John Bohan, Nederland. Last week I received a text from my nephew in Florida, which read, “Hey Uncle John, my Dad said I should talk to you.” My first thought was, “Wow! My nephew is asking for advice!” Is it about his career? Is he buying a new car? Or maybe he’s wondering how the global economy will affect the markets going forward? No, it was much more mundane, but right up my alley. “How much should I put away for my retirement?” he asked. I was beaming with pride! Drew is a 22-year old, recent college graduate who is joining the police academy. And, he was asking about his retirement. This is the Holy Grail for financial planners. We spend our entire careers trying to get families to plan, and here was my nephew, way ahead of the game.
I composed myself, and after drafting multiple texts, I went old school and called him on the phone. After 15 minutes, we had devised a plan. Save 11% for retirement, build an emergency fund and pay down his student loans in 10 years. How many of us would have asked for financial advice when we were 22? Most of us blindly fill out paperwork and then hope it works out down the road. If our young adults aren’t asking for financial guidance, be bold and give them your common cent$ advice anyway.
Personal finance is one of the most important topics we can teach our children, even those young adults. And since personal finance hasn’t become a high school or college credit requirement, that duty falls on our shoulders as parents or grandparents. Here are a few tools to teach your kids, whether they are five or 25, about money that will go a long way.
Just Save It – Start by putting $5, $50, or $500 from every paycheck into a savings account.
Be Thrifty – It the never goes out of style to be conservative with your spending.
Use Financial GPS – Map out your financial goals and monitor your progress regularly.
The truth is, you don’t have to be a banker, business owner or financial advisor to teach your kids good habits when it comes to finances. If you’ve been fair to partly cloudy with money in the past, you’ll have a few lessons of your own to teach them about what not to do and a few more tips to set them on the path to smart money management.