Help your children learn savings habits for a lifetime
RICHMOND, VA (WWBT) - As we begin this new year it’s a great time to consider healthy financial habits for a lifetime. Financial planners call it creating a savings ethic and you want to do it at a very early age. If you have a child nearing the end of their college career, or heading straight into the workforce, now is the time to get them started on smart saving habits.
Many young people go through a lot of job changes early on and they should have some extra money on the side just in case something happens, like their car breaks down.
Michael Joyce with the Richmond financial firm Agili says young people who are starting a new job should put 10% of their salary into a 401-k plan right away. “Do it right from the first paycheck because then you’ll never miss it! It’s pretax dollars that will create for him or her a culture of savings,” said Joyce.
Another thing to do from the start? Whenever you can, take a small amount out of each paycheck and put it in a savings account. The 401k is there for retirement and that savings account can act as an emergency fund.
Like we mention a lot, communication with your child is key here. It’s not the most exciting thing to talk about, but if you instill that savings ethic now - you’ll be setting them up for a lifetime of financial stability.
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