Vail Daily column: Talk to adult children about smart financial moves
If you have children who are finishing college or embarking on a full-time job, then you likely want them to get off to a good start in their adult and working lives.
You probably have some good advice to offer — especially when it comes to making smart financial moves. But you might consider these for starters:
Investing for the future — Young people may not think they can also afford to invest for the future. This can be challenging indeed.
If your children go to work for an employer that offers a retirement plan, such as a 401(k), then you may want to point out that they can have money automatically invested.
• Buying a home and paying off a mortgage — With interest rates still low, now is not a bad time for prospective first-time homebuyers. If they do buy a house, and their incomes go up as their careers progress, then they may wonder if they should pay down their mortgage more quickly. While they might feel good about lowering that debt, you may want to point out that an argument could be made for putting money in assets that will likely be more liquid, such as stocks and bonds.
For one thing, if your children were to lose their jobs, and they needed cash to tide them over until they were once again employed, they’d likely find it harder to get money out of their homes than their investment accounts.
Also, in terms of accumulating resources for retirement, they might be better off building up their investment portfolios, rather than sinking every extra dollar into their homes.
Using credit wisely — Urge your children to avoid taking on excessive credit card debt and taking out non-essential loans.
Having a good credit score can pay off in several ways, including getting better rates on mortgages. You may want to risk sounding old fashioned by encouraging your children to live within their means.
And consider pointing out that it’s often the people who are the most frugal today who may end up with the most money tomorrow. It’s not easy for young people to get off on the right foot, financially speaking. But as someone who knows a thing or two about saving, investing and controlling debt, you can help your children out by imparting a few words of wisdom.
This article was written by Edward Jones for use by your local Edward Jones financial adviser. Edward Jones and its associates and financial advisers do not provide tax or legal advice. Chuck Smallwood, Bret Hooper, Tina DeWitt, Charlie Wick, Chris Murray, Kevin Brubeck and Dolly Schaub are financial advisers with Edward Jones Investments. They can be reached in Edwards at 970-926-1728 and in Eagle at 970-328-4959 and 970-328-0361.
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