|Thanksgiving weekend advice for young adults
Question: My children are coming in town for Thanksgiving this year. I always cut out your columns and send them to my kids. Can you write something that would be good advice for them? I just don’t want them to end up like me.
Answer: Kids, you heard your mom (or dad). You don’t have to make the same financial mistakes they did. You can do better (and believe me, they want you to!).
Here then is a short list of actions you can take, which if followed reasonably well, will give you the best chance possible for a successful financial life.
Best of all, it’s pretty simple.
Save first. The most important word among those two is “first.” It’s not enough to decide to be saver. You’ve got to determine that saving will be your number one financial priority. I recommend to my clients that they save 15% of their gross annual income. And you do that by saving 15% of every paycheck…first. Yeah, it’s a chunk of change.
Spend only what’s left. Your decision to be a saver first will significantly impact your lifestyle. If you are a saver, you won’t live in as big a house as you can possibly afford; nor will you drive a new car every few years. A commitment to save must be accompanied by a commitment to control your spending, or all your work will be for nothing. You’ll save money into an account, only to spend it out of that same account the following month. That is not saving – it is just deferred spending.
Avoid consumer debt. “I don’t believe in debt,” she says. Then she produces a list of credit cards (with outstanding balances) longer than my arm, along with “good reasons” why she spent all that money she now can’t pay back.
If I had a hair follicle for every time someone told me a story like that, I could be an honorary member of Duck Dynasty.
The reason most people have credit card debt is that they wanted something in the moment they weren’t willing to plan for. Don’t be that guy. Learn to tell yourself no.
Protect yourself. Today, you’re young, beautiful and invincible. The young and beautiful is fun while it lasts, but the invincible part has never been true. You just may not have lived long enough for one of the “bad things” to happen.
The list of bad events is short but significant: loss of property due to a hazard or natural disaster, lawsuits, bankruptcy, sickness, disability, incapacity and death. Fun list, right?
It may be tempting to put off dealing with this bit of reality. Don’t you do it. Get with a professional that can guide you through what insurance coverage and legal strategies are right for you. Pay what it costs for the coverage you need. It will be worth it.
Don’t get cute. You know the old joke…what does a redneck say right before he dies? “Hey, watch this…”
Don’t be stupid with your money. Don’t let other people be stupid with your money. Just because your fraternity brother has been a stock broker for seven weeks does not mean he (or his boss) should take all your hard earned savings to put into a “can’t miss” stock pick of the week. Be broadly diversified, boring and patient.
Well, these simple steps will get you started. Nothing can guarantee riches, but following these steps will give you a great opportunity to enjoy financial stability, prosperity and enjoyment for years to come.
Besides all that…you’ll make your momma happy.
Byron R. Moore, CFP® is managing director / planning group of Argent Advisors, Inc. Email him at firstname.lastname@example.org. Write to him at 500 East Reynolds Drive, Ruston, LA 71270 or call him at (318) 251-5858.The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. No forecasts can be guaranteed. Argent Advisors, Inc. does not offer tax, insurance or legal advice. The information contained in this column should not be construed as a substitute for personalized investment, tax, insurance or legal advice.
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