Capitalizing on his genetic inheritance to bat left and throw right, professional baseball player, Sam Ewing once said,“Parents who wonder where the younger generation is going should remember where it came from.”
In order for your children to experience the positive impact of inheritance - whether it’s genes, wealth or intelligence- parents need to equip their children with the resources and commitment needed to achieve success. This also applies to ensuring your children have the required knowledge and tools for financial wellness - especially as they enter college and transition into adulthood.
MarketWatch published an article highlighting some of the biggest financial mistakes Gen X and Y (24 – 58 years of age) have made, which included not getting professional financial advice, lack of savings, not taking advantage of employer matching, not looking beyond retirement investments, and not investing in stocks.
Wondering why this applies to your family? By evaluating and learning from previous generations, you can help your children start college off on the right foot and prepare them for a successful financial future. Starting with the four simple steps outlined below, you can set the foundation for your children to make better financial decisions when they enter the workforce and eventually start a family of their own.
1. Create a budget
Track all income and expenses for a period of time. This allows them to see where money is going and how it is being spent. This is also a great opportunity to evaluate what types of expenditures are considered a “need” versus a “want,” which helps prioritize spending.
2. Seek advice from trusted resources
During this time it is important to ask questions and - when risk is minimal - encourage mistakes as a learning opportunity. Being able to reach out to family for advice is key and will help develop relationship-building skills when it’s time to transition to a professional advisor.
3. Getting a job and establishing credit
Balancing a job with school not only helps with prioritization and time management, but also brings in a steady cash flow. This establishes financial confidence and enables credit-building opportunities. We recommend starting off small (such as getting a credit card for only refueling the car) to minimize risk while still establishing credit.
4. Take advantage of technology applications
With today’s fast and growing technology, our children live in a world where knowledge is at their fingertips. There are mobile apps out there that help teach financial planning and investment strategies with little to no risk.
Our clients understand the importance of creating a well thought-out, long-term financial plan – for them and their families. We are here to ensure you are headed in the right direction and help support your family’s immediate and long-term financial planning goals.
If you are interested in M.J. Smith & Associates reviewing your family portfolio and/or discussing options, please contact us today and we would be happy to talk with you.
The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.This information does not purport to be a complete description of the developments referred to in this material. Links are being provided for informational purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.
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