Professionals Share Best Financial Tips They Received as Teens
Navigating today’s financial landscape has become increasingly complicated, and money management for teens is a topic rarely covered in a typical public school curriculum. Yet teens and young adults face many difficult financial decisions that will have a powerful impact on their lives ahead. In March 2017 a team of financial experts compiled some of the best money tips they were given when they were young, along with the sources of those tips. The recurring themes included savings, investments, learning the ins and outs of credit, and living within your means.
Save, save, save! – is the key to achieving financial wellness, according to a number of financial professionals. “The best financial advice I ever received as a young adult was to set aside 20-30% of my income for investments, before I had real expenses,” says Brian Davis, Director of Education and financial blogger for Spark Rental. “My stepfather relentlessly harped on me about it, and I would roll my eyes. But in my 20s, I started buying rental properties with my saved funds, and generating passive income…When young people see firsthand from an early age how powerful passive income is, they ‘get it,’ and internalize the desire for more.” Brannon Lambert of Canvasback Wealth Management echoes the sentiment that opening a savings account was the best thing his parents ever did for him: “I would take the money I earned from mowing yards or bagging groceries along with my passbook to the bank… The money I worked hard for gained context as I watched the balance grow with each and every deposit.”
Betty Brennan, President of Taylor Studios, says her parents had her open a savings account at a very young age. “As a young child I would get as little as $2 gifts from aunts and uncles. I had a piggy bank and when that added up we went to the bank to make a deposit,” she explains. “They taught me good financial principles.” Founder and CEO of Nia Global Solutions, Kristin Hull, claims the best advice she received was from her grandmother who suggested she save at least 10% of her salary each month. “I also learned to choose a community bank that matched my values,” Hull adds. “Instead of a large bank that may likely be funding environmentally destructive projects, local banks generally keep the money and lending happening in our local communities, doing good.”
Timothy Wiedman of Doane College and Ashley Hill of College Prep Ready take this advice a step further to advocate for maximizing retirement savings. “Many years ago a business professor told the class that when we were eligible to contribute to a 401(k) or a 403(b) or a 457 retirement plan where our employer provided a matching contribution of some sort, we should sign up immediately and contribute enough to get the maximum employer match,” comments Wiedman. “He pointed out that the employer matching contribution was essentially free money; so not joining a retirement plan under those circumstances was like volunteering for a pay cut.” In addition, Hill says, “The best financial guidance that I received as a young adult is from my parents. They encouraged me to invest in a Roth IRA and I am reaping the benefits of that advice today.”
Another important tip that promotes financial literacy among youth is learning to use credit wisely. Financial coach and NFEC Certified Financial Education Instructor Maggie Germano suggests, “One of the best financial tips I ever got as a teenager was to never just pay the minimum balance on a credit card bill. I was taking an economics class in high school, and my teacher emphasized how dangerous credit card interest can be. I never forgot that, and I have always paid off my credit card every month.” Being smart with credit helps people get the best terms on future loans and cards, too, other professionals say. “The best financial advice I ever received was from my father: never pay a credit card late or carry a balance,” offers Rachel Cohen of Not-WingingIt. “These pieces of advice helped me build stellar credit and savings. I’m now able to get the best interest rates and credit cards.” And as Trevor Stirmel of Innovation Financial Coaching contributes, debt freedom is one of the biggest keys to financial success. “When you commit all of your money to payments you have things, but no money. After learning this, I became debt-free, now live a debt-free life, and have and continue to build wealth so I can impact other people’s lives and leave a legacy to my children.” This advice carries over into other life aspects, according to Rianka Dorsainvil, President of Your Greatest Contribution, who comments: “Don’t spend money before you have it. Always pay your credit card off on a monthly basis. Know the importance of your credit score. Some employers actually do a credit report when doing a background check… You wouldn’t want to be denied a job because of your credit history.”
Saving, spending only the money you have, and avoiding debt are excellent tips for today’s teens and young adults. These suggestions can help young people establish healthy, secure financial futures.
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