Top Financial Lessons to Share With Your Children
Even if you children are adults, they still need your advice
- Save 10% for retirement: Start at whatever allocation you can afford (usually you need to contribute 4% to get all your company match), then increase your contributions by 1% a year until you get to 10%. DO NOT CASH OUT YOUR 401K WHEN YOU CHANGE JOBS!!!!!
- Rainy-day Fund: Financial surprises happen at the worst time. Have a rainy-day fund of 6 months living expenses in a savings account. Start by saving $500 monthly.
- Life Insurance: Have $500,000 – $1,000,000 life insurance until their kids are off to college. Always buy inexpensive term insurance.
- Cars: Please Do NOT lease cars. Buy them and drive them for a long time.
- Dave Ramsey: If you struggle with credit card debt, register for a Dave Ramsey class. His program is truly life changing and are offered all around the treasure valley.
- Financial Plan: Have a plan to ensure you are on track to retire and accomplish other important financial goals. Everyone over age 35 needs a plan.
- Inheritance: Do not promise your kids an inheritance. If you plan on giving them money, don’t demotivate them. Allow them to develop respectful money habits by themselves so they will honor your values with your money.