Put a Plan in Place
The younger they start, the more prepared your child will be for retirement, purchasing a home and staying out of debt long-term. It never hurts to discuss the benefits of saving young in a standard savings account or in a retirement account. Remember, most people earn the bulk of their monies between the ages of 25 and 40; the younger you are when you start your retirement plan, the better prepared for retirement. Usually, this means putting a budget in place, setting up a monthly savings plan and setting retirement savings goals.
Stay as Debt Free as Possible
Unfortunately, thousands of people graduate annually with high student loan debt. When you combine student loan debt and credit card debt, the monthly payments can be overwhelming. Young people should learn to start saving for college early and make sure they do not take on credit card debt unless they can pay off their monthly balances. Students who are not receiving what they need from student grants should look around and find the best possible options for student loans so they are paying as little as possible with the maximum amount of flexibility.
Earn More and Spend Less
Unfortunately, oftentimes young people discover their earning power is far less than anticipated. One option is to start working a part-time job to fund their retirement accounts or to create an emergency fund. This can be crucial for those who are interested in obtaining a home loan later; if the funds are put into a standard savings account and left alone, the compounded interest can help young people reach their dream of home ownership.
Mistakes Happen: Get Back on Track
Having a budget is all well and good provided you follow that budget. The more frugal you are when you are young, the more likely you will be to reach your financial goals. This does not have to mean deliberately avoiding things you wish to have; instead, create a plan to save money for big purchases rather than going into debt. We all make mistakes with our finances at one time or another. Do not let this deter you; simply start over and get back on track with your savings plans and create a new budget if necessary.
Investing in Yourself Matters
Young people should learn that saving money should not be considered a burden. Instead, saving money should be more about investing in themselves and their future. Putting a strong financial management plan in place while you are young is important as it can make a difference in renting a home and buying a home as well as giving you the flexibility to change jobs if a better offer comes along.
At Oklahoma Central Credit Union, we are committed to helping the community learn the skills necessary to manage your money. Whether your child is still in grade school or preparing for college, we offer a whole range of financial tools to help them learn more about managing money as well as a range of financial accounts designed to encourage saving for retirement and for emergencies. Call us today at 918-664-6000 or stop by one of our offices for additional information.