Nansemond River Financial Services

Financial Planning, Investment & Insurance Planning

My Blog

Blog

Having the Money Talk with Your Children

Posted on June 13, 2017 at 10:19 AM
Having the Money Talk with Your Children
 
How much financial knowledge do they have?
 
 
Some young adults manage to acquire a fair amount of financial literacy. In the classroom or the workplace, they learn a great deal about financial principles. Others lack such knowledge and learn money lessons by paying, to reference William Blake, "the price of experience."
 
Broadly speaking, how much financial literacy do young people have today? At this writing, some of the most recent data appears in U.S. Bank's 2016 Student and Personal Finance Study. After surveying more than 1,600 American high school and undergraduate students, the bank found that just 15% of students felt knowledgeable about investing. For that matter, just 42% felt knowledgeable about deposit and checking accounts. 1
 
Relatively few students understood the principles of credit. Fifty-four percent thought that having "too many" credit cards would negatively impact their credit score. Forty-four percent believed that they could build or improve their credit rating by using credit or debit cards. Neither perception is accurate. 1
 
Are parents teaching their children well about money? Maybe not. An interesting difference of opinion stood out in the survey results. Forty percent of the parents of the survey respondents said that they had taught their kids specific money management skills, but merely 18% of the teens and young adults reported receiving such instruction. 1,2  
 
A young adult should go out into the world with a grasp of certain money truths. For example,   high-interest debt should be avoided whenever possible, and when it is unavoidable, it should be the first debt attacked. Most credit cards (and private student loans) carry double-digit interest rates. 3      
 
Living independently means abiding by some kind of budget. Budgeting is a great skill for a young adult to master, one that may keep them out of some stressful financial predicaments.
 
At or before age 26, health insurance must be addressed. Under the Affordable Care Act, most young adults can remain on a parent's health plan until they are 26. This applies even if they marry, become parents, or live away from mom and dad. But what happens when they turn 26? If they sign up for an HMO, they need to understand how out-of-network costs can creep up on them. They should understand the potentially lower premiums that they could pay if enrolled in a high-deductible health plan (HDHP), but also the tradeoff - they might get hit hard in the wallet if a hospital stay or an involved emergency room visit occurs. 3,4      
 
Lastly, this is an ideal time to start saving & investing. Any parent would do well to direct their son or daughter to a financial professional of good standing and significant experience for guidance about building and keeping wealth. If a young adult aspires to retire confidently later in life, this could be the first step. A prospective young investor should know the types of investments available to them as well as the difference between investments and investment vehicles (which many Americans, young and old, confuse).
 
A money talk does not need to cover all the above subjects at once. You may prefer to dispense financial education in a way that is gradual and more anecdotal than implicitly instructive. Whichever way the knowledge is shared, sooner is better than later - because financially, kids have to grow up fast these days.
 
Mark McGahee may be reached at 757 539 9465 or [email protected]
www.nansemondriverfinancialservices.com
 
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
 
Securities offered through Securities America, Inc. Member FINRA/SIPC. Advisory Services offered through Securities America Advisors, Inc. Trading instructions sent via e-mail may not be honored. Please contact my office at 757-539-9465 or Securities America, Inc. at 800-747-6111 for all buy/sell orders. You should continue to rely on confirmations and statements received from the custodian(s) of your assets. The text of this communication is confidential and use by any person who is not the intended recipient is prohibited. Any person who receives this communication in error is requested to immediately destroy the text of this communication without copying or further dissemination. Your cooperation is appreciated."
   
Citations.
1 - stories.usbank.com/dam/september-2016/USBankStudentPersonalFinance.pdf [9/16]
2 - tinyurl.com/yc6ejxjp [10/27/16]
3 - cnbc.com/2017/03/02/parents-need-to-have-real-world-money-talk-with-kids.html [3/2/17]
4 - healthcare.gov/young-adults/children-under-26/ [6/8/17]
 

Categories: Financial Planning

Post a Comment

Oops!

Oops, you forgot something.

Oops!

The words you entered did not match the given text. Please try again.

328 Comments

Reply CurtisPub
3:52 PM on July 4, 2022 
citalopram
Reply Annashuby
4:39 PM on July 4, 2022 
4 propecia
Reply Edgargon
2:24 AM on July 5, 2022 
buy cheap sildalis
Reply Michaelbix
5:03 AM on July 5, 2022 
buy viagra with discover card
Reply CurtisPub
6:20 AM on July 5, 2022 
erythromycin 50 mg
Reply Williamacism
3:00 PM on July 5, 2022 
ivermectin pill cost buying viagra without prescription how to buy viagra in uk
Reply Jackshuby
6:25 PM on July 5, 2022 
price of retin a in mexico
Reply DavidPAL
7:15 PM on July 5, 2022 
atarax 50 mg
Reply Timothylip
7:56 PM on July 5, 2022 
celexa 10 mg tablet cost
Reply Michaellebra
8:10 PM on July 5, 2022 
cialis over the counter south africa
Reply CurtisPub
6:51 AM on July 6, 2022 
triamterene generic
Reply Miashuby
8:14 AM on July 6, 2022 
tamoxifen tablets for sale uk
Reply Kiashuby
10:04 AM on July 6, 2022 
finasteride hair loss
Reply Judyshuby
3:26 PM on July 6, 2022 
stromectol order online
Reply CurtisPub
9:52 PM on July 6, 2022 
diclofenac cream brand name
Reply Michaellebra
10:21 PM on July 6, 2022 
robaxin 750 mg uk
Reply Miclhaw
11:53 PM on July 6, 2022 
40 mg tadalafil
Reply Williamacism
11:56 PM on July 6, 2022 
viagra cost in uk tetracycline capsules 250 mg lexapro prescription cost buy cialis daily allopurinol 3 mg buy flomax online how to buy provigil online suhagra 50
Reply Carlshuby
1:16 AM on July 7, 2022 
quineprox 900
Reply DavisKef
2:59 AM on July 7, 2022 
generic lexapro online pharmacy