personal finances — July 29, 2013

Hit the Road of Life at Full Speed

by Bob Williams

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learning the basics of personal finance

Looking back, we really didn’t get much in the way of guidance from our parents when we first set out in “The Real World.” Just a couple of years out of high school and about to get our first apartment, we really had no clue what we were getting into.

Sure, we’d had part-time jobs through high school. But suddenly it was five-days-a-week work, insurance, car payment, rent and who-knows-what. Yikes!

Lucky for us, we learned quickly. And the occasional helpful nudge from Mom didn’t hurt, either. But it would have been a whole lot easier – on everyone – if we had been given the ground rules before the game began. As alumni of the College of Hard Knocks, we’ve seen most of the bumps in the road and know where they are. We think it’s time to start passing that roadmap to our younger travelers so that they don’t have to make the same mistakes we did.

Real Life 101

Here are some general guidelines we think can help guide our young adults in making logical, positive choices in their new lives as Productive Members of Society:

Know Your Way Around a Checkbook – Some of us didn’t see the business end of a checkbook – the register – until we were out on our own. It would make sense for parents to set up a register of sorts so kids could track their allowance, their spending – and their balance. OK, we understand that some folks think paper is SO old-school, but let the youngsters learn the theory on paper, before they’re unleashed on your electronic banking app. The point is that youngsters understand where their money comes from – and what happens when it runs out.

Get Advice from a Veteran – Those of us who’ve “been around the block a few times” can be a great source of knowledge for soon-to-be taxpayers. Take that son or daughter about to head to college or work aside, and go over your economic routine with them – paying a house note, figuring property taxes, maybe even the finer points of car maintenance. Resist the temptation to lecture; instead, educate. We think just being familiar with personal finance process can enable young adults to make better choices.

Join the Tax Team - If you do your own taxes, have your “student” sit with you while you go over the forms, whether paper or electronic. Understanding how the process works will cut down on the intimidation factor. One of the lessons here should be to file on time every year. The best way to avoid tax worries is with preparation.

If you use a professional tax preparer for your yearly taxes, introduce them to your youngster. He or she might choose to take the same route, and familiarity could work in everyone’s favor. Many long-term relationships have been formed in just this way. And do the same at your bank. If you’ve dealt with the same loan officer, for example, an introduction now could open doors for your son or daughter later.

Give the Gift of Organization – Whether it’s a purpose-made financial document storage system, a set of file pockets or just a portable file box, give your young adult a way to start his own record-keeping system. Organizational skills are important, whether going off to school, the military – or setting up housekeeping on their own for the first time. And check back with them to make sure they’re using it!

After all this, though, seeing your youngster head off on their own for the first time can be a bit like sending up a weather balloon. You can’t steer it, only hope you’ve given it enough gas to do its job. We have a feeling, though, if you can follow at least a few of our suggestions, you might see that little balloon sprout some wings and really fly.

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