or draining your accounts.

Establish solo accounts

If you don’t already have one, set up a personal checking and savings account for yourself as soon as you can before you go. Make sure the account is listed only in your name and that statements from the account are sent to a secure mailing address or email address so that your abuser cannot access the account or have knowledge of your finances.

Squirrel away whatever money you can without your spouse noticing—maybe a part of whatever allowance you receive or, if you work, as much of your paycheck as you think you can get away with. You want to have a cushion when you leave.

Get your direct deposit set up so that the first paycheck after your planned departure date will go to your personal account.

Protect yourself from debt

Try to pay off any balances on joint credit cards so that it will be easier to close the account and prevent an abuser from racking up debt.

If you’re unable to pay off what’s owed, call your credit issuer and request that your name be removed from the account. This won’t protect you from any existing debt, but it may help protect you from having to pay for anything charged after you leave the abuser.

Take your share

Assuming you have access to joint bank accounts, you will want to make a withdrawal of 50% of the balances and put that in your personal account, says divorce attorney Emily Doskow.

If you live in one of the nine “community property” states—in which whatever is earned or acquired during marriage is split 50/50 in a divorce—you are legally entitled to half. The rest of the states attempt to split property fairly based on what each person brings in and other factors, meaning it can be 50/50 or not. But even if the court finds you aren’t entitled to half, the worst consequence is that you have to pay some of the money back.

To protect yourself, take screenshot of account at the date at which you do it showing the amount before and after.

Making this withdrawal is the last thing you should do before you leave, as this will definitely alert a spouse to your plans to go. But you do want to make sure you get this money before your partner can drain the account.

Ask for help

Need help finding a place to live or a job, recovering your money, or handling the trauma of abuse? The National Coalition Against Domestic Violence has a coalition in each state that can help you find resources in your area.

Also, as you begin rebuilding, you might consider taking Allstate’s free financial empowerment and career empowerment courses, which have helped more than 400,000 domestic abuse victims become financially independent.

Above all, remember that you are not alone. “Talk with people who are more advanced in their recovery and getting re-established,” says Neiser. “Ask them to share the smart, insightful techniques they’ve used. Many people working at these shelters and advocacy groups are victims themselves.”

A previous version of this article referred to Janay Palmer as the wife of Ray Rice at the time of the incident. The couple later married but at the time she was his fiancée.

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Related:
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MONEY Kids & Money

The Most and Least Expensive Cities to Raise a Child

Where you choose to raise your child can have a huge impact on your parenting costs. Here are the cities that will run up your spending the most—and the least.

Having a child today will set you back close to a quarter million dollars by the time your offspring reaches 18, an annual study released Monday by the U.S. Department of Agriculture found. A middle-income family can expect to shell out on average $245,340 (or $304,480, when adjusted for projected inflation), with the biggest chunk of the budget going to housing, followed by child care costs.

Of course, your bottom line could be very different depending on where you live. According to data from personal finance website NerdWallet, child-rearing costs can vary by more than $340,000, based on local housing market prices and the cost of daycare (which exceeds the cost of college in 31 states).

Families living in cities in more rural areas can expect to pay the least to raise a child to adulthood, but those living in the urban Northwest and on the West Coast should expect to pay far above the average.

Here are the cities where you’ll pay the most and the least to rear your child.

Most Expensive Cities to Raise A Child

Rank City Cost of raising a child
1 New York (Manhattan), NY $540,514
2 Honolulu, HI $429,635
3 San Francisco, CA $402,112
4 New York (Brooklyn), NY $400,951
5 Hilo, HI $369,559
6 San Jose, CA $363,807
7 Orange County, CA $353,081
8 Washington, DC $342,552
9 Oakland, CA $337,477
10 Fairbanks, AK $334,562

Least Expensive Cities to Raise a Child

Rank City Cost of raising a child
1 Norman, OK $199,298
2 Harlingen, TX $199,694
3 Ashland, OH $206,793
4 Salina, KS $207,525
5 Pueblo, CO $208,155
6 Memphis, TN $208,322
7 Temple, TX $208,593
8 Richmond, IN $209,522
9 Jackson, MS $211,309
10 Hattiesburg, MS $211,451

 

Related: Why the $245,000 Cost of Raising a Child Shouldn’t Stop You From Having One

MONEY

What It Costs to Raise a Child

Baby drinking milk bottle filled with cash
Mike Kemp—Getty Images

Parents will spend nearly a quarter of a million dollars to raise a child born today to age 18. The good news: The cost isn't going up as much as in years past.

A middle-income family can expect to pay $245,340 to raise one child up to age 18, according to an annual study released today by the U.S. Department of Agriculture. When adjusted for anticipated annual inflation of 2.4% though, the total in 2032 dollars will look more like $304,480.

The cost to raise a child, excluding pregnancy and college expenses, increased by only 1.8% over last year’s estimates, representing the smallest price jump since the financial crisis.

Middle-income parents shelled out between $12,800 and $14,970 last year on their child, depending on the child’s age. But wealthier families spent more than twice what middle-income parents do, reaching $407,820 to rear a child for 18 years.

Housing remains the largest expense of any parent’s budget at 30%, unchanged from 2012, followed by child care/education (18%), and then food (16%). More affluent families spent a larger percentage of their funds on childcare costs, while those in middle or lower income households tend to spend more on food.

The amount spent also varied by region, driven largely by the cost of housing. Those living in the urban south could expect to spend $230,610 on their child, but those living in rural areas could expect to spend far less—$193,590. Families living in the urban northwest can expect to pay the most at $282,480.

Related:
Why the Cost of Raising a Child Shouldn’t Stop You From Having a Baby

MONEY Ask the Expert

How to Tell if You Can Afford to Have a Baby

Pregnancy test with dollar sign
Sarina Finkelstein (photo illustration)—William Andrew/Getty Images

Q: “I’m a 38-year-old female, who has been focused on paying down student loans, currently at about $58,000 (my initial amount was $98,000). Minimum monthly payments are about $650, but I pay about $1,000 a month. I’ve paid down my loans by living very modestly, and at the expense of saving for retirement or planning a family. But now I’m afraid that if I don’t start having children now, I won’t be able to. Can I afford to start a family?” ‑ S.C., Brooklyn, N.Y.

A: “Having a child is an exciting but scary step, and money can be a big part of that worry,” says financial planner Matt Becker, father of two and founder of the blog Mom and Dad Money. “I wouldn’t dive in without considering the financial consequences, but I also wouldn’t let them scare you off.”

Considering the average cost for a middle-income couple to raise a child for 18 years comes in at just under a quarter of a million dollars, excluding college costs, according to the U.S. Department of Agriculture, you may never feel like having a baby is in the budget. But keep in mind that four million babies are born in the U.S. each year, and most of their parents adjust just fine to the new costs.

Even with your student loan debt, starting a family should be do-able for you, says Becker. You’ll just need to make room for in your budget for baby.

First step, get a handle on how you are currently allocating your income. (Mint.com can help you track your spending.) Then consider how your income might change after the baby, says San Diego financial planner Andrew Russell, who’s also a dad of two. For example, will you or your partner stay home part time or full time? Will you take any unpaid parental leave?

Once you know what your post-baby income will look like, get a rough estimate of the new expenses you will be footing, both one-time (like maternity clothes, hospital costs, car seat, crib) and ongoing (childcare, food and diapers). Becker recommends using Babycenter’s child cost calculator.

You’ll also want to factor in the cost of basic protections like life and disability insurance, which can help ensure your child will still be provided for if a parent dies prematurely or is seriously injured. “These will add to your monthly budget, but are well worth the cost for the financial security they provide,” says Becker.

With your big student loan payments, you may find through this exercise that your future expenses with baby exceed your income. So what next? See if you qualify for any loan forgiveness programs. Also, look for any fat in your budget to cut out—particularly recurring expenses that require a one-time effort to change like switching to a cheaper cell phone plan, cutting cable, or moving to an area with less expensive rents.

“Obviously this is a big life goal with a certain time frame, and if there is not that much room to cut back on spending, then you need to minimize the amount you pay back on loans,” says Russell, who adds that it’s okay for you to dial back to the minimum payment. “The debt is too large for you to take a good chunk out of it in the next few years, so you’re going to have to move forward with it.”

While the lower payment will add to your interest over time, the federal tax deduction on student loan interest—if you qualify—will offset some of the cost. Plus, every time you and/or your partner receive pay raises and bonuses, you can funnel that additional income toward the debt.

Once you’ve figured out your post-baby budget, start living on it—even before you get pregnant, Becker advises. And put the money you would be spending into a savings account. Besides helping you see if you can handle the budget, “this helps you build up a savings cushion that will relieve a lot of the financial anxiety that can come with a growing family,” says Becker. You will need to plump that cushion before the baby’s arrival anyway: With the general rule being to have cash reserves equaling six months of living expenses, you’ll need to make sure your emergency fund now reflects all the new costs you’ll be covering.

Related:

MONEY

Help! My Wife’s Dad Puts Her Money at Risk

Did you ever want to be a personal-finance advice columnist? Well, here’s your chance.

In our “Readers to the Rescue” department, we publish questions from readers seeking help with sticky financial situations, along with advice from other readers on how to solve those problems. Here’s our latest reader question:

My father-in-law still manages my wife’s investments. She is very cautious and conservative. He is reckless, but has been able to make money. What should I do about this situation, if anything?

Got a good answer? Submit it to us in the form below. We’ll publish selected reader advice in an upcoming issue. (Your answer may be edited for length and clarity.)

Please include your contact information so we can get in touch; if we use your advice in the magazine, we’d like to check with you first, and possibly run your picture as well.

Thanks!

To submit your own question for “Readers to the Rescue,” send an email to social@moneymail.com.

To be notified of future “Readers to the Rescue” questions and answers, find MONEY on Facebook or follow MONEY on Twitter.

MONEY holiday shopping

MONEY Experts Chat: Smart Holiday Shopping

Have you started your holiday shopping? If you’re like most people, the answer is “No.” Good. That means you still have time to plan your budget carefully, unearth the best deals, and keep yourself out of financial hot water.

Holidays and overspending go hand in hand. According to a recent report by the credit bureau TransUnion, the typical consumer charges nearly 40% more on credit cards in December than he or she does the other 11 months of the year. And that can lead to a debt hangover that takes months to recover from. Don’t let that happen to you.

Join MONEY magazine and personal finance website LearnVest on Thursday, Nov. 21 at 4 p.m. eastern time (1 p.m. pacific) to discuss smart holiday spending. Our experts will answer your questions about how to budget and save money during the holidays — and still get to enjoy the season.

The Experts:

  • Alexa von Tobel is the founder and CEO of LearnVest.com (@LearnVest), a leading personal finance website, and the author of the upcoming book Financially Fearless: The LearnVest Program for Taking Control of Your Money.
  • Diane Harris (@dianeharris) is the executive editor of MONEY. She frequently edits family money stories and has written extensively about holiday spending and kids.
  • Kristen Bellstrom () is a senior editor at MONEY, where she edits travel, technology, real estate, and spending stories.

The Topics:

During the hour-long discussion, our experts can weigh in on:

  1. Holiday Budgeting: How to figure out how much you can afford to spend, stick to that budget for the entire season, and avoid the credit card debt trap.
  2. Keeping a Lid on the Cost of Gifts: Tricks to find savings, the ideal times and places to shop, and the best ways to pay.
  3. Talking to Your Children: How do you set reasonable expectations for how much you’ll spend? And how do you talk to your family about keeping down the costs of gifts?
  4. Making the Season More Meaningful: What you can do to make the holidays feel less commercial.
  5. Holiday Travel Tips: Strategies to limit travel costs during this busy time.
  6. After the Holidays: What’s the etiquette on returns? Have you factored in the hidden costs?

How to Join:

  • Just hop onto Twitter on Thursday, Nov. 21 at 4pm EST/1 pm PST
  • Follow @MONEY, where we will be moderating the chat and sharing your great responses
  • Ask a question by including the hashtag #HolidayChat
  • Watch it all unfold by searching #HolidayChat on Twitter or TweetChat

We look forward to hearing from you via the #HolidayChat hashtag on Thursday!

Find MONEY on Facebook. Follow MONEY on Twitter.

MONEY family money

How to Ask Your Sibling to Chip in for a Parent’s Care

The financial burden of caring for an elderly parent is typically a large one: Family caregivers spend an average $5,500 a year, AARP reports.

That’s not to mention the physical and emotional toll. (Depression rates among working women caregivers over 50 are 2½ times higher than those of non-caregivers, one study found.)

So if your siblings aren’t sharing the load, you’re probably bearing some resentment. “Caregivers often don’t know how to ask for help,” says Gail Hunt of the National Alliance for Caregiving. “They just keep plugging away without realizing they’re burning out.”

Use this talk to get your brother to spare a dime and lend a hand.

The Ground Rules

Know your goals. In the short term you may want your brother to split the bills or take Dad on weekends. Also, deciding what you want long term, for you and your parent, helps put the situation in perspective, says Clare Fowler of Mediate.com.

Avoid finger-pointing. Stick to what’s happening now, not what your sis has failed to do in the past. “Blaming is not going to be helpful,” says family therapist Barry Sommer.

Have a fail-safe. Emotions can run high with siblings. When tempers impede progress, call a time-out.

When You’re Face to Face…

1. Opening gambit: “I wanted to talk about Mom’s care since she broke her hip. To start with, thank you for staying with her the last time I was away.”

Why it works: By acknowledging your sibling’s contributions, you’re setting yourself up as partners who will tackle the problem together — and preventing old rivalries from reemerging, says Vicki Rackner, author of Caregiving Without Regrets.

2. State the problem: “The home health aide has hastened her recovery. But paying $720 a week is straining our budget and putting us behind on college savings.”

Why it works: You’re laying out the costs straightforwardly, while providing enough detail of how this impacts your finances that he knows you’re not just being dramatic. “With family, it’s important to be direct or else you’ll sound disingenuous,” says Fowler.

3. Ask, don’t tell: “What do you think you could contribute?”

Why it works: You’re probably not fully aware of your sibling’s obligations and resources, so putting this question to him — rather than making a demand — will help you figure out a reasonable care-sharing strategy.

If you get pushback, figure out where it’s coming from and try to address his concerns. Should money be the issue, for example, you could suggest dividing costs based on income or having him spend more time with Mom so you can cut back the aide’s hours.

4. Split the jobs: “I’d like help thinking about what care Mom needs. Maybe we can start a list of duties — and figure out who should do what?”

Why it works: Collaborating on this list can help your sibling realize how much time caregiving requires. If he or she lives far away and any division of labor would leave you with a hefty load, you might ask your sib to share the cost of a geriatric-care manager to help you out.

5. Iterate a plan: “So we’ll split costs 60/40, with the option to revisit if our situations change. We’ll also Skype weekly to discuss Mom’s progress.”

Why it works: “You’re summing up the conversation and framing it so the goals are clear for both of you,” says Fowler. You’ll leave with a positive feeling and reminder of what must be done.

MONEY family money

How to Talk to Your Aging Parents About Money

Are bills piling up on Mom’s kitchen table? Are you worried Dad might fall prey to a scam?

Time to discuss if they need help with their finances. Proceed carefully because they may not see things as you do: A 2012 Fidelity study found that while 24% of adult children think their parents will need a hand with money, 97% of the parents do not.

“Conversations about money with your elderly parents are really about control — something they don’t want to lose,” says David Solie, author of How to Say It to Seniors. Try these tips.

THE GROUND RULES

Drop the attitude. An I-know-better air will put their backs up. Take care your concern doesn’t come across as if you think their intelligence is diminished, says Solie.

Avoid saying “you should…” Those two little words are sure to put them on the defensive.

Bring in a third party. To your mom and dad, you will always be a kid — which is why the talk may go better if you deliver it alongside an outside expert, says Paula Span, author of When the Time Comes.

WHEN YOU’RE FACE TO FACE…

1. Opening gambit. “Mom, I just read an article with great tips about how to simplify managing your money as you get older. Can I share a few of them?”

The strategy: “Bring yourself into the equation as a helper, not an overseer,” Span says. Framing the advice as someone else’s ideas may make your parents more open to accepting them.

2. Dangle a carrot. “I think we can save you some money on your cable bill, Dad. How about we take a look?”

The strategy: Suggest a small, concrete action with a clear payoff to start. An Allianz survey reveals that 61% of older Americans worry about outliving their money, so helping your parents cut costs is a good first move.

Seeing how beneficial your suggestions can be is likely to make them more receptive to other, more serious forms of help.

3. Keep your warnings indirect. “I know you’re too smart for this, but I want to tell you about this scam I heard about so you can warn your friends.”

The strategy: Being straightforward — “Mom, Dad, you need to watch out for people who ask for your bank account online” — may feel patronizing to your parents. Instead, plant a seed that doesn’t reflect on their competence to manage their affairs, says Colorado elder-law attorney Catherine Seal.

4. Ask if you can tag along. “My friend’s dad keeps getting invited to free-lunch retirement seminars. Do you? I’d love to go if you go.”

The strategy: Instead of trying to put the kibosh on a move you know is not smart, stand beside them during the sales pitch, suggests Kim Linder, a caregiver consultant. Then ask tough questions that will push your parents to think before they leap.

5. Use metaphors. “You wouldn’t buy a used car without a mechanic checking under the hood. Same goes for your investments. Let’s have a financial adviser look into this.”

The strategy: “In the second half of life, the right brain becomes the gatekeeper for information,” says Solie. “We respond better to stories and metaphors — the stuff that gives meaning to facts and linear data.”

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