Why Kids Should Learn to Save as Early as Possible

Although preparing young people for a secure financial future is crucial, research has indicated that teenagers in the U.S. are woefully uninformed when it comes to saving and investing. If you have children, it may surprise you to know that kids as young as five years old have the ability to start learning about saving and investing their money.

Here are just a few reasons why it’s crucial to teach your kids about saving and investing as early as possible:

Kids are Developmentally Capable of Learning

A number of studies have indicated that most young children are developmentally capable of learning to save money – even if it’s in a physical piggy bank at home to start off with. Teaching them early will not only provide them with a hands-on mindset about saving part of the money they receive; it could also help them acquire a taste for financial planning that will remain with them into adulthood.

It will Teach them about the Value of Money

In today’s society, physical cash is being exchanged less and less – making it more challenging than ever to educate children about spending and saving. As such, it’s imperative for you to include even your youngest child in the household budgeting process because it will help them develop a basic understanding of how money-related transactions work when using debit or credit cards and online banking channels.

They can Learn about Delayed Gratification

Another reason why it’s crucial to teach young children about how money works is that it will help them to understand the concept of delayed gratification – which will go a long way in helping to ensure that they remain free from consumer debt as adults. 

Studies were performed with young children that involved offering them one piece of candy or one toy right away or two pieces of candy and additional toys if they would be willing to wait for a short while. Most of the children involved in the study opted to wait so that they could receive a better return – meaning that they fully understood the concept of not being able to have everything they wanted right away.

Set them Up for a Secure Financial Future

Educating your children about saving from a young age will also help set them up to enjoy a solid financial future – without the need to move back home due to money-related difficulties. Teaching them the concept of ‘spend, save, share’ will not only introduce a healthy attitude to any amounts of money they receive; educating them about sharing or donating to charity will in turn help raise children to become socially aware adults as well. 

One of the best ways to help teach your kids about money is to have them open their own bank account as soon as they start receiving an allowance and/or financial gifts from friends and family. If you would like additional advice regarding financial education for children, get in touch with our team today. 

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Retirement Tips

Keen to Retire Earlier than Planned? Keep these Points in Mind

Most Americans dream of being able to retire early in a convenient and comfortable living environment, surrounded by those that they care about the most. However, with so many changes that have taken place over the past few years, retirement can seem further away than ever before for many people – and some may now even think that they’ll never be able to retire because of the lack of income after doing so. 

If you intend retiring earlier than usual with a decently sized nest egg, you’ll need to keep the advice below in mind:

Establish a Plan

Several working Americans completely forget to even think about retirement. Although you may have already set up your 401(k), you may not be taking full advantage of retirement savings options that are available to you. 

These days, several online retirement tools are available to help you determine where you are with your current savings plan, as well as how far you still have to go until you reach your goal of being financially comfortable during this time of your life. 

Start by establishing goals and familiarizing yourself with your company’s retirement plans and policies as soon as possible – you may find that they’re willing to make matching contributions, which technically equates to free money towards your retirement goals. 

If you’re feeling overwhelmed at the idea of trying to set up a financial plan for your retirement, don’t hesitate to et in touch with a professional advisor for assistance.

Consider your Position in Life

The approach you take towards planning for your retirement will largely depend on your current age, income, assets you own and the age you want to be when you stop working. For instance, if you’re in your 20s or 30s and want to retire at 55, you’ll need to make aggressive contributions towards a good retirement plan. 

If you’re closer to retirement age, it’s still not too late to start working on funding your retirement> making small adjustments such as directing funds into your IRA or reducing unnecessary expenses can have a tremendous impact on retirement savings – far more than you realize.

Think Positively about your Retirement

While it may seem scary to think about the time that you’ll no longer be working, retirement will be your ultimate goal if you intend relaxing and being as comfortable as possible during this part of your life. 

You should also be thinking of retirement as your end goal instead of something unknown. While it may be the time for you to reduce living expenses, it should also be the time of your life where you no longer have to stress over a job or income.

Don’t allow daily life and an overfull schedule let you forget about putting a practical retirement plan into place. Although determining what your expenses will be during retirement is a relatively simple process, you’re welcome to get in touch with one of our financial advisors if you require assistance in this regard. 

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retirement planning

Is it Possible to ‘Catch Up’ with Retirement Planning?

Are you in your 40s or 50s, concerned and thinking that it may be too late for you to start planning for your retirement? Although you may be getting a later than average start, this shouldn’t deter you from setting up a practical retirement plan. After all, starting late is better than not starting at all. 

Information on Forbes revealed that a mere 18% of American employees that are 55 or older have said that they’re highly confident that they’ll have enough money saved to retire comfortably. Just under 50% noted that they were ‘somewhat confident’ that they’d be able to afford to retire. 

If you’re concerned about not having a retirement plan yet, the tips below can help get you started with planning for this part of your life:

Reevaluate Any Existing Plans you may have

If you already have somewhat of a plan in place for how you’re going to afford retirement, now is the time to reevaluate it – especially if you haven’t paid much attention to it over the past few years. 

Start off by estimating your projected spending during retirement. How much will you need to live on each month? If you aren’t sure where to start or how to calculate the amount you’ll need to live on, it’s recommended to contact a reputable financial advisor for assistance.

Kids Moved Out? Start Saving Even More

After your kids have moved out of the house, you should be able to reallocate the funds you were spending on their needs towards your retirement savings. If you’re fortunate enough to still be earning the same as you were when your kids lived at home, you’ll find that it will be possible to save quite a large chunk of money from here on out.

Cut Spending wherever Possible before Retirement

As they enter their retirement years, a number of Americans adjust their lifestyles accordingly. For some, it may be aspects as simple as opting for cheaper cable, phone and internet plans – while others may have to consider more drastic measures like moving to cheaper cost of living areas. Anything that you intend changing during retirement can in fact be changed now, which will allow you to live more comfortably during your golden years.

Convert Monthly Installments to Savings

Have you recently paid the last installment on your car or mortgage? If so, don’t consider these amounts as extra spending money. Instead, transfer them directly into your retirement savings each month – and watch your portfolio start growing.

Take Advantage of Company Retirement and 401(k) Plans

When last did you transfer contributions to your company retirement fund or 401(k)? If these options are available, you should be taking full advantage of them because this will provide you with some extra cushioning in your retirement budget. Many companies make matching contributions to plans like these, so you shouldn’t let the opportunity of this free money go to waste. 

If you want to start making up for lost time with your retirement investing and aren’t sure how to begin, contact our financial advisors for assistance today. 

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new year finances

New Year, New You? How About a new Financial Plan as Well?

The New Year is the ideal time to set up some new financial goals for your family, but it’s essential to start with smaller goals that will help you work towards those that are bigger over time. Regardless of the financial goals you intend achieving, it will be a good idea to set up a support system that will help make it easier to achieve them. 

Below are some examples of financial goals you can consider setting for your family:

Compile a Realistic Budget

Several individuals who earn six figure paychecks still struggle financially because they don’t take the time to compile a budget for their money. As such, setting up a realistic budget will probably be the most important step you can take if you intend being financially successful. 

Although it might seem intimidating to compile a budget for the first time, you shouldn’t let this stop you from doing it. Tracking your income and expenses will not only help you understand your finances better; you’ll also be able to plan ahead for any major financial decisions that may need to be made. For instance, perusing your spending will help you differentiate between genuine needs and wants – which will result in a change in your spending habits over time. 

When compiling your budget, have copies of bank account statements on hand because this will help you see exactly where your money is being spent each month. If you find that expenses are exceeding your income, you’ll either have to cut items out of your budget wherever possible or find ways to earn additional income to cover the shortfall.

Repay Consumer Debt

The next financial goal to set should be repaying any consumer debt you have from store cards, credit cards and any other places where you’ve been making purchases on credit – and your budget will go a long way in helping to achieve this. 

Most financial experts recommend listing debts from smallest to largest, paying as much as possible towards the smallest amount owing and paying minimum required amounts on the rest each month. As the smaller debts are fully repaid, the amounts that were being applied to them can then be rolled over to the next outstanding bill in line.

Start a Savings Account

Up to 60% of Americans have noted that they would struggle to cover a $500 emergency if it arises because of not having any money saved. 

Once your debts have been fully repaid, place the money you were paying towards them into a dedicated savings account until you have approximately three months of living expenses accumulated. This will provide a lifesaving financial cushion in the event of possible job loss or other emergency that may occur.

If the idea of setting financial goals is leaving you feeling overwhelmed, it may be a good idea to schedule an appointment with an accredited financial advisor. Contact us today if you would like to learn more about taking control of your financial future.

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