my GODS i wish I'd been taught this stuff. Trying to convince the 19 year old he needs to open a similar account and start saving... We'll see how it goes!
I highly recommend Your Money or Your Life. Not because I believe that accumulating enough savings to live off of is a reasonable goal for most people. Because of the clear explanation that you are trading your life energy for your money, and you should think about that when you decide what to spend your money on. And it may make you spend less on some things, but may also make you spend more on something else.
This is actually a conversation that should start with a child's allowance. We followed a book called Bank of Dad, and our kids had to put 1/4 allowance into save/spend/give/invest each month. They didn't understand the "invest" portion until college loomed. My sister and I have always had very different financial styles, with the same frugal parents, so I decided I didn't want to leave it to chance with my kids. Someone described my older son as "being able to spend both sides of a penny" -so I guess we had an influence!
I am a wee bit mentally ill about money (<- understatement) so I tried very hard not to pass that part along to my kids. I’m pleased to report that both are good savers, but also spend for pleasure in a way that I’m still trying to allow myself. I call it a win!
This seems like a good place to mention that new IRS regulations allow you to roll over money from an educational 529 to an IRA, starting this year. (Subject to the yearly contribution limits, and a $35,000 lifetime total.) While I realize not many folks end up with a surplus in such accounts, some do, and it’s a great/easy way for a young adult to start retirement savings.
I was a good little saver from my teenage summer jobs, putting some of every paycheck in my savings account. I dutifully enrolled in the IRA plan at my first real job (pretty sure my father encouraged me) but at the lowest possible withdrawal amount, so like 3%. By the time I was fully invested, I was married and my husband insisted I up the percentage to maybe 7% (Clearly there is a pattern, which I'm fine with, by the way).
Our 20 and 22 year olds work during the summer, so at the end of the season we take a look at what they've earned, how much they think they will need for 'fun money' during the school year and transfer some into an investment account (that they can withdraw from if they need to) and some into a Roth IRA. Our son has a few shares of stock in companies he likes, and our daughter is doing research for her own purchases. They each have one credit card, which they are putting on automatic pay, and use their debit card for most purchases. Once they are closer to moving out, we'll probably have them look into a budgeting app.
This is such a huge topic, and I appreciate you touching on how things are different for our kids than they were for us. I have twins, and they couldn't be more different from each other. In response to how the world currently is. one is starting a retirement account (even though she is going back to school) and the other one feels retirement will always be out of reach so why bother? Needless to say, their approaches to money are different in every way. All of which is to say, do the best you can, but also know that your kids are going to be who they are. (Isn't this true of all things parenting?)
Glad to know my post was helpful. <3
my GODS i wish I'd been taught this stuff. Trying to convince the 19 year old he needs to open a similar account and start saving... We'll see how it goes!
I highly recommend Your Money or Your Life. Not because I believe that accumulating enough savings to live off of is a reasonable goal for most people. Because of the clear explanation that you are trading your life energy for your money, and you should think about that when you decide what to spend your money on. And it may make you spend less on some things, but may also make you spend more on something else.
This is actually a conversation that should start with a child's allowance. We followed a book called Bank of Dad, and our kids had to put 1/4 allowance into save/spend/give/invest each month. They didn't understand the "invest" portion until college loomed. My sister and I have always had very different financial styles, with the same frugal parents, so I decided I didn't want to leave it to chance with my kids. Someone described my older son as "being able to spend both sides of a penny" -so I guess we had an influence!
I am a wee bit mentally ill about money (<- understatement) so I tried very hard not to pass that part along to my kids. I’m pleased to report that both are good savers, but also spend for pleasure in a way that I’m still trying to allow myself. I call it a win!
This seems like a good place to mention that new IRS regulations allow you to roll over money from an educational 529 to an IRA, starting this year. (Subject to the yearly contribution limits, and a $35,000 lifetime total.) While I realize not many folks end up with a surplus in such accounts, some do, and it’s a great/easy way for a young adult to start retirement savings.
I was a good little saver from my teenage summer jobs, putting some of every paycheck in my savings account. I dutifully enrolled in the IRA plan at my first real job (pretty sure my father encouraged me) but at the lowest possible withdrawal amount, so like 3%. By the time I was fully invested, I was married and my husband insisted I up the percentage to maybe 7% (Clearly there is a pattern, which I'm fine with, by the way).
Our 20 and 22 year olds work during the summer, so at the end of the season we take a look at what they've earned, how much they think they will need for 'fun money' during the school year and transfer some into an investment account (that they can withdraw from if they need to) and some into a Roth IRA. Our son has a few shares of stock in companies he likes, and our daughter is doing research for her own purchases. They each have one credit card, which they are putting on automatic pay, and use their debit card for most purchases. Once they are closer to moving out, we'll probably have them look into a budgeting app.
This is such a huge topic, and I appreciate you touching on how things are different for our kids than they were for us. I have twins, and they couldn't be more different from each other. In response to how the world currently is. one is starting a retirement account (even though she is going back to school) and the other one feels retirement will always be out of reach so why bother? Needless to say, their approaches to money are different in every way. All of which is to say, do the best you can, but also know that your kids are going to be who they are. (Isn't this true of all things parenting?)