Is your young adult ready for the real world?
Many young people are looking forward to leaving home in the next few weeks. Having graduated high school, they’re embarking on the next chapter in their lives: post-secondary education or the work force. Many may have already experienced working at a part-time job. Perhaps mom and dad encouraged them to save, discussed finances, opened up an RESP and have made sure their child is literate with money. But there are young adults out there who’ve never been taught to set aside money for necessities, emergencies, and the future—before spending on entertainment and “stuff”. Do young people read the paper? If they do, this column is for them!
Most people admit they have some regrets in their financial pasts. Whether it is not saving for retirement or a bad credit situation, these regrets can add stress to your life for a long time. Ensuring your children have an understanding of how credit works and illustrating for them how their savings will grow over the years is as much parenting as teaching them to cook and do laundry. Basically, you know your child is going to be an adult with bills and payments and income. Is that child equipped to make good decisions that benefit her future and will she have security as she sets out in the world on her own? There are some ways you can help.
Money Mentors is an Alberta based, not-for-profit credit counselling agency. It aims to help families and individuals recover from financial crisis and move forward in their lives. They offer credit counselling, money coaching, retirement planning and teach financial literacy and, best of all, it’s free! Their site offers free online resources on a number of topics—debt management, choosing a credit counselling agency, organizing your finances, to name a few. They can teach you to set investment goals, write a home budget, or roll down your credit card debt. They offer free online courses like Budgeting Boot Camp and R & R Retirement. There is a course on this site for everyone if you have a computer and a few hours to dedicate to your financial well-being. If you can’t immediately get to the free courses, go to Resources on the top of the page and find Free Online Courses there.
Budget now, profit later
The Money Mentors site is intended for people in every stage of life, do give it a look—you are bound to learn something that helps you reach your financial goals. For the young adult today this site is a convenient way to review some money basics that might not have felt relevant while they were living with mom and dad. But the decisions they make in the next few years can either haunt them or benefit them for a long time to come. We could all heed the advice found on the site:
1) track your spending
2) automate your savings
3) save loose change
4) learn to comparison shop
5) avoid spending triggers
6) consider buying used
7) save windfall income
8) institute a waiting period before you buy
9) consider the cost in hours you will work to pay for it
10) be content with what you have.
Many stores make credit seem so easy. 0% down, no payments for 6 months, we’ve all heard the appealing ads. It’s a great deal if you know for certain you can pay the whole bill off before you are charged the exorbitant interest after 6 months. A nightmare situation for a young person is buying their electronics on such a plan, heading off to university where they find they spend more money than they planned on social life and miss their first several payments. Now they have student loans, consumer debt, possibly no job, and a few years ahead of them where these credit issues are going to snowball into a problem that effects whether they can buy a house, start a family, and ever feel secure. Contrast that with a young adult who knows how much money they have available to them every month, pays the bills first, stashes a bit for emergencies or savings, and lives simply on what’s left over.
It's never too late to learn
Sites like moneymentors.ca are refreshing to find in an online world where everyone is selling something. If you have been struggling to make ends meet it is worth your time to try a free online course and read through the resources there. Make reading and learning about financial fitness part of your routine and the good habits are sure to follow. If people starting out in life can get the financial knowledge they need before making poor decisions, who knows how far they can go.