3 Simple Lessons For A Better Financial Future

Eagle West Group

No matter how young you may have been when you started (properly) managing your personal finances you likely wish you had started sooner.

If you have a son or daughter, grandchildren, or nieces and nephews — chances are they all need financial guidance. Financial planning skills are not taught in elementary school. For most Americans coming to grips with their personal financials and planning for retirement both come as a rude awakening.

In fact, for many Americans, they don’t realize until it’s too late just how important financial planning is.

Northwestern Mutual’s 2018 Planning & Progress Study, which surveyed 2,003 adults, found that 21 percent of Americans have nothing saved at all for their golden years, and a third of Americans have less than $5,000. To put that into perspective, it means that 31 percent of U.S. adults could last only a few months on their savings if they had to retire tomorrow.   –  Source: CNBC

 

But you can have a tremendous impact on their ultimate success or failure. Just sharing the knowledge you gained through experience can be a great help toward getting them started. Start the conversation sooner, rather than later. Instill in them a sense of importance in proper financial management; how important these decisions will be for their entire lives.

If they can remember the name of every Pokemon and dinosaur they can remember these important lessons.

If you’re not exactly sure how to start this conversation consider these important tips toward achieving financial goals in the future:

  1. Start Now: This is the most important message you can pass along to them. Hammer it home, because this is the only way for them to build real wealth and feel secure about their future. A feeling of future security allows us to make better decisions for ourselves by taking some of the pressure off. And the sooner we learn the importance of saving, and the sooner we actually start saving, the better the results we will have in the long run.
  2. Cherish Great Credit: Good credit is no longer good enough. Today it takes great credit to do the really important things like buying a car or get a mortgage. And great credit takes effort. Pay off debts, managing credit appropriately, no delinquent student loans or unpaid electric bills floating around. Having great credit means actively managing your credit by checking your report regularly for any irregularities. Anything that pops up needs to be corrected immediately.
  3. Set Financial Goals: Once you get them convinced of the importance of saving and managing, then you can introduce them to the concept of setting specific financial goals. This might be difficult because they will likely be focused on major planned life decisions. They will need to be reminded that their adult life will be filled with unplanned expenses and having specific funds set-up for these unpleasant surprises is always a good idea.

The essence of solid financial planning is preparation. The better prepared you are for all of life’s twists and turns, the better the outcome in the long run. By sharing what you have learned, what you know about the importance of financial planning, you will be giving someone else a chance to avoid some of the obstacles you may have encountered. Especially if the lesson is “start saving early!”

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Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Elevate and Eagle West are not affiliated with Cambridge.

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