kids and money Archives - The Free Financial Advisor

What is the Coverdell ESA?

May 29, 2019 by Jacob Sensiba

Introducing the last account type on our quest to find the best way to save for college, the Coverdell ESA.

Without further delay, here’s what you need to know about the Coverdell ESA.

What is it?

Like the 529, the Coverdell ESA is an education savings vehicle for K-12 and secondary education. Coverdell ESA stands for Coverdell Education Savings Account.

It got its name from Senator Paul Coverdell, who introduced the legislation for a similar account, the Education IRA. In 2002, a new piece of legislation was introduced to make the account what it is today.

The 529 and the Coverdell ESA share many of the same characteristics, but there are some things that set it apart. All of these will be listed below.

Advantages

Savings and investments in the account grow tax-deferred and are withdrawn tax-free when used for qualified education expenses.
When it comes time to withdraw, those funds are not considered income, as long as you are using them for qualified education expenses.
Can use in conjunction with other education tax credits, like the Lifetime Learning Credit, as long as there’s no double-dipping.
These accounts are self-directed, so your investment options are plentiful. They include…
- Age-based funds
- Static mutual funds
- ETFs
- Stocks
- Bonds
- Real estate

Disadvantages

Contribution limit of $2,000 per child per year.
The funds inside the account are taken into consideration when you file for financial aid. The assets are considered their parents assets.
If the money is not withdrawn from the account by the time the beneficiary is 30, they could be subject to taxes and penalties.
- After 30, the funds inside the account become fully taxable and you’re penalized 10%.
Like the 529, contributions to this account are not tax-deductible.

Unique Characteristics

Only eligible to families/individuals that fall below an income threshold ($110,000 for single taxpayers and $220,000 for couples who file jointly).
The contribution limit is $2,000 per child per year, so even if a family member opens an account for your child, you still can’t go over that number, or there will be a penalty.
Qualified expenses include…
- Tuition
- Books
- Supplies
- Equipment
- Tutoring
- Special needs services
And can also include…
- Room and board
- Uniforms
- Supplementary and transportation services
With a 529, the account owner has control over the assets. Conversely, with a Coverdell ESA, the beneficiary has control.

Conclusion

Effectively, there are three education savings vehicles used today. The UTMA/UGMA, Coverdell ESA, and the 529 plan. I’ve written about the other two in the past so go check those out.

On paper, the 529 looks like the best option, with a high contribution limit, a large number of qualified expenses, and there’s no penalty for letting funds sit for decades.

That is all true, and honestly, I prefer the 529, but the vast, vast majority of people that are helping their children save for college will not come close to the high contribution limit.

The only drawback to the Coverdell ESA is the penalty if the funds aren’t used before 30. Other than that, I don’t think the $2,000 contribution limit is a factor because most people can’t put that much away, anyway. Not without sacrificing their ability to save for retirement, as well.

That said, they’re both great options and you can’t go wrong with either one.

What Is A 529 Plan?

May 22, 2019 by Jacob Sensiba

Education, especially secondary education, is getting more and more expensive. The cost of a 4-year public university has gone up 110% from 1994 to 2014 (Source).

Conversely, wages have grown an astounding 8 times slower than that (Source).

What can you do to save for college? How can you help your kids? Are there certain vehicles that work better than others?

We’ll take a look at one of those in the following article.

What is a 529?

A college savings plan that is exempt from federal taxes, if you use the funds to pay for qualified education-related expenses.

Those expenses include tuition, books, room and board, computer equipment, and necessary supplies for students with special needs, as long as the student is attending at least half-time.

Advantages

Funds can be used for K-12, university, graduate school, and trade schools.
Parents can withdraw $10,000 per student per year to pay for tuition ONLY.
Other people, besides the account owner, can contribute to a 529 plan.
If funds are used for the beneficiary you intended, they can be transferred to a family member.
Earnings grow tax-deferred

Disadvantages

Gift tax exclusions – You are exempt from paying gift taxes if you keep it under $15,000 per individual per year, or $75,000 as lump sum every 5 years.
A penalty of 10% will be assessed for funds used on non-qualified expenses.
Limited investment options – most plans offer mutual funds as investments
- Risk-based – Aggressive, moderate, conservative, etc.
- Age-based – You can select an age-based fund from the get-go, and the fund company will reallocate into new funds as your child gets older.
- Self-selected

Miscellaneous

All plans come with federal tax advantages, but some states offer tax deductions and credits as well!
Every dollar in a 529 plan will deduct 5.6% from your family’s need-based financial aid
- One way around that is to have a family member act as the custodian for the account, so it isn’t in your name
- However, once the child begins withdrawing the funds and is still attending school, they could have 50% of their financial aid withheld because those withdrawals are considered income
You can open one using other state’s plans, besides your own state

Other types of accounts

Coverdell ESA – Similar to the 529 in that you use the funds to pay for education-related expenses, However, there is an annual contribution limit of $2,000 per beneficiary, and there’s also an income restriction (once you make above a certain amount, you can no longer contribute to a Coverdell ESA).
UTMA/UGMA – Stands for Uniform Transfer to Minors Act/Uniform Gift to Minors Act. I’ve written about this in the past, so if you’d like to learn more, check out the article here.
IRA – You can use a Traditional IRA or a Roth IRA to pay for education expenses. Similar to the 529 and the Coverdell ESA, the expenses must be qualified and the student must go to a qualified institution, as indicated by the Department of Education. The most beneficial way to use an IRA is to withdraw the funds from a Roth IRA, but only withdraw what you contributed.

Conclusion

Secondary education is expensive! If you start saving for your kids’ college right away, the compounding returns could really help you save a decent amount.

It’s important to use the right vehicle, and, in my opinion, there’s no better option than the 529.

If you’d like to learn more about paying for college, read this article here. Or if you’re a future or current student that need some finance tips, read this one here.

Be advised: Investments in 529 plans involve risks to principal and may involve additional fees such as enrollment charges and annual maintenance fees. 529 plans offer no guarantees. There are exceptions to the gift tax and estate tax exemptions; please contact a qualified tax, legal, or financial advisor for more information prior to investing.

If reading this blog post makes you want to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

What are UGMA and UTMA accounts?

May 8, 2019 by Jacob Sensiba Leave a Comment

What is a UGMA account? What is a UTMA account? How are they different? What is the purpose of using one over other savings vehicles?

We’re going to dive into those questions and a few others in the following piece.

What are they?

The UTMA and the UTMA are custodial accounts. An adult (the custodian) opens an account for the benefit of a minor.

UTMA stands for Uniform Transfer to Minors Act. UGMA stands for Uniform Gift to Minors Act. The difference has to do with the age of majority, but more on that later.

Characteristics

For all intents and purposes, these accounts are treated the same. As I said, an adult opens the account for the benefit of a minor.

The account itself does not have a limit of how much you can contribute to it, however, there is a gift tax exclusion for the custodian or anyone else that contributes to the account. While I’m here, I should mention that anyone can put money into the account, not just the custodian.

Anyway, the gift tax exclusion is $15,000 per recipient. If the person doing the gifting this amount, they could owe the gift tax.

As far as the age of the majority goes, generally the UGMA is 18 and the UTMA is 21. However, every state is different, so make sure you check to see what the age of majority is in your state.

Prior to the age of majority, the minor is unable to use the funds in the account UNLESS it’s for the benefit of said minor. Once they hit the age of majority, they can use the funds however they want.

Disadvantages

Two of the more common vehicles for education savings are the 529 plan and the Coverdell ESA. Now, I’m not going to go into those two, but they each share one key advantage. Any funds withdrawn for education-related expenses, come out tax-free.

The UTMA/UGMA does not have this capability. What’s more, the taxes on any capital gains made and/or dividends received throughout the year must be paid by the minor.

Also, funds sitting in a UTMA/UGMA, for the sake of the FAFSA, are considered the minor’s assets, and can negatively affect financial aid.

Advantages

There’ve been a lot of negatives so far, and if I’m being honest, there are other savings vehicles available that have more advantages.

The one thing I can think of as an advantage is accessibility.

With the 529 and the Coverdell ESA, any funds not used for education-related expenses are subject to a penalty.

With a UGMA/UTMA, the beneficiary can use the funds for anything that benefits them (while they’re a minor), or they can use them for anything at all once they’ve hit the age of majority.

Conclusion

If you are looking for accounts that are designed around saving for college, then a UTMA/UGMA is not for you. However, if you are looking for an account that is easy to set up, easy to use, and gives you more control, then I definitely would recommend utilizing one.

To make a formal recommendation, I’d go with the UTMA. Again, depending on your state’s rules, this enables you to save more for the beneficiary and prolongs when they can have access to those funds.

If you have any questions about what was said here and for my disclosures, go to my website.

If reading this blog post makes you want to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Summer Money Activities for Kids

May 21, 2013 by Average Joe 20 Comments

Shannon Ryan joined us to kick off the new Stacking Benjamins podcast yesterday, and we received a ton of great feedback and requests to “get this in writing.” So, we owe a big thank you to Shannon, who sent over her tips for us. If you missed the podcast, here are some great tips to help kids learn about money. Enjoy!

Summer is the perfect time to start talking to your kids about money as life is less structured, and you have more time to slow down and have these important conversations. And don’t worry–money conversations do not have to be boring! Position them correctly and you can have fun while teaching your kids good, life-long money habits.

1. Set Clear Goals and Make It Fun

Over a favorite family meal, we discuss how we’re going to use our family money in three areas – what will Save our money for; what will Spend our money on; and who will we Share our money with? If your children are older than 6, have them create their own summertime money goals. For example; Save–for a new bike; Spend–during a trip to the ice cream store; Share–with a local charity, such as the humane society where you can deliver your donation in person. Once your kids have their goals, help them find fun ways to earn money. For example, post jobs in the house, a lemonade stand, etc.

Fun Activity: Make goal-setting a fun event and your kids will no longer dread the word “goals”. Celebrate achievements and create friendly, sibling competitions on who can reach their goals first.

2. Slow Down and Have Regular Money Conversations

Some of my best money conversations with the girls happen during our normal activities. For example, take your kids shopping. Have them help you prepare the shopping list to create a clear understanding on what the family “needs” are and where “wants” fit in. At the store, be sure to talk through your purchases with your kids instead of making internal comparisons. For example, why you buy a name

brand vs a store brand for one item and not another.

Activity Idea: See how much money you can save on groceries for the summer. Make a list of needed items and search for coupons and specials. Use the money saved for something fun.

3. Make Your Goals Visual

Post family and individual goals where everyone can see them. You can cut out pictures from magazines or print pictures from the internet to create a vision board for your goals. Set up jars or envelopes for their Save, Spend and Share goals. When they earn money, discuss with them how they want to allocate their money towards their goals.

Activity Idea: Have you kids decorate their jars or envelopes with images of the things they plan to save, spend and share their money on or with.

4. Post Jobs so the Kids Learn How to Earn Money

I am not a believer in allowance, but I do believe you need to find a way to put money in your kids hands, so they can learn to make decisions around it. Each week create a job posting that consists of various chores that are important to running the house, but outside the children’s expected responsibilities (in our house, this includes–making beds, cleaning dishes and cleaning up after themselves).

Fun Activity: Weekly job postings allow kids to pick and choose which jobs they want to do. Plus, they can choose whether to do a lot (and earn a lot) or do little (and earn little). We treat this like a real job and on pay day, if they haven’t done their work to my satisfaction, they may not get paid. Or if they have gone above what the job entailed, they could earn bonus.

5. Let Them Flex Their Decision-Making Muscles!

We all have a finite amount of money, so the earlier you can teach your children to make wise choices with their money–the better! One of the best ways to teach them is to involve them in the decision-making process. You want them to figure out what makes them truly happy, rather

than listening to what others tell them they need. Once they master this, they will spend their money on the things they want and learn to create joy with any amount of money.

Fun Activity: Create an entertainment budget. Give your kids multiple options, some expensive and some not, then let them figure out how to use the money.

Photo: Mosieur J.

Shannon Ryan, CFP® is a Mom on a mission to help busy parents teach their kids simple, value-based principles that guide their money decisions and support their long-term financial well-being. Shannon wrote The Heavy Purse to help parents start money conversations with their children through a fun, bedtime story and developed companion workbooks to help deepen those conversations. Visit www.TheHeavyPurse.com to learn more on how to raise Money Smart Kids.

5 Summer Activities to Create Money Savvy Kids: High School

June 26, 2012 by Average Joe 29 Comments

Ah, we made it! It’s most rewarding yet the most challenging to work with high school students on money management.

While these activities are the most fun for parents, high school students are more difficult to engage than younger children.

If you don’t have high school age children yet, you may not know this, but your brains will disappear for about four or five years.

Looking for tips for younger children? Try:

5 Educational Summer Activities For Kids – Early Elementary

5 Summer Activities to Create Money Savvy Kids: Upper Elementary to Middle School

5 Great High School Activities

1) Family book club. Right now, my 17 year old kids and I are reading I Will Teach You To Be Rich by Ramit Sethi. If you haven’t read this book yet, by all means, start now. It contains powerful advice wrapped in easy-to-understand language.

Every day the kids read a chapter. Then, at dinner, we discuss that day’s reading. Sometimes these conversations devolve (“why does a stock go up or down?” “what’s a good Roth IRA investment?”), but I love it. Who doesn’t want to have relaxed conversations about money with a curious 17 year old?

Why I like it: I get to ensure my kids get to college with some clue about money before they arrive. Because I made sure the book was fun and easy to read, and because I don’t preach, we’re able to have great talks about money.

2) Engage kids in the Family Meeting. If you’ve read this blog before, you’ll know that I love the idea of a family meeting. Budgets within a family are more about good communication than about counting pennies. If everyone is on the same page spending each day will be more careful, and life is made up of these little crisp 24 hour periods.

Some people have a violent reaction to this advice. “Show my kid my bills and my savings? That’s none of their business.” You are correct, but lets challenge your assumptions: why is it taboo to talk about your financial situation with others, especially those as close as your teenager.

Boundaries must be drawn. You’ll have to explain what happens when the whole street learns about your finances. But in the bigger picture, if they help you pay the bills, evaluate savings and plan large purchases, you’ll hand them a lifetime of knowledge that they’ll appreciate down the road.

Why I like it: When we began talking frankly with our children about bills and savings, they began to see how tight every month is for the average family. Next year we were planning on going to France for their graduation. The reality of two children in college at once has set in and we’re downgrading the vacation plan to a rental house on Lake Michigan for seven days. No groans from the kids because they understand the math behind the decision.

3) Find a job. I’m not talking about grabbing the local Dairy Queen gig (if I had that summer job I’d weigh about 750 pounds!). I’m talkin’ about helping junior through the process of fighting for a summer internship at a resume-building position. If they’re interested in engineering, try to find opportunities with a large local company. If law or medicine, apply at the hospital, a law firm, or the local doctor’s office.

There’s a ton that junior learns while creating a resume, dressing appropriately and speaking well. The training involved in competing for these positions is a good primer in adult life skills.

Why I like it: By working in a professional environment, high school kids get a first hand look at how business works. Studies have shown that people who work in “real jobs” before college are more likely to do well in the classroom because they know how their learning might apply in the real world.

4) Scholarship hunt. Finding money for college is a full time job. The internet is brimming with opportunities for money, but you have to know who to ask and what scholarships to pursue. Most high schoolers only scratch the surface when it comes to searching for scholarships.

Instead of one-offing each opportunity, we found quickly that many of the scholarship opportunities were similar. My kids could write a couple of basic essays and then modify them to fit each particular offer. Most needed references from teachers and community members. We didn’t just learn about scholarship, we learned about creating systems to efficiently attack more quickly.

Why I like it: By formulating essays and asking for letters of reference, kids learn about the importance of written and verbal communication. They also realize that “going it alone” isn’t usually a good idea. It makes sense to find some powerful friends to help you….AND my kids were surprised that most powerful people want to help.

5) Board games. I’m back with more board games to teach the family about money. This time the games are downright fun for adults. Games such as Acquire can teach simple mergers and acquisitions. Power Grid is a modern-day version of monopoly involving power companies. And, in this year when the politics of the nation are up for grabs, 1960: The Making of a President is a good primer on the campaign process while also serving as a fun way to learn some history.

Why I like it: Board games are a great way to spend time with your kids. Instead of arguing or fighting about curfews and money, you’ll enjoying each other’s company over a communal activity.

How do you teach high school kids about money? Let’s have some more ideas in the comments below!

Photo Credit: Reading: NannySnowflake; Internship: ChesCrowell

5 Summer Activities to Create Money Savvy Kids: Upper Elementary to Middle School

June 19, 2012 by Average Joe 14 Comments

Looking for educational activities for younger kids? Check last week’s installment: 5 Educational Summer Activities for Kids – Early Elementary.

I mentioned before that I have a love/hate relationship with summer.

To keep my twins from just attacking the XBox every day, I designed a bunch of fun summer activities, many that taught important life lessons. Let’s tackle those games I used when they were from third grade till about 6th or 7th grade.

Steal These Ideas!

If you have kids between the ages of 9 and 14, and wonder how you’ll keep the family entertained all summer, here’s a well-used list of activities that I can personally endorse…because we did them all.

Next week we’ll move into the High School years.

1) Grocery Store – Good news parents: if you plan correctly, the grocery store game only gets better as kids get older. At this age we had a couple of games. First we planned the trip to the store. Not only did they help me find valuable coupons, but they also searched online for deals on items we knew we’d need. This wasn’t just educational, it actually saved me time and money. At the store, each child had a personal list of items to find. After a few weeks we knew the store like the back of our hand and could get in and out in no time. The best news? They were so excited about the cash register and whether we made the budget or not that the “can I have one of these?” moments went out the window.

Why I Like It: At 17 I feel like my kids are already becoming savvy shoppers. They hunt for deals and are willing to compare costs before making a purchase.

2) Open a Savings Account – I’ll admit that we were late to the game here. We should have started this at 10 years old but didn’t get there until much later. My mistake. By taking kids into the bank and getting them acquainted with how it works, my kids already enjoy the banking experience. We compared different savings account options (even though they only had money at the time for the basic savings).

We talked about the difference between savings and checking, and decided together to forego the ATM card. The bank was great about this. I think so few kids are interested that they really enjoyed the fact that my kids seemed interested. We took a bank tour and they spent time answering all of my twin’s questions.

Why I Like It: I would have liked it better if I’d done this task at 10 years old with them (earlier ages, in my opinion, have limited “educational” returns). My kids both realize now how valuable a bank account is and how dangerous an ATM card can be. I think they’re getting close to ready for college and accounts on their own. At the very least, they’ll feel comfortable with the bank when they go to open their own account.

3) Start a Business – Lemonade stand. Carnival. EBay products. Dog sitting. Baby sitting. Heck, even blogging. Opening a business can be a rewarding experience, but not if you just hand junior a bunch of stuff and tell her to go sell it. If she keeps all of the proceeds, I think you’ve done her a disservice. Instead, create an overall plan for the business. Talk about an advertising campaign. Look at the cost of goods. Help them buy the product (via a loan from you) and then talk about their mark up. When they make money, they have to return the money they borrowed from you before making money. We had many little businesses along the way, and ran them this way each time.

Why I Like It: You’re teaching so many skills with this activity I can’t even begin here. Marketing (persuasive writing), technology, math, economics, are only a few of the skills kids will pick up while trying to learn to sell a product.

4) Board Games – Last week I mentioned what a game geek I am. Board games can teach kids so many money skills. An older game, Payday, is one of my favorites for financial lessons. You get paid once a month, pay bills and try to take advantage of opportunities (deals) when they arise. Buy insurance to guard against health and auto issues. On that note, another bad game but great teacher of financial lessons is Life. Have children, go to school (or not), buy insurance (or not), move up the career ladder. Sure, the game is very luck dependent, but it’s fun to move around the board and see just how many kids you can fit in that car (until you have to feed them….).

By age 12 kids will be able to grasp games that are better simulations, such as Agricola, Power Grid and Puerto Rico.They may not teach a child a ton about money today, but they do give kids a leg up on analytical skills and grabbing opportunities.

Why I Like It: Playing board games is a great way to teach lessons while playing as a family. I ‘m glad my kids like to play games. We generally aren’t competitive and have a few laughs together that I think we’ll all remember forever. (IF you want to purchase games listed AND help support the blog, you can use the Amazon links above to make your purchase. Thanks!)

5) Hold a Stock Tracking Competition – Step one of owning stocks is gaining a basic understanding about how the stock market works. Don’t think you know how it works well and worried you won’t be able to teach them? Learn together! Make a list of companies you admire. Research whether they’re public or not (and have stock that you can track). Give yourself an imaginary sum of money and invest!

We’d have a summer-long competition. The winner’s prize? They picked what we were having for dinner one night and we bought ice cream to celebrate.

Why I Like It: To effectively teach anything you have to brush up on skills yourself. I found that because I was teaching my kids, I paid better attention to my own portfolio.

What are your favorite activities with older children? Did you start any businesses at that age? Share in the comments!

Photo: Grocery List: MStewartPhotography; Lemonade Stand: EvinDC

5 Educational Summer Activities For Kids – Early Elementary

June 12, 2012 by Average Joe 16 Comments

I have a love/hate relationship with summer.

Without any direction, my kids have one thought: XBox. It takes a ton of energy to continually point them to worthwhile summer activities when they aren’t at work or sports practices (even when I take away the XBox).

I love spending time with my children during the summer,

…but my professional goals get chucked out the window when they’re home.

I avoid frustration by realizing that my kids won’t be here forever. This helps me realize again that I want to spend every minute possible doing summer activities with them. They’re already past the “dad’s cool” age (I’m not sure we spent much time in that stage….sigh), so I’ve decided that educational fun is best. Why not have a good time and learn something at the same time?

I can’t believe that in 14 months I’m going to lose them to college. After that, who knows where the wind will take them?

My Experience Is Your Gain

If you have kids under age 10 and wonder how you’ll keep the family entertained all summer, here’s a well-used list of educational activities that I can personally endorse…because we did them all.

This week we’ll tackle Early Elementary years (I’ve blocked out everything before that). Next week we’ll hurdle Late Elementary, then we’ll move into the Middle and High School years. I’ve noted whether each educational activity is an indoor game or outdoor game to help you find what you’re looking for.

1) Grocery Store – (indoor games) I can’t keep up the “keep your hands off that”, “no, we can’t get it,” “Put that back!” game for very long. You can call this game “self preservation.”

First, clip coupons. Give them the scissors to cut out the ones that you want. Have them help you organize them in a box. Then, make the list together.

At the store, make it a scavenger hunt. As you approach aisles with coupon items, tell them that you’re getting close to treasure. It’s not only one of our favorite educational summer activities, but a good one for all year round.

Why I Like It: A trip that can be a drudge becomes fun for the kids and bearable for you. Plus, I actually begin seriously looking for grocery deals that might become more “treasure.”

2) Count Change – (indoor games) Each day we’d come home and empty pockets into a jar in front of the piggy bank sitting on top of a piece of paper. Here’s what we’d do then:

First, talk about the different denominations. It’s a mystery to a 5 year old why a dime is worth double the value of a nickel when it’s half as small. Mind bender.
Second, track the years of the coins. For fun one day we started looking at the years on the coins. With newer quarters we started collecting states.
Finally, we’d track the amount of money that went into the piggy bank on paper. Initially they’d watch me do the math. Later, as they improved, they’d do some or all of the math.

Why I Like It: Besides being a coin geek, my kids realized that change is valuable and they learned some simple math skills. They’re still great at math!

3) Insurance Video – (indoor games) Your homeowners’ insurance policy (hopefully) allows you replacement value of all the items inside (with the exception of high-dollar assets, which should be separately insured). The problem? You have to remember what you owned.

So, I pretended we were making a movie. We dressed in costumes (by we, I mean “they”…I’m a geeky dad, but the costume thing is beyond me). We created some silly plot line where they had to open drawers as I peered inside. That took almost three days to make and we had a blast.

Why I Like It: You’re completing a task hardly anyone accomplishes and entertaining the kids at the same time. You’re a ninja.

4) Board Games – (indoor games) You may not know what a game geek I am. I started playing board games in 8th grade when my family got rid of the television (my grades went through the roof AND we had family game nights all the time…and still do).

Monopoly Jr. is an awesome game to teach young kids about money. My kids had their breakthrough (finally understanding the difference between a bill with a $1 on it and another with a $5 on it) while making change in this game. Different than Monopoly (which I can’t stand), the game is short and has a theme more fitting young kids: you’re buying rides at an amusement park.

Why I Like It: The game is widely available AND fun for everyone involved…even dad. (IF you want to purchase the game AND help support the blog, you can use this Amazon link to make your purchase. Thanks!)

5) Charity Drive – (Indoor games / Outdoor games)What’s more fun than cleaning the garage? Cleaning the garage with your kids and giving stuff to charity. This one is last because it’s a little like herding goldfish….but we got it done. Load up unwanted items and head to your favorite charitable institution.

Once I explained what we were doing, my kids decided to donate some toys they didn’t use anymore.

Why I Like It: It’s important for me to teach my kids that we live in a community and not everyone is as fortunate as our family. I also appreciate the tax deduction!

What are your favorite summer activities with children? Or do you remember a favorite from when you were a child? Share in the comments!

Photo Credits: Grocery: epSos.de @ Flickr; Man and Camera: puukibeach @ Flickr)