When I talk to our generation about money and finances, I let them know a few simple facts. When the government goes into debt, someone else has to pay it back (this relates to all political parties). When you go into debt, not only do YOU have to pay it back, but the interest you must pay back to credit card companies can be financially crushing. So avoid personal debt at all costs. One way to avoid this debt is to not live paycheck to paycheck and put money aside in an emergency fund for those pouring down rainy days.
I also tell them that each generation is living longer than the last, and government supported retirement programs, like Social Security, may not be a guaranteed paycheck for our generation. So, now it’s as important as ever to start preparing ourselves for the longevity of our lives. As life expectancy increases, one of these days we are going to retire before having our mid-life crisis! We are almost to the point where we’re “retired” longer than we’re working. If you start working at age 22 and retire at age 62, you still have 30 years without income to support your ongoing lifestyle. So we have two options, start preparing for our financial future now, or continue working into our late 70s. I want our generation to understand the importance of saving for the unexpected and saving for the future.
We need to start taking control of our own financial lives. The best way to start is by making savings a priority. When you start working with a financial planner, if it’s me or someone else, make sure they’re a CERTIFIED FINANCIAL PLANNER™. Talk with them about opening up a Roth or Traditional IRA and making direct deposits from your checking account into this retirement vehicle every time you receive a paycheck from work. Don’t even give yourself the chance to spend the money, save it before you even know it’s there. Remember, you don’t need a $50,000 car, which depreciates in value once you take it off the lot, when a $20,000 car will due. All I want is for our generation to be more fiscally responsible than the last. I need to stop sounding like your parents, but just like them, I want what’s best for you.
One last thing, I am starting a blog on our company’s website which targets our generation. So if you are interested or know someone who could benefit from our conversations, just forward an email address to me at evbedel@bedelfinancial.com