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Your Child's Money

March 02, 2016

What to do with the 'leftovers'

It is common amongst parents and industry professionals to discuss the various breakdowns of commissions, wages and percentages associated with the money your child makes during his/her acting career.  However, what is not discussed regularly is what to do with the little bit of money that is left over after each paycheck is divvied up.

Children In Film wants to provide you with a breakdown of percentages, but also wants to provide a few suggestions for your 'leftovers.'

Let's go with a real scenario.  So your child just came home with her first check.  She made $100.  Now 10% is going to her agency and 15% is going to her manager.  She now has $75.  Then another 15%, by law, goes in to her trust account leaving $60 and don't forget about taxes!  A rough estimate leaves her with $40.

    $100.00
   - $10.00 - Talent Agent
   - $15.00 - Talent Manager
   - $15.00 - Coogan Account
   - $20.00 - Income Taxes
------------
$40.00

This amount may be disappointing or, at the very least, seem insignificant.  But remember, your child has earned this money and even $40 is exciting, and this $40 is your child's money.  These 'leftovers' can be used in a variety of ways to not only reward your child, but to also teach your child the value of money.

Here are some ideas we've come up with to help you decide what to do with your leftovers:

Save, Save, Save: Yes, 15% of your child's money is going into a trust account.  This is good news for when she turns 18 and is perhaps ready to buy a car, pay for college or travel.  However, it doesn't necessarily teach her the process of saving and the responsibility associated with managing money.  One suggestion is to take a small portion of your child's earnings each month and purchase a savings bond.  Even a $25 savings bond, in a matter of years will be worth $50 and your child can learn to associate positive feelings with saving money.

Reward your child: remember, this is your child's money.  However, it is up to you, the parent, to teach your child how to responsibly handle his/her earnings.  As a reward for work well-done and for saving a portion of earnings, perhaps you will decide together that a small portion of this money goes strait to your child in cash to spend in the manner that they choose.

Banking: Depending on your child's age, consider setting up a joint checking and/or savings account at your bank.  This will allow your child to learn about banking and feel excited when they have their own statements, bank card, and/or check book.  You may also decide to invest.  Remember, time is on your child's side.  Financial institutions such as the AFTRA-SAG Federal Credit Union can help you and your child invest appropriately.



 
 
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